State Impacts of Health Care Reform

1. State Impacts of Health Care Reform • Estimates of the influx of newly-covered individuals in California by 2014: • range from 1.5 to 2 million new Medi-Cal beneficiaries • over 3 million others subsidized by the California Health Benefit Exchange. • Estimated 147,000 to 195,000 of the new Medi-Cal enrollees will need substance use disorder services.* • Estimated 155,000 to 400,000 of the new Medi-Cal enrollees will need mental health services.* * Note: these figures are estimates.

2. Fiscal Exposure for Counties DRUG MEDI-CAL Section 1902 of the SSA has the basic Medicaid requirements. With few exceptions, the following rules must hold for the Drug Medi-Cal program administration: • Comparability of Services • Services to be comparable for eligible individuals – equal in amount, scope, duration for all beneficiaries in a covered group; services to categorically needy can not be less in amount, scope, duration than those provided to medically needy groups.

3. Drug Medi-Cal Rules (cont.) • Statewideness: • Benefits offered to any individual must be available throughout the state. • Choice of Providers: • An individual mayobtain Drug Medi-Cal services from any institution, agency, pharmacy, person, or organization that is qualified to perform the services (i.e. D/MC-certified). • In California, if a certified D/MC provider is not given a contract by a specified county, that provider is guaranteed a direct contract with the state. DHCS can access the county’s realignment funds in the BH subaccount to finance the direct contract.

4. County Intervention Support Services Realignment Subaccount: • Allows Dept. of Health Care Services to notify the Controller, DOF and a county that said county is failing to perform a federal Medicaid program (applies to Drug Medi-Cal and specialty mental health services) to the extent federal Medicaid funds are at risk. The Controller then deposits the county’s revenues for the program in question into the County Intervention Support Services Subaccount. • This section is intended to cover a case in which a county refuses to perform Drug Medi-Cal or is performing inadequately (beneficiaries are not receiving entitled services). How is this “inadequacy” determined? • DHCS will have access to those funds in the County Intervention Support Services Subaccount.

5. Drug Medi-Cal Rules (cont.) • Minor Consent: • Though billed under Drug Medi-Cal for SUD services, Minor Consent is not part of the federal entitlement, and there is no federal match. • Counties are not required to provide or contract for Minor Consent services. However, in the 2011 Realignment, the State used historical DMC expenditures, which included Minor Consent expenditures, to determine county realignment allocations. So counties are encouraged to continue these services to youth who need them.

6. Minor Consent (cont.) • The realignment superstructure statutes state that a county that seeks to  implement significant reductions or elimination of optional or discretionary services must do so in an open setting with board of supervisor approval. • Under Title 42-CFR federal confidentiality rules, the SUD program and/or county cannot disclose that the minor is receiving Minor Consent services for alcohol or drug treatment.

7. Healthy Families • Beginning this year, the state is transferring Healthy Families youth to the Medi-Cal program. The expectation is that many more youth will receive SUD treatment under this shift than had accessed treatment under the Healthy Families program. • In the 2011 Realignment, the State did not take into account either historical SUD expenditures for Healthy Families youth, nor projected expenditures for serving these youth in Drug Medi-Cal, when determining county realignment allocations.

8. Fiscal Exposure for Counties Maintenance of Effort: • The purpose of the Substance Abuse Prevention and Treatment Block Grant MOE is to ensure Federal SAPTBG funds are used to supplement, not supplant state funding. • The SAPTBG MOE has implications for the county’s Behavioral Health realignment subaccount, as it limits somewhat the county’s flexibility with regard to the use of those subaccount funds.

9. Maintenance of Effort Requirements Substance Abuse Prevention & Treatment Block Grant MOE In order to maintain federal Block Grant funding for substance use disorder prevention and treatment, the state is required to maintain state expenditures for SUD at a level that is no less than the average of the 2 preceding fiscal years’ expenditures. Per the Code of Federal Regulations, the SAPTBG must be the funding of last resort for authorized services. Consequences of Not Meeting the MOE Requirement There will be a dollar-for-dollar reduction to the state’s Block Grant award if it is determined by SAMHSA that the state did not materially comply with the MOE requirement.

10. Maintenance of Effort Requirements (cont.) Implications for Counties: Under Realignment, counties will now be responsible to meet the state’s MOE obligation. Realignment funds for substance use disorder services in the Behavioral Health subaccount will be counted as state funds only for the purpose of the MOE. • Each county will be responsible to meet its portion of the state’s MOE obligation for any given fiscal year, which means that it must expend realignment funds for authorized SUD services in an amount at least equivalent to the average expenditures for the previous 2 fiscal years. The state will notify each county of its MOE obligation when it sends out the preliminary allocation letters each year. • If a county underspends its realignment allocation in any given fiscal year, and fails to meet its MOE obligation, it risks losing an equivalent amount of federal Block Grant funding.

11. SB 1014- • Requires ADP to notify each county regarding its estimated amount of federally required MOE statewide expenditure levels on authorized activities. • ADP may reduce federal funding allocations, on a dollar for dollar basis, to a county that has reduced expenditures in a way that could result in a decrease in SAPTBG funding. • The State Fiscal Year 2012-13 total MOE is approximately $204 million.