Mental Health Financial Issues California Institute for Behavioral Health Solutions (CIBHS) Small County Fiscal Technical Assistance April 26, 2019

Mental Health Financial Issues Quarterly Federal Financial Management Report (QFFMR) DHCS Information Notices Other Fiscal Issues

Quarterly Federal Financial Management Report The reporting of costs for the Substance Abuse Block Grant (SABG) changed as of January 1, 2019 SABG is now retrospective reimbursement rather than advance allocation DHCS changed the QFFMR forms to reflect reimbursement Third Quarter (1/1/19-3/31/19) Summary form and detail General Ledger form that supports information on Summary Report unused SABG funds in top section of Summary form Most counties received State FY Q1 payments but State does not have authority to release SFY Q2 payments yet DHCS has proposed hosting a webinar to address county questions https://www.dhcs.ca.gov/provgovpart/Pages/SUD_Forms.aspx

DHCS Information Notices 19-020 – CSI Assessment Record 19-019 – MHSA Program Review Implementation 19-018 – DMC-ODS Provider Selection Review Process 19-017 – MHSA Implementation of W&I Sections 5892 and 5892.1 19-016 – Revisions to ODS Interim Rates 19-015 – Establishing a FY19/20 County Contract Rate in SD/MC Claiming System 19-014 – Approval of CAADE as DMC Certifying Organization 19-013 – ICD 10 Revisions to SD/MC Claiming System

MHSA Program Review Implementation DHCS Information Notice 19-019 notifies counties that DHCS will conduct program reviews of performance contracts to determine compliance Focus is on compliance with the performance contract Not a fiscal audit Seventeen counties chosen for calendar year 2019 Performance contract key elements Submission of MHSA Annual Revenue and Expenditure Report by December 31st MHSA funds used to expand services Non-Supplant of existing resources Distribution of MHSA Funds

MHSA Fiscal Changes SB 192 added W&I Code Sections 5892 and 5892.1 Required plan to spend the funds Prudent Reserve Limit Allocation of Interest Plans to spend the funds Counties were required to submit to the OAC by January 1, 2019 a plan on how they intend to spend all reverted and reallocated funds Counties that did not submit a plan to the OAC must remit the reverted funds to DHCS

MHSA Fiscal Changes Prudent Reserve Funding Limit Counties are required to establish a prudent reserve that does not exceed 33 percent of the average CSS revenue received in the local MHS Fund in the preceding five years Five fiscal years (FY13/14 through FY17/18) Sum of total distributions from July 2013 through June 2018 multiplied by 76 percent divided by 5 multiplied by 33 percent Counties must complete the calculations and certify form DHCS 1819 Counties that exceed the limit have until June 30, 2020 to move the funds from the prudent reserve to CSS and PEI (if applicable) Include transfer(s) in FY19/20 MHSA Annual Update Report transfer(s) on FY19/20 MHSA Annual Revenue and Expenditure Report Allocation of Interest Counties must allocate interest based on the amount of interest earned by each component during the fiscal year Applies to interest earned in FY18/19 and subsequent FY

Revisions to DMC-ODS Rates Counties have ability to request updated DMC-ODS rates Must submit revisions to DHCS by February 1st prior to start of the fiscal year Fiscal Plan template Justification for the rate change Certified Public Expenditure data Revised projections for units of service and beneficiaries Basically two year lag between actual data and interim rates

SD/MC Contract Rates County Mental Health Plans (MHPs) have the ability to limit interim rates paid to contract providers using the County Contract Rate form Only necessary if the interim rates for contractors are higher than what the MHP wants to pay the contractor MHPs can establish one set of contract rates for all contractors DHCS will pay the lower of the contract rate or the amount claimed In general, MHPs claim at interims rate equal to the rates paid to contractors Form is not necessary Contract rates are interim rates subject to cost settlement through the normal cost report process

Other Fiscal Issues Allocation of MHSA Revenue and Interest CBHDA Prudent Reserve Recommendations Co-Practitioner Claiming CANS and PSC-35 State General Fund allocation methodology CBHDA MEDSLITE Recommendation DHCS auditors interpretation of indirect costs Redirection of future MHSA funding for WET Five Year Plan 15% of revenues in excess of $1.9 billion after accounting for NPLH, limited to $300 million in aggregate Allocation of OIG recoupments between funding sources 2020 Waiver

Other Fiscal Issues AB43 – Open Meetings Network Adequacy Calculation of MHSA FSP Percentage MHSA Annual Adjustment $443.6 million to be posted 7/1/19 DHCS Reorganization Audit Treatment of Units of Service