Realignment 2011 Growth Allocation October 16,

GOAL FOR TODAY IDENTIFY RELEVANT FACTORS USED TO DETERMINE THE ALLOCATION METHODOLOGY FOR DISTRIBUTING GROWTH FUNDS 2

HISTORY 1957 – State legislature enacts the Short-Doyle Act By the end of this year, there was a total of 14 state hospitals with a population of 36, – Medi-Cal is created: Title XIX of the Social Security Act authorized the Federal Government to reimburse states for the costs The Act requires states to share in the costs of Medicaid expenditures and permits state and local governments to participate in financing the non-federal share of the Medicaid expenditures 3

HISTORY 1968 – The Lanterman-Petris-Short Act changes the law by establishing standards and legal procedures for involuntary hospitalization 1969 – The California Community Mental Health Services Act “deinstitutionalized” mental health services to the community rather than state hospitals 4

HISTORY 1971 – Traditional Medi-Cal benefits expand to include Short-Doyle community mental health services which allowed counties to obtain federal funds to match their own funding. Short Doyle/Medi-Cal System (SD/MC) offered a broader range of mental health services 1972 and 1973 – Governor Reagan vetoed provisions to use savings from state hospitals closures to fund community mental health programs 5

HISTORY 1974 – Legislature requires all counties to have mental health programs 1984 – AB 3632 (McGuire) assigns county mental health departments the responsibility to provide special education students with mental health services 1987 – AB 377 (Cathie Wright) passed to fund the Children’s System of Care model in California (based on the Ventura County Pilot) 6

1991 LANDSCAPE State budget shortfall Historically, there was no dedicated funding stream for mental health Programs were funded on a year to year basis subject to the appropriation by the Legislature Result was that funding was unpredictable which made it difficult to plan 7

1991 REALIGNMENT 1991 – Bronzan-Wright-McCorquodale Realignment Act of 1991 Shifts authority from state to counties for mental health programs Three revenue sources fund Realignment  ½ cent of State Sales tax  State Vehicle License Fees  State Vehicle License Fee Collections 8

1991 REALIGNMENT Realignment revenues are collected by the State and distributed to counties on a monthly basis as funds are collected until each county receives funds equal to previous year’s total Revenues above that amount are placed into growth accounts and distributed according to a formula, as set forth in statute 9

1991 REALIGNMENT To the extent resources are available, mental health funds should be to serve the target populations: 1.Seriously emotionally disturbed children or adolescents: Minors under the age of 18 who have a DSM diagnosis other than substance use or developmental disorder which results in behavior inappropriate to the child’s age and shall meet one or more of the following: 10

1991 REALIGNMENT  Self-care  School functioning  Family relationships, OR  Ability to function in the community AND either of the following occur 11

1991 REALIGNMENT The child is at risk of removal from the home or has already been removed Impairments have been present for more than 6 months or are likely to continue for more than a year without treatment  OR the child displays psychotic features, risk of suicide or violence 12

1991 REALIGNMENT 2. Adults with DSM diagnosis other than a substance use disorder or developmental disorder or Traumatic Brain Injury (TBI)  Adult has substantial functional impairments in independent living, social relationships, vocational skills or physical condition 13

1991 REALIGNMENT Target population adult individuals to be served (to the extent resources are available) include: Homeless persons who are mentally ill Person needing state hospital, acute inpatient care, etc. Person arrested or convicted of crimes Person with first episode of mental illness with psychotic features Veterans in need of mental health services Reference: WIC

1991 REALIGNMENT Services to be provided to children and adults (to the extent resources are available): Pre-crisis and crisis Comprehensive Evaluation and Assessment Individual Service Plan Medication Education and Management Case Management Twenty-Four Hour Treatment 15

1991 REALIGNMENT Rehabilitation and Support Services Vocational Rehabilitation Residential Services Services for Homeless Persons Group Services Reference: WIC

HISTORY 1993 – California adopts the Medicaid Rehabilitation Option to expand community mental health services (State Plan Amendment) 1995 – Medi-Cal Managed Care is implemented  California institutes Medicaid Early and Periodic Screening, Diagnosis and Treatment (EPSDT) 17

EPSDT As part of the lawsuit (T.L. v Belshé), the state agreed to provide State General Fund to counties as the match for these expanded services Counties assumed responsibility for providing these services which included all of the specialty mental health services MHP’s to provide the SMHS to children with SED who meet medical necessity criteria 18

1915(b) WAIVER 1995 – Waiver approved which consolidated the Psychiatric Inpatient Hospital services provided through the Fee for Service System and the SD/MC. County mental health departments became responsible for both FFS and SD/MC psychiatric hospital systems for the first time. All Medi-Cal beneficiaries must receive their specialty mental health services through the county: The 1915(b) Medicaid waiver waives “freedom of choice” for the beneficiary This resulted in the risk for this entitlement program shifting from the state to the counties 19

HISTORY From 1995 through 1998, the state consolidated FFS and SD/MC programs into one “carved out” specialty mental health managed care program via a phase-in waiver process Consolidation allowed for more flexibility in the use of state funding by the counties and enabled more integrated and coordinated care Local governments must certify that the expenditures are eligible for FFP (Federal Financial Participation) 20

HISTORY 1999 – Assembly Bill 34 (Steinberg) is passed for pilot programs in 3 counties for homeless mentally ill adults 2000 – Assembly Bill 2034 (Steinberg) expands the homeless mentally ill adults program 2000 – Assembly Bill 88 (Thomson) requires health plans to provide “parity” coverage for adults with specified mental illnesses and for SED children 2004 – Voters approve the Mental Health Services Act (Proposition 63) 21

HISTORY 2008 – The US Mental Health Parity and Addiction Equity Act of 2008 requires group health insurance plans to offer coverage for mental illness and SUD 2010 – The Patient Protection and Affordable Care Act (ACA): Managed Care Plans to provide services to mild to moderate mental illness 22

2011 REALIGNMENT 2011 – Realignment 2011 Motivating Factors: $26 billion budget gap and expiring taxes Federal 3 Judge Panel on prison overcrowding Move government closer to the people where the services are delivered 23

2011 REALIGNMENT Build on previous success of state-county realignment Realignment funding is constitutionally protected Funded with cent sales tax until 2017, state constitutionally obligated to pay equivalent thereafter 24

2011 REALIGMENT October 1, Assembly Bill 109 – began “Public Safety” Realignment Assembly Bill 114 (Carter) transfers responsibility for educationally related mental health services (formerly AB 3632) to county education agencies (LEAs) November, Constitutional Amendment - Proposition 30 25

2011 REALIGNMENT Also realigned –Drug Medi-Cal –Women’s and Children Residential Treatment Services and –Drug Court A Realignment Behavioral Health Subaccount was created, funded through sales tax revenue distributed to the counties 26

DRUG MEDI-CAL REALIGNMENT Substance Use Disorder (SUD) Services remain the same as outlined before EXCEPT for those counties that opt-in to the recently approved Drug Medi-Cal Organized Delivery System (DMC-ODS) 1115 Demonstration Waiver 27

2011 REALIGNMENT There are no separate accounts for the realigned programs within the Behavioral Health Subaccount – all BH realigned programs must be funded through this subaccount Realignment “superstructure” language –Created separate accounts between the Support Services (Health and Human Services) and Law Enforcement Service Accounts 28

2011 REALIGNMENT Any Medi-Cal beneficiary (adults and children) who meets medical necessary criteria is entitled to receive SMHS –DSM Diagnosis (with some exceptions) –Significant impairment or probability of significant deterioration in an important area of life 29

2011 REALIGNMENT The Early and Periodic Screening, Diagnosis and Treatment (EPSDT) benefit provides comprehensive and preventive health care services for children under 21 years of age who are enrolled in Medi-Cal – access to all necessary services to “correct or ameliorate defects, physical and mental illnesses and conditions discovered by the screening services” 30

1915(b) WAIVER Services covered under the waiver and SPA: –Outpatient (Assessment, plan development, individual or group therapy, collateral) –Targeted Case Management –Medication Support –Day Treatment Intensive and Rehabilitative –Crisis Intervention –Crisis Stabilization –Psychiatric Hospitalization 31

ADDITIONAL SERVICES For children and youth: Therapeutic Behavioral Services (Emily Q v Bonta) Intensive Care Coordination and Intensive Home Based Services (Katie A v Bonta) Therapeutic Foster Care – In process (Katie A v Bonta) 32

1915(b) Waiver Applies to PIHP – Prepaid Inpatient Health Plan (PIHPs) – which means (1) Provides medical services to enrollees under contract with the State agency; (2) Provides, arranges for, or otherwise has responsibility for the provision of any inpatient hospital services; and (3) Does not have a comprehensive risk contract 33

1915(b) WAIVER Waives sections of 1902 Social Security Act: –State wideness –Comparability 34

2011 REALIGNMENT Section of Government Code regarding the Behavioral Health Subaccount: The funds shall be allocated pursuant to schedules provided by the Department of Finance created in accordance with any criteria contained in this section and in consultation with appropriate state departments and the California State Association of Counties 35

2011 REALIGNMENT Funds distributed from the Behavioral Health Subaccount must be used to provide Medi-Cal specialty mental health services and DMC and other drug services per Section 30025(f)(16)(B) 36

2011 REALIGNMENT Base not set yet due to changing landscape and no historical data: Affordable Care Act Katie A Implementation Healthy Families Transition (December, 2012) Drug Medi-Cal 37

2011 REALIGNMENT Since 2011 Realignment, factors applied to growth: First call on growth is to entitlement programs to cover prior year Medi-Cal claims True-up of the counties over their BH Subaccount prior year amounts Provide a minimum of $100,000 to counties that have not participated in DMC (FY 13/14) Remaining 13/14 growth was distributed based on the number of Medi-Cal beneficiaries in each county after fully funding 38

GOAL FOR TODAY IDENTIFY RELEVANT FACTORS USED TO DETERMINE THE ALLOCATION METHODOLOGY FOR DISTRIBUTING GROWTH FUNDS Keep in mind: Growth is variable and Counties need predictability for planning 39

Please direct comments or questions to: 40