Chapter 8.9 - Transition of Community-Based Medi-Cal Mental Health

California Welfare and Institutions Code — §§ 14700-14727

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Sections (35)

Added by Stats. 2011, Ch. 29, Sec. 20. (AB 102) Effective June 29, 2011. Conditionally inoperative as provided in Section 14721.

(a)(1) It is the intent of the Legislature to transfer to the State Department of Health Care Services, no later than July 1, 2012, the state administration of Medi-Cal specialty mental health managed care, the Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) Program, and applicable functions related to federal Medicaid requirements, from the State Department of Mental Health.

(2)It is further the intent of the Legislature for this transfer to occur in an efficient and effective manner, with no unintended interruptions in service delivery to clients and families. This transfer is intended to do all of the following:

(A)Improve access to culturally appropriate community-based mental health services, including a focus on client recovery, social rehabilitation services, and peer support.

(B)Effectively integrate the financing of services, including the receipt of federal funds, to more effectively provide services.

(C)Improve state accountabilities and outcomes.

(D)Provide focused, high-level leadership for behavioral health services within the state administrative structure.

(b)Effective July 1, 2012, the state administrative functions for the operation of Medi-Cal specialty mental health managed care, the EPSDT Program, and applicable functions related to federal Medicaid requirements, that were

performed by the State Department of Mental Health shall be transferred to the State Department of Health Care Services. This state administrative transfer shall conform to a state administrative transition plan provided to the fiscal and applicable policy committees of the Legislature as soon as feasible, but no later than October 1, 2011. This state administrative transition plan may also be updated by the Governor and provided to all fiscal and applicable policy committees of the Legislature upon its completion, but no later than May 15, 2012.

(c)All regulations and orders concerning Medi-Cal specialty mental health managed care and the EPSDT Program shall remain in effect and shall be fully enforceable unless and until readopted, amended, or repealed by the State Department of Health Care Services, or until they expire by their own terms.

§ 14701

Amended by Stats. 2014, Ch. 71, Sec. 200. (SB 1304) Effective January 1, 2015. Conditionally inoperative as provided in Section 14721.

(a)The State Department of Health Care Services, in collaboration with the State Department of State Hospitals and the California Health and Human Services Agency, shall create a state administrative and programmatic transition plan, either as one comprehensive transition plan or separately, to guide the transfer of the Medi-Cal specialty mental health managed care and the EPSDT Program to the State Department of Health Care Services effective July 1, 2012.

(b)(1) Commencing no later than July 15, 2011, the State Department of Health Care Services, together with the State Department of State Hospitals, shall convene a series of stakeholder meetings and forums to receive input from clients, family

members, providers, counties, and representatives of the Legislature concerning the transition and transfer of Medi-Cal specialty mental health managed care and the EPSDT Program. This consultation shall inform the creation of a state administrative transition plan and a programmatic transition plan that shall include, but is not limited to, the following components:

(A) The plan shall ensure that it is developed in a way that continues access and quality of service during and immediately after the transition, preventing any disruption of services to clients and family members, providers and counties, and others affected by this transition.

(B) A detailed description of the state administrative functions currently performed by the State Department of Mental Health regarding Medi-Cal specialty mental health managed care and the EPSDT Program.

(C) Explanations of the operational steps, timelines, and key milestones for determining when and how each function or program will be transferred. These explanations shall also be developed for the transition of positions and staff serving Medi-Cal specialty mental health managed care and the EPSDT Program, and how these will relate to, and align with, positions at the State Department of Health Care Services. The State Department of Health Care Services and the California Health and Human Services Agency shall consult with the Department of Human Resources in developing this aspect of the transition plan.

(D) A list of any planned or proposed changes or efficiencies in how the functions will be performed, including the anticipated fiscal and programmatic impacts of the changes.

(E) A detailed organization chart that

reflects the planned staffing at the State Department of Health Care Services in light of the requirements of subparagraphs (A) to (C), inclusive, and includes focused, high-level leadership for behavioral health issues.

(F) A description of how stakeholders were included in the various phases of the planning process to formulate the transition plans and a description of how their feedback will be taken into consideration after transition activities are underway.

(2)The State Department of Health Care Services, together with the State Department of State Hospitals and the California Health and Human Services Agency, shall convene and consult with stakeholders at least twice following production of a draft of the transition plans and before submission of transition plans to the Legislature. Continued consultation with stakeholders shall occur in accordance with the requirement in

subparagraph (F) of paragraph (1).

§ 14702

Added by Stats. 2012, Ch. 34, Sec. 245. (SB 1009) Effective June 27, 2012. Conditionally inoperative as provided in Section 14721.

For purposes of this chapter, the following definitions shall apply:

(a)“Department” means the State Department of Health Care Services.

(b)“Director” means the Director of Health Care Services.

§ 14703

Added by Stats. 2012, Ch. 34, Sec. 246. (SB 1009) Effective June 27, 2012. Conditionally inoperative as provided in Section 14721.

Contracts entered into pursuant to this chapter shall be exempt from the requirements of Chapter 1 (commencing with Section 10100) and Chapter 2 (commencing with section 10290) of Part 2 of Division 2 of the Public Contract Code.

§ 14704

Added by Stats. 2012, Ch. 34, Sec. 247. (SB 1009) Effective June 27, 2012. Conditionally inoperative as provided in Section 14721.

A regulation or order concerning Medi-Cal specialty mental health services adopted by the State Department of Mental Health pursuant to Division 5 (commencing with Section 5000), as in effect preceding the effective date of this section, shall remain in effect and shall be fully enforceable, unless and until the readoption, amendment, or repeal of the regulation or order by the department, or until it expires by its own terms.

§ 14705

Amended by Stats. 2024, Ch. 40, Sec. 73. (SB 159) Effective June 29, 2024. Operative January 1, 2025, pursuant to Sec. 85 of Stats. 2024, Ch. 40. Conditionally inoperative as provided in Section 14721.

(a)(1) This section shall apply to specialty mental health services provided by counties to Medi-Cal eligible individuals. Counties shall provide services to Medi-Cal beneficiaries and seek the maximum federal reimbursement possible for services rendered to persons with mental illnesses.

(2)To the extent permitted under federal law and Section 5892, funds distributed to the counties from the Mental Health Subaccount, the Mental Health Equity Subaccount, and the Vehicle License Collection Account of the Local Revenue Fund, funds from the Mental Health Account and the Behavioral Health Subaccount of the Local Revenue Fund 2011, funds from the Behavioral Health Services Fund, and any other funds from which the Controller makes distributions to

the counties may be used to pay for services provided by these funds that the counties can then certify as public expenditures in order to achieve the maximum federal reimbursement possible for services pursuant to this chapter.

(3)The standards and guidelines for the administration of specialty mental health services to Medi-Cal eligible persons shall be consistent with federal Medicaid requirements, as specified in the approved Medicaid state plan and waivers to ensure full and timely federal reimbursement to counties for services that are rendered and claimed consistent with federal Medicaid requirements.

(b)With regard to each person receiving specialty mental health services from a mental health plan, the mental health plan shall verify whether the person is Medi-Cal eligible and, if determined to be Medi-Cal eligible, the person shall be referred when appropriate to a

facility, clinic, or program that is certified for Medi-Cal reimbursement.

(c)With regard to county operated facilities, clinics, or programs for which claims are submitted to the department for Medi-Cal reimbursement for specialty mental health services to Medi-Cal eligible individuals, the county shall ensure that all requirements necessary for Medi-Cal reimbursement for these services are complied with, including, but not limited to, utilization review and the submission of yearend cost reports by December 31 following the close of the fiscal year.

(d)Counties shall certify to the state that they have incurred public expenditures prior to requesting the reimbursement of federal funds.

§ 14705.5

Added by renumbering Section 5719 by Stats. 2012, Ch. 34, Sec. 153. (SB 1009) Effective June 27, 2012. Operative July 1, 2012, by Sec. 254 of Ch. 34. Conditionally inoperative as provided in Section 14721.

Each public or private facility or agency providing local specialty mental health services pursuant to a county performance contract plan shall make a written certification within 30 days after a patient is admitted to the facility as a patient or first given services by such a facility or agency, to the local mental health director of the county, stating whether or not each of these patients is presumed to be eligible for

specialty mental health services under the Medi-Cal program.

§ 14705.7

Added by renumbering Section 5716 by Stats. 2012, Ch. 34, Sec. 150. (SB 1009) Effective June 27, 2012. Conditionally inoperative as provided in Section 14721.

Mental health plans may contract with providers on a negotiated net amount basis in the same manner as set forth in Section 5705. Negotiated net amounts or rates shall not be in contracts between the state and mental health plans for specialty mental health services. Reimbursement to mental health plans that have certified public expenditures shall be consistent with

federal Medicaid requirements for calculating upper payment limits, as specified in the approved Medicaid state plan and waivers.

§ 14706

Added by renumbering Section 5722 by Stats. 2012, Ch. 34, Sec. 157. (SB 1009) Effective June 27, 2012. Operative July 1, 2012, by Sec. 254 of Ch. 34. Conditionally inoperative as provided in Section 14721.

(a)The department shall have responsibility for conducting investigations and audits of claims and reimbursements for expenditures for specialty mental health services provided by mental health

plans to Medi-Cal eligible individuals.

(b)The amount of the payment or repayment of federal funds in accordance with audit findings pertaining to

Medi-Cal specialty mental health services shall be determined by the department pursuant to the existing administrative appeals process of the department.

§ 14707

Amended by Stats. 2015, Ch. 455, Sec. 56. (SB 804) Effective January 1, 2016. Conditionally inoperative as provided in Section 14721.

(a)In the case of federal audit exceptions, the department shall follow federal audit appeal processes unless the department, in consultation with the County Behavioral Health Directors Association of California, determines that those appeals are not cost beneficial.

(b)Whenever there is a final federal audit exception against the state resulting from expenditure of federal funds by individual counties, the department may offset federal reimbursement and request the Controller’s office to offset the distribution of funds to the counties from the Mental Health Subaccount, the Mental Health Equity Subaccount, and the Vehicle License Collection Account of the Local Revenue Fund, funds from the Mental Health Account and the

Behavioral Health Subaccount of the Local Revenue Fund 2011, and any other mental health realignment funds from which the Controller makes distributions to the counties by the amount of the exception. The department shall provide evidence to the Controller that the county has been notified of the amount of the audit exception no less than 30 days before the offset is to occur. The department shall involve the appropriate counties in developing responses to any draft federal audit reports that directly impact the county.

§ 14707.5

Repealed (in Sec. 113) and added by Stats. 2023, Ch. 790, Sec. 114. (SB 326) Effective October 12, 2023. Operative January 1, 2025, by its own provisions. Conditionally inoperative as provided in Section 14721.

(a)It is the intent of the Legislature to develop a performance outcome system for Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) mental health services that will improve outcomes at the individual and system levels and will inform fiscal decisionmaking related to the purchase of services.

(b)The State Department of Health Care Services, in collaboration with the California Health and Human Services Agency and in consultation with the Behavioral Health Services Oversight and Accountability Commission, shall create a plan for a performance outcome system for EPSDT mental healthservices

provided to eligible Medi-Cal beneficiaries under the age of 21 pursuant to 42 U.S.C. Section 1396d(a)(4)(B).

(1)(A) Commencing no later than September 1, 2012, the department shall convene a stakeholder advisory committee comprised of representatives of child and youth clients, family members, providers, counties, and the Legislature.

(B)This consultation shall inform the creation of a plan for a performance outcome system for EPSDT mental health services.

(2)In developing a plan for a performance outcomes system for EPSDT mental health services, the department shall consider the following objectives, among others:

(A)High-quality and accessible

EPSDT mental health services for eligible children and youth, consistent with federal law.

(B)Information that improves practice at the individual, program, and system levels.

(C)Minimization of costs by building upon existing resources to the fullest extent possible.

(D)Reliable data that is collected and analyzed in a timely fashion.

(3)At a minimum, the plan for a performance outcome system for EPSDT mental health services shall consider evidence-based models for performance outcome systems, such as the Child and Adolescent Needs and Strengths (CANS), federal requirements, including the review by the External Quality Review Organization (EQRO),

and timelines for implementation at the provider, county, and state levels.

(c)The State Department of Health Care Services shall provide the performance outcomes system plan, including milestones and timelines, for EPSDT mental health services described in subdivision (a) to all fiscal committees and appropriate policy committees of the Legislature no later than October 1, 2013.

(d)The State Department of Health Care Services shall propose how to implement the performance outcomes system plan for EPSDT mental health services described in subdivision (a) no later than January 10, 2014.

(e)(1) (A) Commencing no later than February 1, 2014, the department shall convene a

stakeholder advisory committee comprised of advocates for, and representatives of, child and youth clients, family members, managed care health plans, providers, counties, and the Legislature.

(B) The committee shall develop methods to routinely measure, assess, and communicate program information regarding informing, identifying, screening, assessing, referring, and linking Medi-Cal eligible beneficiaries to mental health services and supports.

(C) The committee shall also review health plan screenings for mental health, health plan referrals to Medi-Cal fee-for-service providers, and health plan referrals to county mental health plans, among others.

(D) The committee shall make recommendations to the department

regarding performance and outcome measures that will contribute to improving timely access to appropriate care for Medi-Cal eligible beneficiaries.

(2)The department shall incorporate into the performance outcomes system established pursuant to this section the screenings and referrals described in this subdivision, including milestones and timelines, and shall provide an updated performance outcomes system plan to all fiscal committees and the appropriate policy committees of the Legislature no later than October 1, 2014.

(3)The department shall propose how to implement the updated performance systems outcome plan described in paragraph (2) no later than January 10, 2015.

(f)This section shall become operative on

January 1, 2025, if amendments to the Mental Health Services Act are approved by the voters at the March 5, 2024, statewide primary election.

§ 14707.7

Added by Stats. 2017, Ch. 550, Sec. 1. (AB 470) Effective January 1, 2018. Conditionally inoperative as provided in Section 14721.

(a)It is the intent of the Legislature to build upon performance outcomes system reports the department has developed pursuant to Section 14707.5 and the Special Terms and Conditions of the Medi-Cal Specialty Mental Health Services Waiver, as approved pursuant to Section 1915(b) of the federal Social Security Act (42 U.S.C. Sec. 1396n(b)), in order to provide data to inform strategies to reduce mental health disparities.

(b)(1) Commencing no later than January 15, 2018, and as needed thereafter, the department shall consult with stakeholders, including, but not limited to, subject-matter experts who represent providers, consumer advocates, consumers, family members, counties, and the Legislature, to inform the updates to

the performance outcomes reports for specialty mental health that the department developed pursuant to Section 14707.5 and the Special Terms and Conditions of the Medi-Cal Specialty Mental Health Services Waiver. The stakeholder consultation shall continuously inform the development of performance outcome and disparities reduction measures.

(2)In building upon the performance outcomes reports for specialty mental health services, the department shall also consider both of the following objectives, among others:

(A)High-quality, culturally and linguistically competent, and accessible specialty mental health services for all eligible beneficiaries, consistent with federal law.

(B)Strategies to reduce mental health disparities.

(3)The performance

outcomes reports for specialty mental health services shall also consider the Special Terms and Conditions of the Medi-Cal Specialty Mental Health Services Waiver, as approved pursuant to Section 1915(b) of the federal Social Security Act (42 U.S.C. Sec. 1396n(b)) and the Medicaid Managed Care Quality Rating System.

(4)In order to identify mental health disparities, at a minimum, the performance outcomes reports for specialty mental health services shall be produced using existing data collected by the state, stratified by both the statewide and county levels in the following areas:

(A)Access, such as timely access to services, including waiting time to assessment and waiting time to first appointment.

(B)Language capacity and language access.

(C)Quality.

(D)Utilization and penetration.

(5)(A) Data required pursuant to paragraph (4) shall be stratified by age, sex, gender identity, race, ethnicity, primary language, sexual orientation, and any other data elements for which there is peer-reviewed evidence to assess performance outcomes related to mental health disparities.

(B)The department shall not report any demographic data under paragraph (4) or this paragraph that would permit identification of individuals.

(6)(A) The department shall publish the performance outcomes reports based on available data for specialty mental health services described in this section on the department’s Internet Web site by December 31, 2018. The

department shall also provide the performance outcomes reports to the Legislature by December 31, 2018.

(B)Commencing January 1, 2019, and annually thereafter, the department shall update the performance outcomes reports for specialty mental health and shall post the updated reports on the department’s Internet Web site.

(7)Commencing January 1, 2019, the department shall consult, as needed, with the stakeholders specified in paragraph (1) to do both of the following:

(A)Incorporate additional components into the performance outcomes reports, including, but not limited to, components concerning the reduction of mental health disparities, such as timely access to services, language access, and quality and utilization measures, relating to mental health services obtained through Medi-Cal managed care plans.

(B)Make recommendations for statewide quality improvement and efforts to reduce mental health disparities based on information reported in the performance outcomes reports.

(8)Upon completion of the activities specified in paragraph (7), the department shall consult with stakeholders on an as-needed basis.

(9)Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this subdivision by means of all-county letters, plan letters, plan or provider bulletins, or similar instructions, without taking regulatory action.

§ 14708

Added by renumbering Section 5720 (as added by Stats. 2011, Ch. 651, Sec. 4) by Stats. 2012, Ch. 34, Sec. 155. (SB 1009) Effective June 27, 2012. Section operative July 1, 2012, by its own provisions. Conditionally inoperative as provided in Section 14721.

(a)For purposes of federal reimbursement to counties that have certified to the state that they have incurred certified public

expenditures, the reimbursement amounts shall be consistent with federal Medicaid requirements for calculating federal upper payment limits, as specified in the approved Medicaid state plan and waivers.

(b)If the reimbursement methodology utilizes federal upper payment limits and the total cost of services exceeds the state maximum rates in effect for the 2011–12 fiscal year, a county may use certified public expenditures to claim the costs of services that exceed the state maximum rates, up to the federal upper payment limits. If a county chooses to claim costs that exceed the state maximum rates with certified public expenditures, the county shall use only local funds, and not state funds, to claim the portion of the costs over the state maximum rates. As a condition of receiving reimbursement up to the federal upper payment limits, a

county shall enter into and maintain an agreement with the department implementing this subdivision.

(c)Notwithstanding this section, in the event that a health facility has entered into a negotiated rate agreement pursuant to Article 2.6 (commencing with Section 14081) of Chapter 7 of Part 4 of Division 9, the facility’s rates shall be governed by that agreement.

(d)This section shall become operative on July 1, 2012.

§ 14709

Added by renumbering Section 5723 by Stats. 2012, Ch. 34, Sec. 158. (SB 1009) Effective June 27, 2012. Operative July 1, 2012, by Sec. 254 of Ch. 34. Conditionally inoperative as provided in Section 14721.

The provisions of subdivision (a) of Section 14000 shall not be construed to prevent providers of specialty mental health services pursuant to this chapter from also being providers of medical assistance mental health services for the purposes of Chapter 7 (commencing with Section 14000).

Clinics providing

Medi-Cal specialty mental health services pursuant to this

chapter shall be required to be certified as a condition to reimbursement for providing those medical assistance mental health services.

§ 14710

Added by renumbering Section 5721 by Stats. 2012, Ch. 34, Sec. 156. (SB 1009) Effective June 27, 2012. Operative July 1, 2012, by Sec. 254 of Ch. 34. Conditionally inoperative as provided in Section 14721.

Except as otherwise provided in this section, in determining the amounts which may be paid, fees paid by persons receiving services or fees paid on behalf of persons receiving services by the federal government, by the Medi-Cal program set forth in Chapter 7 (commencing with Section 14000),

and by other public or private sources, shall be deducted from the costs of providing services. However, a mental health plan may negotiate a contract that permits a specialty mental health care provider to retain unanticipated funds above the budgeted contract amount, provided that the unanticipated revenues are utilized for the specialty mental health services specified in the contract. If a provider is

permitted by contract to retain unanticipated revenues above the budgeted amount, the specialty mental health provider shall specify the services funded by those revenues in the

yearend cost report submitted to the mental health plan. A mental health plan shall not permit the retention of any fees paid by private resources on behalf of Medi-Cal beneficiaries without having those fees deducted from the costs of providing services. Whenever feasible, persons with mental illness who are eligible for

specialty mental health services under the Medi-Cal program shall be treated in a facility approved for reimbursement in that program. General unrestricted or undesignated private charitable donations and contributions made to charitable or nonprofit organizations shall not be considered as “fees paid by persons” or “fees paid on behalf of persons receiving services” under this section and the contributions shall not be applied in determining the amounts to be paid. These unrestricted contributions shall not be used in part or in whole to defray the costs or the allocated costs of the

Medi-Cal program.

§ 14711

Amended by Stats. 2015, Ch. 455, Sec. 57. (SB 804) Effective January 1, 2016. Conditionally inoperative as provided in Section 14721.

(a)The department shall develop, in consultation with the County Behavioral Health Directors Association of California, a reimbursement methodology for use in the Medi-Cal claims processing and interim payment system that maximizes federal funding and utilizes, as much as practicable, federal Medicaid and Medicare reimbursement principles. The department shall work with the federal Centers for Medicare and Medicaid Services in the development of the methodology required by this section.

(b)Reimbursement amounts developed through the methodology required by this section shall be consistent with federal Medicaid requirements and the approved Medicaid state plan and waivers.

(c)Administrative costs shall be claimed separately in a manner consistent with federal Medicaid requirements and the approved Medicaid state plan and waivers and shall be limited to 15 percent of the total actual cost of direct client services.

(d)The cost of performing quality assurance and utilization review activities shall be reimbursed separately and shall not be included in administrative cost.

(e)The reimbursement methodology established pursuant to this section shall be based upon certified public expenditures, which encourage economy and efficiency in service delivery.

(f)The reimbursement amounts established for direct client services pursuant to this section shall be based on increments of time for all noninpatient services.

(g)The reimbursement methodology shall not be implemented until it has received any necessary federal approvals.

(h)This section shall become operative on July 1, 2012.

§ 14712

Amended by Stats. 2019, Ch. 465, Sec. 11. (AB 1642) Effective January 1, 2020. Conditionally inoperative as provided in Section 14721.

(a)Notwithstanding any other state law, the department shall implement managed mental health care for Medi-Cal beneficiaries through contracts with mental health plans. Mental health plans may include individual counties, counties acting jointly, or an organization or nongovernmental entity determined by the department to meet mental health plan standards. A contract may be exclusive and may be awarded on a geographic basis.

(b)Two or more counties acting jointly may agree to deliver or subcontract for the delivery of specialty mental health services subject to the approval by the department. The agreement may encompass all or any portion of the specialty mental health services provided

pursuant to this chapter. This agreement shall not relieve the individual counties of fiscal responsibility for providing these services. Any agreement between counties shall delineate each county’s responsibilities and fiscal liability for overpayments.

(c)(1) The department shall contract with a county or counties acting jointly for the delivery of specialty mental health services to each county’s eligible Medi-Cal beneficiary population. If a county decides not to contract with the department, does not renew its contract, or is unable to meet the standards set by the department, the county shall inform the department of this decision in writing.

(2)If the county is unwilling to contract for the delivery of specialty mental health services, the department shall

ensure that specialty mental health services are provided to Medi-Cal

beneficiaries.

(3)If the department or county determines that the county is unable to adequately provide specialty mental health services, or that the county does not meet the standards of a mental health plan, the department shall ensure that specialty mental health services are provided to Medi-Cal beneficiaries.

(4)The department may contract with qualifying individual counties, counties acting jointly, or other qualified entities approved by the department for the delivery of specialty mental health services in any county that is unable or unwilling to contract with the department. The county may not subsequently contract to provide specialty mental health services under this chapter unless the department elects to contract with the county.

(d)If a county does not contract with the department or other

department-approved entity to provide specialty mental health services, the department shall work with the Department of Finance and the Controller to sequester funds from the county that is unable or unwilling to contract in accordance with Section 30027.10 of the Government Code.

§ 14713

Amended by Stats. 2019, Ch. 465, Sec. 12. (AB 1642) Effective January 1, 2020. Conditionally inoperative as provided in Section 14721.

(a)The department and mental health plans shall comply with all applicable federal laws, regulations, and the guidelines, standards, and requirements specified in the state plan, waiver, and mental health plan contract, and, except as provided in this chapter, all applicable state statutes and regulations.

(b)If the department determines that a mental health plan has failed to comply with the requirements of Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), Chapter 8.8 (commencing with Section 14600), or this chapter, the department may impose sanctions and plans of correction pursuant to Section

14197.7.

(c)If federal requirements that affect this chapter are changed, it is the intent of the Legislature that state requirements be revised to comply with those changes.

§ 14714

Amended by Stats. 2022, Ch. 402, Sec. 1. (AB 1051) Effective January 1, 2023. Conditionally inoperative as provided in Section 14721.

(a)(1) Except as otherwise specified in this chapter, a contract entered into pursuant to this chapter shall include a provision that the mental health plan contractor shall bear the financial risk for the cost of providing medically necessary specialty mental health services to Medi-Cal beneficiaries.

(2)If the mental health plan is not administered by a county, the mental health plan shall not transfer the obligation for any specialty mental health services to Medi-Cal beneficiaries to the county. The mental health plan may purchase services from the county. The mental health plan shall establish mutually agreed-upon protocols with the county that clearly establish conditions

under which beneficiaries may obtain non-Medi-Cal reimbursable services from the county. Additionally, the plan shall establish mutually agreed-upon protocols with the county for the conditions of transfer of beneficiaries who have lost Medi-Cal eligibility to the county for care under Part 2 (commencing with Section 5600), Part 3 (commencing with Section 5800), and Part 4 (commencing with Section 5850) of Division 5.

(3)The mental health plan shall be financially responsible for ensuring access and a minimum required scope of benefits and services, consistent with state and federal requirements, to Medi-Cal beneficiaries who are residents of that county regardless of where the beneficiary resides, except as provided for in Section 14717.1 or 14717.2. The department shall require that the same definition of medical necessity be used, and the

minimum scope of benefits offered by each mental health plan be the same, except to the extent that prior federal approval is received and is consistent with state and federal laws.

(b)(1) Any contract entered into pursuant to this chapter may be renewed if the mental health plan continues to meet the requirements of this chapter, regulations promulgated pursuant to this chapter, and the terms and conditions of the contract. Failure to meet these requirements shall be cause for nonrenewal of the contract. The department may base the decision to renew on timely completion of a mutually agreed-upon plan of correction of any deficiencies, submissions of required information in a timely manner, or other conditions of the contract.

(2)If the contract is not

renewed based on the reasons specified in paragraph (1), the department shall notify the Department of Finance, the fiscal and policy committees of the Legislature, and the Controller of the amounts to be sequestered from the Mental Health Subaccount, the Mental Health Equity Account, and the Vehicle License Fee Collection Account of the Local Revenue Fund and the Mental Health Account and the Behavioral Health Subaccount of the Local Revenue Fund 2011, and the Controller shall sequester those funds in the Behavioral Health Subaccount pursuant to Section 30027.10 of the Government Code. Upon this sequestration, the department shall use the funds in accordance with Section 30027.10 of the Government Code.

(c)(1) The obligations of the mental health plan shall be changed only by contract or contract amendment.

(2)Notwithstanding paragraph (1), the mental health plan shall comply with federal and state requirements, including the applicable sections of the state plan and waiver.

(3)A change may be made during a contract term or at the time of contract renewal, when there is a change in obligations required by federal or state law, or when required by a change in the interpretation or implementation of any law or regulation.

(4)To the extent permitted by federal law, either the department or the mental health plan may request that contract negotiations be reopened during the course of a contract due to substantial changes in the cost of covered benefits that result from an unanticipated event.

(d)The department shall immediately terminate a contract when the director finds that there is an immediate threat to the health and safety of Medi-Cal beneficiaries. Termination of the contract for other reasons shall be subject to reasonable notice of the department’s intent to take that action and notification to affected beneficiaries. The plan may request a hearing by the Office of Administrative Hearings and Appeals.

(e)A mental health plan may terminate its contract in accordance with the contract. The mental health plan shall provide written notice to the department at least 180 days before the termination or nonrenewal of the contract.

(f)Upon the request of the director, the Director of the Department of

Managed Health Care may exempt a mental health plan from the Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code). These exemptions may be subject to conditions the director deems appropriate. This section does not impair or diminish the authority of the Director of the Department of Managed Health Care under the Knox-Keene Health Care Service Plan Act of 1975, nor does it reduce or otherwise limit the obligation of a mental health plan contractor licensed as a health care service plan to comply with the requirements of the Knox-Keene Health Care Service Plan Act of 1975, and the rules of the Director of the Department of Managed Health Care promulgated under the Knox-Keene Health Care Service Plan Act of 1975. The director, in consultation with the Director of the Department of Managed Health Care, shall analyze

the

appropriateness of licensure or application of applicable standards of the Knox-Keene Health Care Service Plan Act of 1975.

(g)The department shall provide oversight to the mental health plans to ensure quality, access, cost efficiency, and compliance with data and reporting requirements. At a minimum, the department shall monitor, through a method independent of any agency of the mental health plan contractor, the level and quality of services provided, expenditures pursuant to the contract, and conformity with federal and state law.

(h)County employees implementing or administering a mental health plan act in a discretionary capacity when they determine whether or not to admit a person for care or to provide any level of care pursuant to this chapter.

(i)If a county discontinues operations as the mental health plan, the department shall approve any new mental health plan. The new mental health plan shall give reasonable consideration to affiliation with nonprofit community mental health agencies that were under contract with the county and that meet the mental health plan’s quality and cost efficiency standards.

(j)This chapter does not modify, alter, or increase the obligations of counties as otherwise limited and defined in Chapter 3 (commencing with Section 5700) of Part 2 of Division 5. The county’s maximum obligation for services to persons ineligible for Medi-Cal shall be no more than the amount of funds remaining in the mental health subaccount pursuant to Sections 17600, 17601, 17604, 17605, and 17609 after fulfilling

the Medi-Cal contract

obligations.

§ 14715

Amended by Stats. 2019, Ch. 465, Sec. 13. (AB 1642) Effective January 1, 2020. Conditionally inoperative as provided in Section 14721.

(a)(1) The department shall require any mental health plan that provides Medi-Cal specialty mental health services to enter into a memorandum of understanding with any Medi-Cal managed care plan that provides Medi-Cal health services to some of the same Medi-Cal recipients served by the mental health plan. The memorandum of understanding shall comply with applicable regulations.

(2)For purposes of this section, a “Medi-Cal managed care plan” means any prepaid health plan or Medi-Cal managed care plan contracting with the department to provide services to enrolled Medi-Cal beneficiaries under Chapter 7 (commencing with Section 14000) or Chapter 8

(commencing with Section 14200), or Part 4 (commencing with Section 101525) of Division 101 of the Health and Safety Code.

(b)The department shall require the memorandum of understanding to include both of the following:

(1)A process or entity to be designated by the local mental health plan to receive notice of actions, denials, or deferrals from the Medi-Cal managed care plan, and to provide any additional information requested in the deferral notice as necessary for a medical necessity determination.

(2)A requirement that the local mental health plan respond by the close of the business day following the day the deferral notice is received.

(c)This

section shall apply to any contracts entered into, amended, modified, extended, or renewed on or after January 1, 2001.

§ 14716

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§ 14717

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§ 14717.1

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§ 14717.2

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§ 14717.25