|Budget Issue:||Transfer administration of behavioral health programs to the Department of Health Care Services|
|Program:||Department of Mental Health|
|Finding or Recommendation:||Recommend that the administration’s proposal to transfer administrative responsibility for EPSDT, MHMC and Drug Medi-Cal from DMH and DADP to DHCS in 2011-12 be referred to policy committees. Recommend that the Legislature reject the administration’s proposed BBL that would provide DOF with authority to transfer both staff and expenditure authority between appropriations for DADP, DMH, and DHCS just ten days after giving the Legislature notification.|
The budget plan proposes to realign the Drug Medi-Cal Program administered by the Department of Alcohol and Drug Programs (DADP) and two community mental health services programs administered by the Department of Mental Health (DMH) — the Early and Periodic Screening Diagnosis and Treatment (EPSDT) Program, and Mental Health Managed Care (MHMC). All three of these programs are components of the state’s Medicaid Program known as Medi-Cal. These three programs are commonly referred to as “carve-outs” because they are not a part of the Medi-Cal Program administered by the Department of Health Care services (DHCS) which provides medical services such as doctor visits and inpatient hospital care to mainly low-income persons. The administration contends that while the state will continue to have important oversight functions and administrative responsibilities, it is no longer essential to have separate departments administer the realigned programs.
Some Details Will Be Provided in the Governor’s 2012-13 Budget Proposal. After administrative responsibility for EPSDT and MHMC are transferred from DMH to DHCS in 2011-12, DMH will continue to have a few remaining community services mental health administrative functions to perform. The 2012-13 Governor’s budget plan will contain a proposal to transfer these remaining functions to some other entity and to create a new Department of State Hospitals, thereby eliminating DMH’s remaining administrative functions.
Similar to the DMH scenario described above, after administrative responsibility for the Drug Medi-Cal Program is transferred from DADP to DHCS, DADP will continue to administer some federal grants, licensing, prevention and counselor certification programs. The budget plan proposes to transfer these functions to another unspecified department and the details for this transition will be provided with the Governor’s 2012-13 budget plan.
The Governor’s proposal has merit because it has the potential to streamline administrative functions and improve service delivery. However, few details have been provided on how the transition would be implemented.
Benefits Could Be Realized. Potential benefits from implementation of this proposal include the following:
Whether the potential benefits identified above and others are realized would depend largely on how realignment and departmental eliminations are implemented.
Details Are Lacking. The administration has not provided a detailed plan for how the resources for administering EPSDT, MHMC and Drug Medi-Cal would be transferredfrom DMH and DADP to DHCS. However the administration has requested Budget Bill Language (BBL) to provide DHCS with the flexibility to implement the reorganization proposal. The proposed BBL would give the Department of Finance (DOF) authority to transfer both staff and expenditure authority between appropriations for DADP, DMH, and DHCS. Prior to authorizing such a transfer DOF would give the Legislature ten days notification. The notification would include the reasons for the transfer, the fiscal assumptions used in calculating the transfer amount, and any potential fiscal effects on the program from which funds are being transferred.
In our view, before going forward with the Governor’s proposal, the Legislature should request additional information from the administration. Specifically, the Legislature should require the administration to provide a transition plan before it authorizes the administration to move forward. At a minimum, the transition plan should answer the following questions:
Policy Implications Should Be Examined. The Governor’s proposal raises a number of policy issues. For example the Legislature may wish to examine whether implementation of the transition proposal would have any impact on the continuity of care provided to EPSDT, MHMC and Drug Medi-Cal beneficiaries. The Legislature may also wish to examine whether the proposal would have any impact on access to care or quality of care. The proposal also creates an opportunity to establish baseline performance measures and quality indicators that could measure whether integration of behavioral health care services with Medi-Cal under DHCS would result in improved integration of services and outcomes. This information could inform future policy decisions. Finally, the proposal should be examined in the context of how it fits in with the state’s plan to implement federal health care reform.
We recommend that the administration’s proposal to transfer administrative responsibility for EPSDT, MHMC and Drug Medi-Cal from DMH and DADP to DHCS in 2011-12 be referred to the appropriate policy committees for further consideration. We further recommend that the Legislature reject the administration’s proposed BBL that would provide DOF with authority to transfer both staff and expenditure authority between appropriations for DADP, DMH, and DHCS just ten days after giving the Legislature notification. However, if the Legislature does approve BBL to provide such transfer authority, we recommend it modify the proposed BBL to require a comprehensive transition plan and at least a 45-day notification period in order to give the Legislature sufficient time to consider the plan.