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Consider authorizing participation in the California State Department of Health Care Services Organized Delivery System pilot for substance use treatment services under Medi-Cal; and Consider delegating authority to the County Administrator to execute the State-County Intergovernmental Agreement and any State associated certification documents, and the master agreement with Partnership Health Plan to oversee the delivery of services under the Organized Delivery System once finalized in concurrence with County Counsel
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Published Notice Required? Yes ___ No _X _
Public Hearing Required? Yes ___ No _X _
DEPARTMENTAL RECOMMENDATION:
The Department of Health and Social Services recommends that the Board consider authorizing participation in in the California State Department of Health Care Services Organized Delivery System pilot for substance use treatment services under Medi-Cal; and consider authorizing the County Administrator to execute the State-County Intergovernmental Agreement and any State associated certification documents, and the master agreement with Partnership Health Plan to oversee the delivery of services under the Organized Delivery System once finalized in concurrence with County Counsel.
SUMMARY:
The State of California Department of Health Care Services (DHCS) included in its 2015 Medi-Cal State Plan a pilot for the implementation of a new Organized Delivery System (ODS) for substance use disorder treatment. The ODS provides a framework for expanded federal financial participation and requires a continuum of care modeled after the American Society of Addiction Medicine (ASAM) criteria. The approach creates a comprehensive service benefit designed to better meet the needs of individuals with substance use disorders and anticipates services to be better integrated with physical and mental health care services.
Solano County currently participates in the standard State Drug Medi-Cal funded program. This program is a limited service benefit with variable degrees of quality, due to its historically limited funding and less robust oversight infrastructure. The State Plan Drug Medi-Cal benefits are limited: outpatient and intensive outpatient treatment (primarily group services as a modality); residential treatment for perinatal women; naltrexone treatment; methadone treatment; and hospital detoxification. The ODS includes all State Plan services and expands federal reimbursement for multiple levels of residential treatment, early intervention services, two levels of intensive outpatient services, case management, medication assisted treatment (buprenorphine, disulfiram, and naloxone), withdrawal management, recovery services, and physician consultation. Under the existing State Drug Medi-Cal program, Solano County funds services that are not reimbursable by Medi-Cal with the Substance Abuse Block Grant (SABG), 2011 Realignment, and County General Fund. Services include (a) residential treatment for adults who are non-perinatal, (b) individual counseling, and (c) case management support. Case management support can include assistance in accessing other needed services such as medical, mental health, educational, social, vocational, rehabilitative, or other community services. All these services will be Medi-Cal reimbursable as part of the ODS.
Beginning July 1, 2020, H&SS recommends that Solano County enter into a contract with DHCS to participate in the ODS, and simultaneously, for the implementation of the ODS, enter into a master agreement with Partnership Health Plan (PHP) in which the County delegates and oversees the implementation of related federal and State requirements. PHP has developed this approach to include Solano and six other PHP counties as a strategy to promote counties’ participation in the ODS. PHP believes the program to be fiscally sound because substance use treatment is known to positively impact other high cost healthcare services and outcomes. PHP will operate a 24-hour phone line for access to services (as it currently does for access to mild/moderate mental health services for PHP members); and the County’s existing Behavioral Health Access line will refer clients to this line for triage and authorization to services. While most individuals receiving public behavioral health services are Medi-Cal eligible, Solano County has historically served a relatively small number of “safety net” clients who are uninsured and not Medi-Cal eligible. To eliminate the need for the County to create a duplicative system for this smaller population, PHP will include these clients in their approach. These services will be funded by the County’s Substance Abuse Block Grant and will be reported separately to Solano County to prevent claiming to DHCS.
Because the ODS is included in the State Plan, it comes with federally-required managed care. PHP will implement the rigorous quality monitoring functions federally-associated with discernment of what is considered a managed care benefit. As a County subcontractor, PHP will be expected to fulfill the contracted obligations associated with implementation, and the County will collaborate and provide oversight to ensure compliance. Upon implementation, the County intends to sunset its existing Drug Medi-Cal provider contracts; PHP has contracts directly with the certified providers to begin services on July 1, 2020. The additional federal funds allow for the PHP contracts with providers to reimburse for services at significantly higher rates than the current structure provides, thereby strengthening the fiscal health of the contracted community-based agencies and improving the quality of care in those programs.
FINANCIAL IMPACT:
In collaboration with DHCS for over two years, PHP developed a fiscal model for each participating county to estimate the yearly costs for the ODS. The model uses Medi-Cal enrollment data to make assumptions on beneficiaries who have a substance abuse issue who will access services in the ODS. Assumptions on types and frequency of services utilized is based on experiences in Marin, Riverside, and San Mateo with implementing the ODS in their counties and available county data for Narcotic Treatment Programs (NTP). Service providers will be reimbursed based on a negotiated cost per unit of service provided. The model uses the projected cost per unit and estimated number of services to determine the cost for each service category.
The model assumes that 960 clients will access the system for an average of 6 months resulting in 5,760 client months. If a client uses a service in a month, PHP will invoice the County an interim per utilizer per month (PUPM) rate. Based on the projected number of clients and program cost for Solano County beneficiaries, the interim PUPM is $1,143.68. An additional $76.63 PUPM (or 6.7% of projected costs) will be paid to PHP to provide administrative and quality assurance activities for the system.
Federal, State, and local funding will provide reimbursement for services delivered in the ODS. There are financial risks associated with this model as the federal and State shares are driven by the actual type of service provided and the beneficiary’s Medi-Cal aid code. Actual type of service and beneficiary aid codes could vary from PHP’s assumptions. Counties will pay PHP the interim PUPM, but the federal and State reimbursement will come to the County from DHCS. If reimbursement from DHCS is not timely, cash flow for the County will be impacted as the interim PUPM will still be paid to PHP monthly.
PHP, the County, and DHCS will participate in a yearly cost reconciliation process. Final PUPM payments will based on the actual cost of the program, number of utilizers, and beneficiary aid codes. If the final PUPM is higher than the interim PUPM, the County will make additional payments to PHP. DHCS will reimburse the County the federal and State share of the additional payments based on PUPM payments, encounter data, and actual allowable costs. If the final PUPM is lower, the County will need to recoup funds from PHP and return the federal and State share overpayments.
Under the model, the County’s estimated share of costs in the proposed model is $1,211,254 and $441,369 for administrative and quality assurance activities, for a total of $1,431,939. As the model is based on several assumptions, any change in the number of services, clients, or Medi-Cal status of participants can impact the County’s share of costs for ODS services. 2011 Realignment will be used to fund the local share to the extent it is available. 2011 Realignment is used to fund both mental health and substance abuse services and is based on sales tax revenues. Depending on economic conditions and demands for services, the availability of 2011 Realignment may fluctuate.
Medi-Cal only provides reimbursement for direct services and does not reimburse for residential room and board costs. PHP has negotiated these costs with the provider as part of their cost per unit. PHP will invoice the County the room and board share of residential treatment. Federal Substance Abuse Block Grant (SABG) will provide funding for this cost as well as for indigent services. County staff whose functions will change with the implementation of the ODS will no longer be partially funded with SABG due to SABG funding restrictions. Many of the staff will be absorbed into the Mental Health Plan and funding for those positions is being explored.
DISCUSSION:
When counties first implemented the ODS, PHP was approached by several of its member counties. While these counties wanted to take advantage of the expanded benefit, they did not have the resources or case volume to support the infrastructure. As a PHP county, this gave Solano County a unique opportunity to leverage PHP’s managed care infrastructure in a regional approach that spans seven participating counties - Shasta, Modoc, Siskiyou, Mendocino, Lassen, Humboldt, and Solano. Neighboring counties - Contra Costa, Marin, Sonoma, Napa, Yolo, Alameda, and Sacramento have also implemented the ODS within their County infrastructure. The PHP Implementation Plan entitled “Drug Medi-Cal Organized Delivery System Waiver Implementation Plan for Regional Model encompassing Humboldt, Lassen, Mendocino, Modoc, Shasta, Siskiyou and Solano, and Trinity Counties” has been approved and can be viewed on the DHCS ODS website. Trinity County has recently decided not to participate in the ODS.
The ODS is implemented in a managed care framework under federal regulations. Participating counties are responsible to ensure that all Medi-Cal beneficiaries living in their county have timely access to the services and that the providers are qualified and trained in evidence-based practices. The 2016 Medicaid Managed Care Final Rule includes requirements for network adequacy, quality assurance, performance improvement, beneficiary protections, and program integrity. This is similar to the County’s role in delivering mental health services under Medi-Cal Mental Health Plan.
With more services that can draw down federal funds, some repurposing of SABG funds can be implemented. Other counties are using these funds to create and expand sober housing that is so critical for treatment to be successful, covering the room and board cost that are separate and in addition to residential drug treatment, and expanding prevention programs. As previously, SABG will also be used to fund services for indigent clients who do not have Medi-Cal.
ALTERNATIVES:
The Board could decide not to approve participation in the ODS and the subsequent contract with Partnership Health Plan. However, this is not recommended because this is an opportunity to improve the service array and reimbursement available for substance use disorder treatment. Furthermore, without implementation of the ODS, local substance use disorder providers are unlikely to be able to sustain operations on the current rate structures. All neighboring counties have implemented the ODS, and not participating would put Solano at a competitive disadvantage with higher rates of payment in the region.
OTHER AGENCY INVOLVEMENT:
There are no other agencies involved with this item.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION