California Senate Bill SB804 Introduced / Bill

 BILL NUMBER: SB 804INTRODUCED BILL TEXT INTRODUCED BY Committee on Health (Senators Hernandez (Chair), Hall, Mitchell, Monning, Nguyen, Nielsen, Pan, Roth, and Wolk) MARCH 26, 2015 An act to amend Sections 11801, 11830.1, 11835, 103577, 104151, and 128456 of, and to repeal Sections 130316 and 130317 of, the Health and Safety Code, and to amend Sections 4033, 4040, 4095, 4096.5, 5326.95, 5400, 5585.22, 5601, 5611, 5664, 5701.1, 5701.2, 5717, 5750, 5845, 5847, 5848, 5848.5, 5892, 5899, 5902, 11467, 11469, 14021.4, 14124.24, 14251, 14499.71, 14707, 14711, 14717, 14718, 14725, 15204.8, 15847.7, and 17604 of the Welfare and Institutions Code, relating to health. LEGISLATIVE COUNSEL'S DIGEST SB 804, as introduced, Committee on Health. Health. (1) Existing law regulates provision of programs and services relating to mental health and alcohol and drug abuse at the state and local levels and serving various populations. These provisions contain various obsolete references to the California Mental Health Directors Association, the County Alcohol and Drug Program Administrators' Association of California, and similar entities. This bill would delete those obsolete references and would refer instead to the County Behavioral Health Directors Association of California, and would make additional conforming changes. (2) Existing law requires the State Department of Health Care Services to provide, no later than January 10 and concurrently with the May Revision of the annual budget, the fiscal committees of the Legislature with an estimate package for the Every Woman Counts Program for early detection of breast and cervical cancer. This bill would require the department additionally to provide to the fiscal and appropriate policy committees of the Legislature quarterly updates on caseload, estimated expenditures, and related program monitoring data for the Every Woman Counts Program, as prescribed. The bill would declare the intent of the Legislature that these provisions supersede similar reporting requirements imposed on the State Department of Public Health by specified uncodified legislation. (3) Existing law, for purposes of Medi-Cal provisions relating to entities that provide payment for certain covered services on behalf of eligible persons, enrollees or subscribers, includes a nonprofit hospital service plan within the descriptions of a fiscal intermediary, a prepaid health plan, and group health coverage. This bill would delete a nonprofit hospital service plan from inclusion as a fiscal intermediary, prepaid health plan, or group health coverage, under the above circumstances. (4) Existing law establishes the State Department of Public Health and sets forth its powers and duties, including, but not limited to, duties as State Registrar relating to the uniform administration of provisions relating to vital records and health statistics. Existing law requires the State Registrar, local registrar, or county recorder to, upon request and payment of the required fee, supply to an applicant a certified copy of the record of a birth, fetal death, death, marriage, or marriage dissolution registered with the official. Existing law authorizes the issuance of certain records without payment of the fee. Existing law, on and after July 1, 2015, requires each local registrar or county recorder to issue, without a fee, a certified record of live birth to any person who can verify his or her status as a homeless person or a homeless child or youth, as defined. This bill would specify that no issuance or other related fee would be changed under the above circumstances. (5) Under the Health Insurance Portability and Accountability Implementation Act of 2001, the Office of HIPAA Implementation assumes statewide leadership, coordination, policy formulation, direction, and oversight responsibilities for HIPAA implementation, and exercises full authority relative to state entities to establish policy, provide direction to state entities, monitor progress, and report on implementation efforts. Under existing law, these duties have been assumed by a successor entity, the Office of Health Information Integrity. These provisions become inoperative and are repealed as of June 30, 2016, at which time funds appropriated for purposes of the act that remain unexpended and unencumbered, revert to the General Fund. This bill would indefinitely extend the act and the operation of the office by deleting the June 30, 2016 repeal date. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 11801 of the Health and Safety Code is amended to read: 11801. The alcohol and drug program administrator, acting through administrative channels designated pursuant to Section 11795, shall do all of the following: (a) Coordinate and be responsible for the preparation of the county contract. (b) Ensure compliance with applicable laws relating to discrimination against any person because of any characteristic listed or defined in Section 11135 of the Government Code. (c) Submit an annual report to the board of supervisors reporting all activities of the alcohol and other drug program, including a financial accounting of expenditures, number of persons served, and a forecast of anticipated needs for the upcoming year. (d) Be directly responsible for the administration of all alcohol or other drug program funds allocated to the county under this part, administration of county operated programs, and coordination and monitoring of programs that have contracts with the county to provide alcohol and other drug services. (e) Ensure the evaluation of alcohol and other drug programs, including the collection of appropriate and necessary client data and program information, pursuant to Chapter 6 (commencing with Section 11825). (f) Ensure program quality in compliance with appropriate standards pursuant to Chapter 7 (commencing with Section 11830). (g) Participate and represent the county in meetings of the  County Alcohol and Drug Program Administrators'   County Behavioral Health Directors  Association of California pursuant to Section 11811.5 for the purposes of representing the counties in their relationship with the state with respect to policies, standards, and administration for alcohol and other drug abuse services. (h) Perform any other acts that may be necessary, desirable, or proper to carry out the purposes of this part. SEC. 2. Section 11830.1 of the Health and Safety Code is amended to read: 11830.1. In order to ensure quality assurance of alcohol and other drug programs and expand the availability of funding resources, the department shall implement a program certification procedure for alcohol and other drug treatment recovery services. The department, after consultation with the  County Alcohol and Drug Program Administrators   County Behavioral Health Directors  Association of California, and other interested organizations and individuals, shall develop standards and regulations for the alcohol and other drug treatment recovery services describing the minimal level of service quality required of the service providers to qualify for and obtain state certification. The standards shall be excluded from the rulemaking requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). Compliance with these standards shall be voluntary on the part of programs. For the purposes of Section 2626.2 of the Unemployment Insurance Code, certification shall be equivalent to program review. SEC. 3. Section 11835 of the Health and Safety Code is amended to read: 11835. (a) The purposes of any regulations adopted by the department shall be to implement, interpret, or make specific the provisions of this part and shall not exceed the authority granted to the department pursuant to this part. To the extent possible, the regulations shall be written in clear and concise language and adopted only when necessary to further the purposes of this part. (b) Except as provided in this section and Sections 11772, 11798, 11798.2, 11814, 11817.8, 11852.5, the department may adopt regulations in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of the Title 2 of the Government Code) necessary for the proper execution of the powers and duties granted to and imposed upon the department by this part. However, these regulations may be adopted only upon the following conditions: (1) Prior to adoption of regulations, the department shall consult with  county alcohol and drug program administrators   the County Behavioral Health Directors Association of California  and may consult with any other appropriate persons relating to the proposed regulations. (2) If an absolute majority of the designated county  alcohol and drug program administrators   behavioral health directors  who represent counties that have submitted county contracts, vote at a public meeting called by the department, for which 45 days' advance notice shall be given by the department, to reject the proposed regulations, the department shall refer the matter for a decision to a committee, consisting of a representative of the county  alcohol and drug program administrators,   behavioral health directors,  the director, the secretary, and one designee of the secretary. The decision shall be made by a majority vote of this committee at a public meeting convened by the department. Upon a majority vote of the committee recommending adoption of the proposed regulations, the department may then adopt them. Upon a majority vote recommending that the department not adopt the proposed regulations, the department shall then consult again with the  county alcohol and drug program administrators   County Behavioral Health Directors Association of California  and resubmit the proposed regulations to the  administrators   county behavioral health directors  for a vote pursuant to this subdivision. (3) In the voting process described in paragraph (2), no proxies shall be allowed nor may anyone other than the designated county  alcohol and drug program administrator,   behavioral health director,  director, secretary, and secretary' s designee vote at the meetings. SEC. 4. Section 103577 of the Health and Safety Code is amended to read: 103577. (a) On or after July 1, 2015, each local registrar or county recorder shall, without  a   an issuance fee or any other associated  fee, issue a certified record of live birth to any person who can verify his or her status as a homeless person or a homeless child or youth. A homeless services provider that has knowledge of a person's housing status shall verify a person's status for the purposes of this subdivision. In accordance with all other application requirements as set forth in Section 103526, a request for a certified record of live birth made pursuant to this subdivision shall be made by a homeless person or a homeless child or youth on behalf of themselves, or by any person lawfully entitled to request a certified record of live birth on behalf of a child, if the child has been verified as a homeless person or a homeless child or youth pursuant to this section. A person applying for a certified record of live birth under this subdivision is entitled to one birth record, per application, for each eligible person verified as a homeless person or a homeless child or youth. For purposes of this subdivision, an affidavit developed pursuant to subdivision (b) shall constitute sufficient verification that a person is a homeless person or a homeless child or youth. A person applying for a certified record of live birth under this subdivision shall not be charged a fee for verification of his or her eligibility. (b) The State Department of Public Health shall develop an affidavit attesting to an applicant's status as a homeless person or homeless child or youth. For purposes of this section, the affidavit shall not be deemed complete unless it is signed by both the person making a request for a certified record of live birth pursuant to subdivision (a) and a homeless services provider that has knowledge of the applicant's housing status. (c) Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), the department may implement and administer this section through an all-county letter or similar instructions from the director or State Registrar without taking regulatory action. (d) For the purposes of this section, the following definitions apply: (1) A "homeless child or youth" has the same meaning as the definition of "homeless children and youths" as set forth in the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11301 et seq.). (2) A "homeless person" has the same meaning as the definition of that term set forth in the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11301 et seq.). (3) A "homeless services provider" includes: (A) A governmental or nonprofit agency receiving federal, state, or county or municipal funding to provide services to a "homeless person" or "homeless child or youth," or that is otherwise sanctioned to provide those services by a local homeless continuum of care organization. (B) An attorney licensed to practice law in this state. (C) A local educational agency liaison for homeless children and  youth designated as such   youth,  pursuant to Section 11432(g)(1)(J)(ii) of Title 42 of the United States Code, or a school social worker. (D) A human services provider or public social services provider funded by the State of California to provide homeless children or youth services, health services, mental or behavioral health services, substance use disorder services, or public assistance or employment services. (E) A law enforcement officer designated as a liaison to the homeless population by a local police department or sheriff's department within the state. SEC. 5. Section 104151 of the Health and Safety Code is amended to read: 104151.  (a)    Notwithstanding Section 10231.5 of the Government Code, each year, by no later than January 10 and concurrently with the release of the May Revision, the State Department of Health Care Services shall provide the fiscal committees of the Legislature with an estimate package for the Every Woman Counts Program. This estimate package shall include all significant assumptions underlying the estimate for the Every Woman Counts Program's current-year and budget-year proposals, and shall contain concise information identifying applicable estimate components, such as caseload; a breakout of costs, including, but not limited to, clinical service activities, including office visits and consults, screening mammograms, diagnostic mammograms, diagnostic breast procedures, case management, and other clinical services; policy changes; contractor information; General Fund, special fund, and federal fund information; and other assumptions necessary to support the estimate.  (b) Notwithstanding Section 10231.5 of the Government Code, each year, the State Department of Health Care Services shall provide the fiscal and appropriate policy committees of the Legislature with quarterly updates on caseload, estimated expenditures, and related program monitoring data for the Every Woman Counts Program. These updates shall be provided no later than November 30, February 28, May 31, and August 31 of each year. The purpose of the updates is to provide the Legislature with the most recent information on the program, and shall include a breakdown of expenditures for each quarter for clinical service activities, including, but not limited to, office visits and consults, screening mammograms, diagnostic mammograms, diagnostic breast procedures, case management, and other clinical services. This subdivision supersedes the requirements of Section 169 of Chapter 717 of the Statutes of 2010 (S.B. 853).  SEC. 6. Section 128456 of the Health and Safety Code is amended to read: 128456. In developing the program established pursuant to this article, the Health Professions Education Foundation shall solicit the advice of representatives of the Board of Behavioral Sciences, the Board of Psychology, the State Department of Health Care Services, the  California Mental   County Behavioral  Health Directors Association  of Calif   ornia  , the California Mental Health Planning Council, professional mental health care organizations, the California Healthcare Association, the Chancellor of the California Community Colleges, and the Chancellor of the California State University. The foundation shall solicit the advice of representatives who reflect the demographic, cultural, and linguistic diversity of the state. SEC. 7. Section 130316 of the Health and Safety Code is repealed.  130316. Any funds appropriated for the purpose of this division that remain unexpended or unencumbered on June 30, 2016, shall revert to the General Fund on that date unless a statute that is enacted before June 30, 2016, extends the provisions of this division.  SEC. 8. Section 130317 of the Health and Safety Code is repealed.  130317. This division shall become inoperative on June 30, 2016, and as of that date is repealed, unless a later enacted statute, that is enacted before June 30, 2016, deletes or extends the dates on which it becomes inoperative and is repealed.  SEC. 9. Section 4033 of the Welfare and Institutions Code is amended to read: 4033. (a) The State Department of Health Care Services shall, to the extent resources are available, comply with the Substance Abuse and Mental Health Services Administration federal planning requirements. The department shall update and issue a state plan, which may also be any federally required state service plan, so that citizens may be informed regarding the implementation of, and long-range goals for, programs to serve mentally ill persons in the state. The department shall gather information from counties necessary to comply with this section. (b) (1) If the State Department of Health Care Services makes a decision not to comply with any Substance Abuse and Mental Health Services Administration federal planning requirement to which this section applies, the State Department of Health Care Services shall submit the decision, for consultation, to the  California Mental   County Behavioral  Health Directors Association  of California  , the California Mental Health Planning Council, and affected mental health entities. (2) The State Department of Health Care Services shall not implement any decision not to comply with the Substance Abuse and Mental Health Services Administration federal planning requirements sooner than 30 days after notification of that decision, in writing, by the Department of Finance, to the chairperson of the committee in each house of the Legislature  which   that  considers appropriations, and the Chairperson of the Joint Legislative Budget Committee. SEC. 10. Section 4040 of the Welfare and Institutions Code is amended to read: 4040. The State Department of Health Care Services or State Department of State Hospitals may conduct, or contract for, research or evaluation studies that have application to mental health policy and management issues. In selecting areas for study the department shall be guided by the information needs of state and local policymakers and managers, and suggestions from the  California Mental   County Behavioral  Health Directors Association of California. SEC. 11. Section 4095 of the Welfare and Institutions Code is amended to read: 4095. (a) It is the intent of the Legislature that essential and culturally relevant mental health assessment, case management, and treatment services be available to wards of the court and dependent children of the court placed out of home or who are at risk of requiring out-of-home care. This can be best achieved at the community level through the active collaboration of county social service, probation, education, mental health agencies, and foster care providers. (b) Therefore, using the Children's Mental Health Services Act (Part 4 (commencing with Section 5850) of Division 5) as a guideline, the State Department of Health Care Services, in consultation with the  California Mental   County Behavioral  Health Directors Association  of California  , the State Department of Social Services, the County Welfare Directors Association, the Chief Probation Officers of California,  county alcohol and drug program administrators,  and foster care providers, shall do all of the following: (1) By July 1, 1994, develop an individualized mental health treatment needs assessment protocol for wards of the court and dependent children of the court. (2) Define supplemental services to be made available to the target population, including, but not limited to, services defined in Section 540 and following of Title 9 of the California Code of Regulations as of January 1, 1994, family therapy, prevocational services, and crisis support activities. (3) Establish statewide standardized rates for the various types of services defined by the department in accordance with paragraph (2), and provided pursuant to this section. The rates shall be designed to reduce the impact of competition for scarce treatment resources on the cost and availability of care. The rates shall be implemented only when the state provides funding for the services described in this section. (4) By January 1, 1994, to the extent state funds are available to implement this section, establish, by regulation, all of the following: (A) Definitions of priority ranking of subsets of the court wards and dependents target population. (B) A procedure to certify the mental health programs. (c) (1) Only those individuals within the target population as defined in regulation and determined to be eligible for services as a result of a mental health treatment needs assessment may receive services pursuant to this section. (2) Allocation of funds appropriated for the purposes of this section shall be based on the number of wards and dependents and may be adjusted in subsequent fiscal years to reflect costs. (3) The counties shall be held harmless for failure to provide any assessment, case management, and treatment services to those children identified in need of services for whom there is no funding. (d) (1) The State Department of Health Care Services shall make information available to the Legislature, on request, on the service populations provided mental health treatment services pursuant to this section, the types and costs of services provided, and the number of children identified in need of treatment services who did not receive the services. (2) The information required by paragraph (1) may include information on need, cost, and service impact experience from the following: (A) Family preservation pilot programs. (B) Pilot programs implemented under the former Children's Mental Health Services Act, as contained in Chapter 6.8 (commencing with Section 5565.10) of Part 1 of Division 5. (C) Programs implemented under Chapter 26 (commencing with Section 7570) of Division 7 of Title 1 of the Government Code and Section 11401. (D) County experience in the implementation of Section 4096. SEC. 12. Section 4096.5 of the Welfare and Institutions Code is amended to read: 4096.5. (a) The State Department of Health Care Services shall make a determination, within 45 days of receiving a request from a group home to be classified at RCL 13 or RCL 14 pursuant to Section 11462.01, to certify or deny certification that the group home program includes provisions for mental health treatment services that meet the needs of seriously emotionally disturbed children. The department shall issue each certification for a period of one year and shall specify the effective date the program met the certification requirements. A program may be recertified if the program continues to meet the criteria for certification. (b) The State Department of Health Care Services shall, in consultation with  the California Mental   County Behavioral  Health Directors Association  of California  and representatives of provider organizations, develop the criteria for the certification required by subdivision (a) by July 1, 1992. (c) (1) The State Department of Health Care Services may, upon the request of a county, delegate to that county the certification task. (2) Any county to which the certification task is delegated pursuant to paragraph (1) shall use the criteria and format developed by the department. (d) The State Department of Health Care Services or delegated county shall notify the State Department of Social Services Community Care Licensing Division immediately upon the termination of any certification issued in accordance with subdivision (a). (e) Upon receipt of notification from the State Department of Social Services Community Care Licensing Division of any adverse licensing action taken after the finding of noncompliance during an inspection conducted pursuant to Section 1538.7 of the Health and Safety Code, the State Department of Health Care Services or the delegated county shall review the certification issued pursuant to this section. SEC. 13. Section 5326.95 of the Welfare and Institutions Code is amended to read: 5326.95. The Director of State Hospitals shall adopt regulations to carry out the provisions of this chapter, including standards defining excessive use of convulsive treatment which shall be developed in consultation with the State Department of Health Care Services and the  California Mental   County Behavioral  Health Directors Association  of California  . SEC. 14. Section 5400 of the Welfare and Institutions Code is amended to read: 5400. (a) The Director of Health Care Services shall administer this part and shall adopt rules, regulations, and standards as necessary. In developing rules, regulations, and standards, the Director of Health Care Services shall consult with the  California Mental   Count   y Behavioral  Health Directors  Association,   Association of California,  the California Mental Health Planning Council, and the office of the Attorney General. Adoption of these standards, rules, and regulations shall require approval by the  California Mental   County Behavioral  Health Directors Association  of California  by majority vote of those present at an official session. (b) Wherever feasible and appropriate, rules, regulations, and standards adopted under this part shall correspond to comparable rules, regulations, and standards adopted under the Bronzan-McCorquodale Act. These corresponding rules, regulations, and standards shall include qualifications for professional personnel. (c) Regulations adopted pursuant to this part may provide standards for services for persons with chronic alcoholism that differ from the standards for services for persons with mental health disorders. SEC. 15. Section 5585.22 of the Welfare and Institutions Code is amended to read: 5585.22. The Director of Health Care Services, in consultation with the  California Mental   County Behavioral  Health Directors Association  of California  , may develop the appropriate educational materials and a training curriculum, and may provide training as necessary to ensure that those persons providing services pursuant to this part fully understand its purpose. SEC. 16. Section 5601 of the Welfare and Institutions Code is amended to read: 5601. As used in this part: (a) "Governing body" means the county board of supervisors or boards of supervisors in the case of counties acting jointly; and in the case of a city, the city council or city councils acting jointly. (b) "Conference" means the  California Mental   County Behavioral  Health Directors Association  of California  as established under former Section 5757. (c) Unless the context requires otherwise, "to the extent resources are available" means to the extent that funds deposited in the mental health account of the local health and welfare fund are available to an entity qualified to use those funds. (d) "Part 1" refers to the Lanterman-Petris-Short Act (Part 1 (commencing with Section 5000)). (e) "Director of Health Care Services" or "director" means the Director of the State Department of Health Care Services. (f) "Institution" includes a general acute care hospital, a state hospital, a psychiatric hospital, a psychiatric health facility, a skilled nursing facility, including an institution for mental disease as described in Chapter 1 (commencing with Section 5900) of Part 5, an intermediate care facility, a community care facility or other residential treatment facility, or a juvenile or criminal justice institution. (g) "Mental health service" means any service directed toward early intervention in, or alleviation or prevention of, mental disorder, including, but not limited to, diagnosis, evaluation, treatment, personal care, day care, respite care, special living arrangements, community skill training, sheltered employment, socialization, case management, transportation, information, referral, consultation, and community services. SEC. 17. Section 5611 of the Welfare and Institutions Code is amended to read: 5611. (a) The Director of Mental Health shall establish a Performance Outcome Committee, to be comprised of representatives from the PL 99-660 Planning Council and the  California Conference of Local Mental Health Directors.   County Behavioral Health Directors Association of California.  Any costs associated with the performance of the duties of the committee shall be absorbed within the resources of the participants. (b) Major mental health professional organizations representing licensed clinicians may participate as members of the committee at their own expense. (c) The committee may seek private funding for costs associated with the performance of its duties. SEC. 18. Section 5664 of the Welfare and Institutions Code is amended to read: 5664. In consultation with the  California Mental   County Behavioral  Health Directors Association  of California  , the State Department of Health Care Services, the Mental Health Services Oversight and Accountability Commission, the California Mental Health Planning Council, and the California Health and Human Services Agency, county mental health systems shall provide reports and data to meet the information needs of the state, as necessary. SEC. 19. Section 5701.1 of the Welfare and Institutions Code is amended to read: 5701.1. Notwithstanding Section 5701, the State Department of Health Care Services, in consultation with the  California Mental   County Behavioral Health Directors Association  of California  and the California Mental Health Planning Council, may utilize funding from the Substance Abuse and Mental Health Services Administration Block Grant, awarded to the State Department of Health Care Services, above the funding level provided in federal fiscal year 1998, for the development of innovative programs for identified target populations, upon appropriation by the Legislature. SEC. 20. Section 5701.2 of the Welfare and Institutions Code is amended to read: 5701.2. (a) The State Department of Mental Health, or its successor, the State Department of State Hospitals, shall maintain records of any transfer of funds or state hospital beds made pursuant to Chapter 1341 of the Statutes of 1991. (b) Commencing with the 1991-92 fiscal year, the State Department of Mental Health, or its successor, the State Department of State Hospitals, shall maintain records that set forth that portion of each county's allocation of state mental health moneys that represent the dollar equivalent attributed to each county's state hospital beds or bed days, or both, that were allocated as of May 1, 1991. The State Department of Mental Health, or its successor, the State Department of State Hospitals, shall provide a written summary of these records to the appropriate committees of the Legislature and the  California Mental   County Behavioral  Health Directors Association of California  within 30 days after the enactment of the annual Budget Act. (c) Nothing in this section is intended to change the counties' base allocations as provided in subdivisions (a) and (b) of Section 17601. SEC. 21. Section 5717 of the Welfare and Institutions Code is amended to read: 5717. (a) Expenditures that may be funded from amounts allocated to the county by the State Department of Health Care Services from funds appropriated to the department shall include, salaries of personnel, approved facilities and services provided through contract, and operation, maintenance, and service costs, including insurance costs or departmental charges for participation in a county self-insurance program if the charges are not in excess of comparable available commercial insurance premiums and on the condition that any surplus reserves be used to reduce future year contributions; depreciation of county facilities as established in the state's uniform accounting manual, disregarding depreciation on the facility to the extent it was financed by state funds under this part; lease of facilities where there is no intention to, nor option to, purchase; expenses incurred under this act by members of the  California Mental   Co   unty Behavioral  Health Directors Association  of California  for attendance at regular meetings of these conferences; expenses incurred by either the chairperson or elected representative of the local mental health advisory boards for attendance at regular meetings of the Organization of Mental Health Advisory Boards; expenditures included in approved countywide cost allocation plans submitted in accordance with the Controller's guidelines, including, but not limited to, adjustments of prior year estimated general county overhead to actual costs, but excluding allowable costs otherwise compensated by state funding; net costs of conservatorship investigation, approved by the Director of Health Care Services. Except for expenditures made pursuant to Article 6 (commencing with Section 129225) of Chapter 1 of Part 6 of Division 107 of the Health and Safety Code, it shall not include expenditures for initial capital improvements; the purchaser or construction of buildings except for equipment items and remodeling expense as may be provided for in regulations of the State Department of Health Care Services; compensation to members of a local mental health advisory board, except actual and necessary expenses incurred in the performance of official duties that may include travel, lodging, and meals while on official business; or expenditures for a purpose for which state reimbursement is claimed under any other provision of law. (b) The Director of Health Care Services may make investigations and audits of expenditures the director may deem necessary. (c) With respect to funds allocated to a county by the State Department of Health Care Services from funds appropriated to the department, the county shall repay to the state amounts found not to have been expended in accordance with the requirements set forth in this part. Repayment shall be within 30 days after it is determined that an expenditure has been made that is not in accordance with the requirements. In the event that repayment is not made in a timely manner, the department shall offset any amount improperly expended against the amount of any current or future advance payment or cost report settlement from the state for mental health services. Repayment provisions shall not apply to Short-Doyle funds allocated by the department for fiscal years up to and including the 1990-91 fiscal year. SEC. 22. Section 5750 of the Welfare and Institutions Code is amended to read: 5750. The State Department of Health Care Services shall administer this part and shall adopt standards for the approval of mental health services, and rules and regulations necessary thereto. However, these standards, rules, and regulations shall be adopted only after consultation with the  California Mental   County Behavioral  Health Directors Association  of California  and the California Mental Health Planning Council. SEC. 23. Section 5845 of the Welfare and Institutions Code is amended to read: 5845. (a) The Mental Health Services Oversight and Accountability Commission is hereby established to oversee Part 3 (commencing with Section 5800), the Adult and Older Adult Mental Health System of Care Act; Part 3.1 (commencing with Section 5820), Human Resources, Education, and Training Programs; Part 3.2 (commencing with Section 5830), Innovative Programs; Part 3.6 (commencing with Section 5840), Prevention and Early Intervention Programs; and Part 4 (commencing with Section 5850), the Children's Mental Health Services Act. The commission shall replace the advisory committee established pursuant to Section 5814. The commission shall consist of 16 voting members as follows: (1) The Attorney General or his or her designee. (2) The Superintendent of Public Instruction or his or her designee. (3) The Chairperson of the Senate Health and Human Services Committee or another member of the Senate selected by the President pro Tempore of the Senate. (4) The Chairperson of the Assembly Health Committee or another member of the Assembly selected by the Speaker of the Assembly. (5) Two persons with a severe mental illness, a family member of an adult or senior with a severe mental illness, a family member of a child who has or has had a severe mental illness, a physician specializing in alcohol and drug treatment, a mental health professional, a county sheriff, a superintendent of a school district, a representative of a labor organization, a representative of an employer with less than 500 employees and a representative of an employer with more than 500 employees, and a representative of a health care services plan or insurer, all appointed by the Governor. In making appointments, the Governor shall seek individuals who have had personal or family experience with mental illness. (b) Members shall serve without compensation, but shall be reimbursed for all actual and necessary expenses incurred in the performance of their duties. (c) The term of each member shall be three years, to be staggered so that approximately one-third of the appointments expire in each year. (d) In carrying out its duties and responsibilities, the commission may do all of the following: (1) Meet at least once each quarter at any time and location convenient to the public as it may deem appropriate. All meetings of the commission shall be open to the public. (2) Within the limit of funds allocated for these purposes, pursuant to the laws and regulations governing state civil service, employ staff, including any clerical, legal, and technical assistance as may appear necessary. The commission shall administer its operations separate and apart from the State Department of Health Care Services and the California Health and Human Services Agency. (3) Establish technical advisory committees  ,  such as a committee of consumers and family members. (4) Employ all other appropriate strategies necessary or convenient to enable it to fully and adequately perform its duties and exercise the powers expressly granted, notwithstanding any authority expressly granted to any officer or employee of state government. (5) Enter into contracts. (6) Obtain data and information from the State Department of Health Care Services, the Office of Statewide Health Planning and Development, or other state or local entities that receive Mental Health Services Act funds, for the commission to utilize in its oversight, review, training and technical assistance, accountability, and evaluation capacity regarding projects and programs supported with Mental Health Services Act funds. (7) Participate in the joint state-county decisionmaking process, as contained in Section 4061, for training, technical assistance, and regulatory resources to meet the mission and goals of the state's mental health system. (8) Develop strategies to overcome stigma and discrimination, and accomplish all other objectives of Part 3.2 (commencing with Section 5830), 3.6 (commencing with Section 5840), and the other provisions of the act establishing this commission. (9) At any time, advise the Governor or the Legislature regarding actions the state may take to improve care and services for people with mental illness. (10) If the commission identifies a critical issue related to the performance of a county mental health program, it may refer the issue to the State Department of Health Care Services pursuant to Section 5655. (11) Assist in providing technical assistance to accomplish the purposes of the Mental Health Services Act, Part 3 (commencing with Section 5800), and Part 4 (commencing with Section 5850) in collaboration with the State Department of Health Care Services and in consultation with the  California Mental   County Behavioral  Health Directors  Association.   Association of California.  (12) Work in collaboration with the State Department of Health Care Services and the California Mental Health Planning Council, and in consultation with the  California Mental   County   Behavioral  Health Directors Association  of California  , in designing a comprehensive joint plan for a coordinated evaluation of client outcomes in the community-based mental health system, including, but not limited to, parts listed in subdivision (a). The California Health and Human Services Agency shall lead this comprehensive joint plan effort. SEC. 24. Section 5847 of the Welfare and Institutions Code is amended to read: 5847. Integrated Plans for Prevention, Innovation, and System of Care Services. (a) Each county mental health program shall prepare and submit a three-year program and expenditure plan, and annual updates, adopted by the county board of supervisors, to the Mental Health Services Oversight and Accountability Commission within 30 days after adoption. (b) The three-year program and expenditure plan shall be based on available unspent funds and estimated revenue allocations provided by the state and in accordance with established stakeholder engagement and planning requirements as required in Section 5848. The three-year program and expenditure plan and annual updates shall include all of the following: (1) A program for prevention and early intervention in accordance with Part 3.6 (commencing with Section 5840). (2) A program for services to children in accordance with Part 4 (commencing with Section 5850), to include a program pursuant to Chapter 4 (commencing with Section 18250) of Part 6 of Division 9 or provide substantial evidence that it is not feasible to establish a wraparound program in that county. (3) A program for services to adults and seniors in accordance with Part 3 (commencing with Section 5800). (4) A program for innovations in accordance with Part 3.2 (commencing with Section 5830). (5) A program for technological needs and capital facilities needed to provide services pursuant to Part 3 (commencing with Section 5800), Part 3.6 (commencing with Section 5840), and Part 4 (commencing with Section 5850). All plans for proposed facilities with restrictive settings shall demonstrate that the needs of the people to be served cannot be met in a less restrictive or more integrated setting. (6) Identification of shortages in personnel to provide services pursuant to the above programs and the additional assistance needed from the education and training programs established pursuant to Part 3.1 (commencing with Section 5820). (7) Establishment and maintenance of a prudent reserve to ensure the county program will continue to be able to serve children, adults, and seniors that it is currently serving pursuant to Part 3 (commencing with Section 5800), the Adult and Older Adult Mental Health System of Care Act, Part 3.6 (commencing with Section 5840), Prevention and Early Intervention Programs, and Part 4 (commencing with Section 5850), the Children's Mental Health Services Act, during years in which revenues for the Mental Health Services Fund are below recent averages adjusted by changes in the state population and the California Consumer Price Index. (8) Certification by the county mental health director, which ensures that the county has complied with all pertinent regulations, laws, and statutes of the Mental Health Services Act, including stakeholder participation and nonsupplantation requirements. (9) Certification by the county mental health director and by the county auditor-controller that the county has complied with any fiscal accountability requirements as directed by the State Department of Health Care Services, and that all expenditures are consistent with the requirements of the Mental Health Services Act. (c) The programs established pursuant to paragraphs (2) and (3) of subdivision (b) shall include services to address the needs of transition age youth ages 16 to 25. In implementing this subdivision, county mental health programs shall consider the needs of transition age foster youth. (d) Each year, the State Department of Health Care Services shall inform the  California Mental   County Behavioral  Health Directors Association  of California  and the Mental Health Services Oversight and Accountability Commission of the methodology used for revenue allocation to the counties. (e) Each county mental health program shall prepare expenditure plans pursuant to Part 3 (commencing with Section 5800) for adults and seniors, Part 3.2 (commencing with Section 5830) for innovative programs, Part 3.6 (commencing with Section 5840) for prevention and early intervention programs, and Part 4 (commencing with Section 5850) for services for children, and updates to the plans developed pursuant to this section. Each expenditure update shall indicate the number of children, adults, and seniors to be served pursuant to Part 3 (commencing with Section 5800), and Part 4 (commencing with Section 5850), and the cost per person. The expenditure update shall include utilization of unspent funds allocated in the previous year and the proposed expenditure for the same purpose. (f) A county mental health program shall include an allocation of funds from a reserve established pursuant to paragraph (7) of subdivision (b) for services pursuant to paragraphs (2) and (3) of subdivision (b) in years in which the allocation of funds for services pursuant to subdivision (e) are not adequate to continue to serve the same number of individuals as the county had been serving in the previous fiscal year. SEC. 25. Section 5848 of the Welfare and Institutions Code is amended to read: 5848. (a) Each three-year program and expenditure plan and update shall be developed with local stakeholders, including adults and seniors with severe mental illness, families of children, adults, and seniors with severe mental illness, providers of services, law enforcement agencies, education, social services agencies, veterans, representatives from veterans organizations, providers of alcohol and drug services, health care organizations, and other important interests. Counties shall demonstrate a partnership with constituents and stakeholders throughout the process that includes meaningful stakeholder involvement on mental health policy, program planning, and implementation, monitoring, quality improvement, evaluation, and budget allocations. A draft plan and update shall be prepared and circulated for review and comment for at least 30 days to representatives of stakeholder interests and any interested party who has requested a copy of the draft plans. (b) The mental health board established pursuant to Section 5604 shall conduct a public hearing on the draft three-year program and expenditure plan and annual updates at the close of the 30-day comment period required by subdivision (a). Each adopted three-year program and expenditure plan and update shall include any substantive written recommendations for revisions. The adopted three-year program and expenditure plan or update shall summarize and analyze the recommended revisions. The mental health board shall review the adopted plan or update and make recommendations to the county mental health department for revisions. (c) The plans shall include reports on the achievement of performance outcomes for services pursuant to Part 3 (commencing with Section 5800), Part 3.6 (commencing with Section 5840), and Part 4 (commencing with Section 5850) funded by the Mental Health Services Fund and established jointly by the State Department of Health Care Services and the Mental Health Services Oversight and Accountability Commission, in collaboration with the  California Mental   County Behavioral  Health Directors  Association.  Association of California.  (d) Mental health services provided pursuant to Part 3 (commencing with Section 5800), and Part 4 (commencing with Section 5850), shall be included in the review of program performance by the California Mental Health Planning Council required by paragraph (2) of subdivision (c) of Section 5772 and in the local mental health board' s review and comment on the performance outcome data required by paragraph (7) of subdivision (a) of Section 5604.2. SEC. 26. Section 5848.5 of the Welfare and Institutions Code is amended to read: 5848.5. (a) The Legislature finds and declares all of the following: (1) California has realigned public community mental health services to counties and it is imperative that sufficient community-based resources be available to meet the mental health needs of eligible individuals. (2) Increasing access to effective outpatient and crisis stabilization services provides an opportunity to reduce costs associated with expensive inpatient and emergency room care and to better meet the needs of individuals with mental health disorders in the least restrictive manner possible. (3) Almost one-fifth of people with mental health disorders visit a hospital emergency room at least once per year. If an adequate array of crisis services is not available, it leaves an individual with little choice but to access an emergency room for assistance and, potentially, an unnecessary inpatient hospitalization. (4) Recent reports have called attention to a continuing problem of inappropriate and unnecessary utilization of hospital emergency rooms in California due to limited community-based services for individuals in psychological distress and acute psychiatric crisis. Hospitals report that 70 percent of people taken to emergency rooms for psychiatric evacuation can be stabilized and transferred to a less intensive level of crisis care. Law enforcement personnel report that their personnel need to stay with people in the emergency room waiting area until a placement is found, and that less intensive levels of care tend not to be available. (5) Comprehensive public and private partnerships at both local and regional levels, including across physical health services, mental health, substance use disorder, law enforcement, social services, and related supports, are necessary to develop and maintain high quality, patient-centered, and cost-effective care for individuals with mental health disorders that facilitates their recovery and leads towards wellness. (6) The recovery of individuals with mental health disorders is important for all levels of government, business, and the local community. (b) This section shall be known, and may be cited, as the Investment in Mental Health Wellness Act of 2013. The objectives of this section are to do all of the following: (1) Expand access to early intervention and treatment services to improve the client experience, achieve recovery and wellness, and reduce costs. (2) Expand the continuum of services to address crisis intervention, crisis stabilization, and crisis residential treatment needs that are wellness, resiliency, and recovery oriented. (3) Add at least 25 mobile crisis support teams and at least 2,000 crisis stabilization and crisis residential treatment beds to bolster capacity at the local level to improve access to mental health crisis services and address unmet mental health care needs. (4) Add at least 600 triage personnel to provide intensive case management and linkage to services for individuals with mental health care disorders at various points of access, such as at designated community-based service points, homeless shelters, and clinics. (5) Reduce unnecessary hospitalizations and inpatient days by appropriately utilizing community-based services and improving access to timely assistance. (6) Reduce recidivism and mitigate unnecessary expenditures of local law enforcement. (7) Provide local communities with increased financial resources to leverage additional public and private funding sources to achieve improved networks of care for individuals with mental health disorders. (c) Through appropriations provided in the annual Budget Act for this purpose, it is the intent of the Legislature to authorize the California Health Facilities Financing Authority, hereafter referred to as the authority, and the Mental Health Services Oversight and Accountability Commission, hereafter referred to as the commission, to administer competitive selection processes as provided in this section for capital capacity and program expansion to increase capacity for mobile crisis support, crisis intervention, crisis stabilization services, crisis residential treatment, and specified personnel resources. (d) Funds appropriated by the Legislature to the authority for purposes of this section shall be made available to selected counties, or counties acting jointly. The authority may, at its discretion, also give consideration to private nonprofit corporations and public agencies in an area or region of the state if a county, or counties acting jointly, affirmatively supports this designation and collaboration in lieu of a county government directly receiving grant funds. (1) Grant awards made by the authority shall be used to expand local resources for the development, capital, equipment acquisition, and applicable program startup or expansion costs to increase capacity for client assistance and services in the following areas: (A) Crisis intervention, as authorized by Sections 14021.4, 14680, and 14684. (B) Crisis stabilization, as authorized by Sections 14021.4, 14680, and 14684. (C) Crisis residential treatment, as authorized by Sections 14021.4, 14680, and 14684. (D) Rehabilitative mental health services, as authorized by Sections 14021.4, 14680, and 14684. (E) Mobile crisis support teams, including personnel and equipment, such as the purchase of vehicles. (2) The authority shall develop selection criteria to expand local resources, including those described in paragraph (1), and processes for awarding grants after consulting with representatives and interested stakeholders from the mental health community, including, but not limited to,  county mental health directors,   the County Behavioral Health Directors Association of California,  service providers, consumer organizations, and other appropriate interests, such as health care providers and law enforcement, as determined by the authority. The authority shall ensure that grants result in cost-effective expansion of the number of community-based crisis resources in regions and communities selected for funding. The authority shall also take into account at least the following criteria and factors when selecting recipients of grants and determining the amount of grant awards: (A) Description of need, including, at a minimum, a comprehensive description of the project, community need, population to be served, linkage with other public systems of health and mental health care, linkage with local law enforcement, social services, and related assistance, as applicable, and a description of the request for funding. (B) Ability to serve the target population, which includes individuals eligible for Medi-Cal and individuals eligible for county health and mental health services. (C) Geographic areas or regions of the state to be eligible for grant awards, which may include rural, suburban, and urban areas, and may include use of the five regional designations utilized by the  California Mental   County Behavioral  Health Directors  Association.   Association of California.  (D) Level of community engagement and commitment to project completion. (E) Financial support that, in addition to a grant that may be awarded by the authority, will be sufficient to complete and operate the project for which the grant from the authority is awarded. (F) Ability to provide additional funding support to the project, including public or private funding, federal tax credits and grants, foundation support, and other collaborative efforts. (G) Memorandum of understanding among project partners, if applicable. (H) Information regarding the legal status of the collaborating partners, if applicable. (I) Ability to measure key outcomes, including improved access to services, health and mental health outcomes, and cost benefit of the project. (3) The authority shall determine maximum grants awards, which shall take into consideration the number of projects awarded to the grantee, as described in paragraph (1), and shall reflect reasonable costs for the project and geographic region. The authority may allocate a grant in increments contingent upon the phases of a project. (4) Funds awarded by the authority pursuant to this section may be used to supplement, but not to supplant, existing financial and resource commitments of the grantee or any other member of a collaborative effort that has been awarded a grant. (5) All projects that are awarded grants by the authority shall be completed within a reasonable period of time, to be determined by the authority. Funds shall not be released by the authority until the applicant demonstrates project readiness to the authority's satisfaction. If the authority determines that a grant recipient has failed to complete the project under the terms specified in awarding the grant, the authority may require remedies, including the return of all or a portion of the grant. (6) A grantee that receives a grant from the authority under this section shall commit to using that capital capacity and program expansion project, such as the mobile crisis team, crisis stabilization unit, or crisis residential treatment program, for the duration of the expected life of the project. (7) The authority may consult with a technical assistance entity, as described in paragraph (5) of subdivision (a) of Section 4061, for purposes of implementing this section. (8) The authority may adopt emergency regulations relating to the grants for the capital capacity and program expansion projects described in this section, including emergency regulations that define eligible costs and determine minimum and maximum grant amounts. (9) The authority shall provide reports to the fiscal and policy committees of the Legislature on or before May 1, 2014, and on or before May 1, 2015, on the progress of implementation, that includes, but are not limited to, the following: (A) A description of each project awarded funding. (B) The amount of each grant issued. (C) A description of other sources of funding for each project. (D) The total amount of grants issued. (E) A description of project operation and implementation, including who is being served. (10) A recipient of a grant provided pursuant to paragraph (1) shall adhere to all applicable laws relating to scope of practice, licensure, certification, staffing, and building codes. (e) Funds appropriated by the Legislature to the commission for purposes of this section shall be allocated for triage personnel to provide intensive case management and linkage to services for individuals with mental health disorders at various points of access. These funds shall be made available to selected counties, counties acting jointly, or city mental health departments, as determined by the commission through a selection process. It is the intent of the Legislature for these funds to be allocated in an efficient manner to encourage early intervention and receipt of needed services for individuals with mental health disorders, and to assist in navigating the local service sector to improve efficiencies and the delivery of services. (1) Triage personnel may provide targeted case management services face to face, by telephone, or by telehealth with the individual in need of assistance or his or her significant support person, and may be provided anywhere in the community. These service activities may include, but are not limited to, the following: (A) Communication, coordination, and referral. (B) Monitoring service delivery to ensure the individual accesses and receives services. (C) Monitoring the individual's progress. (D) Providing placement service assistance and service plan development. (2) The commission shall take into account at least the following criteria and factors when selecting recipients and determining the amount of grant awards for triage personnel as follows: (A) Description of need, including potential gaps in local service connections. (B) Description of funding request, including personnel and use of peer support. (C) Description of how triage personnel will be used to facilitate linkage and access to services, including objectives and anticipated outcomes. (D) Ability to obtain federal Medicaid reimbursement, when applicable. (E) Ability to administer an effective service program and the degree to which local agencies and service providers will support and collaborate with the triage personnel effort. (F) Geographic areas or regions of the state to be eligible for grant awards, which shall include rural, suburban, and urban areas, and may include use of the five regional designations utilized by the  California Mental   County B   ehavioral  Health Directors  Association.   Association of California.  (3) The commission shall determine maximum grant awards, and shall take into consideration the level of need, population to be served, and related criteria, as described in paragraph (2), and shall reflect reasonable costs. (4) Funds awarded by the commission for purposes of this section may be used to supplement, but not supplant, existing financial and resource commitments of the county, counties acting jointly, or city mental health department that received the grant. (5) Notwithstanding any other law, a county, counties acting jointly, or city mental health department that receives an award of funds for the purpose of supporting triage personnel pursuant to this subdivision is not required to provide a matching contribution of local funds. (6) Notwithstanding any other law, the commission, without taking any further regulatory action, may implement, interpret, or make specific this section by means of informational letters, bulletins, or similar instructions. (7) The commission shall provide a status report to the fiscal and policy committees of the Legislature on the progress of implementation no later than March 1, 2014. SEC. 27. Section 5892 of the Welfare and Institutions Code is amended to read: 5892. (a) In order to promote efficient implementation of this act, the county shall use funds distributed from the Mental Health Services Fund as follows: (1) In 2005-06, 2006-07, and in 2007-08 10 percent shall be placed in a trust fund to be expended for education and training programs pursuant to Part 3.1. (2) In 2005-06, 2006-07 and in 2007-08 10 percent for capital facilities and technological needs distributed to counties in accordance with a formula developed in consultation with the  California Mental   County Behavioral  Health Directors Association  of California  to implement plans developed pursuant to Section 5847. (3) Twenty percent of funds distributed to the counties pursuant to subdivision (c) of Section 5891 shall be used for prevention and early intervention programs in accordance with Part 3.6 (commencing with Section 5840) of this division. (4) The expenditure for prevention and early intervention may be increased in any county in which the department determines that the increase will decrease the need and cost for additional services to severely mentally ill persons in that county by an amount at least commensurate with the proposed increase. (5) The balance of funds shall be distributed to county mental health programs for services to persons with severe mental illnesses pursuant to Part 4 (commencing with Section 5850), for the children's system of care and Part 3 (commencing with Section 5800), for the adult and older adult system of care. (6) Five percent of the total funding for each county mental health program for Part 3 (commencing with Section 5800), Part 3.6 (commencing with Section 5840), and Part 4 (commencing with Section 5850) of this division, shall be utilized for innovative programs in accordance with Sections 5830, 5847, and 5848. (b) In any year after 2007-08, programs for services pursuant to Part 3 (commencing with Section 5800), and Part 4 (commencing with Section 5850) of this division may include funds for technological needs and capital facilities, human resource needs, and a prudent reserve to ensure services do not have to be significantly reduced in years in which revenues are below the average of previous years. The total allocation for purposes authorized by this subdivision shall not exceed 20 percent of the average amount of funds allocated to that county for the previous five years pursuant to this section. (c) The allocations pursuant to subdivisions (a) and (b) shall include funding for annual planning costs pursuant to Section 5848. The total of these costs shall not exceed 5 percent of the total of annual revenues received for the fund. The planning costs shall include funds for county mental health programs to pay for the costs of consumers, family members, and other stakeholders to participate in the planning process and for the planning and implementation required for private provider contracts to be significantly expanded to provide additional services pursuant to Part 3 (commencing with Section 5800), and Part 4 (commencing with Section 5850) of this division. (d) Prior to making the allocations pursuant to subdivisions (a), (b), and (c), funds shall be reserved for the costs for the State Department of Health Care Services, the California Mental Health Planning Council, the Office of Statewide Health Planning and Development, the Mental Health Services Oversight and Accountability Commission, the State Department of Public Health, and any other state agency to implement all duties pursuant to the programs set forth in this section. These costs shall not exceed 5 percent of the total of annual revenues received for the fund. The administrative costs shall include funds to assist consumers and family members to ensure the appropriate state and county agencies give full consideration to concerns about quality, structure of service delivery, or access to services. The amounts allocated for administration shall include amounts sufficient to ensure adequate research and evaluation regarding the effectiveness of services being provided and achievement of the outcome measures set forth in Part 3 (commencing with Section 5800), Part 3.6 (commencing with Section 5840), and Part 4 (commencing with Section 5850) of this division. The amount of funds available for the purposes of this subdivision in any fiscal year shall be subject to appropriation in the annual Budget Act. (e) In 2004-05 funds shall be allocated as follows: (1) Forty-five percent for education and training pursuant to Part 3.1 (commencing with Section 5820) of this division. (2) Forty-five percent for capital facilities and technology needs in the manner specified by paragraph (2) of subdivision (a). (3) Five percent for local planning in the manner specified in subdivision (c). (4) Five percent for state implementation in the manner specified in subdivision (d). (f) Each county shall place all funds received from the State Mental Health Services Fund in a local Mental Health Services Fund. The Local Mental Health Services Fund balance shall be invested consistent with other county funds and the interest earned on the investments shall be transferred into the fund. The earnings on investment of these funds shall be available for distribution from the fund in future years. (g) All expenditures for county mental health programs shall be consistent with a currently approved plan or update pursuant to Section 5847. (h) Other than funds placed in a reserve in accordance with an approved plan, any funds allocated to a county  which   that  have not been spent for their authorized purpose within three years shall revert to the state to be deposited into the fund and available for other counties in future years, provided however, that funds for capital facilities, technological needs, or education and training may be retained for up to 10 years before reverting to the fund. (i) If there are still additional revenues available in the fund after the Mental Health Services Oversight and Accountability Commission has determined there are prudent reserves and no unmet needs for any of the programs funded pursuant to this section, including all purposes of the Prevention and Early Intervention Program, the commission shall develop a plan for expenditures of these revenues to further the purposes of this act and the Legislature may appropriate these funds for any purpose consistent with the commission's adopted plan  which   that  furthers the purposes of this act. (j) For the 2011-12 fiscal year, General Fund revenues will be insufficient to fully fund many existing mental health programs, including Early and Periodic Screening, Diagnosis, and Treatment (EPSDT), Medi-Cal Specialty Mental Health Managed Care, and mental health services provided for special education pupils. In order to adequately fund those programs for the 2011-12 fiscal year and avoid deeper reductions in programs that serve individuals with severe mental illness and the most vulnerable, medically needy citizens of the state, prior to distribution of funds under paragraphs (1) to (6), inclusive, of subdivision (a), effective July 1, 2011, moneys shall be allocated from the Mental Health Services Fund to the counties as follows: (1) Commencing July 1, 2011, one hundred eighty-three million six hundred thousand dollars ($183,600,000) of the funds available as of July 1, 2011, in the Mental Health Services Fund, shall be allocated in a manner consistent with subdivision (c) of Section 5778 and based on a formula determined by the state in consultation with the  California Mental   County Behavioral  Health Directors Association  of California  to meet the fiscal year 2011-12 General Fund obligation for Medi-Cal Specialty Mental Health Managed Care. (2) Upon completion of the allocation in paragraph (1), the Controller shall distribute to counties ninety-eight million five hundred eighty-six thousand dollars ($98,586,000) from the Mental Health Services Fund for mental health services for special education pupils based on a formula determined by the state in consultation with the  California Mental   County Behavioral  Health Directors Association  of California  . (3) Upon completion of the allocation in paragraph (2), the Controller shall distribute to counties 50 percent of their 2011-12 Mental Health Services Act component allocations consistent with Sections 5847 and 5891, not to exceed four hundred eighty-eight million dollars ($488,000,000). This allocation shall commence beginning August 1, 2011. (4) Upon completion of the allocation in paragraph (3), and as revenues are deposited into the Mental Health Services Fund, the Controller shall distribute five hundred seventy-nine million dollars ($579,000,000) from the Mental Health Services Fund to counties to meet the General Fund obligation for EPSDT for fiscal year 2011-12. These revenues shall be distributed to counties on a quarterly basis and based on a formula determined by the state in consultation with the  California Mental   County Behavioral  Health Directors Association  of California  . These funds shall not be subject to reconciliation or cost settlement. (5) The Controller shall distribute to counties the remaining 2011-12 Mental Health Services Act component allocations consistent with Sections 5847 and 5891, beginning no later than April 30, 2012. These remaining allocations shall be made on a monthly basis. (6) The total one-time allocation from the Mental Health Services Fund for EPSDT, Medi-Cal Specialty Mental Health Managed Care, and mental health services provided to special education pupils as referenced shall not exceed eight hundred sixty-two million dollars ($862,000,000). Any revenues deposited in the Mental Health Services Fund in fiscal year 2011-12 that exceed this obligation shall be distributed to counties for remaining fiscal year 2011-12 Mental Health Services Act component allocations, consistent with Sections 5847 and 5891. (k) Subdivision (j) shall not be subject to repayment. (  l  ) Subdivision (j) shall become inoperative on July 1, 2012. SEC. 28. Section 5899 of the Welfare and Institutions Code is amended to read: 5899. (a) The State Department of Health Care Services, in consultation with the Mental Health Services Oversight and Accountability Commission and the  California Mental   County Behavioral  Health Directors Association  of California  , shall develop and administer instructions for the Annual Mental Health Services Act Revenue and Expenditure Report. This report shall be submitted electronically to the department and to the Mental Health Services Oversight and Accountability Commission. (b) The purpose of the Annual Mental Health Services Act Revenue and Expenditure Report is as follows: (1) Identify the expenditures of Mental Health Services Act (MHSA) funds that were distributed to each county. (2) Quantify the amount of additional funds generated for the mental health system as a result of the MHSA. (3) Identify unexpended funds, and interest earned on MHSA funds. (4) Determine reversion amounts, if applicable, from prior fiscal year distributions. (c) This report is intended to provide information that allows for the evaluation of all of the following: (1) Children's systems of care. (2) Prevention and early intervention strategies. (3) Innovative projects. (4) Workforce education and training. (5) Adults and older adults systems of care. (6) Capital facilities and technology needs. SEC. 29. Section 5902 of the Welfare and Institutions Code is amended to read: 5902. (a) In the 1991-92 fiscal year, funding sufficient to cover the cost of the basic level of care in institutions for mental disease at the rate established by the State Department of Health Services shall be made available to the department for skilled nursing facilities, plus the rate established for special treatment programs. The department may authorize a county to administer institutions for mental disease services if the county with the consent of the affected providers makes a request to administer services and an allocation is made to the county for these services. The department shall continue to contract with these providers for the services necessary for the operation of the institutions for mental disease. (b) In the 1992-93 fiscal year, the department shall consider county-specific requests to continue to provide administrative services relative to institutions for mental disease facilities when no viable alternatives are found to exist. (c) (1) By October 1, 1991, the department, in consultation with the  California Conference of Local Mental Health Directors   County Behavioral Health Directors Association of California  and the California Association of Health Facilities, shall develop and publish a county-specific allocation of institutions for mental disease funds  which   that  will take effect on July 1, 1992. (2) By November 1, 1991, counties shall notify the providers of any intended change in service levels to be effective on July 1, 1992. (3) By April 1, 1992, counties and providers shall have entered into contracts for basic institutions for mental disease services at the rate described in subdivision (e) for the 1992-93 fiscal year at the level expressed on or before November 1, 1991, except that a county shall be permitted additional time, until June 1, 1992, to complete the processing of the contract, when any of the following conditions are met: (A) The county and the affected provider have agreed on all substantive institutions for mental disease contract issues by April 1, 1992. (B) Negotiations are in process with the county on April 1, 1992, and the affected provider has agreed in writing to the extension. (C) The service level committed to on November 1, 1991, exceeds the affected provider's bed capacity. (D) The county can document that the affected provider has refused to enter into negotiations by April 1, 1992, or has substantially delayed negotiations. (4) If a county and a provider are unable to reach agreement on substantive contract issues by June 1, 1992, the department may, upon request of either the affected county or the provider, mediate the disputed issues. (5) Where contracts for service at the level committed to on November 1, 1991, have not been completed by April 1, 1992, and additional time is not permitted pursuant to the exceptions specified in paragraph (3) the funds allocated to those counties shall revert for reallocation in a manner that shall promote equity of funding among counties. With respect to counties with exceptions permitted pursuant to paragraph (3), funds shall not revert unless contracts are not completed by June 1, 1992. In no event shall funds revert under this section if there is no harm to the provider as a result of the county contract not being completed. During the 1992-93 fiscal year, funds reverted under this paragraph shall be used to purchase institution for mental disease/skilled nursing/special treatment program services in existing facilities. (6) Nothing in this section shall apply to negotiations regarding supplemental payments beyond the rate specified in subdivision (e). (d) On or before April 1, 1992, counties may complete contracts with facilities for the direct purchase of services in the 1992-93 fiscal year. Those counties for which facility contracts have not been completed by that date shall be deemed to continue to accept financial responsibility for those patients during the subsequent fiscal year at the rate specified in subdivision (a). (e) As long as contracts with institutions for mental disease providers require the facilities to maintain skilled nursing facility licensure and certification, reimbursement for basic services shall be at the rate established by the State Department of Health Services. Except as provided in this section, reimbursement rates for services in institutions for mental diseases shall be the same as the rates in effect on July 31, 2004. Effective July 1, 2005, through June 30, 2008, the reimbursement rate for institutions for mental disease shall increase by 6.5 percent annually. Effective July 1, 2008, the reimbursement rate for institutions for mental disease shall increase by 4.7 percent annually. (f) (1) Providers that agree to contract with the county for services under an alternative mental health program pursuant to Section 5768 that does not require skilled nursing facility licensure shall retain return rights to licensure as skilled nursing facilities. (2) Providers participating in an alternative program that elect to return to skilled nursing facility licensure shall only be required to meet those requirements under which they previously operated as a skilled nursing facility. (g) In the 1993-94 fiscal year and thereafter, the department shall consider requests to continue administrative services related to institutions for mental disease facilities from counties with a population of 150,000 or less based on the most recent available estimates of population data as determined by the Population Research Unit of the Department of Finance. SEC. 30. Section 11467 of the Welfare and Institutions Code is amended to read: 11467. (a) The State Department of Social Services, with the advice and assistance of the County Welfare Directors Association, the Chief Probation Officer's Association, the  California Mental   County Behavioral  Health Directors Association  of California  , research entities, foster youth and advocates for foster youth, foster care provider business entities organized and operated on a nonprofit basis, tribes, and other stakeholders, shall establish a working group to develop performance standards and outcome measures for providers of out-of-home care placements made under the AFDC-FC program, including, but not limited to, foster family agency, group home, and THP-Plus providers, and for the effective and efficient administration of the AFDC-FC program. (b) The performance standards and outcome measures shall employ the applicable performance standards and outcome measures as set forth in Sections 11469 and 11469.1, designed to identify the degree to which foster care providers, including business entities organized and operated on a nonprofit basis, are providing out-of-home placement services that meet the needs of foster children, and the degree to which these services are supporting improved outcomes, including those identified by the California Child and Family Service Review System. (c) In addition to the process described in subdivision (a), the working group may also develop the following: (1) A means of identifying the child's needs and determining which is the most appropriate out-of-home placement for a child. (2) A procedure for identifying children who have been in congregate care for one year or longer, determining the reasons each child remains in congregate care, and developing a plan for each child to transition to a less restrictive, more family-like setting. (d) The department shall provide updates regarding its progress toward meeting the requirements of this section during the 2013 and 2014 budget hearings. (e) Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 13340) of Part 1 of Division 3 of Title 2 of the Government Code), until the enactment of applicable state law, or October 1, 2015, whichever is earlier, the department may implement the changes made pursuant to this section through all-county letters, or similar instructions from the director. SEC. 31. Section 11469 of the Welfare and Institutions Code is amended to read: 11469. (a) The department, in consultation with group home providers, the County Welfare Directors Association, the Chief Probation Officers of California, the  California Mental   County Behavioral  Health Directors Association  of California  , and the State Department of Health Care Services, shall develop performance standards and outcome measures for determining the effectiveness of the care and supervision, as defined in subdivision (b) of Section 11460, provided by group homes under the AFDC-FC program pursuant to Sections 11460 and 11462. These standards shall be designed to measure group home program performance for the client group that the group home program is designed to serve. (1) The performance standards and outcome measures shall be designed to measure the performance of group home programs in areas over which the programs have some degree of influence, and in other areas of measurable program performance that the department can demonstrate are areas over which group home programs have meaningful managerial or administrative influence. (2) These standards and outcome measures shall include, but are not limited to, the effectiveness of services provided by each group home program, and the extent to which the services provided by the group home assist in obtaining the child welfare case plan objectives for the child. (3) In addition, when the group home provider has identified as part of its program for licensing, ratesetting, or county placement purposes, or has included as a part of a child's case plan by mutual agreement between the group home and the placing agency, specific mental health, education, medical, and other child-related services, the performance standards and outcome measures may also measure the effectiveness of those services. (b) Regulations regarding the implementation of the group home performance standards system required by this section shall be adopted no later than one year prior to implementation. The regulations shall specify both the performance standards system and the manner by which the AFDC-FC rate of a group home program shall be adjusted if performance standards are not met. (c) Except as provided in subdivision (d), effective July 1, 1995, group home performance standards shall be implemented. Any group home program not meeting the performance standards shall have its AFDC-FC rate, set pursuant to Section 11462, adjusted according to the regulations required by this section. (d) Effective July 1, 1995, group home programs shall be classified at rate classification level 13 or 14 only if all of the following are met: (1) The program generates the requisite number of points for rate classification level 13 or 14. (2) The program only accepts children with special treatment needs as determined through the assessment process pursuant to paragraph (2) of subdivision (a) of Section 11462.01. (3) The program meets the performance standards designed pursuant to this section. (e) Notwithstanding subdivision (c), the group home program performance standards system shall not be implemented prior to the implementation of the AFDC-FC performance standards system. (f) By January 1, 2016, the department, in consultation with the County Welfare Directors Association, the Chief Probation Officers of California, the  California Mental   County Behavioral  Health Directors Association  of California  , research entities, foster youth and advocates for foster youth, foster care provider business entities organized and operated on a nonprofit basis, Indian tribes, and other stakeholders, shall develop additional performance standards and outcome measures that require group homes to implement programs and services to minimize law enforcement contacts and delinquency petition filings arising from incidents of allegedly unlawful behavior by minors occurring in group homes or under the supervision of group home staff, including individualized behavior management programs, emergency intervention plans, and conflict resolution processes. SEC. 32. Section 14021.4 of the Welfare and Institutions Code is amended to read: 14021.4. (a) California's plan for federal Medi-Cal grants for medical assistance programs, pursuant to Subchapter XIX (commencing with Section 1396) of Title 42 of the United States Code, shall accomplish the following objectives: (1) Expansion of the location and type of therapeutic services offered to persons with mental illnesses under Medi-Cal by the category of "other diagnostic, screening, preventative, and rehabilitative services"  which   that  is available to states under the federal Social Security Act and its implementing regulations (42 U.S.C. Sec. 1396d(a)(13); 42 C.F.R. 440.130). (2) Expansion of federal financial participation in the costs of specialty mental health services provided by local mental health plans or under contract with the mental health plans. (3) Expansion of the location where reimbursable specialty mental health services can be provided, including home, school, and community based sites. (4) Expansion of federal financial participation for services  which   that  meet the rehabilitation needs of persons with mental illnesses, including, but not limited to, medication management, functional rehabilitation assessments of clients, and rehabilitative services  which   that  include remedial services directed at restoration to the highest possible functional level for persons with mental illnesses and maximum reduction of symptoms of mental illness. (5) Improvement of fiscal systems and accountability structures for specialty mental health services, costs, and rates, with the goal of achieving federal fiscal requirements. (b) The department's state plan revision shall be completed with review and comments by the  California Mental   County Behavioral  Health Directors Association  of California  and other appropriate groups. (c) Services under the rehabilitative option shall be limited to specialty mental health plans certified to provide Medi-Cal under this option. (d) It is the intent of the Legislature that the rehabilitation option of the state Medicaid plan be implemented to expand and provide flexibility to treatment services and to increase the federal participation without increasing the costs to the General Fund. (e) The department shall review and revise the quality assurance standards and guidelines required by Section 14725 to ensure that quality services are delivered to the eligible population. Any reviews shall include, but not be limited to, appropriate use of mental health professionals, including psychiatrists, in the treatment and rehabilitation of clients under this model. The existing quality assurance standards and guidelines shall remain in effect until the adoption of the new quality assurance standards and guidelines. (f) Consistent with services offered to persons with mental illnesses under the Medi-Cal program, as required by this section, it is the intent of the Legislature for the department to include care and treatment of persons with mental illnesses who are eligible for the Medi-Cal program in facilities with a bed capacity of 16 beds or less. SEC. 33. Section 14124.24 of the Welfare and Institutions Code is amended to read: 14124.24. (a) For purposes of this section, "Drug Medi-Cal reimbursable services" means the substance use disorder services described in the California State Medicaid Plan and includes, but is not limited to, all of the following services, administered by the department, and to the extent consistent with state and federal law: (1) Narcotic treatment program services, as set forth in Section 14021.51. (2) Day care rehabilitative services. (3) Perinatal residential services for pregnant women and women in the postpartum period. (4) Naltrexone services. (5) Outpatient drug-free services. (6) Other services upon approval of a federal Medicaid state plan amendment or waiver authorizing federal financial participation. (b) (1) While seeking federal approval for any federal Medicaid state plan amendment or waiver associated with Drug Medi-Cal services, the department shall consult with the counties and stakeholders in the development of the state plan amendment or waiver. (2) Upon federal approval of a federal Medicaid state plan amendment authorizing federal financial participation in the following services, and subject to appropriation of funds, "Drug Medi-Cal reimbursable services" shall also include the following services, administered by the department, and to the extent consistent with state and federal law: (A) Notwithstanding subdivision (a) of Section 14132.90, day care habilitative services, which, for purposes of this paragraph, are outpatient counseling and rehabilitation services provided to persons with substance use disorder diagnoses. (B) Case management services, including supportive services to assist persons with substance use disorder diagnoses in gaining access to medical, social, educational, and other needed services. (C) Aftercare services. (c) (1) The nonfederal share for Drug Medi-Cal services shall be funded through a county's Behavioral Health Subaccount of the Support Services Account of the Local Revenue Fund 2011, and any other available county funds eligible under federal law for federal Medicaid reimbursement. The funds contained in each county's Behavioral Health Subaccount of the Support Services Account of the Local Revenue Fund 2011 shall be considered state funds distributed by the principal state agency for the purposes of receipt of the federal block grant funds for prevention and treatment of substance abuse found at Subchapter XVII of Chapter 6A of Title 42 of the United States Code. Pursuant to applicable federal Medicaid law and regulations including Section 433.51 of Title 42 of the Code of Federal Regulations, counties may claim allowable Medicaid federal financial participation for Drug Medi-Cal services based on the counties certifying their actual total funds expenditures for eligible Drug Medi-Cal services to the department. (2) (A) If the director determines that a county's provision of Drug Medi-Cal treatment services are disallowed by the federal government or by state or federal audit or review, the impacted county shall be responsible for repayment of all disallowed federal funds. In addition to any other recovery methods available, including, but not limited to, offset of Medicaid federal financial participation funds owed to the impacted county, the director may offset these amounts in accordance with Section 12419.5 of the Government Code. (B) A county subject to an action by the director pursuant to subparagraph (A) may challenge that action by requesting a hearing in writing no later than 30 days from receipt of notice of the department's action. The proceeding shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the director has all the powers granted therein. Upon a county's timely request for hearing, the county's obligation to make payment as determined by the director shall be stayed pending the county's exhaustion of administrative remedies provided herein but no longer than will ensure the department's compliance with Section 1903(d)(2)(C) of the federal Social Security Act (42 U.S.C. Sec. 1396b). (d) Drug Medi-Cal services are only reimbursable to Drug Medi-Cal providers with an approved Drug Medi-Cal contract. (e) Counties shall negotiate contracts only with providers certified to provide Drug Medi-Cal services. (f) The department shall develop methods to ensure timely payment of Drug Medi-Cal claims. (g) (1) A county or a contracted provider, except for a provider to whom subdivision (h) applies, shall submit accurate and complete cost reports for the previous fiscal year by November 1, following the end of the fiscal year. The department may settle Drug Medi-Cal reimbursable services, based on the cost report as the final amendment to the approved county Drug Medi-Cal contract. (2) Amounts paid for services provided to Drug Medi-Cal beneficiaries shall be audited by the department in the manner and form described in Section 14170. (3) Administrative appeals to review grievances or complaints arising from the findings of an audit or examination made pursuant to this section shall be subject to Section 14171. (h) Certified narcotic treatment program providers that are exclusively billing the state or the county for services rendered to persons subject to Section 1210.1 or 3063.1 of the Penal Code or Section 14021.52 of this code shall submit accurate and complete performance reports for the previous state fiscal year by November 1 following the end of that fiscal year. A provider to which this subdivision applies shall estimate its budgets using the uniform state daily reimbursement rate. The format and content of the performance reports shall be mutually agreed to by the department, the County  Alcohol and Drug Program Administrators'   Behavioral Health Directors  Association of California, and representatives of the treatment providers. (i) Contracts entered into pursuant to this section 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. (j) Annually, the department shall publish procedures for contracting for Drug Medi-Cal services with certified providers and for claiming payments, including procedures and specifications for electronic data submission for services rendered. (k) If the department commences a preliminary criminal investigation of a certified provider, the department shall promptly notify each county that currently contracts with the provider for Drug Medi-Cal services that a preliminary criminal investigation has commenced. If the department concludes a preliminary criminal investigation of a certified provider, the department shall promptly notify each county that currently contracts with the provider for Drug Medi-Cal services that a preliminary criminal investigation has concluded. (1) Notice of the commencement and conclusion of a preliminary criminal investigation pursuant to this section shall be made to the county behavioral health director or his or her equivalent. (2) Communication between the department and a county specific to the commencement or conclusion of a preliminary criminal investigation pursuant to this section shall be deemed confidential and shall not be subject to any disclosure request, including, but not limited to, the Information Practices Act of 1997 (Chapter 1 (commencing with Section 1798) of Title 1.8 of Part 4 of Division 3 of the Code of Civil Procedure), the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code), requests pursuant to a subpoena, or for any other public purpose, including, but not limited to, court testimony. (3) Information shared by the department with a county regarding a preliminary criminal investigation shall be maintained in a manner to ensure protection of the confidentiality of the criminal investigation. (4) The information provided to a county pursuant to this section shall only include the provider name, national provider identifier (NPI) number, address, and the notice that an investigation has commenced or concluded. (5) A county shall not take any adverse action against a provider based solely upon the preliminary criminal investigation information disclosed to the county pursuant to this section. (6) In the event of a preliminary criminal investigation of a county owned or operated program, the department has the option to, but is not required to, notify the county pursuant to this section when the department commences or concludes a preliminary criminal investigation. (7) This section shall not limit the voluntary or otherwise legally mandated or contractually mandated sharing of information between the department and a county of information regarding audits and investigations of Drug Medi-Cal providers. (8) "Commenced" means the time at which a complaint or allegation is assigned to an investigator for a field investigation. (9) "Preliminary criminal investigation" means an investigation to gather information to determine if criminal law or statutes have been violated. SEC. 34. Section 14251 of the Welfare and Institutions Code is amended to read: 14251.  (a)     (1)    "Prepaid health plan" means  any plan which   a plan that  meets all of the following criteria:  (a)   (A)   Licensed   Is licensed  as a health care service plan by the Director of the Department of Managed Health Care pursuant to the Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2 (commencing with Section 1340), Division 2, Health and Safety Code), other than a plan organized and operating pursuant to Section 10810 of the Corporations Code  which   that  substantially indemnifies subscribers or enrollees for the cost of provided services, or has an application for licensure pending and was registered under the Knox-Mills Health Plan Act prior to its  repeal (Chapter 941, Statutes of 1975) or licensed as a nonprofit hospital service plan by the Insurance Commissioner pursuant to Section 11493(e) and Sections 11501 to 11505 of the Insurance Code.   repeal.   (b)   (B)  Meets the requirements for participation in the Medicaid Program (Title XIX of the Social Security Act) on an at risk basis.  (c)   (C)  Agrees with the State Department of Health  Care  Services to furnish directly or indirectly health services to Medi-Cal beneficiaries on a predetermined periodic rate basis.  "Prepaid   (2)    "Prepaid health plan" includes any organization  which   that  is licensed as a plan pursuant to the Knox-Keene Health Care Service Plan Act of 1975 and is subject to regulation by the Department of Managed Health Care pursuant to that act, and  which   that  contracts with the State Department of Health  Care  Services solely as a fiscal intermediary at risk.  Except   (b)     (1)    Except for the requirement of licensure pursuant to the Knox-Keene Act, the State Director of Health  Care  Services may waive any provision of this chapter  which   that  the director determines is inappropriate for a fiscal intermediary at risk.  Any such   An  exemption or waiver shall be set forth in the fiscal intermediary at risk contract with the State Department of Health  Care  Services.  "Fiscal   (2)    "Fiscal intermediary at risk" means any entity  which   that  entered into a contract with the State Department of Health  Care  Services on a pilot basis pursuant to subdivision (f) of Section 14000, as in effect June 1, 1973, in accordance with which the entity received capitated payments from the state and reimbursed providers of health care services on a fee-for-service or other basis for at least the basic scope of health care services, as defined in Section 14256, provided to all beneficiaries covered by the contract residing within a specified geographic region of the state. The fiscal intermediary at risk shall be at risk for the cost of administration and utilization of services or the cost of services, or both, for at least the basic scope of health care services, as defined in Section 14256, provided to all beneficiaries covered by the contract residing within a specified geographic region of the state. The fiscal intermediary at risk may share the risk with providers or reinsuring agencies or both. Eligibility of beneficiaries shall be determined by the State Department of Health  Care  Services and capitation payments shall be based on the number of beneficiaries so determined. SEC. 35. Section 14499.71 of the Welfare and Institutions Code is amended to read: 14499.71. For the purposes of this article, "fiscal intermediary" means an entity that agrees to pay for covered services provided to Medi-Cal eligibles in exchange for a premium, subscription charge, or capitation payment; to assume an underwriting risk; and is  either  licensed by the Director of the Department of Managed Health Care under 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) or is licensed as a nonprofit hospital service plan by the Insurance Commissioner pursuant to subdivision (e) of Section 11493 of the Insurance Code and Sections 11501 to 11505, inclusive, of the Insurance Code.   (Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code).  SEC. 36. Section 14707 of the Welfare and Institutions Code is amended to read: 14707. (a) In the case of federal audit exceptions, the department shall follow federal audit appeal processes unless the department, in consultation with the  California Mental   County Behavioral  Health Directors Association  of Cali   fornia  , 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. SEC. 37. Section 14711 of the Welfare and Institutions Code is amended to read: 14711. (a) The department shall develop, in consultation with the  California Mental   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. SEC. 38. Section 14717 of the Welfare and Institutions Code is amended to read: 14717. (a) In order to facilitate the receipt of medically necessary specialty mental health services by a foster child who is placed outside his or her county of original jurisdiction, the department shall take all of the following actions: (1) On or before July 1, 2008, create all of the following items, in consultation with stakeholders, including, but not limited to, the California Institute for Mental Health, the Child and Family Policy Institute, the  California Mental   County Behavioral  Health Directors Association  of California  , and the California Alliance of Child and Family Services: (A) A standardized contract for the purchase of medically necessary specialty mental health services from organizational providers, when a contract is required. (B) A standardized specialty mental health service authorization procedure. (C) A standardized set of documentation standards and forms, including, but not limited to, forms for treatment plans, annual treatment plan updates, day treatment intensive and day treatment rehabilitative progress notes, and treatment authorization requests. (2) On or before January 1, 2009, use the standardized items as described in paragraph (1) to provide medically necessary specialty mental health services to a foster child who is placed outside his or her county of original jurisdiction, so that organizational providers who are already certified by a mental health plan are not required to be additionally certified by the mental health plan in the county of original jurisdiction. (3) (A) On or before January 1, 2009, use the standardized items described in paragraph (1) to provide medically necessary specialty mental health services to a foster child placed outside his or her county of original jurisdiction to constitute a complete contract, authorization procedure, and set of documentation standards and forms, so that no additional documents are required. (B) Authorize a county mental health plan to be exempt from subparagraph (A) and have an addendum to a contract, authorization procedure, or set of documentation standards and forms, if the county mental health plan has an externally placed requirement, such as a requirement from a federal integrity agreement, that would affect one of these documents. (4) Following consultation with stakeholders, including, but not limited to, the California Institute for Mental Health, the Child and Family Policy Institute, the  California Mental   County Behavioral  Health Directors Association  of California  , the California State Association of Counties, and the California Alliance of Child and Family Services, require the use of the standardized contracts, authorization procedures, and documentation standards and forms as specified in paragraph (1) in the 2008-09 state-county mental health plan contract and each state-county mental health plan contract thereafter. (5) The mental health plan shall complete a standardized contract, as provided in paragraph (1), if a contract is required, or another mechanism of payment if a contract is not required, with a provider or providers of the county's choice, to deliver approved specialty mental health services for a specified foster child, within 30 days of an approved treatment authorization request. (b) The California Health and Human Services Agency shall coordinate the efforts of the department and the State Department of Social Services to do all of the following: (1) Participate with the stakeholders in the activities described in this section. (2) During budget hearings in 2008 and 2009, report to the Legislature regarding the implementation of this section and subdivision (c) of Section 14716. (3) On or before July 1, 2008, establish the following, in consultation with stakeholders, including, but not limited to, the  California Mental   County Behavioral  Health Directors Association  of California  , the California Alliance of Child and Family Services, and the County Welfare Directors Association of California: (A) Informational materials that explain to foster care providers how to arrange for specialty mental health services on behalf of the beneficiary in their care. (B) Informational materials that county child welfare agencies can access relevant to the provision of services to children in their care from the out-of-county local mental health plan that is responsible for providing those services, including, but not limited to, receiving a copy of the child's treatment plan within 60 days after requesting services. (C) It is the intent of the Legislature to ensure that foster children who are adopted or placed permanently with relative guardians, and who move to a county outside their original county of residence, can access specialty mental health services in a timely manner. It is the intent of the Legislature to enact this section as a temporary means of ensuring access to these services, while the appropriate stakeholders pursue a long-term solution in the form of a change to the Medi-Cal Eligibility Data System that will allow these children to receive specialty mental health services through their new county of residence. SEC. 39. Section 14718 of the Welfare and Institutions Code is amended to read: 14718. (a) This section shall be limited to specialty mental health services reimbursed to a mental health plan that certifies public expenditures subject to cost settlement or specialty mental health services reimbursed through the department's fiscal intermediary. (b) The following provisions shall apply to matters related to specialty mental health services provided under the approved Medi-Cal state plan and the Specialty Mental Health Services Waiver, including, but not limited to, reimbursement and claiming procedures, reviews and oversight, and appeal processes for mental health plans (MHPs) and MHP subcontractors. (1) As determined by the department, the MHP shall submit claims for reimbursement to the Medi-Cal program for eligible services. (2) The department may offset the amount of any federal disallowance, audit exception, or overpayment against subsequent claims from the MHP. The department may offset the amount of any state disallowance, or audit exception or overpayment against subsequent claims from the mental health plan, through the 2010-11 fiscal year. This offset may be done at any time, after the department has invoiced or otherwise notified the mental health plan about the audit exception, disallowance, or overpayment. The department shall determine the amount that may be withheld from each payment to the mental health plan. The maximum withheld amount shall be 25 percent of each payment as long as the department is able to comply with the federal requirements for repayment of federal financial participation pursuant to Section 1903(d)(2) of the federal Social Security Act (42 U.S.C. Sec. 1396b(d)(2)). The department may increase the maximum amount when necessary for compliance with federal laws and regulations. (3) (A) Oversight by the department of the MHPs may include client record reviews of Early Periodic Screening Diagnosis and Treatment (EPSDT) specialty mental health services rendered by MHPs and MHP subcontractors under the Medi-Cal specialty mental health services waiver in addition to other audits or reviews that are conducted. (B) The department may contract with an independent, nongovernmental entity to conduct client record reviews. The contract awarded in connection with this section shall be on a competitive bid basis, pursuant to the Department of General Services contracting requirements, and shall meet both of the following additional requirements: (i) Require the entity awarded the contract to comply with all federal and state privacy laws, including, but not limited to, the federal Health Insurance Portability and Accountability Act (HIPAA; 42 U.S.C. Sec. 1320d et seq.) and its implementing regulations, the Confidentiality of Medical Information Act (Part 2.6 (commencing with Section 56) of Division 1 of the Civil Code), and Section 1798.81.5 of the Civil Code. The entity shall be subject to existing penalties for violation of these laws. (ii) Prohibit the entity awarded the contract from using or disclosing client records or client information for a purpose other than the one for which the record was given. (iii) Prohibit the entity awarded the contract from selling client records or client information. (C) For purposes of this paragraph, the following terms shall have the following meanings: (i) "Client record" means a medical record, chart, or similar file, as well as other documents containing information regarding an individual recipient of services, including, but not limited to, clinical information, dates and times of services, and other information relevant to the individual and services provided and that evidences compliance with legal requirements for Medi-Cal reimbursement. (ii) "Client record review" means examination of the client record for a selected individual recipient for the purpose of confirming the existence of documents that verify compliance with legal requirements for claims submitted for Medi-Cal reimbursement. (D) The department shall recover overpayments of federal financial participation from MHPs within the timeframes required by federal law and regulation for repayment to the federal Centers for Medicare and Medicaid Services. (4) (A) The department, in consultation with mental health stakeholders, the  California Mental   County Behavioral  Health Directors Association  of California  , and MHP subcontractor representatives, shall provide an appeals process that specifies a progressive process for resolution of disputes about claims or recoupments relating to specialty mental health services under the Medi-Cal specialty mental health services waiver. (B) The department shall provide MHPs and MHP subcontractors the opportunity to directly appeal findings in accordance with procedures that are similar to those described in Article 1.5 (commencing with Section 51016) of Chapter 3 of Subdivision 1 of Division 3 of Title 22 of the California Code of Regulations, until new regulations for a progressive appeals process are promulgated. When an MHP subcontractor initiates an appeal, it shall give notice to the MHP. The department shall propose a rulemaking package consistent with the department's appeals process that is in effect on July 1, 2012 by no later than the end of the 2013-14 fiscal year. The reference in this subparagraph to the procedures described in Article 1.5 (commencing with Section 51016) of Chapter 3 of Subdivision 1 of Division 3 of Title 22 of the California Code of Regulations, shall only apply to those appeals addressed in this subparagraph. (C) The department shall develop regulations as necessary to implement this paragraph. (5) The department shall conduct oversight of utilization controls as specified in Section 14133. The MHP shall include a requirement in any subcontracts that all inpatient subcontractors maintain necessary licensing and certification. MHPs shall require that services delivered by licensed staff are within their scope of practice. Nothing in this chapter shall prohibit the MHPs from establishing standards that are in addition to the federal and state requirements, provided that these standards do not violate federal and state requirements and guidelines. (6) (A) Subject to federal approval and consistent with state requirements, the MHP may negotiate rates with providers of specialty mental health services. (B) Any excess in the distribution of funds over the expenditures for services by the mental health plan shall be spent for the provision of specialty mental health services and related administrative costs. (7) Nothing in this chapter shall limit the MHP from being reimbursed appropriate federal financial participation for any qualified services. To receive federal financial participation, the mental health plan shall certify its public expenditures for specialty mental health services to the department. (8) Notwithstanding Section 14115, claims for federal reimbursement for service pursuant to this chapter shall be submitted by MHPs within the timeframes required by federal Medicaid requirements and the approved Medicaid state plan and waivers. (9) The MHP shall use the fiscal intermediary of the Medi-Cal program of the State Department of Health Care Services for the processing of claims for inpatient psychiatric hospital services rendered in fee-for-service Medi-Cal hospitals. The department shall request the Controller to offset the distribution of funds to the counties from the Mental Health Subaccount, the Mental Health Equity Subaccount, or the Vehicle License Collection Account of the Local Revenue Fund, or funds from the Mental Health Account or the Behavioral Health Subaccount of the Local Revenue Fund 2011 for the nonfederal financial participation share for these claims. (c) Counties may set aside funds for self-insurance, audit settlement, and statewide program risk pools. The counties shall assume all responsibility and liability for appropriate administration of the funds. Special consideration may be given to small counties with a population of less than 200,000. Nothing in the paragraph shall in any way make the state or department liable for mismanagement or loss of funds by the entity designated by counties under this subdivision. (d) The department shall consult with the California Mental Health Directors Association in February and September of each year to obtain data and methodology necessary to forecast future fiscal trends in the provision of specialty mental health services provided under the Medi-Cal specialty mental health services waiver, to estimate yearly specialty mental health services related costs, and to estimate the annual amount of federal funding participation to reimburse costs of specialty mental health services provided under the Medi-Cal specialty mental health services waiver. This shall include a separate presentation of the data and methodology necessary to forecast future fiscal trends in the provision of Early Periodic Screening, Diagnosis, and Treatment specialty mental health services provided under the Medi-Cal specialty mental health services waiver, to estimate annual EPSDT specialty mental health services related costs, and to estimate the annual amount of EPSDT specialty mental health services provided under the state Medi-Cal specialty mental health services waiver, including federal funding participation to reimburse costs of EPSDT. (e) When seeking federal approval for any federal Medicaid state plan amendment or waiver associated with Medi-Cal specialty mental health services, the department shall consult with staff of the Legislature, counties, providers, and other stakeholders in the development of the state plan amendment or waiver. (f) This section shall become operative on July 1, 2012. SEC. 40. Section 14725 of the Welfare and Institutions Code is amended to read: 14725. (a) The State Department of Health Care Services shall develop a quality assurance program to govern the delivery of Medi-Cal specialty mental health services, in order to assure quality patient care based on community standards of practice. (b) The department shall issue standards and guidelines for local quality assurance activities. These standards and guidelines shall be reviewed and revised in consultation with the  California Mental   County Behavioral  Health Directors Association  of   California,  as well as other stakeholders from the mental health community, including, but not limited to, individuals who receive services, family members, providers, mental health advocacy groups, and other interested parties. The standards and guidelines shall be based on federal Medicaid requirements. (c) The standards and guidelines developed by the department shall reflect the special problems that small rural counties have in undertaking comprehensive quality assurance systems. SEC. 41. Section 15204.8 of the Welfare and Institutions Code is amended to read: 15204.8. (a) The Legislature may appropriate annually in the Budget Act funds to support services provided pursuant to Sections 11325.7 and 11325.8. (b) Funds appropriated pursuant to subdivision (a) shall be allocated to the counties separately and shall be available for expenditure by the counties for services provided during the budget year. A county may move funds between the two accounts during the budget year for expenditure if necessary to meet the particular circumstances in the county. Any unexpended funds may be retained by each county for expenditure for the same purposes during the succeeding fiscal year. By November 20, 1998, each county shall report to the department on the use of these funds. (c) Beginning January 10, 1999, the Department of Finance shall report annually to the Legislature on the extent to which funds available under subdivision (a) have not been spent and may reallocate the unexpended balances so as to better meet the need for services. (d) No later than September 1, 2001, the department in consultation with relevant stakeholders, which may include the County Welfare Directors  Association, the California Association of Mental Health Directors, and the County Alcohol and Drug Program Administrators Association,   Association and the County Behavioral Health Directors Association of California,  shall develop the allocation methodology for these funds, including the specific components to be considered in allocating the funds. SEC. 42. Section 15847.7 of the Welfare and Institutions Code is amended to read: 15847.7. (a) For purposes of Sections 15847, 15847.3, and 15847.5, "group health coverage" includes any  nonprofit hospital service plan,  health care service plan, self-insured employee welfare benefit plan, or disability insurance providing medical or hospital benefits. (b) This section shall become operative on July 1, 2014. SEC. 43. Section 17604 of the Welfare and Institutions Code is amended to read: 17604. (a) All motor vehicle license fee revenues collected in the 1991-92 fiscal year that are deposited to the credit of the Local Revenue Fund shall be credited to the Vehicle License Fee Account of that fund. (b) (1) For the 1992-93 fiscal year and fiscal years thereafter, from vehicle license fee proceeds from revenues deposited to the credit of the Local Revenue Fund, the Controller shall make monthly deposits to the Vehicle License Fee Account of the Local Revenue Fund until the deposits equal the amounts that were allocated to counties, cities, and cities and counties as general purpose revenues in the prior fiscal year pursuant to this chapter from the Vehicle License Fee Account in the Local Revenue Fund and the Vehicle License Fee Account and the Vehicle License Fee Growth Account in the Local Revenue Fund. (2) Any excess vehicle fee revenues deposited into the Local Revenue Fund pursuant to Section 11001.5 of the Revenue and Taxation Code shall be deposited in the Vehicle License Fee Growth Account of the Local Revenue Fund. (3) The Controller shall calculate the difference between the total amount of vehicle license fee proceeds deposited to the credit of the Local Revenue Fund, pursuant to paragraph (1) of subdivision (a) of Section 11001.5 of the Revenue and Taxation Code, and deposited into the Vehicle License Fee Account for the period of July 16, 2009, to July 15, 2010, inclusive, and the amount deposited for the period of July 16, 2010, to July 15, 2011, inclusive. (4) Of vehicle license fee proceeds deposited to the Vehicle License Fee Account after July 15, 2011, an amount equal to the difference calculated in paragraph (3) shall be deemed to have been deposited during the period of July 16, 2010, to July 15, 2011, inclusive, and allocated to cities, counties, and a city and county as if those proceeds had been received during the 2010-11 fiscal year. (c) (1) On or before the 27th day of each month, the Controller shall allocate to each county, city, or city and county, as general purpose revenues the amounts deposited and remaining unexpended and unreserved on the 15th day of the month in the Vehicle License Fee Account of the Local Revenue Fund, in accordance with paragraphs (2) and (3). (2) For the 1991-92 fiscal year, allocations shall be made in accordance with the following schedule: Allocation Jurisdiction Percentage Alameda .................... 4.5046 Alpine ..................... 0.0137 Amador ..................... 0.1512 Butte ...................... 0.8131 Calaveras .................. 0.1367 Colusa...................... 0.1195 Contra Costa ............... 2.2386 Del Norte .................. 0.1340 El Dorado .................. 0.5228 Fresno ..................... 2.3531 Glenn ...................... 0.1391 Humboldt ................... 0.8929 Imperial ................... 0.8237 Inyo ....................... 0.1869 Kern ....................... 1.6362 Kings ...................... 0.4084 Lake ....................... 0.1752 Lassen ..................... 0.1525 Los Angeles ................ 37.2606 Madera ..................... 0.3656 Marin....................... 1.0785 Mariposa ................... 0.0815 Mendocino .................. 0.2586 Merced ..................... 0.4094 Modoc ...................... 0.0923 Mono ....................... 0.1342 Monterey ................... 0.8975 Napa ....................... 0.4466 Nevada ..................... 0.2734 Orange ..................... 5.4304 Placer ..................... 0.2806 Plumas ..................... 0.1145 Riverside .................. 2.7867 Sacramento ................. 2.7497 San Benito ................. 0.1701 San Bernardino.............. 2.4709 San Diego .................. 4.7771 San Francisco .............. 7.1450 San Joaquin ................ 1.0810 San Luis Obispo ............ 0.4811 San Mateo .................. 1.5937 Santa Barbara .............. 0.9418 Santa Clara ................ 3.6238 Santa Cruz ................. 0.6714 Shasta ..................... 0.6732 Sierra ..................... 0.0340 Siskiyou.................... 0.2246 Solano ..................... 0.9377 Sonoma ..................... 1.6687 Stanislaus ................. 1.0509 Sutter ..................... 0.4460 Tehama ..................... 0.2986 Trinity .................... 0.1388 Tulare ..................... 0.7485 Tuolumne ................... 0.2357 Ventura .................... 1.3658 Yolo ....................... 0.3522 Yuba ....................... 0.3076 Berkeley ................... 0.0692 Long Beach ........... 0.2918 Pasadena ................... 0.1385 (3) For the 1992-93, 1993-94, and 1994-95 fiscal years and fiscal years thereafter, allocations shall be made in the same amounts as were distributed from the Vehicle License Fee Account and the Vehicle License Fee Growth Account in the prior fiscal year. (4) For the 1995-96 fiscal year, allocations shall be made in the same amounts as distributed in the 1994-95 fiscal year from the Vehicle License Fee Account and the Vehicle License Fee Growth Account after adjusting the allocation amounts by the amounts specified for the following counties: Alpine .......................... $(11,296) Amador .......................... 25,417 Calaveras ....................... 49,892 Del Norte ....................... 39,537 Glenn ........................... (12,238) Lassen .......................... 17,886 Mariposa ........................ (6,950) Modoc ........................... (29,182) Mono ............................ (6,950) San Benito ...................... 20,710 Sierra .......................... (39,537) Trinity ......................... (48,009) (5) (A) For the 1996-97 fiscal year and fiscal years thereafter, allocations shall be made in the same amounts as were distributed from the Vehicle License Fee Account and the Vehicle License Fee Growth Account in the prior fiscal year. (B) Initial proceeds deposited in the Vehicle License Fee Account in the 2003-04 fiscal year in the amount that would otherwise have been transferred pursuant to former Section 10754 of the Revenue and Taxation Code for the period June 20, 2003, to July 15, 2003, inclusive, shall be deemed to have been deposited during the period June 16, 2003, to July 15, 2003, inclusive, and allocated to cities, counties, and a city and county during the 2002-03 fiscal year. (d) The Controller shall make monthly allocations from the amount deposited in the Vehicle License Collection Account of the Local Revenue Fund to each county in accordance with a schedule to be developed by the State Department of State Hospitals in consultation with the  California Mental   County Behavioral  Health Directors Association  of California  , which is compatible with the intent of the Legislature expressed in the act adding this subdivision. (e) Before making the monthly allocations in accordance with paragraph (5) of subdivision (c) and subdivision (d), and pursuant to a schedule provided by the Department of Finance, the Controller shall adjust the monthly distributions from the Vehicle License Fee Account to reflect an equal exchange of sales and use tax funds from the Social Services Subaccount to the Health Subaccount, as required by subdivisions (d) and (e) of Section 17600.15, and of Vehicle License Fee funds from the Health Account to the Social Services Account. Adjustments made to the Vehicle License Fee distributions pursuant to this subdivision shall not be used in calculating future year allocations to the Vehicle License Fee Account.