Historic (Base) Benefits:
 Narcotic Treatment Program (NTP) – Outpatient treatment primarily
utilizing methadone.
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Outpatient treatment utilizing the narcotic antagonist Naltrexone.
Outpatient Drug Free – Mostly group counseling and some limited
individual counseling.
Day Care Rehabilitative – Intensive outpatient treatment, including
group and individual counseling, eligibility for which is limited to
pregnant and postpartum women and, as an EPSDT benefit, to
children under 21.
Perinatal Residential – Residential treatment provided to pregnant
and postpartum women in facilities of 16 beds or less, not including
beds occupied by children. (Room & board must be paid for by
revenue other than D/MC.)
Enhanced DMC Benefits:
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Pursuant to new state statute (ABX 1 & SBX 1), the DMC
benchmark benefits are based on the SUD benefits in the Kaiser
Small Group Plan, and are now an entitlement for the Medicaid
population. With the exception of residential treatment and
detox, these enhanced benefits were added to the State Plan for
Drug Medi-Cal.
These enhanced benefits supplement, do not replace the current
Drug Medi-Cal benefits.
These benefits, like the historic DMC benefits, are available
statewide. There is no county opt-in.
The enhanced benefits are an entitlement for all Drug Medi-Cal
eligible, not just for the newly-eligible (the expansion
population).
Enhanced Benefits (pursuant to ABX 1 & SBX 1):
 Intensive outpatient treatment programs for all DMC
populations. Formerly called “daycare rehabilitative,” these
services include outpatient counseling and rehabilitation services
that are provided at least 3 hours per day, 3 days per week.
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Transitional residential recovery services for all DMC
populations, including chemical dependency treatment in a
nonmedical transitional residential recovery setting that provides
counseling and support services in a structured environment,
and inpatient voluntary detox in chemical dependency treatment
facilities and freestanding psychiatric facilities. (Note: these
benefits are not yet included in the DMC State Plan.)
What is the current status of the residential treatment benefit?
Although residential treatment for all DMC populations is one of
the enhanced benefits in the state’s benchmark benefit plan, CMS
has asked DHCS to remove this benefit from the State Plan because
of the Institutions for Mental Disease (IMD) payment exclusion, a
federal Medicaid rule that prohibits FFP for services provided to any
individual between the ages of 21 and 65 who is a patient in an
inpatient psychiatric or substance use disorder treatment facility
with more than 16 beds.
Currently, other than 11 perinatal residential programs, there are
no residential SUD programs in California that receive Medicaid
funding, due to the IMD exclusion. Consequently, only 1,825 beds
of the total statewide 18,155 licensed beds for residential SUD
treatment are reimbursable under Drug Medi-Cal.
Other Medi-Cal SUD benefits that are not included in DMC:
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Medically necessary voluntary inpatient detoxification in general
acute hospital settings; hospitalization for medical management
of withdrawal symptoms, including room and board, physician
services, drugs, dependency recovery services, education and
counseling. (Note: this is provided as a Medi-Cal fee-for-service
benefit.)
Medication-Assisted Treatment – This service includes
medications, other than methadone and naltrexone, that are
used in the treatment of substance use disorders in outpatient
settings. These medications are provided via Medi-Cal managed
care of Medi-Cal FFS, depending on the medication.
Screening and Brief Intervention – This service is available to the
Medi-Cal adult population for alcohol misuse, and is provided in
primary care settings via Medi-Cal managed care or FFS.
DHCS is pursuing a DMC Organized Delivery System Waiver as an
amendment to the current Section 1115 Bridge to Reform
Demonstration Waiver. This amendment would demonstrate how
organized SUD care increases successful outcomes for DMC
beneficiaries.
Key Program Elements of the Waiver:
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Continuum of Care: Participating counties will be required to
provide a continuum of services, including early intervention,
physician consultation, outpatient treatment, case management,
medication-assisted treatment, recovery services, withdrawal
management, and at least one level of residential treatment. *
Assessment Tool: The ASAM assessment tool determines the
most appropriate level of care, so that clients can enter the
system at the appropriate level and step up or step down in
intensity of services, based on their response to treatment.
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Case Management and Residency: Case management services
will be required and funded to ensure that the client is moving
through the continuum of care. Counties will be required to
coordinate care for those beneficiaries residing in the county.
Selective Provider Contracting: The Waiver would give counties
more authority to select their provider network. Counties,
however, cannot discriminate against providers, must ensure an
adequate provider network, and must guarantee beneficiary
access to all covered services.
Provider Appeals Process: The Waiver provides a process
whereby providers can appeal to the county if they are not
selected to contract with the county. Providers can also appeal
to the State on the basis of ensuring network adequacy.
Provider Certification: The State will partner with counties to
certify DMC providers, with counties conducting application and
on-site reviews and issuing provisional certification, and the
State issuing final approval.
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Clear State and County Roles: Counties will be responsible for
oversight and monitoring of providers as specified in their DMC
contract with the State.
Coordination: The Waiver supports coordination across systems,
such as requiring counties to enter into MOUs with Medi-Cal
managed care health plans for referrals and coordination, and
requiring county SUD services to collaborate with criminal justice
partners.
Authorization and Utilization Management: The Waiver provides
that counties will authorize services and ensure utilization
management.
Workforce: The Waiver will expand the pool of Medi-Cal eligible
service providers to include licensed practitioners of the healing
arts (LPHAs) for the assessment of beneficiaries, and other
services within their scope of practice.
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Program Improvement: The Waiver promotes patient-centered,
evidence-based practices, including medication-assisted
treatment services, and increasing system capacity for youth
services.
Voluntary County Opt-In Demonstration: The proposed Waiver
will be operational in counties that elect to opt into this
organized DMC delivery system and agree to meet the specified
requirements. Opt-in counties could choose to create an
organized delivery system separate from Medi-Cal managed
care, or could contract with Medi-Cal managed care plans to
provide the DMC benefits. In a county that does not opt-in, there
will be no change in DMC services from the current delivery
system.
* Potential Relief from IMD Exclusion: As an element of the Waiver
proposal, DHCS is requesting the CMS approve an exception to the
IMD payment exclusion for residential treatment services in those
counties that opt-in to this demonstration. If CMS approval is
granted, federal funds would be available to provide short-term
residential treatment services to all eligible adults in facilities over
16 beds, and inpatient voluntary detox in chemical dependency
treatment facilities and freestanding psychiatric facilities over 16
beds.
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The former process required counties to certify their total DMC
expenses through the CPE process. DHCS then drew down FFP
based on that total expense. Counties could then pay their
contracted providers less than the total certified expense and
retain the difference to cover county administrative expenses.
CMS has stated that DHCS can only reimburse counties with the
DMC reimbursement rate for the CPE-certified total direct service
expense, and must reimburse counties for county administrative
costs through a separate process.
Therefore, effective July 1, 2014, DHCS has begun reimbursing
counties for administrative DMC expenses through a separate
invoicing process.
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For DMC claims with service dates on or after July 1, 2014,
counties shall claim reimbursement for administrative DMC
expenses separately from direct service expenses.
• Such administrative expenses must be expenses actually incurred,
and cannot be estimated expenses.
• County administrative expenses will be limited to 15% of the
DMC-reimbursable part of the county’s direct service expenses.
What are county administrative DMC expenses?
County administrative DMC expenses are expenses actually incurred as
the result of providing county-operated DMC services, or as the result
of administrative activities by a county as part of its business
relationship with contracted providers, to provide DMC services.
What are direct service expenses?
Direct service expenses are those which have a clear, direct, and
documented relationship to services that are provided to beneficiaries,
i.e.
• Compensation of employees for time devoted and identified
specifically with the delivery of a DMC service;
• Cost of materials spent specifically on the delivery of a DMC
service.
• Cost of maintaining facilities used to deliver DMC services.
• Depreciation or lease costs of buildings and equipment used to
deliver DMC services; and
• Cost of services provided by contract.
What are indirect service expenses?
Indirect service expenses are those that are incurred for a common or
joint purpose which benefits more than one cost objective, and are not
readily assignable to the cost objectives specifically benefited. Since
such indirect expenses benefit the provision of DMC services, or
administration of DMC services, a portion of such expenses may be
allocated to county administrative costs. Typical indirect expenses
include:
• Compensation of county employees for time not devoted
specifically to the delivery of a reimbursable activity, or
performance of specific administrative activity;
• Allocated, indirect non-personnel expenses such as rent, utilities,
insurance, and depreciation of county facilities;
• Allocated, indirect personnel expenses to cover management
services such as Director’s Office, Human Resources, Accounting,
Budgeting, I.T., Business Services, Legal, etc.
The initial Information Notice from DHCS (14-033) did not include
provisions for counties to claim for quality assurance, utilization
review, and Medi-Cal compliance oversight activities, all of which
counties are required to do under the new DMC contracts.
However, DHCS has indicated that a new Information Notice is
being prepared that will stipulate how counties may claim
reimbursement for these activities as administrative expenses.