1. County Behavioral Health Directors Association - All Members Meeting Drug Medi-Cal Presentation August 13, 2015 1

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3. State Plan The State of California enters into an agreement with the Center for Medicare and Medicaid Services (CMS) to administer the Medi-Cal (Medicaid) program. The State Plan is updated as needed through the State Plan Amendment (SPA) process. http://www.dhcs.ca.gov/formsandpubs/laws/Pages/CaliforniStatePlan.aspx http://www.dhcs.ca.gov/formsandpubs/laws/Pages/ApprovedSPA.aspx 3

4. Rate Setting Methodology Rates For Services Other Than The Narcotic Treatment Program Daily Dosing Service – The proposed reimbursement rates are determined from the most recently completed cost report data for each service (reference is Welfare and Institutions Code, Sec. 14021.6). – The cost reports are provided by county-operated providers. – The providers are those who submit claims for services under a State/County contract. – For the FY 2015-16 rates, the rates for services other than NTP daily dosing were calculated using cost report data from FY 2011-12, which was the most recently completed cost report data available. http://www.dhcs.ca.gov/formsandpubs/ADPBulletins/MHSUDSInformationNotice15-020.pdf 4

5. Rate Setting Methodology NTP Daily Dosing Rate-Setting Methodology – We are continuing with the same methodology that we have used since FY 1997-98. – The methodology is for the dosing only because the NTP counseling rates come from the cost-driven Outpatient Drug Free counseling rates. – NTP providers are not required to report the same detailed cost report data as are the non-NTP providers (WIC Section 14124.24(h)). Therefore, the rate setting methodology adds the various component costs for delivering the daily dose to a beneficiary to determine the total annual cost. It then converts that total annual cost to a daily reimbursement rate. 5

6. Certified Public Expenditure (CPE) The Social Security Act Section 1903(a) requires that counties and direct providers submit a signed CPE form to DHCS (via email or fax) for DMC claims that were submitted for adjudication through the Short-Doyle Medi-Cal Billing System, to certify that the expenditures are eligible for federal financial participation. Counties can submit the CPE form after the claims have been adjudicated (and after they have received notification of any denied claims) to reflect the amount paid to contracted providers, but payments are not processed by DHCS until the CPE is submitted. More information is available in Information Notice 15-019 available to download at: http://www.dhcs.ca.gov/formsandpubs/ADPBulletins/MHSUDS%20Information%20Notice%2015-019.pdf 6

7. Short Doyle Drug Medi-Cal Billing Trading partners (TP’s), counties and direct providers, contract with the Department to submit claims for Drug Medi-Cal (DMC) services rendered by certified DMC providers. As of 2008 the department changed the billing process to be in full compliance with Health Insurance Portability and Accountability Act (HIPAA). Transaction sets used for DMC billing – 837P, TA1, 999, SR Report, 835,277PSI Information Technology Web Services (ITWS) portal where the TP’s upload 837P and receive claims related communication 7

8. Short Doyle Drug Medi-Cal Billing Short Doyle Medi-Cal (SDMC) system adjudicates claims – Validates client eligibility and provider information, and edits for business requirements Approved claims are transferred from SDMC System to SMART (DMC payment system) – SMART validates that a contract is in place and has available funds – Counties - CPE submitted, Direct Providers – DMC Claims Certification – An approved 835 is generated when a warrant is issued (not 1:1 ratio) 8

9. Cost Report and Settlement The SUD cost report is the annual process to settle the difference between what was paid by DHCS to counties in a given year and their actual costs. Counties report their annual expenditures for SUD services and DHCS ensures categorical funding was spent appropriately, ensures disallowed claims are accounted for, and shifts costs across programs if necessary. A county’s cost report is considered completed after DHCS sends an interim settlement package to the county, and the accounting office issues an interim settlement (either an accounts payable or accounts receivable). It is call “interim” because it is not final until an audit has been completed, or three years have passed from the date of the interim settlement without an audit being initiated by DHCS. More information regarding the cost report process is available at: http://www.dhcs.ca.gov/services/Pages/SUDS-PTRSD.aspx 9

10. Questions? 10