“Remodeling” the Drug Med-Cal Program:
The Department of Alcohol and Drug Programs’ Analysis and Response
Specific
Report Findings
In
its analysis, the report states that the Drug Medi-Cal (DMC) program, as
currently designed, provides a patchwork of services with an inconsistent
level of support for modes of treatment from county to county and for
different treatment populations. The
Department of Alcohol and Drug Program’s (Department) response will focus on
the following specific findings
1. Significant inconsistencies exist in the resources provided to support different modes of treatment, including, the prioritization of narcotic treatment program services, and the cessation of Naltrexone services.
2. A disproportionately small share of DMC funding is spent on children and female beneficiaries.
3. Significant variations exist in the availability and extent of DMC services from one county to another in California.
4. The State is failing to take full advantage of available federal support for community substance abuse treatment services.
5. DMC is a rigidly controlled program that is relatively complex and costly to administer.
6. The State is incurring substantial costs for the hospitalization of beneficiaries whose substance abuse problems have gone untreated.
In response to the report’s findings, the Department would like to make the following clarifications and observations:
1. Significant inconsistencies exist in the resources provided to support different modes of treatment, including, the prioritization of narcotic treatment program services, and the cessation of Naltrexone services.
The
program’s “heavy focus” on the Narcotic Treatment Program (NTP) modality
means a “disproportionate share of state resources are devoted to persons
addicted to narcotics.”
The DMC program is an entitlement and funding is driven by expenditures and
utilization. The
modality-specific funding determinations are a result of county and direct
provider budgets that reflect local needs, not a state-level decision to fund
a specific modality over another.
The
Department’s appropriation of funds for the DMC program is a direct State
General Fund appropriation for regular and perinatal services.
The federal share of DMC funding, secured through an Interagency
Agreement with the Department of Health Services, appears in the budget as
reimbursements for both DMC Regular and DMC Perinatal.
The Department establishes these funding levels through a biannual Estimates
and Premises process relying on analysis and forecasting of caseload, units of
service, and reimbursement rates. While
the Estimates and Premises process does account for funding levels by
modality, the process does not drive any allocation of funding to those
specific modalities. The process,
through its analysis of units of service and caseload, responds to the level
of expenditure and utility within these modalities, i.e. demand.
1(a) “Heavy Focus” on the Narcotic Treatment Program
The NTP portion of the DMC program is significant when one considers
NTP beneficiaries represent approximately 47% of the entire beneficiary
population, yet are responsible for 78% of state funding costs annually (Table
1). A significant cause of this
trend is the service frequency of the modality.
The NTP modality is a daily
service, and as such incurs greater expenditures when compared to modalities
of lesser frequency (e.g., Outpatient Drug Free or Day Care Rehabilitative)
due to a higher number of units of service.
For example, in Fiscal Year (FY) 1999-00, beneficiaries in the
Outpatient Drug Free (ODF) modality received over 50,000 units of individual
counseling services, while NTP clients received slightly more than 4 million
dosing units of service (Table 2).
Additionally,
individual counseling is billed in 10-minute increments pursuant to licensure
and program regulations, clients in the NTP program must receive 50-minutes of
individual counseling per month. As
a result, the 18,742 NTP clients in the DMC program for FY 1999-00 would have
received a minimum of five units of service each month: or 93,710 units of
service. Assuming this figure
held relatively constant for the entire fiscal year, these clients would have
received a minimum of 1,124,520 counseling units of service for the year.
The actual units of service for FY 1999-00 represent an average
of 8 counseling units of service per month for NTP beneficiaries (Table 2).
The report also states that during the early 1990’s the DMC program was
subject to spending caps and other fiscal limitations, and it confirms that
the Sobky v. Smoley decision
facilitated an expansion in narcotic treatment services.
These factors attributed to the increased expenditures beginning in FY
1995-96. However, beyond
significant increases during FY 1995-96 and FY 1996-97, the proportion of DMC
expenditures attributed to the NTP modality have remained relatively constant
and consistent with SGF increases (Table 3).
Also, when considering the comparison of NTP services funded by DMC compared
to those funded by non-DMC sources, the
data suggests the possibility that counties are leveraging DMC funding for NTP
services and using non-DMC funding for other treatment delivery and services.
(Tables 4 and 4a).
1(b) Cessation of Naltrexone Services
The report also states that Naltrexone treatment expenditures have ceased due to a lack of providers and clients pursuing the treatment modality. The Department concurs that the absence of expenditures reflects a change in service delivery wherein providers are no longer utilizing the medication for treatment, i.e. the demand for this modality is not there. Although Naltrexone is federally approved for relapse prevention among alcohol abusers as well as opiate abusers, DMC providers have not submitted reimbursement claims for this modality since FY 1998-99. We believe that reasons for this include, but are not limited to, the following:
·
Naltrexone is designed to block euphoric effects of opiates to
prevent relapse, but is ineffective in alleviating symptoms of withdrawal in
opiate abusers; i.e. the client needs to be clean for a minimum number of days
prior to the effective use of Naltrexone.
·
Naltrexone is not recommended for use among pregnant substance
abusers.
·
California regulations currently do not permit use of Naltrexone
for alcohol abusers.
The
Department will request that its Medical Director confirm the extent to which
medical necessity (or lack thereof) influences Naltrexone use. The Department
will also survey counties and providers to understand the reasons for the lack
of Naltrexone utilization by June 30, 2004.
2.
A disproportionately small share of DMC funding is spent on
children and female beneficiaries.
Despite an increased treatment caseload for youth services in the last few
years, the Department acknowledges the many challenges, such as administrative
barriers, fingerprinting, level of care, supervision and cost that occur in
serving our under-represented youth population.
The
Department also concurs with the report’s findings that women are
under-represented in the DMC program. Many
of the women currently in or entering treatment for substance abuse services
are also eligible for substance abuse treatment services funded through not
only CalWORKS, but also federal block grant assistance, and some SGF-funded
programs.
As
such, the utilization of DMC for female clients appears low in comparison to
the total number of women eligible for services.
The
Department will begin to evaluate resource options to investigate further the
potential barriers, as well as opportunities, for enhancing services to women
and youth under the DMC program by September 30, 2004.
3.
Significant variations exist in the availability and extent of DMC
services from one county to another in California.
The report identified that 19 out of 58 counties in California do not
participate in the DMC program. Some of the reasons for lack of participation
among these counties are:
a. The counties identified have small populations. Eighteen of these counties, in fact, have populations of less than 60,000; the remaining county, Kings County, has a population of approximately 136,000.
b.
These counties have a small number of potential DMC eligible clients,
and as such, the expense of administering the program for such a small
beneficiary pool is fiscally and administratively prohibitive to the counties,
or any potential community-based provider.
c.
Some of these counties have other publicly funded treatment services
available for substance abuse treatment through the federal Substance Abuse
Prevention Block Grant, State General Fund (SGF), or county funds that are
utilized in lieu of DMC funds.
The
report indicated clients are seeking treatment under the DMC program by
crossing county lines, and this may pose a barrier to effective treatment
participation and service delivery. The
Department concurs with the report’s concerns.
Some of the reasons for this trend are:
·
In
some counties (primarily Southern California), the program located in another
county is actually closer to where the client lives.
·
In
some counties with long waiting lists for services, crossing county lines will
allow for expedited treatment.
·
In
some rural counties, there may not be any providers, or the only provider may
be located in another county.
4.
The state is failing to take full advantage of available federal
support for community substance abuse treatment services.
The Department respectfully points out that the disparity between the number
of DMC eligible individuals and DMC service beneficiaries, does not
necessarily suggest a failure in fully accessing federal assistance.
The report contends the State is missing an opportunity to improve or expand
services by not serving all the DMC-eligible clients it can.
The report points to the fact that in FY 2001-02 54,600 clients
completing California Alcohol and Drug Data System (CADDS) forms were eligible
for DMC, yet only 43,100 of these individuals received DMC services.
The report estimates this disparity of eligible vs. beneficiary results
in losses of matching federal funds in the “millions to low tens of millions
of dollars.”
Counties
may be using other sources of funds, such as the federal block grant, or in
the case of women, CalWORKS, to treat these clients, thus reflecting how
counties and providers are making autonomous funding decisions using their own
discretion in terms of need and funding availability.
Currently
we are working with the Department of Health Services (DHS) to identify
funding opportunities within the DMC program. The
challenge may be greatest in the rural counties. The Department will continue
to find ways to better meet these services with DMC funding.
The report also discusses the opportunity for the State to better access substance abuse treatment services for veterans through the federal Veterans Administration (VA). The Department agrees that a number of DMC beneficiaries are potentially eligible for veterans’ benefits and services through the VA, and accordingly there is a potential opportunity to assist counties in identifying and securing these clients to treatment.
For
example, our preliminary analysis of the VA program indicates that within the
VA’s Sierra Pacific Network (VISN 21), a region serving Northern California,
outpatient substance abuse treatment services are available at nine outpatient
clinics; outside treatment referrals are in place at 10 other sites.
Another promising aspect of the VA treatment system is that
buprenorphine is an available narcotic replacement therapy medication at
several clinics.
The Department will further analyze the potential capacity of the VA system
statewide to treat all veterans referred to their programs.
We will need to ascertain the extent to which the treatment services
are comparable in structure and scope to those in the DMC program or other
programs administered by the Department in order to verify the quality and
quantity of the treatment services provided. The
Department will examine what incentives, if any, may be available to encourage
treatment providers to refer veterans to such programs.
The
Department will explore several opportunities to utilize this resource.
These could include, but are not limited to,
·
working
with the VA, counties, and providers to establish a contracting infrastructure
wherein the VA contracts with providers for treatment services to VA eligible
clients;
·
revising
CADDS forms to include VA eligibility information; and,
· defining and interfacing, in collaboration with the counties, a network of VA facilities with available and appropriate capacity to treat AOD clients.
The
Department will complete an analysis and develop recommendations regarding VA
benefits by the end of the calendar year.
5.
Drug Medi-Cal is a rigidly controlled program that is relatively
complex and costly to administer.
The
report states that the combination of State and county administrative
expenditures represents 14% of the program’s costs.
State administrative costs for the DMC program are approximately 6% of
the total program costs (Table 5).
Under the DMC contract, counties bear a level of administrative responsibility
both fiscally and programmatically for administering the DMC program.
The administrative responsibilities under this contract remain
unspecified, vary with the administrative composition and needs of each
county, and are reflected in each county budget.
(For non-NTP modalities, the State does not designate or define an
administrative portion to the rate). As
a result, counties claim varying percentages of administrative costs each
fiscal year. For example, in
FY 2000-01 the counties administrative costs ranged from 3.9% to 19.3% of
their total DMC costs.
Additionally,
the report contends the program’s high administrative costs result, in part,
from an “elaborate rate-setting mechanism” and the shared administrative
responsibilities among the Department, the Department of Health Services, and
the counties. (The DMC program
costs incurred by the Department of Health Services are accounted for
separately under the general program,
not via the rate setting mechanism developed by the Department.)
The
Department will raise this issue for analysis as part of the overall Medi-Cal
reform effort now underway.
6.
The state is incurring substantial costs for the hospitalization of
beneficiaries whose substance abuse problems have gone untreated.
The
Department is a consistent advocate of the need to recognize the tangential
negative impact of substance abuse on other social services and programs,
including the hospitalization of persons with substance abuse problems.
There
are many Californians whose untreated substance abuse problem is a serious
fiscal matter, as well as a concern for communities and families.
There are many reasons why a person may go untreated, including
limited treatment capacity, and unwillingness to enter into treatment. The
1994 California Drug and Alcohol Treatment Assessment (CalDATA) study, as well
as the 2003 California Treatment Outcome Project (CalTOP) report found that
for every dollar invested in treatment, there was a $7 savings in social and
related service costs.
The Department concurs that efforts must continue to improve the delivery and
availability of substance abuse treatment programs for beneficiaries, in order
to reduce the social and medical costs that result from untreated substance
abuse problems. And, we acknowledge the continuing challenges we face to
insure treatment for all who need it.
One
example of a new program within the Department designed to address this issue
is the California Screening, Brief Intervention, Referral and Treatment (CASBIRT)
Program.
This
program is the result of a $17.4 million grant ($3.5 million annually for five
years) from the Center for Substance Abuse Treatment (CSAT).
The purpose of the grant is to reduce substance abuse by intervening
early with nondependent users and referring dependent individuals to community
treatment services.
This
major policy initiative is focused on those individuals who do not need
dependency treatment, but need to change their AOD behavior before they
progress toward more serious, costly problems. Screening, brief intervention,
referral and treatment is designed to intervene with this large population to
reduce avoidable, future problems and their associated health, social and
economic costs. The key to this effort is to engage nondependent users during
medical visits, through routine screening of patients and providing
appropriate interventions, brief treatment services, or referral to
specialized treatment. Medical
visits are considered “teachable moments” for the 80% of the general
population having a medical contact each year.
The expected program outcomes include 25% reduction in drug use among nondependent users and 50% of nondependent drinkers reducing to lower-risk levels.
The
Governor’s Prevention Advisory Council will serve as the State-level Policy
Steering Committee, and a Multi-County Policy Steering Committee will be
formed of health care agencies, state and county alcohol/drug administration
and staff, health plans, physicians and others directly involved in the
CASBIRT program to address financing mechanisms and policy issues to expand
and sustain services.
Report Recommendations
We
include preliminary comments on two report recommendations: 1) shift funding
and programs to local control (realignment); and 2) the development of a
state-administered NTP program as part of other cost containment measures for
methadone.
1.
Shift
Funding and Programs to Local Control (Realignment)
The Department considered realignment of programs as part of the FY
2003-04 Governor’s Budget. At
that time, we analyzed and evaluated the programmatic, fiscal, and legal
ramifications of this course of action.
Most importantly, the Department is concerned that realigned state funding for
substance abuse treatment services not compromise or risk the
maintenance-of-effort (MOE) requirement for the SAPT block grant.
The Substance Abuse and Mental Health Services Administration (SAMHSA)
has stated the intent of federal MOE statutes and regulations are to ensure
the expenditures included in the State’s MOE calculation are appropriated to
and expended by the principal agency of the State (i.e., the Department).
Therefore, further analysis and evaluation must occur to insure that
accountability is not lost by shifting funding to counties.
Additionally, there are differences in the level of services, as well as the administrative and fiscal requirements among the various programs that must be carefully considered when assessing realignment options. To what extent the State can efficiently realign these programs, and maintain adequate oversight and fiscal responsibility, requires further evaluation.
2.
Develop a State-Administered NTP Program
The report states the DMC program could be improved by requiring the
State to administer the NTP program entirely, and directly contract for these
services with providers across the State.
The report concludes this would be consistent with the Sobky
v. Smoley decision, in that it could make NTP services more uniformly
available statewide.
This recommendation should
also be part of an overall analysis and evaluation of the DMC program.
Cost containment in NTP services is desirable and should be achieved
along with improvements to the service: i.e., the State should be working
towards implementing best practices that meet the needs of the client and
deliver the most appropriate and effective treatment services.
For example, the Department
could consider modifications to NTP program rules that support and advocate a
gradual dosage decrease for clients; as the report suggests, examining
treatment extensions, and deriving a science-based approach to continued
long-term methadone maintenance.
The inclusion of buprenorphine is important to this discussion and according
to the report, after gradual integration, could yield cost savings, as well.
The Department will evaluate the report’s suggestion to pursue
statutory and regulatory changes to include buprenorphine as a treatment
method, including. short and
long-term fiscal implications that require further evaluation.
A cost and programmatic analysis of buprenorphine is currently
underway, the results of which will guide and inform the next appropriate
steps for including this medication in narcotic replacement therapy.
A full evaluation should also include an analysis of the costs for the State
to assume full administration of the NTP program. It is unclear, however, how
a wholly state-administered NTP program would not incur significant cost
increases to the State for administration and oversight.
In particular, the Department could experience an increase in
accounting, contract management, program monitoring, auditing and legal costs
to administer and oversee the 144 licensed NTP programs and program contracts
resulting from this proposal. We
must also determine whether the current portion of NTP rates dedicated to
administration would adequately fund the State’s costs.
The report also recommends the State review licensing and certification
requirements for NTPs to see which rules duplicate or exceed federal
requirements regarding the operation of methadone programs, patient
eligibility for take-home medication, and clinic capacity.
We wish to note the Department is currently developing regulations or
otherwise evaluating the program to better align State oversight with federal
regulations in the following areas:
·
Title 9 regulations (program requirements) in general;
· lifting the restrictions for patient eligibility for take-homes;
· removing the limitation on the capacity of methadone clinics; and
· serology testing at admission as good for one year unless medically necessary.
The Department will raise the issues noted above during our participation in the State’s Medi-Cal reform efforts.
Summary
We
would like to commend the thorough effort and analysis of the LAO in
developing this report. The
issues raised, and the perspective brought to them, suggest that we both seek
to ensure effective and efficient funding and delivery of substance abuse
treatment services for California.
In
short, some recommendations are already underway. For example, the Department
is revising State regulations to avoid duplication with federal regulations.
Additionally, there are some immediate opportunities for the State to explore
and evaluate; for example, the availability of substance abuse treatment
services under the federal Veteran’s Administration.
Other aspects of the report’s findings and recommendations require a
more comprehensive evaluation and analysis, which the Department intends to
initiate separately or in conjunction with the overall Medi-Cal reform effort,
Comments/Questions
Please
direct any questions regarding to the Department of Alcohol and Drug Programs,
Program Operations Division at, (916) 322-6680.