Memorandum
Date: April 25, 2023
To: The Honorable Lake County Board of Supervisors
From: Stephen Carter, Jr., Interim Behavioral Health Director
Subject: Consideration of Presentation by Behavioral Health Services regarding State-wide payment reform for Drug Medi-Cal plans and updated recommendations regarding the Organized Delivery System.
Executive Summary:
All County Mental Health Plans and Drug Medi-Cal (DMC) Plans will go live with payment reform on July 1, 2023. Please see attached FAQ regarding the general outline of payment reform. Significantly, plans move from a cost-based reimbursement to fee-for-service reimbursement. Because of this, there is significant opportunity for patient revenue generation. This revenue must be used to expand and/or enhance DMC services in the County.
The Organized Delivery System (ODS) allows the County to operate under a waiver that enables reimbursement for non-covered DMC services, significantly residential treatment services. Here is a comparison of covered services under DMC and ODS:
|
Drug Medi-Cal (status quo) |
Organized Delivery System (either Regional Model or Direct contract) |
Early Periodic Screening, Diagnosis and Treatment (EPSDT) |
|
Intensive Outpatient Treatment |
Withdrawal Management Services |
Outpatient Drug-Free Treatment |
*Non-Perinatal Residential Treatment Services |
*Perinatal Residential Treatment Services |
|
Narcotic Treatment Program (NTP) |
|
|
|
*Does not include Room and Board costs
From a service network perspective, which is one of the most significant considerations with regard to joining the Regional Model with Partnership Healthplan, Lake is only missing one required service: youth residential. Presently, we are in the community discovery process to explore provision of this service.
Moving forward into FY 2023-24 and CalAIM payment reform, Lake DMC Plan stands to generate millions in revenue after costs. These monies must be reinvested into the community to expand services. By joining the Regional Model, LCBHS and Lake County would forfeit the increased rates under payment reform and instead contract for a Per User Per Month (PUPM) rate, which is dramatically less than payment reform rates. Essentially, by joining the Regional Model of ODS Lake forfeits the ability to bill at the higher rates established through payment reform.
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Recommended Action: Reconsideration of joining the Organized Delivery System Regional Model.