(a) Notwithstanding any other law, commencing no sooner than July 1, 2022, subject to subdivision (f) of Section 14184.102, each Medi-Cal behavioral health delivery system shall comply with the behavioral health payment reform provisions approved in the CalAIM Terms and Conditions and any associated instruction issued by the department pursuant to subdivision (d) of Section 14184.102.

(b) As a component of Behavioral Health Payment Reform under CalAIM, the department shall, at a minimum, design and implement an intergovernmental transfer-based reimbursement methodology to replace the use of certified public expenditures for claims associated with covered Specialty Mental Health and Drug Medi-Cal services provided through Medi-Cal behavioral health delivery systems.

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(c) Notwithstanding any other law, commencing no sooner than July 1, 2022, the nonfederal share of any payments associated with each Medi-Cal behavioral health delivery system shall consist of voluntary intergovernmental transfers of funds provided by eligible governmental agencies or public entities associated with a respective Medi-Cal behavioral health delivery system. Upon providing any intergovernmental transfer of funds, each transferring entity shall certify that the transferred funds qualify for federal financial participation pursuant to Section 433.51 of Title 42 of the Code of Federal Regulations, any other applicable federal Medicaid laws, and the CalAIM Terms and Conditions, and in the form and manner specified by the department. Any intergovernmental transfer of funds made pursuant to this section shall be considered voluntary for purposes of all state and federal laws. Notwithstanding any other law, the department shall not assess the fee described in subdivision (d) of Section 14301.4 or any other similar fee on the intergovernmental transfers made pursuant to this section. The total intergovernmental transfer-funded payment amount, which includes the federal and nonfederal share, paid to a Medi-Cal behavioral health delivery system shall be for the support of behavioral health-related services and activities that benefit patients served by the Medi-Cal behavioral health delivery system, consistent with federal law.

(d) (1) The department shall establish and implement prospective reimbursement rate methodologies utilizing past county cost experience for covered Specialty Mental Health and Drug Medi-Cal services provided by Medi-Cal behavioral health delivery systems. Those methodologies shall make use of peer groups whereby counties are grouped according to past cost experience, where the department determines appropriate. The department shall determine the frequency of payments and intergovernmental transfers made pursuant to this section. The department shall consult with the representatives of Medi-Cal behavioral health delivery systems in the development of the rate methodologies, peer groups, and the payment schedule.

(2) The department, in consultation with the representatives of Medi-Cal behavioral health delivery systems, shall review and may modify the methodologies annually, including, but not limited to, adjustments to the peer groups or to rates.

(e) (1) The Medi-Cal County Behavioral Health Fund is hereby created in the State Treasury.

(2) The nonfederal moneys collected by the department pursuant to this section shall be deposited in the Medi-Cal County Behavioral Health Fund.

(3) Notwithstanding § 13340 of the Government Code, the moneys deposited in the Medi-Cal County Behavioral Health Fund are continuously appropriated, without regard to fiscal year, to the department for purposes of implementing this section.

(4) (A) Notwithstanding any other law, for counties that elect to participate in the offset and transfer of funds pursuant to this paragraph, moneys from the following sources shall be offset and transferred by the Controller into the Medi-Cal County Behavioral Health Fund pursuant to schedules, in accordance with subparagraph (C), provided by the department and created in consultation with the Department of Finance and applicable counties:

(i) The Behavioral Health Subaccount in the Support Services Account in the Local Revenue Fund 2011 established pursuant to subparagraph (B) of paragraph (2) of subdivision (b) of § 30025 of the Government Code.

(ii) The Mental Health Subaccount in the Sales Tax Account in the Local Revenue Fund established pursuant to paragraph (1) of subdivision (b) of Section 17600.

(iii) The Mental Health Services Fund established pursuant to Section 5890.

(B) To the extent that funds are offset and transferred from the subaccounts or fund listed in subparagraph (A), the use of the funds shall be consistent with, and in furtherance of, the purposes for which they were previously deposited to the subaccounts or fund, as applicable.

(C) (i) If the department prepares monthly schedules, it shall provide the schedules to the Controller by the first day of each month. If the department prepares quarterly schedules, it shall provide the schedules to the Controller detailing offsets for each month in that quarter by the first day of each quarter as agreed upon by the department, the Department of Finance, and the Controller.

(ii) The department shall provide notifications to the Controller to start, stop, or resume offsetting funds by the first day of the month for changes expected to take effect in the current month. Notifications received by the Controller after the first day of the month shall be processed in the subsequent month.

(5) Notwithstanding § 16305.7 of the Government Code, the Medi-Cal County Behavioral Health Fund shall contain all interest and dividends earned on moneys in the fund and shall be used only for the purpose of implementing this section.

(Amended by Stats. 2023, Ch. 42, Sec. 159. (AB 118) Effective July 10, 2023.)