Summary of LAO Findings and Recommendations on the 2011-12 Budget

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	Program	Budget Issue	LAO Finding Or Recommendation	Last Updated
Go Back	Department of Alcohol and Drug Programs	Three options for reducing costs in the Drug Medi-Cal Program.	We recommend the Legislature consider the following three options for reducing costs in the Drug Medi-Cal Program: 1) establish monthly co-pay for all program participants, 2) establish group counseling maximum in outpatient Drug Free Program, and 3) reduce maximum reimbursable counseling in the Narcotic Treatment Program.	12-06-10

Detailed Narrative
Option 1: Establish monthly co-pay for all Drug Medi-Cal program participants. This option would establish a monthly co-payment for all Drug Medi-Cal enrollees. Each dollar of co-pay would generate about $850,000 annually. Co-pays up to $3.50 can be implemented without a federal Medicaid waiver. As part of the May revision, the administration has proposed $5.00 co-pays for other Medi-Cal benefits. Individuals cannot be denied service for failure to pay unless the state obtains a federal waiver. A $2.50 monthly co-payment would result in General Fund savings of about $2 million annually. Pro: Increases personal participation and commitment to treatment. Avoids further reductions in program Con: Depending on level of co-pay, some patients may forgo treatment Due to parity law, this may not be an option if Legislature rejects similar proposals for co-pays on other Medi-Cal benefits Option 2: Establish group counseling maximum in Outpatient Drug Free program In the Outpatient Drug Free program, patients receive a minimum of two group counseling sessions per month. Currently, there is no upper limit. This option would place an upper limit on the number of reimbursable group counseling sessions by reducing average usage by some percentage. A 10 percent reduction in overall average usage in regular group counseling would generate estimated General Fund savings of approximately $1.5 million annually. Savings would be greater if this option were applied to the minor consent population. Pro: Would encourage greater efficiency in group counseling Avoids further reductions in program Consistent with existing counseling limits in Narcotic Treatment Program Con: Some individuals may not receive the level of needed counseling Option 3: Reduce maximum reimbursable individual counseling in Narcotic Treatment Program In the Narcotic Treatment Program, patients receive a maximum of 200 minutes of group or individual counseling per month. This option would lower the upper limit on the number of reimbursable individual counseling sessions by reducing overall average usage by some percentage. A 10 percent reduction in average usage in regular individual counseling would generate estimated General Fund savings of approximately $1.5 million annually. Pro: Would encourage greater efficiency in group counseling Avoids further reductions in program Con: Some individuals may not receive the level of needed counseling Our focus here is on options that would provide immediate General Fund savings.

Detailed Narrative

Option 1: Establish monthly co-pay for all Drug Medi-Cal program participants.

This option would establish a monthly co-payment for all Drug Medi-Cal enrollees. Each dollar of co-pay would generate about $850,000 annually. Co-pays up to $3.50 can be implemented without a federal Medicaid waiver. As part of the May revision, the administration has proposed $5.00 co-pays for other Medi-Cal benefits. Individuals cannot be denied service for failure to pay unless the state obtains a federal waiver. A $2.50 monthly co-payment would result in General Fund savings of about $2 million annually.

Pro:

Increases personal participation and commitment to treatment.
Avoids further reductions in program

Con:

Depending on level of co-pay, some patients may forgo treatment
Due to parity law, this may not be an option if Legislature rejects similar proposals for co-pays on other Medi-Cal benefits

Option 2: Establish group counseling maximum in Outpatient Drug Free program

In the Outpatient Drug Free program, patients receive a minimum of two group counseling sessions per month. Currently, there is no upper limit. This option would place an upper limit on the number of reimbursable group counseling sessions by reducing average usage by some percentage. A 10 percent reduction in overall average usage in regular group counseling would generate estimated General Fund savings of approximately $1.5 million annually. Savings would be greater if this option were applied to the minor consent population.

Pro:

Would encourage greater efficiency in group counseling
Avoids further reductions in program
Consistent with existing counseling limits in Narcotic Treatment Program

Con:

Some individuals may not receive the level of needed counseling

Option 3: Reduce maximum reimbursable individual counseling in Narcotic Treatment Program

In the Narcotic Treatment Program, patients receive a maximum of 200 minutes of group or individual counseling per month. This option would lower the upper limit on the number of reimbursable individual counseling sessions by reducing overall average usage by some percentage. A 10 percent reduction in average usage in regular individual counseling would generate estimated General Fund savings of approximately $1.5 million annually.

Pro:

Would encourage greater efficiency in group counseling
Avoids further reductions in program

Con:

Some individuals may not receive the level of needed counseling

Our focus here is on options that would provide immediate General Fund savings.