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2014

Other Budget Issues

Further Detail

Background 

Tuberculosis (TB). TB is a contagious bacterial disease that is spread through airborne particles. An individual with active TB can spread the disease to others through coughing, sneezing, or talking around others. Individuals may also be infected with “latent” TB, which does not exhibit any symptoms, but if left untreated can develop into active TB disease. In 2011, there were 2,325 reported cases of TB in the state. In recent years, between 8 percent and 10 percent of individuals infected with TB have died from TB in the state.

State Law Establishes Procedures for TB Control. The Department of Public Health (DPH) is the lead state agency for TB control and prevention activities, and the department performs various administrative and support activities for TB control. However, the primary responsibility for TB control resides with local health officers (LHOs). Each county and city is required to designate an LHO to perform a variety of public health responsibilities (including TB control). However, most cities, with the exception of the cities of Berkeley, Long Beach, and Pasadena, have conferred this authority upon their county LHO. The LHOs have broad statutory authority to protect the public from the spread of TB, and can issue civil detention orders for individuals known or suspected to have TB to be detained in a health facility for examination or treatment. The LHOs can also issue civil orders excluding individuals with infectious TB from attending public places or requiring individuals to isolate themselves in their residence. The law requires that counsel be provided, upon request, for individuals who are subject to a civil detention order.

Local Detention and Health Facility Discharge of TB Inmates/Patients. When a local inmate with TB is released or transferred from a “local detention facility” (local jails) to another jurisdiction, the transferring local detention facility is required to provide notification and a written treatment plan to the LHO in the receiving jurisdiction. When transferring inmates with TB, local detention facilities are also required to provide notification and a written treatment plan to the medical officer of the receiving local detention facility. In addition, health facilities must submit for approval a written treatment plan to the LHO prior to discharging a patient with TB. An LHO must review treatment plans submitted to them by health facilities within 24 hours.

State Provides TB Control Funding to LHOs. The state has provided funding to LHOs for TB control for several decades. The Legislature significantly increased this funding in 1994-95 (from $876,000 to $5.7 million) to support the implementation of a strategic plan for TB control and elimination recommended by the California Tuberculosis Elimination Task Force. The Task Force’s strategic plan was implemented through two pieces of legislation—Chapter 676, statutes of 1993 (AB 803, Gotch) and Chapter 685, Statutes of 1994 (AB 804, Gotch)—which established several features of the state’s current TB control law, including the notification and treatment plan review procedures described above. Currently, the DPH provides approximately $6.7 million (General Fund) annually to LHOs for TB control through a funding formula that is based on the number of TB cases in each jurisdiction. The DPH provides this funding based upon three ranking priorities of activities: (1) identifying and treating individuals with TB; (2) identifying individuals who have had contact with TB patients, and providing appropriate treatment; and (3) targeted testing of high-risk populations to detect individuals with latent TB.

Federal Government Also Provides TB Control Funding. In addition to the state funding, DPH also passes through federal funding to the LHOs for TB control (approximately $4 million annually). Additionally, three counties (Los Angeles, San Diego, and San Francisco) receive federal funding for TB control directly from the federal government (a total of $7.7 million in 2012-13).

Commission on State Mandates (CSM) Finds Several Provisions of TB Control Laws Are State Mandates. On October 27, 2011, the CSM determined that the following provisions of TB control laws (see Figure 1 below for full list of statutes) constituted state-reimbursable mandates:

• For LHOs...(1) Reviewing treatment plans submitted by health facilities within 24 hours of receipt and (2) notifying the medical officer of a state parole region when there are reasonable grounds to believe that a parolee with TB has ceased TB treatment.
• For local detention facilities...(1) Notifying and submitting a written treatment plan to LHOs when an inmate with TB is discharged and (2) notifying the LHO and medical officer of the local detention facility when a person with TB is transferred to a facility in another jurisdiction.
• For counties and cities with designated LHOs…Providing counsel to non-indigent TB patients, who are subject to a civil detention order, for purposes of representing the TB patients in court hearings reviewing civil detention orders.

State Mandate Costs For TB Control Laws. After the commission determined that certain provisions of the TB control laws constituted a state-reimbursable mandate, three counties (San Francisco, Orange, and San Bernardino) submitted $173,720 in reimbursement claims to the State Controller’s Office for costs incurred between 2002-03 and 2012-13. Costs resulting from LHO review of treatment plans represent the vast majority of local agency claims. While many factors make it difficult to estimate future mandate costs from this initial set of reimbursement claims, we think that annual costs for this mandate likely would not exceed several hundred thousand dollars.

Governor’s Proposal

The Governor’s budget proposes to suspend the TB control mandate in 2014-15. Suspending this mandate would make local compliance with the provisions of the statutes related to the TB control mandate (see Figure 1) optional in 2014-15. Suspending the TB control mandate would allow the state to defer payment of prior year mandate reimbursement claims, resulting in General Fund savings of $173,720 in 2014-15.

LAO Analysis

Mandated Activities Likely Reduce TB Infection Rates. The activities required by the TB control mandate likely reduce the spread of TB through a standardized system of treatment plan review by LHOs, although the extent of such reduction is unclear. The LHOs likely have more experience with TB cases than a typical medical professional, particularly as TB has become less common. The complexity of TB cases also varies, and certain cases (such as multidrug-resistant TB) may require more assistance from LHOs than others. The LHO review and approval of TB treatment plans appears to be a reasonable way to ensure that TB patients are on an appropriate treatment plan prior to being discharged from medical facilities and potentially exposing the public to active TB. Similarly, the notification requirements under the TB control mandate for local detention facilities appears to be a reasonable method to prevent the spread of TB within and outside of local detention facilities.

Increased TB Infection Rates Could Increase Public and Private Health Care Costs. To the extent that suspending the TB control mandate resulted in increased rates of TB infection, there would be unknown, but potentially significant public and private health care costs related to an increase in annual TB cases. Therefore, any savings realized from suspending the TB control mandate would be offset by an increase in TB-related health care costs that resulted from the mandate suspension.

Suspending LHO Review of Treatment Plans Raises Issues Given Other Statutory Requirements Placed on Health Facilities. Health facilities are required to submit treatment plans to LHOs and obtain approval prior to releasing TB patients. If the TB control mandate were suspended, and LHOs chose to no longer review treatment plans submitted by health facilities, health facilities would never receive approval to release TB patients. Under this scenario, health facilities would be unable to comply with the existing statutory requirement to obtain approval prior to discharging TB patients. In order to ensure that statute is internally consistent, any decisions by the Legislature to make changes to the requirement of LHOs  to review treatment plans submitted by health facilities should also take into account the statutory requirements of health facilities.

LAO Recommendation

Reject Governor’s Proposal. Given the potential drawbacks of suspending the TB control mandate discussed above, we recommend rejecting the Governor’s proposal to suspend the TB control mandate. Instead, we recommend the Legislature appropriate $173,720 to pay prior year claims. Funding the mandate, as we propose, would require counties to continue to implement its provisions.

Fund Future TB Control Mandate Activities Through Existing TB Control Funding Stream. Going forward, we recommend the Legislature effectively eliminate future TB control mandate claims by requiring local agencies to use the existing TB control funding stream to pay for the activities required by the TB control mandate. The TB control mandate activities clearly further the objectives for which the existing TB control funding stream was established. In addition, the Legislature previously augmented this funding stream to help pay for these mandated responsibilities.

If local agencies find that the amount of state funding for TB control is not sufficient to pay for all state-required TB control responsibilities, including these mandated activities, local agencies could develop a budget augmentation proposal for the Legislature and administration to consider. The Legislature should weigh the need for additional TB control funding against its other budgetary priorities.