On Tuesday, the state Senate will discuss a new federal waiver proposal by the Department of Health Care Services for the Drug Medi-Cal Treatment Program.

The idea to run the program as an organized delivery system will be fleshed out at today’s informational presentation, a joint hearing by the Senate Committee on Health and the Senate Committee on Budget and Fiscal Review.

DHCS officials want to submit the plan to CMS sometime in March 2015. That means an official kickoff of stakeholder input in a late January conference call and then workgroups will work out the details of the plan starting in February.

According to the department background paper, funding for substance use disorder treatments was shifted to the counties in 2011, but the delivery system remained the same and needs to be realigned.

“The waiver will give state and county officials more authority to select quality providers to meet drug treatment needs,” the state summary of the waiver proposal says. “This will strike an appropriate balance between ensuring access to these vital services while also ensuring that drug treatment services are being provided consistent with program goals.”

According to DHCS, there are four compelling reasons to seek the Drug Medi-Cal waiver:

• Program integration. Through better coordination of substance use disorder treatments, the state said, beneficiaries’ care will improve — with county mental health, public safety systems and primary care delivery aligned;
• Improvements in the state’s mental health system. DHCS officials said California has had positive results in the state-administered and county-operated Medi-Cal Specialty Mental Health program, and the waiver will build on that success;
• Medi-Cal expansion. The expansion of Medi-Cal eligibility means tens of thousands more Medi-Cal enrollees might receive substance use disorder treatment; and
• Improving the program. Drug Medi-Cal needs more oversight, given the recent abuses of the program.

Allegations of improprieties in the program included:

• Fabrication of patient documents;
• Busing teenagers without drug problems from group homes to rehabilitation clinics;
• Paying patients to show up for fictitious counseling sessions;
• Billing for patients who are incarcerated or dead; and
• Charging for too many client counseling appointments, such as one case in which 179 clients were reportedly treated in one day, but reporters staking out the clinic documented fewer than 30 people entering or leaving the clinic.