SECTIONS 5700-5724 - California Statutes

WELFARE AND INSTITUTIONS CODE

SECTION 5700-5724

5700. (a) The Legislature recognizes that mental health services
provided by county mental health programs are funded from the
following general categories or sources of public funding:
(1) Funds received by counties from the Local Revenue Fund and
county funds necessary to meet the federal maintenance of effort
requirements.
(2) Funds from appropriations made to the department or for which
the department is responsible for administering, which are designated
for local mental health services.
(3) Reimbursements through the Medi-Cal program for mental health
services to Medi-Cal eligible individuals receiving mental health
services from county mental health programs.
(4) Funds from county or local appropriations which are designated
for local mental health services.
(b) The Legislature further recognizes that there are procedures
and requirements which are unique to each category set forth in
subdivision (a), as well as procedures and requirements which apply
to all four categories.

5701. (a) To achieve equity of funding, available funding for local
mental health programs beyond the funding provided pursuant to
Section 17601 shall be distributed to cities, counties, and cities
and counties pursuant to the procedures described in subdivision (c)
of Section 17606.05.
(b) Funding provided pursuant to Section 6 of Article XIII B of
the California Constitution, funding provided pursuant to subdivision
(c), and funding provided for future pilot projects shall be exempt
from the requirements of subdivision (a).
(c) Effective in the 1994-95 fiscal year and each year thereafter:
(1) The State Department of Mental Health shall annually identify
from mental health block grant funds provided by the federal
government, the maximum amount that federal law and regulation permit
to be allocated to counties and cities and counties pursuant to this
subdivision. This section shall apply to any federal mental health
block grant funds in excess of the following:
(A) The amount allocated to counties and cities and counties from
the alcohol, drug abuse, and mental health block grant in the 1991-92
fiscal year.
(B) Funds for departmental support.
(C) Amounts awarded to counties and cities and counties for
children's systems of care programs pursuant to Part 4 (commencing
with Section 5850).
(D) Amounts allocated to small counties for the development of
alternatives to state hospitalization in the 1993-94 fiscal year.
(E) Amounts appropriated by the Legislature for the purposes of
this part.
(2) Notwithstanding subdivision (a), annually the State Department
of Mental Health shall allocate to counties and cities and counties
the funds identified in paragraph (1), not to exceed forty million
dollars ($40,000,000) in any year. The allocations shall be
proportional to each county's and each city and county's percentage
of the forty million dollars ($40,000,000) in Cigarette and Tobacco
Products Surtax funds that were allocated to local mental health
programs in the 1991-92 fiscal year.
(3) Monthly, the Controller shall allocate funds from the Vehicle
License Collection Account of the Local Revenue Fund to counties and
cities and counties for mental health services. Allocations shall be
made to each county or city and county in the same percentages as
described in paragraph (2), until the total of the funds allocated to
all counties in each year pursuant to paragraph (2) and this
paragraph reaches forty million dollars ($40,000,000).
(4) Funds allocated to counties and cities and counties pursuant
to paragraphs (2) and (3) shall not be subject to Section 17606.05.
(5) Funds that are available for allocation in any year in excess
of the forty million dollar ($40,000,000) limits described in
paragraph (2) or (3) shall be deposited into the Mental Health
Subaccount of the Local Revenue Fund.
(6) Nothing in this section is intended to, nor shall it, change
the base allocation of any city, county, or city and county as
provided in Section 17601.

5701.1. Notwithstanding Section 5701, the State Department of
Mental Health, in consultation with the California Mental Health
Directors Association, may utilize funding from the Substance Abuse
and Mental Health Services Administration Block Grant, awarded to the
State Department of Mental Health, above the funding level provided
in federal fiscal year 1998, for the development of innovative
programs for identified target populations, upon appropriation by the
Legislature.

5701.2. (a) The department shall maintain records of any transfer
of funds or state hospital beds made pursuant to Chapter 1341 of the
Statutes of 1991.
(b) Commencing with the 1991-92 fiscal year, the department shall
maintain records that set forth that portion of each county's
allocation of state mental health moneys that represent the dollar
equivalent attributed to each county's state hospital beds or bed
days, or both, that were allocated as of May 1, 1991. The department
shall provide a written summary of these records to the appropriate
committees of the Legislature and the California Mental Health
Directors Association within 30 days after the enactment of the
annual Budget Act.
(c) Nothing in this section is intended to change the counties'
base allocations as provided in subdivisions (a) and (b) of Section
17601.

5701.3. Consistent with the annual Budget Act, this chapter shall
not affect the responsibility of the state to fund psychotherapy and
other mental health services required by Chapter 26.5 (commencing
with Section 7570) of Division 7 of Title 1 of the Government Code,
and the state shall reimburse counties for all allowable costs
incurred by counties in providing services pursuant to that chapter.
The reimbursement provided pursuant to this section for purposes of
Chapter 26.5 (commencing with Section 7570) of Division 7 of Title 1
of the Government Code shall be provided by the state through an
appropriation included in either the annual Budget Act or other
statute. Counties shall continue to receive reimbursement from
specifically appropriated funds for costs necessarily incurred in
providing psychotherapy and other mental health services in
accordance with this chapter. For reimbursement claims for services
delivered in the 2001-02 fiscal year and thereafter, counties are not
required to provide any share of those costs or to fund the cost of
any part of these services with money received from the Local Revenue
Fund established by Chapter 6 (commencing with Section 17600) of
Part 5 of Division 9.

5701.4. Costs that were reimbursed, prior to July 1, 1991, from the
local assistance appropriation contained in Item 4440-101-001 of the
annual Budget Act, shall be reimbursed from funds received by
counties pursuant to this chapter.

5701.5. City-operated Bronzan-McCorquodale programs paid by the
state under Section 5615 shall be directly funded in accordance with
this chapter.

5701.6. (a) Counties may utilize money received from the Local
Revenue Fund established by Chapter 6 (commencing with Section 17600)
of Part 5 of Division 9 to fund the costs of any part of those
services provided pursuant to Chapter 26.5 (commencing with Section
7570) of Division 7 of Title 1 of the Government Code. If money from
the Local Revenue Fund is used by counties for those services,
counties are eligible for reimbursement from the state for all
allowable costs to fund assessments, psychotherapy, and other mental
health services allowable pursuant to Section 300.24 of Title 34 of
the Code of Federal Regulations and required by Chapter 26.5
(commencing with Section 7570) of Division 7 of Title 1 of the
Government Code.
(b) This section is declaratory of existing law.

5702. For the purposes of this part, the definition of maintenance
of effort contained in Section 17608.05 shall apply.

5703. Nothing in this chapter shall prevent a county, or counties
acting jointly, from appropriating additional funds for mental health
services. In no event shall counties be required to appropriate more
than the amount required under the provisions of this chapter.

5704. Funds described in paragraphs (1) and (2) of subdivision (a)
of Section 5700 shall be deposited in the mental health account of
the local health and welfare trust fund and shall only be used to
fund expenditures for the costs of mental health services as
delineated in regulations promulgated by the department, and shall
not be used to fund expenditures for costs excluded by Section 5714
or for costs specifically excluded from funding from this source by
any other provision of law.

5704.5. (a) It is the intent of the Legislature that special
consideration be given to children's services in funding county
services to expand existing programs or to establish new programs.
(b) A county may not decrease the proportion of its funding
expended for children's services below the proportion expended in the
1983-84 fiscal year unless a determination has been made by the
governing body in a noticed public hearing that the need for new or
expanded services to persons under age 18 has significantly
decreased.

5704.6. (a) Except as provided in subdivision (c), each county
shall allocate for services to persons under age 18, 50 percent of
the amount of any funding augmentation received for new or expanded
mental health programs until the amount expended for mental health
services to persons under age 18 equals not less than 25 percent of
the county's gross budget for mental health or not less than the
percentage of persons under age 18 in the total population of the
county, whichever percentage is less. Once achieved, this minimum
ratio shall be maintained continuously thereafter.
(b) As used in this section, the term "new or expanded mental
health programs" does not include any programs which are required by
statute, or programs which provide alternatives to hospitalization
for patients of state hospitals.
(c) From each funding augmentation for new or expanded mental
health programs, a county may allocate to persons under age 18 an
amount less than the percentage required in subdivision (a) when a
determination has been made by the governing body in a noticed public
hearing that the need for new or expanded services to persons under
age 18 does not exist or is less than the need for services to one or
more specified groups of adults.

5705. (a) It is the intent of the Legislature that the use of
negotiated net amounts or rates, as provided in this section, be
given preference in contracts for services under this division.
(b) Negotiated net amount or rates may be used as the cost of
services in contracts between the state and the county or contracts
between the county and a subprovider of services, or both, in
accordance with the following provisions:
(1) A negotiated net amount shall be determined by calculating the
total budget for services for a program or a component of a program,
less the amount of projected revenue. All participating government
funding sources, except for the Medi-Cal program (Chapter 7
(commencing with Section 14000) of Part 3 of Division 9), shall be
bound to that amount as the cost of providing all or part of the
total county mental health program as described in the county
performance contract for each fiscal year, to the extent that the
governmental funding source participates in funding the county mental
health programs. Where the State Department of Health Services
promulgates regulations for determining reimbursement of Short-Doyle
mental health services allowable under the Medi-Cal program, those
regulations shall be controlling as to the rates for reimbursement of
Short-Doyle mental health services allowable under the Medi-Cal
program and rendered to Medi-Cal beneficiaries. Providers under this
subdivision shall report to the State Department of Mental Health and
local mental health programs any information required by the State
Department of Mental Health in accordance with procedures established
by the Director of Mental Health.
(2) A negotiated rate is the payment for services delivered on a
per unit of service basis. All participating governmental funding
sources shall be bound by that amount as the cost of providing that
service for that county mental health program to the extent that the
governmental funding source participates in funding the county and
mental health program. Where the State Department of Health Services
promulgates regulations for determining reimbursement of Short-Doyle
mental health services allowable under the Medi-Cal program, those
regulations shall be controlling as to the rates for reimbursement of
Short-Doyle mental health services allowable under the Medi-Cal
program and rendered to Medi-Cal beneficiaries. Providers under this
subdivision shall report to the local mental health program and the
local mental health program shall report to the State Department of
Mental Health any information required by the department in
accordance with procedures established by the Director of Mental
Health.
(3) A county choosing to participate in the negotiated rate
setting process for community mental health services under the
Medi-Cal program in any fiscal year shall submit a negotiated rate
proposal to the State Department of Mental Health, along with the
prior fiscal year cost report, by December 31 following the close of
the fiscal year. The department shall respond with comments to the
negotiated rate proposal of a participating county by January 31
following the submission of the prior year cost report.
(4) Failure to submit both the rate proposal, as required by
paragraph (3), and the prior fiscal year cost report by December 31,
as required by subdivision (c) of Section 5718, shall result in
disapproval of the rate proposal, and consequent settlement of the
current year cost report to actual cost.
(c) Notwithstanding any other provision of this division or
Division 9 (commencing with Section 10000), absent a finding of
fraud, abuse, or failure to achieve contract objectives, no
restrictions, other than any contained in the contract, shall be
placed upon a provider's expenditure or retention of funds received
pursuant to this section.

5706. Notwithstanding any other provision of law, the portions of
the county mental health services performance contract which become a
contractual arrangement between the county and the department shall
be exempt from the requirements contained in the Public Contract Code
and the State Administrative Manual, and shall be exempt from
approval by the Department of General Services.

5707. Funds appropriated to the department which are designated for
local mental health services and funds which the department is
responsible for allocating or administering, including, but not
limited to, federal block grants funds, shall be expended in
accordance with this section and Sections 5708 to 5717, inclusive,
except when there are conflicting federal requirements, in which case
the federal requirements shall be controlling.

5708. (a) To maintain stability during the transition, counties
that contracted with the department during the 1990-91 fiscal year on
a negotiated net amount basis may continue to use the same funding
mechanism.
(b) For those counties that contracted with the department
pursuant to subdivision (a) with respect to the 1990-91 fiscal year,
the negotiated rate mechanism for Short-Doyle Medi-Cal services for
those counties shall be continued until a new ratesetting methodology
is developed pursuant to Section 5724.

5709. Regardless of the funding source involved, fees shall be
charged in accordance with the ability to pay for mental health
services rendered but not in excess of actual costs in accordance
with Section 5720.

5710. (a) Charges for the care and treatment of each patient
receiving service from a county mental health program shall not
exceed the actual or negotiated cost thereof as determined or
approved by the Director of Mental Health in accordance with standard
accounting practices. The director may include the amount of
expenditures for capital outlay or the interest thereon, or both, in
his or her determination of actual cost. The responsibility of a
patient, his or her estate, or his or her responsible relatives to
pay the charges and the powers of the director with respect thereto
shall be determined in accordance with Article 4 (commencing with
Section 7275) of Chapter 3 of Division 7.
(b) The Director of Mental Health may delegate to each county all
or part of the responsibility for determining the financial liability
of patients to whom services are rendered by a county mental health
program and all or part of the responsibility for determining the
ability of the responsible parties to pay for services to minor
children who are referred by a county for treatment in a state
hospital. Liability shall extend to the estates of patients and to
responsible relatives, including the spouse of an adult patient and
the parents of minor children. The Director of Mental Health may also
delegate all or part of the responsibility for collecting the
charges for patient fees. Counties may decline this responsibility as
it pertains to state hospitals, at their discretion. If this
responsibility is delegated by the director, the director shall
establish and maintain the policies and procedures for making the
determinations and collections. Each county to which the
responsibility is delegated shall comply with the policy and
procedures.
(c) The director shall prepare and adopt a uniform sliding scale
patient fee schedule to be used in all mental health agencies for
services rendered to each patient. In preparing the uniform patient
fee schedule, the director shall take into account the existing
charges for state hospital services and those for community mental
health program services. If the director determines that it is not
practicable to devise a single uniform patient fee schedule
applicable to both state hospital services and services of other
mental health agencies, the director may adopt a separate fee
schedule for the state hospital services which differs from the
uniform patient fee schedule applicable to other mental health
agencies.

5711. (a) In the case of federal audit exceptions, federal audit
appeal processes shall be followed unless the State Department of
Mental Health, in consultation with the California Conference of
Local Mental Health Directors, determines that those appeals are not
cost beneficial.
(b) Whenever there is a final federal audit exception against the
state resulting from expenditure of federal funds by individual
counties, the State Department of Mental Health or the State
Department of Health Services may request the Controller's office to
offset the county's allocation from the Mental Health Subaccount of
the Sales Tax Account of the Local Revenue Fund by the amount of the
exception. The Controller shall be provided evidence that the county
has been notified of the amount of the audit exception no less than
30 days before the offset is to occur. The State Department of Mental
Health and the State Department of Health Services shall involve the
appropriate counties in developing responses to any draft federal
audit reports which may directly impact the counties.

5712. The department shall contract with counties for the funds
appropriated to, and allocated by, the department pursuant to
paragraph (2) of subdivision (a) of Section 5700 in accordance with
the following:
(a) The net cost of all services specified in the contract between
the counties and the department shall be financed on a basis of 90
percent state funds and 10 percent county funds except for services
to be financed from other public or private sources as indicated in
the contracts.
(b) The cost requirement for local financial participation
pursuant to this section shall be waived for all counties with a
population of 125,000 or less based on the most recent available
estimates of population data as determined by the Population Research
Unit of the Department of Finance.
(c) The cost requirements for local financial participation
pursuant to this section shall be waived for funds provided pursuant
to Part 2.5 (commencing with Section 5775).

5713. Advances for funding mental health services may be made by
the Director of Mental Health from funds appropriated to the
department for local mental health programs and services specified in
the annual Budget Act. Advances made pursuant to this section shall
be made in the form and manner the Director of Mental Health shall
determine. When certified by the Director of Mental Health, advances
shall be presented to the Controller for payment. Each advance shall
be payable from the appropriation made for the fiscal year in which
the expenses upon which the advance is based are incurred.

5714. To continue county expenditures for legal proceedings
involving mentally disordered persons, the following costs incurred
in carrying out Part 1 (commencing with Section 5000) of this
division shall not be paid for from funds designated for mental
health services.
(a) The costs involved in bringing a person in for 72-hour
treatment and evaluation.
(b) The costs of court proceedings for court-ordered evaluation,
including the service of the court order and the apprehension of the
person ordered to evaluation when necessary.
(c) The costs of court proceedings in cases of appeal from 14-day
intensive treatment.
(d) The cost of legal proceedings in conservatorship other than
the costs of conservatorship investigation as defined by regulations
of the State Department of Mental Health.
(e) The court costs in postcertification proceedings.
(f) The cost of providing a public defender or other
court-appointed attorneys in proceedings for those unable to pay.

5715. Subject to the approval of the department, at the end of the
fiscal year, a county may retain unexpended funds allocated to it by
the department from funds appropriated to the department, with the
exception of block grant funds, exclusive of the amount required to
pay for the care of patients in state hospitals, for 12 months for
expenditure for mental health services in accordance with this part.

5716. Counties may contract with providers on a negotiated rate or
negotiated net amount basis in the same manner as set forth in
Section 5705, except that negotiated rates for Short-Doyle Medi-Cal
services shall be approved by the department. If a negotiated rate
for Short-Doyle Medi-Cal services is not approved by the department,
reimbursement to the county shall be in accordance with applicable
provisions of this chapter and department regulation and shall be
based upon actual cost.

5717. (a) Expenditures that may be funded from amounts allocated to
the county by the department from funds appropriated to the
department shall include negotiated rates and net amounts; salaries
of personnel; approved facilities and services provided through
contract; operation, maintenance and service costs including
insurance costs or departmental charges for participation in a county
self-insurance program if the charges are not in excess of
comparable available commercial insurance premiums and on the
condition that any surplus reserves be used to reduce future year
contributions; depreciation of county facilities as established in
the state's uniform accounting manual, disregarding depreciation on
the facility to the extent it was financed by state funds under this
part; lease of facilities where there is no intention to, nor option
to, purchase; expenses incurred under this act by members of the
California Conference of Local Mental Health Directors for attendance
at regular meetings of these conferences; expenses incurred by
either the chairperson or elected representative of the local mental
health advisory boards for attendance at regular meetings of the
Organization of Mental Health Advisory Boards; expenditures included
in approved countywide cost allocation plans submitted in accordance
with the Controller's guidelines, including, but not limited to,
adjustments of prior year estimated general county overhead to actual
costs, but excluding allowable costs otherwise compensated by state
funding; net costs of conservatorship investigation, approved by the
Director of Mental Health. Except for expenditures made pursuant to
Article 6 (commencing with Section 129225) of Chapter 1 of Part 6 of
Division 107 of the Health and Safety Code, it shall not include
expenditures for initial capital improvements; the purchaser or
construction of buildings except for equipment items and remodeling
expense as may be provided for in regulations of the State Department
of Mental Health; compensation to members of a local mental health
advisory board, except actual and necessary expenses incurred in the
performance of official duties that may include travel, lodging, and
meals while on official business; or expenditures for a purpose for
which state reimbursement is claimed under any other provision of
law.
(b) The director may make investigations and audits of
expenditures the director may deem necessary.
(c) With respect to funds allocated to a county by the department
from funds appropriated to the department, the county shall repay to
the state amounts found not to have been expended in accordance with
the requirements set forth in this part. Repayment shall be within 30
days after it is determined that an expenditure has been made that
is not in accordance with the requirements. In the event that
repayment is not made in a timely manner, the department shall offset
any amount improperly expended against the amount of any current or
future advance payment or cost report settlement from the state for
mental health services. Repayment provisions shall not apply to
Short-Doyle funds allocated by the department for fiscal years up to
and including the 1990-91 fiscal year.

5718. (a) (1) This section and Sections 5719 to 5724, inclusive,
shall apply to mental health services provided by counties to
Medi-Cal eligible individuals. Counties shall provide services to
Medi-Cal beneficiaries and seek the maximum federal reimbursement
possible for services rendered to the mentally ill.
(2) To the extent permitted under federal law, funds deposited
into the local health and welfare trust fund from the Sales Tax
Account of the Local Revenue Fund may be used to match federal
medicaid funds in order to achieve the maximum federal reimbursement
possible for services pursuant to this chapter. If a county applies
to use local funds, the department may enforce any additional federal
requirements that use may involve, based on standards and guidelines
designed to enhance, protect, and maximize the claiming of those
resources.
(3) The standards and guidelines for the administration of mental
health services to Medi-Cal eligible persons shall be based on
federal medicaid requirements.
(b) With regard to each person receiving mental health services
from a county mental health program, the county shall determine
whether the person is Medi-Cal eligible and, if determined to be
Medi-Cal eligible, the person shall be referred when appropriate to a
facility, clinic, or program which is certified for Medi-Cal
reimbursement.
(c) With regard to county operated facilities, clinics, or
programs for which claims are submitted to the department for
Medi-Cal reimbursement for mental health services to Medi-Cal
eligible individuals, the county shall ensure that all requirements
necessary for Medi-Cal reimbursement for these services are complied
with, including, but not limited to, utilization review and the
submission of year-end cost reports by December 31 following the
close of the fiscal year.
(d) Counties shall certify to the state that required matching
funds are available prior to the reimbursement of federal funds.

5719. Each public or private facility or agency providing local
mental health services pursuant to a county performance contract plan
shall make a written certification within 30 days after a patient is
admitted to the facility as a patient or first given services by
such a facility or agency, to the local mental health director of the
county, stating whether or not each of these patients is presumed to
be eligible for mental health services under the California Medical
Assistance Program.

5719.5. (a) Notwithstanding any other provision of state law, and
to the extent permitted by federal law, the State Department of
Mental Health may, in consultation with the State Department of
Health Services, field test major components of a capitated,
integrated service system of Medi-Cal mental health managed care in
not less than two, and not more than five participating counties.
(b) County participation in the field test shall be at the
counties' option.
(c) Counties eligible to participate in the field test described
in subdivision (a) shall include either of the following:
(1) Any county with an existing county organized health system.
(2) Any county that has been designated for the development of a
new county organized health system.
(d) The State Department of Mental Health, in consultation with
the State Department of Health Services, the counties selected for
field testing, and groups representing mental health clients, their
families and advocates, county mental health directors, and public
and private mental health professionals and providers, shall develop,
for the purpose of the field test, major components for an
integrated, capitated service system of Medi-Cal mental health
managed care, including, but not limited to, all of the following:
(1) (A) A definition of medical necessity.
(B) The preliminary definition developed pursuant to this
paragraph shall be submitted to the Legislature no later than
February 1, 1994.
(2) Protocols for facilitating access and coordination of mental
health, physical health, educational, vocational, and other
supportive services for persons receiving services through the field
test.
(3) Procedures for promoting quality assurance, performance
monitoring measures and outcome evaluation, including measures of
client satisfaction, and procedures for addressing beneficiary
grievances concerning service denials, changes, or terminations.
(e) Counties participating in the field test shall report to the
State Department of Mental Health as the department deems necessary.
(f) Counties participating in the field test shall do both of the
following:
(1) (A) Explore, in consultation with the State Department of
Mental Health, the State Department of Health Services, and the
California Mental Health Directors Association, rates for capitated,
integrated Medi-Cal mental health managed care systems, using an
actuarially sound ratesetting methodology.
(B) These rates shall be evaluated by the State Department of
Mental Health and the State Department of Health Services to
determine their fiscal impact, and shall result in no increase in
cost to the General Fund, compared with the cost that would occur
under the existing organization of Medi-Cal funded mental health
services, except for caseload growth and price increases as included
in the Medi-Cal estimates prepared by the State Department of Health
Services and approved by the Department of Finance. In evaluating the
fiscal impact of these rates, the departments shall take into
account any shift in clients between Medi-Cal programs in which the
nonfederal match is funded by state funds and those in which the
match is funded by local funds.
(2) Demonstrate the appropriate fiscal relationship between county
organized health systems for the federal medicaid program and
integrated, capitated Medi-Cal mental health managed care programs.

5720. (a) Notwithstanding any other provision of law, the director,
in the 1993-94 fiscal year and fiscal years thereafter, subject to
the approval of the Director of Health Services, shall establish the
amount of reimbursement for services provided by county mental health
programs to Medi-Cal eligible individuals.
(b) Notwithstanding this section, in the event that a health
facility has entered into a negotiated rate agreement pursuant to
Article 2.6 (commencing with Section 14081) of Chapter 7 of Part 4 of
Division 9, the facility's rates shall be governed by that
agreement.

5721. Except as otherwise provided in this section, in determining
the amounts which may be paid, fees paid by persons receiving
services or fees paid on behalf of persons receiving services by the
federal government, by the California Medical Assistance Program set
forth in Chapter 7 (commencing with Section 14000) of Part 3 of
Division 9, and by other public or private sources, shall be deducted
from the costs of providing services. However, a county may
negotiate a contract which permits a mental health care provider to
retain unanticipated funds above the budgeted contract amount,
provided that the unanticipated revenues are utilized for the mental
health services specified in the contract. If a provider is permitted
by contract to retain unanticipated revenues above the budgeted
amount, the mental health provider shall specify the services funded
by those revenues in the year end cost report submitted to the
county. A county shall not permit the retention of any fees paid by
private resources on behalf of Medi-Cal beneficiaries without having
those fees deducted from the costs of providing services. Whenever
feasible, mentally disordered persons who are eligible for mental
health services under the California Medical Assistance Program shall
be treated in a facility approved for reimbursement in that program.
General unrestricted or undesignated private charitable donations
and contributions made to charitable or nonprofit organizations shall
not be considered as "fees paid by persons" or "fees paid on behalf
of persons receiving services" under this section and the
contributions shall not be applied in determining the amounts to be
paid. These unrestricted contributions shall not be used in part or
in whole to defray the costs or the allocated costs of the California
Medical Assistance Program.

5722. (a) The department shall have responsibility, as delegated by
the State Department of Health Services, for conducting
investigations and audits of claims and reimbursements for
expenditures for mental health services provided by county mental
health programs to Medi-Cal eligible individuals.
(b) The amount of the payment or repayment of federal funds in
accordance with audit findings pertaining to Short-Doyle Medi-Cal
mental health services shall be determined by the State Director of
Health Services pursuant to the existing administrative appeals
process of the State Department of Health Services.

5723. The provisions of subdivision (a) of Section 14000 shall not
be construed to prevent providers of mental health services pursuant
to this part from also being providers of medical assistance mental
health services for the purposes of Chapter 7 (commencing with
Section 14000) of Part 3 of Division 9. Clinics providing mental
health services pursuant to this part shall not be required to be
licensed as a condition to reimbursement for providing such medical
assistance mental health services.

5723.5. Notwithstanding any other provision of state law, and to
the extent permitted by federal law and consistent with federal
regulations governing these claims, the state may seek federal
reimbursement for back claims under the Short-Doyle Medi-Cal program.

5724. (a) The department and the State Department of Health
Services shall jointly develop a new ratesetting methodology for use
in the Short-Doyle Medi-Cal system that maximizes federal funding and
utilizes, as much as practicable, federal medicare reimbursement
principles. The departments shall work with the counties and the
federal Health Care Financing Administration in the development of
the methodology required by this section.
(b) Rates developed through the methodology required by this
section shall apply only to reimbursement for direct client services.
(c) Administrative costs shall be claimed separately and shall be
limited to 15 percent of the total cost of direct client services.
(d) The cost of performing utilization reviews shall be claimed
separately and shall not be included in administrative cost.
(e) The ratesetting methodology established pursuant to this
section shall contain incentives relating to economy and efficiency
in service delivery.
(f) The rates established for direct client services pursuant to
this section shall be based on increments of time for all
noninpatient services.
(g) The ratesetting methodology shall not be implemented until it
has received any necessary federal approvals.