OLA#: 016-03D

LEGISLATIVE ANALYST REPORT

TO: Honorable Members of the Board of Supervisors

FROM: Office of the Legislative Analyst

DATE: June 30, 2003

SUBJECT:Employee Suggestion #561: Limit Drug Abuse Programs to City Residents

EMPLOYEE SUGGESTION

To conserve resources, admit only San Francisco residents to mental health and substance abuse treatment programs in San Francisco.

The employee believes that San Francisco operates on an 'everyone is welcome' policy that leads to far more abuse of services than the numbers reported by Community Substance Abuse Services and Community Mental Health Services reveal. Once treatment is completed, these individuals may remain in San Francisco and burden substance abuse, mental health, medical, emergency, housing, and social services. The employee believes that a presence in San Francisco for 30 days should not be sufficient to allow access to treatment programs, since it is unlikely these clients intend to become residents. Stronger proofs of residency should be required. If a client claims to be homeless, he or she should be required to enroll in General Assistance before receiving mental health or substance abuse services. The employee believes that refusing to do even that much would seem to indicate that the individual is not appropriate for treatment.

EXECUTIVE SUMMARY

Although policies are in place to exclude out-of-county residents from treatment programs, some non-residents do get served by Community Behavioral Health Services (CBHS) through its current divisions, Community Mental Health Services (CMHS) and Community Substance Abuse Services (CSAS), because of certain allowed exemptions to the policy. An additional unknown number of non-residents may also be served by CMHS/CSAS because of limitations in ability to apply strict proof-of-residency requirements while still serving client populations who have minimal residency documentation, including the homeless. CMHS and CSAS believe that the number of non-residents served due to lack of residency documentation is small, but have no easy way to fully verify residency.

In an attempt to abide by the mission of Department of Public Health and ensure access to populations that may have minimal residency documentation,

a more feasible and appropriate strategy to reduce CMHS and CSAS's need for General Fund monies would be to increase reimbursements from SSI and Medi-Cal. The Department of Public Health is currently pursuing this strategy by attempting to maximize the number of clients who are eligible for these benefits, through a pilot program called the SSI Advocacy Project.¹ The integration of CMHS and CSAS into Community Behavioral Health Services, currently in process, opens a potential avenue of revenue based on the realignment of costs for clients with dual disorders. Medi-Cal funding for substance abuse disorders is severely limited, but Medi-Cal funding is available for treating mental health disorders. For individuals manifesting both substance abuse and mental health impairments, shifting as much of their care as possible into the Mental Health funding network leverages the treatment funds. The Board of Supervisors may wish to request the Department to provide updates on their progress.

ANALYSIS & RECOMMENDATIONS

Current Policy Regarding Non-Residents

Both CMHS and CSAS have policies in place to reserve treatment slots funded by San Francisco's tax base for San Francisco residents and to exclude non-residents. Exceptions to the policy fall into three categories: 1) funding based, 2) clinically based, and 3) fictitious addresses. If a program is funded by revenue other than the San Francisco tax base, there may be different residency stipulations. Examples include regional specialty programs such as the UC Center on Deafness, methadone maintenance programs supported by Drug Medi-Cal which by law cannot be restricted by county of residence, and criminal justice programs such as those funded by the Substance Abuse and Crime Prevention Act of 2000 (SACPA, a.k.a. Prop. 36) or the California Department of Corrections (CDC). Clinical exceptions are believed to result in more humane treatment and more cost effectiveness in the long-term. Examples include providing crisis services to non-residents, providing treatment to non-residents during the lag period before residency status is established, and the largest category, providing services to individuals who are undocumented due to factors such as immigration status or homelessness. CBHS believes that exceptions due to clients using fictitious addresses are low.

While some counties require copies of electric or phone bills to prove residency, it is unlikely that such strict requirements would be possible in San Francisco without jeopardizing the mission of CMHS and CSAS. Instituting requirements to produce proof of residency through a series of rent, utility, paycheck, driver's license or postal receipts have been reviewed by CMHS/CSAS. The largest group of individuals lacking proof of residency are those who simply have no documents. In the experience of CBHS, rather than acquiring documentation, these individuals are more likely to become alienated from accessing treatment. At the moment there does not appear to be a cost-effective and foolproof way of determining residency without excluding, at a minimum, the homeless population. It is also possible that the potential savings from making residency checks more rigid could be outweighed by delayed identification of mental health and substance abuse health consequences, making the unintended costs of a more stringent residence policy high.

City Definition of Residency

The definition for residency used by the City and County of San Francisco to determine eligibility for benefits including General Assistance is physical presence in the city for 30 days and indicating intent to reside in the city.

Community Mental Health Services²

It is the policy of Community Mental Health Services (CMHS) to deny non-San Francisco residents admission to treatment, with the exception of the UC Center on Deafness, which is a specialty service for the region, or for clients requiring emergency services. If a non-San Francisco resident requires emergency services, treatment may be provided until the crisis is resolved, at which time the client will be referred to relevant services in their county of residence.³

Residency is determined by checking the client's Medi-Cal County Code, receipt of General Assistance from the City and County of San Francisco, or other evidence of San Francisco residence such as family ties in the city. If none of these pieces of information is available, 30 days of residence is required to receive services. Residence may be granted if an individual expresses intent to reside in San Francisco and has no other established residence (e.g. individuals who are homeless). Individuals intending to reside in San Francisco but who have not yet established residency may be offered time-limited authorization for treatment up to 90 days while their residency is being switched

Community Substance Abuse Services

It is the policy of Community Substance Abuse Services (CSAS) to require that its clients be residents of San Francisco or express the intent to reside in San Francisco. If a client has been in San Francisco fewer than 30 days, access is limited to outpatient treatment. For clients who have been in the city longer than 30 days, residential treatment is available. Programs specifically supported by a funding base other than San Francisco General Funds may have residency requirements to match the funding requirements.

Residency is determined by a client's self-report during the admission interview. Other than for criminal justice clients, no attempt is made to verify the truthfulness of their statements. CSAS believes that there is little incentive to fabricate residency status, although it appears to the Legislative Analyst that the incentive would be to receive treatment services otherwise unavailable to non-residents.

Population Receiving Services

Community Mental Health Services

In CMHS, roughly 21,000 clients are served annually with a total of $130 million in contracted services. For the 55 to 60 percent who are receiving Medi-Cal benefits, residency can be verified using the client's Medi-Cal County Code. Some clients on Medi-Cal appear to be out-of-county residents but are rightly served under current CMHS policy, which entitles them to service during the three-month period in which Medi-Cal benefits are transferred to San Francisco. CMHS reports that "a very small number" of clients who retain out-of-county Medi-Cal have been allowed to continue ongoing treatment in San Francisco because transferring these clients back to their original county would disrupt their care, and because there are an equal number of San Francisco Medi-Cal clients receiving mental health services in other counties. For the 5 percent of clients who have private insurance, residency can be verified.

Approximately 35 percent of CMHS clients are indigent. If a client receives San Francisco General Assistance (GA), residency is verifiable. Clients who are indigent but not receiving GA are usually homeless or otherwise unstable. This represents the bulk of CMHS clients lacking residency verification. The exact number is unavailable but estimates range from 5 to 20 percent of clients (1,000 to 4,000 individuals). CMHS believes that these individuals are clinically appropriate exceptions to the residency requirement: the Department feels that not providing services is inhumane and only escalates treatment costs at a future date when the untreated problems have become worse.

An unknown number of out-of-county residents using fictitious addresses are served in circumstances that are, CMHS believes, unavoidable. For example, it is possible for clients to fake San Francisco residence by using a friend's address. There is little the City can do to prevent this without making proof of residency requirements so strict as to exclude a significant segment of the population in need.

The average cost for mental health services consisting of inpatient, acute care, or long-term residential care is over $7000 per client per year. The cost of outpatient mental health care varies, but is approximately $2000 per client annually. The overall average is $6,200 per person.

There is currently no way to know how many out-of-county residents are misusing the San Francisco treatment system. Therefore, a cost savings based on these data can not be calculated.

Community Substance Abuse Services

In Fiscal Year 2001-02, approximately 14,000 unduplicated clients⁴ received treatment services from CSAS at a total annual cost of $43 million. This corresponds to a daily average of 5,000 people receiving CSAS-supported treatment (General Funds plus other revenue).⁵ In substance abuse, the average annual cost for treatment is $3,000 per client. Annual residential treatment costs an average of $8,600 per client; outpatient costs vary from $2,200 to $4,000 per client.

On intake, 67 percent of clients gave a San Francisco address whether legitimate or not (residency approved). Seven percent gave acceptable out-of-county addresses (residency exceptions due to alternative funding). For substance abuse programs, the Medi-Cal County Code is not applicable for determining residency eligibility on a large scale. Even when clients qualify for Medi-Cal, the programs do not. The State of California provides only very limited Drug Medi-Cal reimbursement for modalities other than methadone maintenance.

Admission counselors are trained to verify residency information, yet one-quarter (3,500) of those seeking treatment in FY01-02 gave no fixed address. CSAS relies on periodic communication with other social service organizations to check and validate that most of these 3,500 clients are legitimate San Francisco residents who are homeless or otherwise undocumented.

As is true for Mental Health, it is misleading to calculate cost savings for Substance Abuse based on these data. CSAS has no evidence that a significant number of out-of-county residents displace San Francisco residents in treatment and feels that creating a strict residency check system is likely to impede access to services for undocumented residents, with the delay in treatment compounding treatment needs in future years.

Due to their low incomes, the vast majority of substances abusing clients are eligible for Medi-Cal. About 20 percent are already on Medi-Cal, but Drug Medi-Cal regulations deny reimbursement claims for most addiction services other than methadone maintenance. There is little room for expanding the Drug Medi-Cal claim base.

Pursuing Other Revenue

The integration of CMHS and CSAS into Community Behavioral Health Services, currently in process, opens a potential avenue of revenue based on the realignment of costs for clients with dual disorders. Nearly all of the consumers in both systems have incomes low enough to qualify for Medi-Cal. Sixty percent of CMHS clients and 20 percent of CSAS clients are currently on Medi-Cal, leaving many more eligible but unenrolled. Medi-Cal funding for substance abuse disorders is severely limited, but Medi-Cal funding is available for treating mental health disorders. For individuals manifesting both substance abuse and mental health impairments, shifting as much of their care as possible into the Mental Health funding network leverages the treatment funds. The more than 3,000 dual disordered clients who register each year for services in both divisions can qualify for greater Medi-Cal reimbursement if the new integrated department, Community Behavioral Health Services, makes a concerted effort.

Recommendations

It appears that stricter enforcement of a residents-only policy would be difficult without violating the mission of CMHS and CSAS and excluding populations that have minimal residency documentation, including the homeless. The cost savings from stricter enforcement are unclear. CMHS and CSAS have suggested that such a change would fail to capture much new revenue, and may prove more costly to the City in future years because delayed community-based treatment means more hospital-based services will become necessary eventually.

A more feasible strategy to reduce CMHS and CSAS needs for General Fund monies would be to increase reimbursements from other sources, for example, SSI and Medi-Cal. All divisions of the Department of Public Health are pursuing this strategy. For example, Department eligibility workers assist low-income clients to achieve benefit authorizations, and Quality Assurance staff train providers in the appropriate documentation of Medi-Cal services to better avoid disallowance's. The integration of CMHS and CSAS into Community Behavioral Health Services, currently in process, opens a potential avenue of revenue based on the realignment of costs for clients with dual disorders. Medi-Cal funding for substance abuse disorders is severely limited, but Medi-Cal funding is available for treating mental health disorders. For individuals manifesting both substance abuse and mental health impairments, shifting as much of their care as possible into the Mental Health funding network leverages the treatment funds. The Board of Supervisors may wish to request that the Department provide updates on progress in expanding revenue sources.

¹ This recommendation was also submitted through the Employee Suggestion Program. For more information on the SSI Advocacy Project, please see OLA report #016-03Q on Medi-Cal reimbursements.

² Community Mental Health Services (CMHS) and Community Substance Abuse Services (CSAS) have recently been integrated to become Community Behavioral Health Services (CBHS). However, since the integration and organizational changes are not yet complete, this report discuses CMHS and CSAS policies separately.

³ CMHS Policies and Procedures Manual. Manual Number:3.03-6. Date: February 16, 2001. Available online at http://www.dph.sf.ca.us/MentlHlth/CMHSPolProcMnl/3.03-06.htm. These policies apply to City-operated clinics, day treatment programs, 24-hour services, contracted organizational clinics, and the private practitioner network.

⁴ Unduplicated Clients have received at least one day of service in outpatient, day treatment, methadone detox, methadone maintenance, residential medically managed detox, or residential treatment modalities.

⁵ CSAS funds services for several thousand additional individuals who receive prevention, outreach, intervention, and community education at an additional annual cost of $8 million.