No Room at Rehab?

Photo via kphotographer/Flickr
Photo via kphotographer/Flickr


A 12-year-old girl is in foster care, but could be living with her father – if he could find a place in an outpatient drug treatment program.

The girl, her father, and the judge and social service workers managing their case want the child and parent reunited.

But the family remains in limbo, because the drug treatment program the father has chosen has spent a year and a half trying to obtain a required certification from the state, says Steven Elson, executive officer of Casa Pacifica, a Ventura County organization that serves foster kids.

The Ventura County program is just one of hundreds statewide that are waiting for approval, even as demand for rehabilitation services is expected to soar with expanded eligibility allowed under the federal Affordable Care Act.

The rehabilitation programs blame the state for the delays. They say a confusing application system, burdensome requirements, and bureaucratic inertia have made the approval process far slower than it needs to be. State officials, though, say they can move only as quickly as the providers complete their applications with detailed and accurate information.

The new application requirements are the state’s reaction to an investigation into fraudulent rehabilitation programs, mostly in the Los Angeles area. A series of stories by CNN and The Center for Investigative Reporting in the summer of 2013 found that the state had paid out $94 million in two years to 56 clinics in Southern California that have shown signs of deception or questionable billing practices, in some cases creating fake clients to cash in on false claims.

In response, California’s regulatory agency made broad changes. Aiming to crack down on fraud, it took a hard line on all treatment programs in the state that serve low-income people through the Medi-Cal program.

The crackdown came as Medi-Cal was set to expand under the Affordable Care Act, enabling more than 2.5 million adults to sign up for coverage that includes drug and alcohol rehabilitation. Meanwhile, federal health reform was also expanding the types of substance abuse treatments that were covered by insurance.

It’s been, says Tom Renfree, “the perfect storm,” and it could leave some of the state’s most vulnerable residents — those in need of drug or alcohol treatment — without a life raft.

Renfree, deputy director for substance use disorders for the County Behavioral Health Directors Association, which represents all county health departments statewide, explains: “At the same time as we have increased caseloads and expanded services, we’re finding that having enough providers to meet capacity is a real challenge, because providers are having such a hard time getting certified.”

Majority of providers still in application process

The department began notifying Drug Medi-Cal providers that they would need to be re-certified under a more stringent application process in late July, 2013. Providers had 30 days to submit their applications. The agency divided the state into three regions, sending providers the notices in three batches, with the last having a deadline in early 2014.

Applications are being scrutinized for the smallest errors or problems, such as people using nicknames, says Tanya Homman, chief of the Department of Health Care Services provider enrollment division. Homman’s department oversees the Drug Medi-Cal program, which certifies new substance abuse treatment providers who accept Medi-Cal. “We do a through review of absolutely every element that is on that application,” she says.

The state also started requiring fingerprinting and background checks as part of the certification process in September 2014.

If the department finds problems with the application, it notifies applicants, giving them 60 days to address the issue. “We complete a full letter to them identifying every single item that is still missing or required,” Homman says.

Once the application is properly completed, the agency visits the site to perform an inspection. If investigators identify any irregularities when combing through the board of directors’ meeting minutes or looking at conditions in the facility, they send another letter, giving the providers another 60 days to make changes before regulators do a final quality control check.

As of Feb. 6, only 7 percent of Drug Medi-Cal sites that had applied for re-certification had been approved, according to the agency.

In total, 806 sites were required to re-apply, but 237 did not respond and were decertified. Of the remaining 569 sites, 42 have been approved and 36 have been denied. That leaves 491 — or 86 percent — still awaiting certification.

Providers who are waiting can still provide services and get reimbursed for them from DHCS, according to the department. But many providers say they are frustrated with the system, some to the point of reconsidering the types of services they want to offer.

Perhaps recognizing the need for additional providers since the expansion of Medi-Cal, the state has prioritized applications from new treatment providers, in the hopes that they can open their doors sooner. But even many of those applications are still awaiting approval.

As of Feb. 6, only 16 percent of new applications had been approved. According to the state, 65 new certification applications had been approved, 55 had been denied and 38 had been terminated, because they were withdrawn by the applicant, were a duplicate application or for other reasons. Meanwhile, 249 applications were still waiting.

State says it’s trying to help providers

Agency spokesman Adam Weintraub says the department meets on a regular basis with provider groups and county officials, and he says those groups have not reported any significant access issues.

“We continually monitor for access issues, and if they do occur, DHCS will take action to ensure that beneficiaries are receiving appropriate care,” he said.

But Renfree says counties across the state are reporting that they’re gradually seeing their drug and alcohol treatment caseloads increase.

“I don’t think there are enough providers to meet the need,” he says. Renfree has not yet heard of long waiting lists, but says that may be because people with substance problems often wait to seek treatment. His association expects more new Medi-Cal enrollees to begin looking for treatment in the coming months. “Things are just getting ramped up,” he says.

If just 10 percent of the 2.5 million new adult Medi-Cal enrollees need substance abuse treatment — a likely estimate, Renfree says — then more than 250,000 new people would need services. “We don’t have the provider capacity right now to take on all those new people,” he says.

Weintraub says the department is unable to provide access reports, which are documents federal and state agencies often create to check if there are enough providers to meet the demand for services. The state does have an access-monitoring plan for other health insurance programs, but the plan does not include Drug Medi-Cal.

Instead, the department requires providers with Drug Medi-Cal contracts — usually counties — to have an access monitoring system. Weintraub, however, couldn’t provide the total number of people the Drug Medi-Cal certified treatment providers are authorized to serve. It’s unclear if the state actually knows this number, which would entail analysis of the data the state collects from all contractors.

The department also said it does not normally track the amount of time it takes for provider applications to be processed and couldn’t give an estimate of the average wait time for approval. But after repeated requests from the California Health Report, Weintraub estimated that between 70 percent and 75 percent of applications had been acted on within six months of the state receiving all the materials necessary from the program. Officially, he said, there is no timeline within which the state is required to act, but the department is using the six-month standard internally because that time period applies to approval of other programs.

The agency did recognize that providers needed extra help filling out the new forms after the first wave of applications were submitted, Homman says. Department officials created videos, held tutorials and tried to respond more clearly in letters sent back to applicants identifying errors.

But providers say the application process remains overly confusing and taxing.

“It has been a long and fairly laborious process,” Renfree says. “We’re not where we want to be, although we have made some progress.”

The frustrating part for Renfree is that there is federal money, through the Affordable Care Act, waiting to help pay Drug Medi-Cal providers, but they need to be certified first.

“There’s a lot of money that we could be accessing that we’re not accessing,” he says.

Difficulty has caused some to rethink services

Ventura County Behavioral Health has been waiting more than a year for its re-certification to be approved, says Patrick Zarate, division manager for the county’s alcohol and drug programs. “It’s been a long, painful struggle,” he says.

Zarate’s program has been able to continue to operate and bill the state during the certification process. But he says the delays are likely causing some providers to think twice about serving Medi-Cal patients. “There’s a lot of investment and time and money and resources to put that application together, and the delays — from a business standpoint — it would really be difficult if you couldn’t even tell when you would be able to open your doors,” he says.

PDAP of Ventura County, or Palmer Drug Abuse Program, which provides outpatient treatment to teens, has been significantly impacted by the new application process, says Ginny Connell, executive and clinical director.

The small nonprofit, which has been operating in California since 1980, was unable to meet the first 30-day deadline, partially because it fell during the winter holiday season, she says.

Although the state says she was notified in the summer of 2013, Connell says she got notice of her 30-day deadline at the end of November. “It said you have 30 days from the date of this letter,” she said.

In mid-January, the state sent Connell another letter saying that an office she once used, down the hall from her current office, had been de-certified.

“I thought, ‘Well that’s not a problem because that’s not our current office,’” she says. “It looked like they were just cleaning up their records.”

Meanwhile, Connell was communicating with the state that she was working on the extensive application. “I was working on the fire clearances and the zoning letters from the different cities we operate in and all those pieces,” she says.

But then, after she turned in the forms in early April, she learned that her entire program had been de-certified and she would not be paid for the services she had provided to Medi-Cal patients from February to mid-April. Because the county reimbursed her upfront for those services, she was told she owed the county about $12,000.

“It’s a huge amount for us,” she says. The costs associated with the application process have left Connell wondering if PDAP can go on serving Medi-Cal patients.

“We’re a small nonprofit, so I can’t help but feel torn, because on the one hand it is part of our mission to provide these services to the broadest and most low-income community that’s in need of adolescent treatment, but on the other hand, this resource for paying for this program feels so burden sometimes I wonder if it’s worth it.”

PDAP was finally recertified in October 2014.

The state says it believes PDAP will not have to repay the county the money the program was paid while it was undergoing certification. But the nonprofit may not be alone in being cut off financially because of a late application, and other providers may have opted to not serve Medi-Cal patients if they weren’t being paid, says Lucianne Ranni, the Ventura County’s quality assurance manager.

“My guess is there are other small operations where that happened also, and maybe they did not provide the services,” she says.

The scary thing, Zarate says, is that the state might not even realize if people are falling through the cracks of the Drug Medi-Cal system because enough treatment programs aren’t available.

“The cost to individuals, we won’t know, but (the state) should have had the ability to be responsive to the implications of the Affordable Care Act and the expansion of the Drug Medi-Cal population,” he says.

A child in need waits

Meanwhile, some adults and the children who depend on them wait for treatment.

CASA Pacifica, the Camarillo-based nonprofit that serves foster youths, took about 18 months to get its application for a new substance abuse program approved. The program, which was finally approved in early February, will provide counseling, support and random drug testing to the parents of some of the children the nonprofit serves.

The goal, Elson says, is to enable parents to be reunited with their kids.

The nonprofit is setting up the new program for about 40 families, which it hopes to start in the summer of 2015 — almost two years after it started the application process.

There’s already a huge need, Elson says. “The need is just so enormous — for 90 percent of the kids that come into (foster) care, there are substance abuse issues somewhere in the family constellation,” he says.

That’s true for the 12-year-old girl Elson mentions as well. “That’s where this program would really work, to be able to address the father’s (alcohol) issue and reunite the child with lots of support,” he says. “That’s certainly her personal goal: to not be in a foster home but to be living at home.”

 Note: This article was edited after publication on March 11 to reflect updated information from the Department of Health Care Services.


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