Optimization of Intergovernmental Transfers Presentation

This presentation focuses on the optimization of intergovernmental transfers (IGTs), specifically the relationship between County Fund Accounts (CFAs) and IGTs. It covers topics such as determining optimal funding sources, reconciliation considerations, dispute resolution processes, and educating county stakeholders on IGTs and CFAs. The content also explains the process of fund transfers between counties and the state, the role of CFAs in holding county funds, and how IGTs are used to match federal Medi-Cal funding.

• Intergovernmental Transfers
• County Fund Accounts
• Funding Optimization
• Stakeholder Education
• Financial Processes

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1. Optimization of Intergovernmental Transfers November 3, 2022

2. Agenda Relationship between County Fund Accounts (CFAs) and IGTs Withholds and wire transfers Determining optimal funding sources to use as IGTs IGT and CFA reconciliation considerations IGT and CFA dispute resolution process Education of County Stakeholders on IGTs and CFAs 1 *Information in this presentation is pre-decisional (DHCS policy still in development as of 10.31.22).

3. Please click on the link in the chat box and answer questions 3 minutes to answer questions PRE-TRAINING ASSESSMENT 2 2

4. Relationship Between CFAs and IGTs IGTs represent a transfer of funds between the county and the state Used to match federal Medi-Cal funding CFAs represent accounts where county funds are held by the state State uses funds in the CFAs as the IGTs 3 *Information in this presentation is pre-decisional (DHCS policy still in development as of 10.31.22).

5. Relationship Between CFAs and IGTs County provides funds to the CFA (withhold and/or wire transfer) DHCS sends county monthly CFA statement that identifies IGT amount needed to maintain fund balance County submits SD/MC claim for adjudication DHCS remits full payment for the approved claim back to the county (inclusive of FFP and local match) Approved SD/MC claims data transferred to DHCS accounting to initiate IGT DHCS withdraws funds from the CFA for non-federal share of each approved claim (IGT) 4 *Information in this presentation is pre-decisional (DHCS policy still in development as of 10.31.22).

6. CFA Statement Example County Fund Account (CFA) Balance Report Report Date: 7/31/2023 10-EXAMPLE 1,000,000.00 County: CFA Balance as of 7/1/2023: $ Transaction ID / Warrant Number 345678912 456789123 63-123456 63-789123 PENDING Transaction Date Transaction Description CFA Balance After Transaction 1,010,000.00 $ 1,011,000.00 $ 761,000.00 $ 511,000.00 $ 261,000.00 $ Amount 7/7/2023 Deposit 7/14/2023 Deposit 7/15/2023 Claim 7/20/2023 Claim 7/27/2023 Claim 10,000.00 1,000.00 (250,000.00) $ (250,000.00) $ (250,000.00) $ $ $ MONTHLY TRANSACTION TOTAL COUNTY BALANCE AS OF REPORT DATE TARGET IGT BALANCE: COUNTY BALANCE LOWER THAN TARGET: CURRENT IGT DEPOSIT RECOMMENDED (739,000.00) $ 261,000.00 $ 1,000,000.00 $ YES 739,000.00 $ IGTs 5 *Information in this presentation is pre-decisional (DHCS policy still in development as of 10.31.22).

7. Withholds and Wire Transfers Counties may use withholds and/or wire transfers to deposit funds into the CFAs on an on-going basis Withholds represents specific percentage(s) of the three major allocations that the state would withhold from the county 1991 Realignment, 2011 Realignment and Mental Health Services Act (MHSA) funding Counties identify percentages for each revenue source Not specifically equal to the monthly IGT amount Adjustment process Wire transfers represent a transfer of county funds to the state 6 CFA monthly statement can be used as invoice for determining amount to transfer *Information in this presentation is pre-decisional (DHCS policy still in development as of 10.31.22).

8. Withhold Example Total Deposited into CFA 1991 Realignment (20% Withold) 2011 Realignment (70% Withold) MHSA (40% Withold) Allocation Withold Distribution Allocation Withold Distribution Allocation Withold Distribution July 200,000 40,000 160,000 365,000 255,500 109,500 752,500 301,000 451,500 596,500 August 200,000 40,000 160,000 370,000 259,000 111,000 1,625,000 650,000 975,000 949,000 September 200,000 40,000 160,000 455,000 318,500 136,500 325,000 130,000 195,000 488,500 October 200,000 40,000 160,000 460,000 322,000 138,000 562,125 224,850 337,275 586,850 November 200,000 40,000 160,000 412,500 288,750 123,750 345,000 138,000 207,000 466,750 December 200,000 40,000 160,000 510,000 357,000 153,000 265,200 106,080 159,120 503,080 7 *Information in this presentation is pre-decisional (DHCS policy still in development as of 10.31.22).

9. Determining Optimal Funding Sources Funding source for the IGT does not need to equal the funding source for Medi-Cal expenditures IGT is a transfer of funds, not an expenditure Appropriate funding sources are used to pay expenditures DHCS will identify recommended funding level for CFA Based on three months of historical claims County will incur expenditures consistent with the requirements of the funding source Consider using funding sources with larger fund balances that can cover expenditures and the IGT MHSA funds used for the IGT must be expended consistent with MHSA plan Funds used for the IGT retain their original purpose 8 Recommend using few funding sources for the IGT Easier to reconcile when receive Medi-Cal payment *Information in this presentation is pre-decisional (DHCS policy still in development as of 10.31.22).

10. Withhold Example Deposits into CFA Medi-Cal Claim Payments 1991 2011 MHSA Total IGT FFP SGF Total July 40,000 255,500 301,000 596,500 August 40,000 259,000 650,000 949,000 660,000 480,000 60,000 1,200,000 September 40,000 318,500 130,000 488,500 825,000 600,000 75,000 1,500,000 October 40,000 322,000 224,850 586,850 550,000 400,000 50,000 1,000,000 November 40,000 288,750 138,000 466,750 605,000 440,000 55,000 1,100,000 December 40,000 357,000 106,080 503,080 660,000 480,000 60,000 1,200,000 July August IGT 1991 2011 MHSA Total 1991 2011 MHSA Total July August 660,000 40,000 255,500 301,000 596,500 2,677 17,330 43,493 63,500 September 825,000 34,773 225,158 565,068 825,000 October 550,000 2,550 16,512 41,438 60,500 November 9 December Total 40,000 255,500 301,000 596,500 40,000 259,000 650,000 949,000 *Information in this presentation is pre-decisional (DHCS policy still in development as of 10.31.22).

11. CFA Statement Example County Fund Account (CFA) Balance Report Report Date: 7/31/2023 10-EXAMPLE 1,000,000.00 County: CFA Balance as of 7/1/2023: $ Transaction ID / Warrant Number 345678912 456789123 63-123456 63-789123 PENDING Transaction Date Transaction Description CFA Balance After Transaction 1,010,000.00 $ 1,011,000.00 $ 761,000.00 $ 511,000.00 $ 261,000.00 $ Amount 7/7/2023 Deposit 7/14/2023 Deposit 7/15/2023 Claim 7/20/2023 Claim 7/27/2023 Claim $ $ 10,000.00 1,000.00 (250,000.00) $ (250,000.00) $ (250,000.00) $ MONTHLY TRANSACTION TOTAL COUNTY BALANCE AS OF REPORT DATE TARGET IGT BALANCE: COUNTY BALANCE LOWER THAN TARGET: CURRENT IGT DEPOSIT RECOMMENDED (739,000.00) $ 261,000.00 $ 1,000,000.00 $ YES 739,000.00 $ 10 Could transfer IGT amount or recommended deposit *Information in this presentation is pre-decisional (DHCS policy still in development as of 10.31.22).

12. IGT and CFA reconciliation considerations Reconcile 837 file to 835 file No change from current process Reconcile monthly CFA statement Deposits to withhold and/or wire transfer amounts Withdrawals to local match on 835 file Reconcile IGTs received to appropriate fund used as the transfer amount 11 *Information in this presentation is pre-decisional (DHCS policy still in development as of 10.31.22).

13. IGT and CFA dispute resolution process DHCS is recommending that counties be required to identify and communicate discrepancies via an appeal letter within 60 days of receipt of the monthly CFA report DHCS will issue a decision within 60 days of the receipt of the appeal 12 *Information in this presentation is pre-decisional (DHCS policy still in development as of 10.31.22).

14. Education of County Stakeholders on IGTs and CFAs The only approach to obtain Federal Medi-Cal reimbursement for county behavioral health services is through the IGT process beginning 7/1/2023 DHCS will provide a new IGT agreement that broadly specifies the terms of the IGT process, including the use of CFAs DHCS will further clarify the specifics of the IGT process through BHINs County Behavioral Health staff can work with County Auditor-Controller staff to establish processes to manage and monitor the IGT process 13 *Information in this presentation is pre-decisional (DHCS policy still in development as of 10.31.22).

15. Next Steps FAQs Release of DHCS guidance on IGTs IGT Agreement BHINs Register for the November 10th Fiscal Data Modeling of Proposed Rates webinar 14 *Information in this presentation is pre-decisional (DHCS policy still in development as of 10.31.22).

16. Questions & Answers Please type your questions in the chat 15 *Information in this presentation is pre-decisional (DHCS policy still in development as of 10.31.22).

17. Post-Training Evaluation Please click on the link in the chat box and answer questions to provide feedback 16

18. Thank You THANK YOU FOR ATTENDING THIS WEBINAR! THE RECORDING AND SLIDES WILL BE AVAILABLE ON OUR WEBSITE ON THE FOLLOWING DAY. PLEASE SEND YOUR QUESTIONS/COMMENTS TO PAYMENTREFORM@CALMHSA.ORG. 17 *Information in this presentation is pre-decisional (DHCS policy still in development as of 10.31.22).