CSAC Bulletin Article

Health and Human Services 02/10/2012

State’s Cuts to Medi-Cal Halted for the Second Time in as Many Weeks

The state suffered yet another setback in its push to implement Medi-Cal reductions that were included in the 2011-12 budget plan. 

The United States Department of Health and Human Services (DHHS) derailed the state’s plan to charge Medi-Cal recipients co-payments of $5 for doctor’s visits, $3 for prescription drugs, $50 for emergency room visits, and up to $200 for hospital visits. 

The DHHS’s Centers for Medicare and Medicaid Services (CMS) said the state’s plan would violate part of the federal Social Security Act, which requires states to meet several tests in order to charge copays. In its ruling, CMS stated that staff were “unable to identify the legal and policy support” for the proposed new copayment system. 

The CMS ruling means that the state could lose $511 million in current year budget savings and face a $575 million hole in the 2012-13 budget year. 

Last week, a federal District Court judge halted the state’s plan to cut Medi-Cal provider reimbursements by 10 percent. The CMS had approved the rate cut last October, but the Judge’s order effectively creates a $623 million hole in the current year budget. 

The state has said it will appeal both the U.S. District Court and CMS rulings. 

State’s Provides Information on Transition of Healthy Families Program Kids to Medi-Cal 

The state Department of Health Care Services (DHCS) held an informational webinar yesterday to outline the Governor’s proposal to shift all Healthy Families Program (HFP) children into the Medi-Cal program by June 30, 2013. To view the webinar, click here.

The proposal would consolidate the HFP into one Medi-Cal program, allowing children living in households with income of up to 250 percent of the Federal Poverty Level (FPL) to utilize Medi-Cal benefits. Approximately 875,000 children would move from HFP to Medi-Cal starting in October 2012.

The state envisions phasing in the transition of three groups over nine months: First, those HFP enrollees who already receive care through an existing managed care system, then those covered by a county managed care system or subcontractor, and lastly those who live in the 28 counties that are supposed to convert to managed care by 2013. All current enrollees would receive notices informing them of the transition to Medi-Cal in three phases to be printed in 13 threshold languages. 

Once the shift of HFP kids to Medi-Cal is complete, the state estimates saving up to $91 million annually. 

The state has outlined a number of benefits for children and families, health plans and providers and the state. 

Reduced Cost Sharing. Children in a family at or below 150 percent FPL would no longer pay premiums or co-payments, and households between 150 and 250 percent FPL would pay premiums ranging from $4 to $27. 

Benefits. Enrollees would also have access to current levels of DentiCal dental services, vision care, and mental health services through the Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) program. EPSDT provides medically necessary mental health under a broader criteria than HFP, thus more children are anticipated to receive mental health services. Medi-Cal children also have access to the free federal Vaccines for Children program. 

Please note that counties will be doing further work with the state to determine if the EPSDT program estimate for realignment includes the addition of HFP children into the caseload. 

Plan and Provider Continuity. The state expects most children to remain in their existing plan during the transition. In response to questions about access to care, Toby Douglas, Director of the Department of Health Care Services, cited current data showing a nearly 80 percent overlap in providers who serve both HFP enrollees and Medi-Cal beneficiaries. He also noted that this proposal is closely linked with a separate proposal to expand Medi-Cal Managed Care to the remaining 28 fee-for-service counties. DHCS and the plans will be doing work to link children to their existing provider in cases where the HFP plan does not contract or subcontract with Medi-Cal.

Counties would continue to provide eligibility for the children transitioning and enrolling in Medi-Cal. The Administration’s proposal includes additional funding for county administration. The state’s plan envisions a model in which counties would do the final eligibility determinations, but the role of the private contractor would continue. For families with incomes over 150 percent FPL, the contractor would be responsible for case maintenance and premium collection and management. All current enrollment methods, programs, and outreach, would remain the same. However, the proposal would impose a new 10 working day deadline on counties for processing at least 90 percent of applications received from the vendor (existing standards for applications submitted directly to the county would not change). 

These details have been outlined in draft form in trailer bill language released by DHCS last week. The Department has invited stakeholder input promised to create a Web site to post data and information related to the proposal in the coming weeks. 

Budget Season Kicks Off with Series of Hearings 

The Assembly and Senate have scheduled a series of hearings on topics related to the Governor’s January Budget proposal for fiscal year 2012-13. 
On the Assembly side, there will be a joint oversight hearing by Budget Subcommittee No. 1 on Health and Human Services and the Assembly Committee on Aging and Long-Term Care regarding “Long-Term Care Integration and Medi-Cal Managed Care: The Future for Beneficiaries, The Work Force, and Our Health Care System.” The Budget Subcommittee No. 1 is chaired by Assembly Member Holly Mitchell, and the Aging and Long-Term Care committee is chaired by Assembly Member Mariko Yamada. The hearing will be March 7. The Assembly will release a more detailed schedule of budget hearings in the coming weeks.

On the Senate side, the Senate Budget and Fiscal Review Committee, led by Senator Mark Leno, will convene as a full committee to hear selected major issues. Budget Subcommittee No. 3, chaired by Senator Mark DeSaulnier, will discuss the Governor’s health and human services proposals. 

Thursday, February 23
Full Senate Budget and Fiscal Review Committee: Long-Term Care and Medi-Cal Managed Care

Thursday, March 1
Full Senate Budget and Fiscal Review Committee: Governor’s CalWORKs and Child Care Proposals and Program Redesign

Thursday, March 8
Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services:

  • Department of Managed Health Care
  • Emergency Medical Services Authority
  • Department of Public Health – AIDS Drug Assistance Program (ADAP), Licensing and Certification, and other issues
  • Department of Health Care Services – family health programs.

Thursday March 22
Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services:

  • Managed Risk Medical Insurance Board (MRMIB) – Healthy Families Program
  • Department of Health Care Services – Federally qualified health center payment reform, annual enrollment, gross premium tax extension and other issues.

Thursday, April 12
Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services:

  • Department of Health Care Services -Medi-Cal Mental Health Services and Drug Medi-Cal, Behavioral Health Reorganization
  • Department of Alcohol and Drug Programs
  • Department of State Hospitals.

Thursday, April 26
Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services:

  • Secretary for Health and Human Services Diana Dooley
  • Department of Health Care Services – Dually Eligible Beneficiary expansion into Managed Care and Long-Term Care Services Integration
  • Department of Aging.

Thursday, May 3
Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services:

  • Open Issues, all departments

Thursday, May 10
Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services:Open Issues, all departments.

Informational Hearings on Behavioral Health Scheduled Next Week

The Senate and Assembly have scheduled two hearings next week focusing on behavioral health issues in California. 

The Assembly and Senate will be convening budget and policy committees for a February 21 hearing on “Restructuring the Behavioral Health System in California.” The following four committees will convene for the hearing: 

  • The Assembly Budget Subcommittee No. 1 on Health and Human Services, chaired by Assembly Member Holly Mitchell;
  • The Assembly Health Committee, chaired by Assembly Member Bill Monning;
  • The Senate Health Committee, chaired by Senator Ed Hernandez;
  • The Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services, chaired by Senator Mark DeSaulnier.

On February 23, the Assembly Select Committee on Disabilities, chaired by Assembly Member Wes Chesbro, will meet to examine “California’s Mental Health System: partners in care.”

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