Monday, May 23, 2005


  • Most of Medi-Cal Redesign Rejected; Managed Care Proposal Modified
  • ACTION Needed to Ensure Access to Drugs for “Dual-Eligibles” Under New Medicare Part D Plan

The Senate Budget Subcommittee on Health, chaired by Senator Denise Moreno Ducheny (D-San Diego), moved forward Friday with a range of decisions on health budget items, and joined the Assembly Budget Subcommittee on Health in closing its business on Saturday.

In most cases where the subcommittee adopted the Administration’s May Revise proposal, the vote was 3-0. In most cases where the committee made a rejected or modified the Administration’s proposal, the vote was 2-1, with Democrat Senators Ducheny and Tom Torlakson voting for the change, and Republican Senator George Runner generally voting to stay with the Adminstration proposal. The detailed recommendations of the committee were included in their agenda, available at:

MEDI-CAL REDESIGN: In previous sessions, the subcommittees rejected proposals to impose premiums on a half-million Medi-Cal patients, and to outsource single-point-of-entry application processing. The legislators also rejected a Administration proposal to impose a $1000 cap on dental services for three million adults on Medi-Cal. Instead, they proposed a higher, $1800 cap, along with additional exclusions, and instituted a sunset so the cap would be lifted after three years.

For a one-page chart of how the Governor Arnold Schwarzenegger’s proposals under “Medi-Cal Redesign” fared, visit the Health Access website at:

HOSPITAL FINANCING: No decisions have been made on the proposed hospital financing waiver, since no details have been made public at this date. However, the subcommittee did get a report from the Administration, who continued to report that they will soon report a deal with the federal Centers for Medicare and Medicaid Services (CMS) for a new hospital financing waiver. Chair Ducheny responded that “you’ve been optimistic since February.”

In addition to the major shift of hospital financing from “intergovernmental transfers (IGTs)” to “certified public expenditures (CPEs),” Stan Rosenstein of the Department of Health Services did report that the federal government is now asking for “reforms” to “bring down the cost of Medi-Cal,” which included the Medi-Cal Redesign managed care proposal. Chair Ducheny argued that California is already the last in the nation in per-patient spending, and has been the most pro-active in controlling costs, including underpaying providers. She understood the request for cost controls, but didn’t think the “reforms” should be dictated, stating she is “resentful if the federal government thinks they know better than our folks.” On the proposed linkage of a hospital waiver to Medi-Cal managed care proposal, she asked the Department to “tell me to who I should send the 15 tapes of hearings” of people expressing concerns about the managed care proposals.

The federal government was reported to also be interested in using some of this money that currently supports public hospitals to reduce the number of uninsured. This concerns many health care advocates, who believe that the safety-net systems is already underfunded, and that the great need for health services will continue even with marked reductions in the number of uninsured.

Other concerns were with the creation of a fixed amount for a “safety net pool,” and the Administration suggested that the question of how the money would be distributed would be be decided later, through a policy process in the summer. This poses a great concern for hospitals, that won’t be able to determine if they will lose money under the hospital waiver, and be forced to close services. It would also set up a divisive situation where hospitals would be pit against each other for needed resources, and an increase to a hospital can only come from reducing funds for another institution.

MANAGED CARE: The Subcommittee rejected the Administration’s trailer bill language that would have, among other things, broadly required mandatory enrollment of aged, blind, and disabled Medi-Cal patients into managed care. Advocates were particularly worried about the implementation timeline of this proposal, and the problem of mandatory enrollment disrupting patient’s access to their doctors and other providers.

However, the Subcommittee did allow the five County Organized Health Systems (COHS) to expand to new counties, if those counties choose, and that could include some mandatory enrollment. The Subcommittee also allowed for the geographic expansion of managed care as well, and adopted new trailer bill language to “carve-out” the California Children’s Services program.

OTHER ACTIONS: The Subcommittee also voted to provide rate reimbursement increases for CalOptima in Orange County, and for the Alameda Alliance for Health in Alameda County, to prevent further financial difficulties that threaten these local initiatives.

MEDICARE DRUGS: The Subcommittee responded to constituency group concerns about the coming implementation of the Medicare prescription drug program, and especially the switch of “dual-eligibles”–those who are both in Medicare and Medi-Cal–from getting comprehensive prescription drug coverage from the Medi-Cal program to getting less comprehensive drug coverage from the Medicare program, with higher cost-sharing.

The Subcommittee voted to create a process to provide “emergency drug coverage for a dual eligible for up to 60 days during the first year of implementation” of the Medicare drug benefit. “The intent would be for emergency coverage–such as for antipsychotics, HIV/AIDS drugs, anti-seizure or other specified classes of drugs or conditions.”

Western Center on Law and Poverty, Health Access California, Congress of California Seniors, Older Women’s League, SF AIDS Foundation, ARC of California, and others urged support for this and broader efforts to ensure that these nearly one million people have access to needed medicines. The Assembly did not include such language, and so this issue will be considered in Conference Committee.

MEDICARE ACTION FOR EMERGENCY COVERAGE: Senior, low-income, consumer, and other patient advocates are now urging members of the Budget Committees to provide emergency drug coverage to ensure that the nearly one million vulnerable Medicare recipients with Medi-Cal coverage continue to get their needed medicines without interruption, to protect them during the implementation of the Medicare Drug program.

The legislature will decide this crucial issue in the next few weeks. Given the uncertainty of the implementation of this Medicare drug benefit, California needs to maintain its commitment to this vulnerable population to ensure they get needed medicines during this transition.

Health Access California promotes quality, affordable health care for all Californians.
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