An Action Against Administrative Hassle…

Monday, April 14th, 2008

* Assembly Subcommittee on Health reviews DMHC, CMAC, Healthy Families, QSRs
* Quarterly Status Reports could result in over 400,000 kicked off Medi-Cal
* Administrative costs and “churning” negates proposed savings
* Other budget items left open: increased premiums and costs, etc.

Click Here for What’s New on the Health Access WeBlog: Junk Insurance; Strange Alliances on Transparency; Consumer Reporting; Committee Humor; What Happens in Health Care; More on QSRs; Fake “Discount Cards”

The Assembly Budget Subcommittee on Health and Human Services, chaired by Assemblywoman Patty Berg, rejected Gov. Arnold Schwarzenegger’s proposal to require Medi-Cal recipients to submit paperwork every three months in order to keep their coverage.

This year, California is grappling with a $14.5 billion budget deficit. Schwarzenegger has ordered a 10 percent across-the-board cut. Altogether, Medi-Cal would have been reduced by $1.1 billion through 2008-09. Due to a decline in enrollment caused by the paperwork burden, these Quarterly Status Reports are estimated to potentially save the state $92.2 million, but also would cause the state to lose an equivalent amount in federal matching dollars.

While the subcommittee left many items open, the subcommittee’s rejection of QSRs was a important signal as negotiations start on budget issues. However, the cut is still officially pending in the Senate. Also, no action, either a cut or the resinstatement of a cut, is final until a full budget is passed and signed into law.


Health experts and advocates argue that Quarterly Status Reports are a way for the state to reduce the number of people enrolled in Medi-Cal, without having to throw them off directly.

If recipients fail to turn in a form that reports changes to their income, health coverage, living situation, property, disability or pregnancy status, then they would be disqualified from coverage. Currently, children need to update this information annually, while adults update the information every six months. The state expects, in the first year, that about 150,000 children will lose coverage at some point, and 14,000 adults. Eventually, 472,000 children are estimated to eventually lose coverage.

The committee voted 4-2 on a party line, with the Democratic majority voting to reject the cut.

“It’s not something we’d like to do…’’ said Toby Douglas of the state Department of Health Care Services, given the Administration’s other proposals for continuous eligibility. But he argued that quarterly status reports – compared with reduced benefits or payments — are a preferable, “simple approach’’ to helping balance the budget. The state reported that constant reporting uncovers some people who are receiving benefits, who are no longer eligible.

Assemblyman Ed Hernandez countered: “What about the individuals who are eligible? I have a concern that there are more individuals who should be getting Medi-Cal, but aren’t getting it.’’ Douglas responded that the state does send a reminder and does not disenroll recipients until 30 days after they do not return the form. Additionally, “If they have a serious problem, they go to the Emergency Room, where they are re-enrolled,’’ Douglas said. Reponded Hernandez: “That’s not very efficient.”

Assemblymember Beall also took a similar line of questions, asking whether QSRs would have a positive or negative impact on children’s health.

QSRs SAVINGS CHALLENGED: Any savings from reduced Medi-Cal enrollees would be easily negated by the extra time, effort and dollars required to not just impose the paperwork, but to re-enroll these same recipients who have to come back on to get services, advocates argued. The County Welfare Directors’ Association shared a study that shows that more than 65% of those disenrolled were back on Medi-Cal within three months at a cost of about $200 per head to process paper.

That cost does not include higher health care costs accrued because the patients were “uninsured’’ when they sought medical attention, or delayed seeking care and exacerbating their health problems because they did not have insurance. “I see this as a reduction to counties because the state is not going to add additional dollars to handle this,’’ said subcommittee chair Patty Berg.


The subcommittee also:
* Approved two limited-term positions at the Department of Managed Health Care to review health plan filings
* Cut $244,000 from the California Medical Assistance Commission. Staffing would remain the same.


Centralized Eligibility Determinations: As a potential alternative cut, the Legislative Analysts’ Office suggested that some Medi-Cal determinations should be done at the state – rather than county – level, use a “single point of entry’’ process parallel to what is used for Healthy Families, saving $75 million. CWDA, however, explained how Medi-Cal with 125 aid codes is far more complicated than Healthy Families. Additionally, this would make it more difficult for recipients to contact workers helping them with applications at the local level, and take the process out of county hands and hand it to a private vendor.

Medicare Part B Premiums: Under the Governor’s proposal, low-income seniors (above 129% of poverty — $13,416 annually) who qualify for both Medicare and Medi-Cal would have to pay their own Medicare Part B premium if they do not meet the monthly share of cost – approximately $500. That means nearly 48,000 seniors, living on about $1,100 a month would now have to dedicate about $100 toward premiums for Medicare physician coverage, a cost now covered by the state of California.

Healthy Families: The Legislative Analysts’ Office suggested the state delay the implementation of SB437 (passed in 2006), which would streamline eligibility and enrollment of children in the program. The state said the program had already been delayed and wanted to begin implementation.

Health Plans in Healthy Families: Health plans opposed a five percent reduction in plan rates. The administration, which has been negotiating rates, has been told the plans have threatened to change or restrict provider networks, or reduce dental care as a result of the rate cuts. Assemblyman Jim Beall prodded and revealed that plans received a 4 percent rate increase in the last fiscal year.

As with many budget items to be heard in the coming weeks, many issues remain unresolved until the governor unveils his May Revision, which will contain a truer picture of the state’s fiscal situation.

Health Access will continue to keep advocates abreast of budget actions. For more information, contact the author of this report, Hanh Kim Quach, policy coordinator at Health Access, at

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