Assembly Budget Subcommittee #1 Hearing on DHCS and Medi-Cal

On Monday, February 23, the Assembly Budget Subcommittee #1 on Health and Human Services held its first hearing on the 2015-16 budget. The hearing focused on the Department of Health Care Services and the Medi-Cal program. The Committee left all agenda items open and did not take any action at the hearing. This provides the Committee with more time to get information and input from the Department and from advocates.

Mari Cantwell, Chief Deputy Director for Health Care Programs, gave an overview of DHCS and the programs it’s responsible for. DHCS has expanded in recent years, a result of health reform implementation, new Medi-Cal initiatives, and the transfer of programs from other agencies.

Medi-Cal Estimate
The Governor’s budget assumes total annual Medi–Cal caseload of 12.2 million for 2015–16. This is a 2 percent increase over the revised caseload estimate of 12 million for 2014–15. Health Access agrees with the Legislative Analyst Office‘s (LAO) that actual caseload information, not estimates, would help the Committee make better decisions. We believe the Administration’s estimates are too high because they don’t fully account for people leaving Medi-Cal for other coverage and IT difficulties in getting more accurate data. Health Access joined the LAO in asking the Committee to require monthly caseload reporting from DHCS and not just estimates.

County Eligibility Administration Cost of Living
The Governor’s proposed budget includes a budget trailer bill proposal to permanently eliminate the annual cost-of-living (COLA) adjustment for reimbursements to counties for administering Medi-Cal eligibility. The State is in the midst of crafting a new reimbursement methodology, but the new methodology is not yet in place. Until then, Health Access, along with the County Welfare Directors Association (CWDA), believes it’s premature to eliminate the COLA. The Legislature and Governor currently have the ability to suspend the COLA on an annual basis, which is what has been done the past several years. In the meantime, counties are getting supplemental funding from the state for the increased workload as a result of ACA implementation.

Health Reform Implementation – Transition Between Covered California and Medi-Cal
The Subcommittee heard testimony about concerns with the process for individuals transferring from Covered California to Medi-Cal (and vice versa), which will continue to occur as people’s income and eligibility changes. There were challenges ensuring continuity of care when about 100,000 enrollees were transferred from Covered CA to Medi-Cal in January 2015. Health Access has heard many reports of people getting incorrect and late notices, which made it difficult for them to transition to new coverage and continuing getting the care they need. We joined Western Center on Law and Poverty and other stakeholders in calling on the Administration to better plan for smooth transitions between these programs.

Hepatitis C Drugs Proposal
The Governor’s proposed budget sets aside $300 million to cover the cost of Hepatitis C drugs in several state programs, including Medi-Cal. Several new drugs that treat and cure Hepatitis C have recently become available at a very high cost. The administration plans to convene a stakeholder group to advise the state on treatment protocols, which will impact state costs. The Administration hopes to have a more definite cost estimate in time for the May Revise. Patient and consumer advocates, along with members of the Subcommittee, strongly encouraged DHCS to include patient advocates in the workgroup.

Child Health and Disability Program Dental Referral
DHCS has proposed to require local Child Health and Disability Prevention programs and providers to refer all Medi-Cal eligible children participating in the program to a dentist beginning at age one instead of at age three. Health Access supports this proposal because it makes California responsive to direction from CMS for the state to improve the rate at which young children receive dental services. This proposal was supported by consumer advocates and dental providers.

Mandatory Open Enrollment for Medi-Cal Managed Care
DHCS is proposing trailer bill language that would lock some Medi-Cal beneficiaries (those under family and child aid codes) into their managed care plans for a full year and only allow them to change plans during a mandatory open enrollment period. Health Access opposes this proposal because it limits consumer choice and access–while health plans can continue to change their providers mid-year. The difference between Medi-Cal managed care plans and their commercial counterparts make mandatory open enrollment inappropriate. First, many beneficiaries are enrolled into a plan by default and don’t know right away that they’ve been defaulted into a plan. As a result, they may not be able to continue seeing their providers if they can’t change to a plan that provides access to their provider. Second, Medi-Cal managed care plans have lower quality ratings than commercial plans, and beneficiaries should have the option of changing plans to get better care. Third, the proposed trailer bill and federal regulations allow people to “disenroll” for cause. While well-intentioned, we are concerned beneficiaries will have a difficult time navigating this process, which is challenging for most consumers. As a result, people will not get the care they need when they need it. Finally, the proposal exempts a large portion of the Medi-Cal population so that it only applies to those in the family and child aid code. Unfortunately, most beneficiaries do not know what eligibility category or aid code they are in and we are concerned this policy would simply create a lot of confusion for counties administering the program and amongst beneficiaries. Other advocates, including Western Center on Law and Poverty, testified in opposition to this proposal.

Limited Scope Program Proposal
Genetically Handicapped Persons Program (GHPP)
Health Access opposed the Department’s proposal to require individuals in GHPP to enroll in other forms of coverage, including Medi-Cal and Covered California. Health Access and the Hemophilia Council of CA are strongly opposed to this proposal because although comprehensive coverage programs cover prescription drugs, many Covered California plans have high cost-sharing for drugs that are out of reach for consumers. GHPP participants include folks whose condition (such as Hemophilia) requires them to adhere to an expensive drug regiment. While we support getting people covered through comprehensive programs, Health Access also believes access to continuous and affordable coverage needs to be prioritized for this community. We asked the Committee to consider requiring GHPP to provide primary coverage for medication and care that is related to the health condition that makes patients eligible for GHPP.

Every Woman Counts, Family Planning Access Care and Treatment, and Improving Access, Counseling, and Treatment for Californians with Prostate Cancer.
Health Access supports the intent of the proposal to give consumers in these programs information about how to get care from a comprehensive coverage program if they are eligible, with the caveat that limited benefit programs should continue for those who aren’t eligible for comprehensive coverage programs and for services not covered under other programs, such as confidential reproductive services.

Major Risk Medical Insurance Program Proposal (MRMIP)
Health Access supports the intent of the proposal to maintain MRMIP for people with Medicare-ESRD (end stage renal disease) individuals can purchase supplemental coverage, and maintain MRMIP as an option for non-ESRD people who are in MRMIP today. MRMIP was originally set up to provide health insurance to Californians who were unable to get affordable coverage due to a pre-existing condition. The need for this high-risk pool has been greatly reduced due to the ACA, which bans denying coverage to people due to a pre-existing condition. While this program now serves a very small amount of people with ESRD, the services are important and should be maintained. The Administration previously proposed to eliminate the MRMIP program in its entirety.

The subcommittee left all these issues open and will revisit them in the coming months as more information becomes available. Assembly Subcommittee #1 will have weekly hearings in March and April. The April 20th hearing will focus on, among other things, Medi-Cal rates, coverage of immigrants, and issues/proposals not in the Governor’s budget.