Budget Conference Committee Considers Health Investments

The Budget Conference Committee convened its first hearing today and health items were at the top of the committee’s agenda. The conference committee is chaired by Senator Leno and include Assemblywoman Shirley Weber (vice chair), Senators Ricardo Lara and Jim Nielsen, and Assemblymembers Richard Bloom and Melissa Melendez. The committee heard the items but left them open pending additional discussion over the next week.

Here’s a report from Health Access’ policy counsel Tam Ma, with a description of each issue, the recommendation of Health Access, and the action of the Conference Committee


MAGI Eligibility Rules

The Affordable Care Act (ACA) established new rules for counting income and family size to determine eligibility for insurance affordability programs, including subsidized health insurance through the Marketplaces, Medicaid and CHIP.

Information technology difficulties have created significant challenges to state and county efforts to implement these new eligibility rules. Currently, the MAGI eligibility rules are only in CalHEERS and not in the county SAWS systems, creating delays and additional workload for counties. The Assembly adopted trailer bill language requiring OSI to report to the Legislature by April 1, 2016 on the feasibility of installing MAGI rules into the SAWS system.

Health Access Recommendation: We support adoption of the Assembly’s trailer bill language and believe studying the feasibility of installing MAGI Eligibility Rules into the SAWS system is an important issue to consider.

Committee Action: The conference committee left this item open. The Legislative Analyst’s Office (LAO) suggests moving the deadline for the study to January 1, 2017, which will allow time for the changes in the queue to be completed before the study is done. Department of Finance is opposed to the proposed trailer bill language because doing the study would take focus away from implementing changes in CalHEERS.


Full Restoration of Adult Dental Benefits

The Senate has proposed to restore full adult dental benefits effective October 1, 2015.

Health Access Recommendation: Health Access supports adopting the Senate’s proposal to fully restore adult dental benefits. Partial restoration of adult dental benefits in the 2013-14 budget has given Medi-Cal recipients access to preventative care, restorations, and full dentures. However, some important dental services, such as gum treatment and partial dentures or implants, are still not covered in Medi-Cal. The omission of these services is particularly important given that tooth extraction is among the most common type of service provided under Federally Required Adult Dental Services (FRADS), which offered very limited dental care for adults in Medi-Cal after California eliminated dental services.

Because most adult Medi-Cal beneficiaries have had some, but not all their teeth pulled, they need partial dentures or bridgework following the extractions. California’s currently policy of only providing full denture replacement only leaves a large portion of Medi-Cal recipients without access to dentures or implants, which has a negative impact on their health and their efforts toward economic self-sufficiency.

Committee Action: The committee left this item open. Senators Leno (D) and Nielsen (R) spoke in strong support of fully restoring adult dental benefits because the lack of access has serious implications for both dental and physical health. Assemblymember Weber (D) stated the Assembly is open to considering this worthy investment and whether this (or other programs) are restored or invested in is a question of resources how this fits into the big picture of the budget.

Medi-Cal Coverage Regardless of Immigration Status

Although the Affordable Care Act made health coverage possible for millions of Californians, it excludes undocumented immigrants currently living and working in the state. President Obama’s recent executive order on immigration addresses the needs of some of the remaining uninsured by allowing certain undocumented immigrants to obtain “deferred action” status, allowing them to temporarily remain the country without fear of deportation. However, more work needs to be done to achieve the vision of health care for all by extending coverage to the remaining undocumented and uninsured who are not eligible for immigration relief from the President’s executive action. The Senate budgeted $40 million to begin the job of covering the remaining uninsured regardless of immigration status (as also proposed in SB 4 (Lara)).

The cost of covering the remaining uninsured regardless of immigration is now a fraction of the cost of proposals from prior years, thanks in large part to the President’s executive action and to the Administration’s recognition that the cost of restricted scope Medi-Cal is 62% of the cost of full-scope Medi-Cal. Also, the proposal this year does not include subsidies for those unauthorized immigrants whose incomes would otherwise make them eligible for subsidies through Covered California.

Health Access Recommendation: Health Access strongly supports adopting the Senate’s proposal. California’s health system is stronger if all Californians have health coverage.

Committee Action: The Committee left this item open. Senator Leno noted that SB 4 has been narrowed to cover all children who are not eligible because of their immigration status, and to set up a capped program for adults. Senator Lara, author of SB 4 and member of the conference committee, said the bill is a modest approach to address the remaining uninsured who are undocumented. It makes sense to give children, who tend to be healthier, comprehensive care rather than spend billions on ER care. There was a lot of discussion about caseload and cost estimates. The LAO estimates 195,000 to 240,000 will be eligible, and it will cost $20M-$150M to cover these kids. The LAO also said it will take awhile for all kids to enroll, so $40M is a reasonable amount to invest to start the program. The DOF is opposed to this item and all other Medi-Cal augmentations because it would commit the state to significant on-going costs.

AB 97 Provider Payment Reductions

The Senate proposes to eliminate AB 97 payment reductions for dental providers and the Assembly proposes to eliminate both the ongoing and retroactive recoupment of AB 97 payment reductions for all providers, including dental providers.

Health Access Recommendation: Health Access requests the Legislature to rescind the AB 97 rate reductions. California’s provider rates are among the lowest in the nation, making access to doctors, specialists, and other providers harder for some of the 12 million Californians with Medi-Cal coverage. Given the concerns with access to dental services in Medi-Cal, we appreciate the Senate’s attention to reimbursement rates for this specific service.

Committee Action: The Committee left this item open. Senator Leno spoke about the Senate’s interest in prioritizing dental rates because of the recent State Audit that revealed Californians on Medi-Cal have poor access to Denti-Cal because of the low rates. Assemblymember Weber stated that members have heard a lot of complaints and concerns from many different providers. The LAO believes it makes sense to target rate restorations where there has been demonstrated access issues, as is the case with dental care. The LAO also recommended the Legislature to require DHCS to do the annual review of dental access that is currently required by law. DOF is opposed to restoring AB 97 rate reductions because over 80% of covered lives is in managed care where rates are set annually and are based on actuarial studies. Furthermore, DOF says the Administration has granted targeted exemptions and forgiven or delayed retroactive recoupment of cuts when it determines access is affected.

Dental Anesthesia Rate

The Senate proposed to increase the dental anesthesia rate to provide rate parity between general anesthesia and dental anesthesia providers.

Health Access Recommendation: Health Access supports rate parity between general anesthesia and dental anesthesia, which would bring California into compliance with federal law prohibiting Medicaid reimbursement discrimination based on provider credentials.

Committee Action: The Committee left this item open and there was little discussion of this issue.

LifeLong Community Clinic Extended Urgent Care

Several legislators has expressed concerned about the closure of West Contra Costa County’s Doctor’s Medical Center, the only hospital serving low-income communities in this area. The closest hospital serving this community is over 20 miles away, making it an inappropriate alternative. The Assembly approved one-time funding of $2 million to LifeLong Community Clinic to open an urgent care program at its health center site across the street from Doctor’s Medical Center.

Health Access Recommendation: We support the Assembly’s proposal for one-time funding to help make the urgent care clinic open 12 hours per day, and help up to 80% of the former Doctor’s Medical Center patients. $ 2 million is a small investment to ensure West Contra Costa residents can access to urgent care in their community.

Committee Action: The Committee left this item open. Questions were raised about whether there is precedent for the state to allocate money for local programs such as the clinic being proposed at LifeLong Community Clinic. Assemblymember Weber said they would gather more information on this matter.

Medi-Cal Caseload – Impact of President’s Executive Order on Immigration

Health Access applauds the Governor, the Assembly and the Senate acting to adopt funding for covering immigrants newly eligible for Medi-Cal due to the President’s Executive Action on Immigration. This action continues California’s existing commitment to providing full-scope Medi-Cal to those who have deferred action status.

However, the Administration’s estimates are in error in several ways:

  • For the budget year, the Administration assumes initial enrollment in October but given judicial action and the ramp-up time for implementation, the earliest likely date is December or January and perhaps later.
  • The Administration assumes a 12 month phase-in with which we concur for those currently enrolled in restricted scope Medi-Cal but a 24 month phase-in is more appropriate for those eligible for restricted scope Medi-Cal but not enrolled in it.
  • The Administration wrongly assumes that only 44% of the undocumented are low-income: data specific to this population indicates that 65% or 66% are low-income (as you would expect given the lack of work permits).
  • The Administration also assumes that only 50% of those on restricted scope Medi-Cal who obtain deferred action will enroll in full-scope Medi-Cal: since those on restricted scope go through the same renewal process as everyone else on Medi-Cal, it is more reasonable to assume 80% of those who are on restricted scope and take advantage of deferred action will enroll in full-scope Medi-Cal.
  • For these reasons, our estimate of likely enrollment on an annual basis is 175,000-230,000, about twice what the Administration estimates. Budget year enrollment is dependent on court action.

Health Access Recommendation: Health Access supports a conference compromise which recognizes that a 12-month phase-in of full-scope coverage will occur for those currently enrolled in restricted scope but that because of delays caused by judicial action, this may occur later in the budget year than anticipated.

Committee Action: The committee voted to adopt the Assembly version (2-1 Senate, 2-1 vote Assembly), which includes the Governor’s proposed $33.1 million ($27.8 milllion GF) and adopt the LAO assumption of a 24-month phase-in of this coverage and the associated reduction in budget year costs ($11M GF). 

County Administration Funding

Both houses went beyond the Governor’s proposal to increase Medi-Cal county administration funding by $150 million ($48.8 million GF) for ongoing implementation of the federal Affordable Care Act (ACA), to augment this amount by another $95.2 million ($31 million GF) using unused current year funding associated with the CalFresh caseload, bringing the total amount of additional funding for Medi-Cal Administration for ACA implementation to $245.3 million ($79.8 million GF).

Health Access Recommendation: Health Access supports adopting the Assembly’s placeholder budget bill language to allow the Administration to further augment Medi-Cal Administration funding in 2015-16 with additional savings if available.

Committee Action: The Committee voted to adopt the Assembly version (Senate 2-1 vote, Assembly 2-1 vote).


Hepatitis C (HCV) Linkage to Care Projects

The spread of hepatitis C infection threatens the public health and economic welfare of the State of California. There are an estimated 750,000 Californians living with the hepatitis C virus (HCV) and most do not know they are infected. Hepatitis C is the leading indication for liver transplant in the United States and a major cause of hospitalizations in California. The Senate has proposed $2.2M in funding for HCV linkage to Care Projects.

Health Access Recommendation: We support the Senate’s proposal to fund linkage to care projects because investing in preventing and treating HCV can help stop the spread of the virus, saving tax resources, reducing overall healthcare spending, and preventing needless suffering for California families.

Committee action: The Committee left this item open. DOF is opposed to new augmentations. Given that the state is spending over an additional $200M for Hepatitis C treatment, Senator Leno raised the question of why investing $2M in prevention, just 1 percent of what we’re spending on treatment, isn’t a good investment.

Dental Disease Prevention Program

The Dental Disease Prevention Program was a successful program that helped to improve the oral health of underserved children by providing school-based oral health prevention services. This program was among the many public health programs that were eliminated in the 2009 budget because of the state’s fiscal crisis. The Assembly has proposed to invest $3.2 million in funding to restore this important program.

Health Access Recommendation: We support adopting the Assembly’s action to restore the Dental Disease Prevention Program. Dental disease is the leading chronic health problem among children in California and schools are the ideal place to provide children with preventative dental care.

Committee Action: The Committee left this item open.

Hepatitis C (HCV) Rapid Testing Kits

Preventing and treating Hepatitis C is good for public health and for the state budget. The Senate has proposed $600,000 in funding to purchase 33,000 HCV rapid testing kits.

Health Access Recommendation: There are an estimated 750,000 Californians living with the hepatitis C virus (HCV) and most do not know they are infected. Improving access to and ease of HCV testing is an important element of HCV treatment and prevention strategies.

Committee Action: The Committee left this item open.

Pre-Exposure Prophylaxis (PrEP) Access and Outreach Program

Both the Assembly and Senate approved funding for the PrEP Access and Outreach program, with a difference in $800K between the two proposals.

Health Access Recommendation: We support funding outreach to individuals at risk for HIV and providing education about PrEP and how to access it. Investment in public health programs will reduce and prevent the spread of HIV infection.

Committee Action: The Committee left this item open.