Recent Budget Subcommittee Hearings on DMHC and DHCS

The Assembly and Senate budget subcommittees recently held hearings on the budgets for the Department of Managed Health Care (DMHC) and Department of Health Care Services (DHCS). You can read the agendas for the Senate Budget Subcommittee #3 on March 19 and in Asm. Budget Subcommittee #1 for more details about these proposals.

Department of Managed Health Care

DMHC’s budget was heard in Senate Budget Subcommittee #3 on March 19 and in Asm. Budget Subcommittee #1 a few days later on March 23. DMHC’s mission is to regulate, and provide quality-of-care and fiscal oversight for health maintenance organizations (HMOs) and preferred provider organizations (PPOs). Health Access supported DMHC’s budget change proposals for additional staff and resources for the following work, and both committees left these items open (did not take a vote) in order to collect more information.

  • Federal Mental Health Parity: DMHC requested staff positions to address workload associated with conducting medical surveys of the 45 health plans that need to comply with the federal Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). MHPAEA requires health plans that offer mental health benefits to do so in a manner comparable to medical and surgical (medical) benefits. Assessing whether health plans are in compliance with MHPAEA involves reviewing health plans’ processes and justifications for classifying benefits into classifications (inpatient, in-network; inpatient, out-of-network; outpatient, in-network; outpatient, out-of-network; and emergency care), determine parity for financial requirement (e.g., deductibles, copays, coinsurance); quantitative treatment limitations (e.g. number of visits, days of treatment) and non-quantitative treatment limitations.
  • Additional Enrollment in the Individual Market: DMHC helps California consumers resolve problems with their health plans and works to provide a stable and financially solvent managed care system. The ACA and California law requires health plans offering coverage in the individual market to accept every individual that applies for that coverage. Last year, DMHC estimated that 90 percent of all new enrollees in individual market plans would be under the jurisdiction of DMHC while the other ten percent would be under jurisdiction of the CA Department of Insurance (CDI). It turns out that DMHC has jurisdiction over approximately 98 percent of the enrollees in Covered California individual market plans. DMHC is requesting additional staff positions to address the increased workload resulting from the revised projected increase in enrollment in the individual market.
  • Large Group Claims Data (SB 1182, Leno, 2014): Last year, Health Access supported Senator Leno’s SB 1182, which requires health plans and insurers to provide de-identified claims data to a large group purchaser. The bill increases transparency by making information available to large group purchasers that helps them understand what is driving their premiums, better negotiate rates, and help efforts to improve the health of employees through disease management programs. DMHC is requesting staff positions to implement the bill.
  • Dental Plans Medical Loss Ratio (AB 1962, 2014): Last year, Health Access also supported AB 1962, which requires dental health plans to report their dental loss ratio to DMHC. Getting information about how much health plans spend on administration vs. actual care will help consumers understand the value of their dental plans. The data collected under AB 1962 will also help the Legislature to establish a dental medical loss ratio after 2018.

Department of Health Care Services (DHCS)

The Senate Budget Subcommittee #3 heard the DHCS budget on March 19. (Assembly Budget Subcommittee #1 heard DHCS’ budget on February 23, and you can read the Health Access blog post on that hearing here.) DHCS operates a number of programs that health care services to eligible individuals, namely Medi-Cal. Medi-Cal coordinates and directs the delivery of health care services to approximately 12 million individuals, including low-income families, seniors and persons with disabilities, children in families with low-incomes or in foster care, pregnant women, low-income people with specific diseases, and childless adults up to 138 percent of the federal poverty level.

  • Medi-Cal Estimates and Caseload: 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 agreed with the Legislative Analyst Office‘s (LAO) that actual caseload information, not estimates, would help the Committee make better decisions. DHCS has begun posting monthly caseload data on its website. 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 reiterated its support for using monthly caseload data, and the department will provided updated numbers in the Governor’s May Revise.Health Access also supported the committee staff’s recommendation to adopt placeholder trailer bill language to eliminate nonemergency emergency room copay in Medi-Cal. The copay has never been implemented because the state has not received approval from the federal Centers for Medicare and Medicaid. We believe the copay unnecessarily imposes additional costs on low-income people who need health care. Studies have shown that the copay does not affect ER use.
  • CalHEERS Oversight: CalHEERS is the IT system that supports the single, streamlined application process for Medi-Cal and Covered California. CalHEERS has had a number of problems, resulting in key populations not being able to access the coverage they need. For example, under the ACA, former foster youth qualify for Medi-Cal coverage until age 26 regardless of their income. This law has been in effect since January 1, 2014 but has not been programmed accurately into CalHEERS, resulting in enrollment delays, enrollment in the wrong affordability program, or denial of Medi-Cal for former foster youth. Consumer advocates continue to be concerned about the lack of transparency and stakeholder engagement in setting the policies and priorities for CalHEERS, contrary to the requirements of AB 1296 (Bonilla, 2011). Specifically, stakeholders have received limited updates regarding CalHEERS changes but have not had an opportunity to give input on those priorities. Health Access echoed the concerns raised by WCLP and other consumer advocates and urged the subcommittee to maintain oversight over this issue.

We have also joined our colleagues at the California LGBT Health and Human Services Network and Equality California to press for the inclusion of optional questions regarding sexual orientation and gender identity (SOGI) demographic data on the Medi-Cal/Covered California application. Because of the ACA’s prohibition on discrimination, as well as the emphasis on affordability, many LGBT individuals and families can get Medi-Cal or private health insurance for the first time. LGBT people face many health disparities, which are reflected in higher rates of breast cancer, tobacco use, drug and alcohol abuse, violence, and suicide, as well as worse mental health outcomes. These disparities are due at least in part to a long history of being discriminated against by medical providers and denied medically necessary care, as well as inability to access health insurance. Collecting data about SOGI is a critical part of addressing these health disparities and help us evaluate whether the investments we’ve made in outreach and enrollment in LGBT communities are working. At the hearing, DHCS publicly committed to working toward making this a reality. You can read the CA LGBT HHS Network’s letter on collecting SOGI data here.

  • Dental Services in Medi-Cal: The Committee heard testimony about a recent California State Auditor (CSA) audit of the Denti-Cal Program, which found that some counties may not have enough providers to meet the dental needs of children in the program. The utilization rate for Medi-Cal dental services by children is low relative to national averages and to the rates of other states. CSA stated a primary reason for low dental provider participation is California’s low reimbursement rates for these services. The federal CMS has directed California to improve access to dental care for children, and DHCS proposes to accomplish this by targeting the use of mobile dentistry vans in Alpine, Amador, and Calaveras counties and increasing outreach to families with children aged 0-3 who haven’t seen a dentist in the last year.

DHCS has also 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.

  • Medi-Cal Provider Rates and Access: The Governor’s Budget continues the AB 97 Medi-Cal payment reductions, which is estimated to save $550M. Consumer advocates, providers and their associations, and others were on-hand to express their concern that the existing Medi-Cal rates, payment reductions, and rate freezes have negatively impacted Medi-Cal enrollee’s ability to access Medi-Cal services. There was testimony that rates are too low to cover the cost of providing services to Medi-Cal patients. Health Access supported restoring the AB 97 rate cut to improve access to Medi-Cal.
  • Medi-Cal Annual Open Enrollment: 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.
  • Elimination of COLA for County Eligibility Administration: 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.