Conference Committee Actions on Health & Human Services

The Joint Budget Conference Committee took action to close out items yesterday that, in most cases, would enact additional cuts to health and human services programs. The outline below refers only to actions taken by the Committee on March 3 – all other actions previously reported in the CSAC Bulletin remain in the Conference Committee’s final report. In total, the Legislature adopted $6 billion in cuts to health and human services programs.

CalWORKs

The Conference Committee took action to make deeper cuts to the CalWORKs program than both houses had individually taken, including:

• Cutting grants by 8 percent, effective June 1, 2011. Both houses had suggested a 5 percent grant cut.
• Reducing the single allocation for child care, welfare-to-work, and administrative costs by $427 million.
• Enacting an earned income disregard policy in which the first $100 of relevant income and then 50 percent of all other relevant earnings are disregarded.
• Reductions in the CalLearn program ($45 million) and the elimination of Community Challenge grants ($20 million).

In Home Supportive Services

The Conference Committee adopted additional unspecified savings of $128.4 million in the In-Home Supportive Services (IHSS) program to be implemented with trailer bill language. Both Houses of the Legislature had previously approved a requirement for IHSS recipients to have a doctor’s certification that personal care services are necessary to prevent our-of-home care to save $152 million General Fund. The Legislature had also previously reduced funding to local IHSS Advisory Committees by $1.4 million, retaining $3,000 for each of the 56 Public Authorities. 

Medi-Cal

Cap on Doctor Visits. The Conference Committee took action to modify the Governor’s proposal to cap doctor’s visits for adult Medi-Cal recipients from 10 to a “soft cap” of seven in order to save an additional $44.9 million GF. The soft cap affects both Medi-Cal Fee-for-Services and Managed Care plans, and is expected to be implemented on October 1, 2011. 

Provider Rate Cut. The Conference Committee made a technical adjustment to the action by both Houses to adopt a 10 percent reduction in Medi-Cal provider payments, including Long-Term Care services, for an additional savings of $39 million. 

Local Maddy Funds to Medi-Cal. The Conference Committee adopted a new proposal to take $55 million from local Emergency Medical Services Fund – also known as “Maddy Funds” – to pay for uninsured emergency medical services for Medi-Cal recipients. These funds are local funds and are intended to help hospitals, physicians and counties pay for some of the costs of providing emergency services to uninsured patients. The Department of Finance representative at the Conference Committee hearing told the committee that counties could compensate for the $55 million take by using new federal Waiver funding, which is not true, as not all counties a participating in the waiver and the funding for those that do is fairly proscribed. As trailer bill becomes available, CSAC will share additional detail. 

The Committee also adopted a shift in Mental Health Services Act funds to fund an $800 million cut in Medi-Cal (see below), as well as a Proposition 10 shift (also see below.)

Mental Health

The Committee adopted language to shift $861 million in Proposition 63 funds from Mental Health Services Act programs to backfill the state’s obligation for special education mental health services for children (AB 3632), the Early and Periodic Screening, Diagnosis and Treatment (EPSDT) program, and Mental Health Managed Care. 

First 5 Commissions (Proposition 10)

The Conference Committee adopted a one-time take of $1 billion from First 5 Commissions (about 5 percent of the sweep comes from the state Commission, while the local county commissions would lose nearly $950 million). The state will use this to fund Medi-Cal services for children aged 0-5. 

This one-time take will be accomplished through a two-thirds vote of the Legislature, rather than through a ballot initiative. Fifty percent of each county commission’s fund balance as of June 30, 2010, is included in this redirection. The smallest counties (receiving less than $600,000 in annual Proposition 10 revenue) are excluded from the requirement. County commissions will be required to shift these reserves to the State by June 30, 2012. 

Child Care

The Conference Committee action on child care includes the following, for a savings of $501 million: 

• Income eligibility: Reduce income eligibility for subsidized child care from 75 percent of the State Median Income (SMI) to 70 percent of SMI. (Governor had proposed 60 percent) for a savings of $30.084 million.
• Age eligibility: De-prioritize 11- and 12-year olds, but prioritize them for before and after school programs. Includes exemptions children who are in non-traditional hours of care and children who are disabled, at risk of abuse, or homeless. Total savings of $38.5 million.
• Subsidy reduction and Co-pay: The compromise is a 10 percent increase in the family fee as opposed to the 35 percent co-pay proposed by the Governor, for savings of $12 million.
• Across-the- Board Reduction: The Conference compromise is a reduction of 15 percent across-the-board, excluding CalWORKs stages 1 and 2, for savings of $267 million.
• Reimbursement – License-exempt: Reduce license-exempt providers from 80 percent to 60 percent of the licensed provider rate (RMR). Savings of $44.1 million.
• Reimbursement: Approve a reduction of up to 10 percent for the Title 5 Standard Reimbursement Rate, based on final Prop 98 funding package. Savings of $109 million.

Adult Day Health/MSSP Compromise

The Conference Committee eliminated Adult Day Health Care (ADHC) as a Medi-Cal optional benefit to save $90 million GF, but also directed the creation of a similar new program in the future and provided $85 million GF to fund this new future program. 

As for the Multipurpose Senior Services Program (MSSP), the Committee cut $2.5 million from the program, down from the Senate’s proposed $5 million cut. 

Developmental Services

The Conference Committee adopted an additional $50 million cut to Developmental Services, for a total proposed cut of $577 million. The Governor had proposed $750 million in cuts.

Mental Health

AB 154 (Beall) – Support
As Introduced January 18, 2011

AB 154, by Assembly Member Jim Beall, would require Knox-Keene licensed health plans to expand mental health coverage to include the diagnosis and treatment of any mental health condition or disorder as defined in the Diagnostic and Statistical Manual IV (DSM-IV) (or subsequent editions), including substance abuse conditions. AB 154 builds upon the original California mental health parity legislation, AB 88 (Thomson, Chapter 534, Statutes of 1999), which requires health plans to provide coverage for the diagnosis and medically necessary treatment of severe mental illnesses of a person of any age, and serious emotional disturbances of children, under the same terms and conditions applied to other medical conditions.

AB 154 is similar to last session’s AB 1600 (Beall), which was vetoed by Governor Schwarzenegger. In fact, Governor Schwarzenegger vetoed the measure four times during his time in office. 

AB 154 has been referred to the Assembly Health Committee, but has not yet been scheduled for a hearing.

Child Care

SB 12 (Corbett) – Support
As Introduced December 6, 2010

SB 12, by Senator Ellen Corbett, would appropriate $250 million from the General Fund to restore CalWORKs Stage 3 child care. 

SB 12 is a response to Governor Schwarzenegger’s October 8, 2010 veto of $256 million in CalWORKs Stage Three child care subsidies from the 2010-11 budget. Since that time, more than 40 local county First 5 Commissions have stepped in to provide bridge loan funding to sustain the program until a legislative solution is adopted.

SB 12 is similar to Assembly Speaker John A. Pérez’s AB 1, which would have appropriated $233.5 million for CalWORKs Stage Three child care. AB 1 has been moved to the Assembly Inactive File, whereas SB 12 has been referred to the Senate Education Committee, but not yet set for hearing.

Adult Protective Services

SB 33 (Simitian) – Support
As Introduced on December 6, 2010

SB 33, by Senator Joe Simitian, would repeal a sunset date for statute that designates certain financial institution employees as mandated reporters for suspected financial abuse of elder or dependent adults. 

Senator Simitian authored SB 1018 in 2007 to expand the definition of mandated reporters of elder or dependent adult abuse to those who work at financial institutions. SB builds that statute by removing the January 1, 2013 sunset date, and makes other small technical changes to the statute. 
A similar bill, AB 518 by Assembly Member Don Wagner, has also been introduced, but has not yet been assigned to a committee. Senator Simitian’s SB 33 has been assigned to the Senate Banking and Financial Institutions Committee and is scheduled to be heard on April 6.