Medicaid Section 1115 Waiver Renewal Updates

The Department of Health Care Services (DHCS) is in the midst of the process to renew California’s “Bridge to Reform” Medicaid Section 1115 Waiver. DHCS has outlined their process as follows:

• Convene stakeholders. DHCS has convened seven stakeholder workgroups to inform the development of the waiver. The stakeholder process began in November 2014 and will continue through the end of January 2015.
• Write the proposal. DHCS will be writing the waiver proposal in the month of February and plans to submit the waiver proposal to the federal Centers for Medicare and Medicaid Services (CMS) in late February/early March. The proposal must be submitted at least six months before the current waiver expires October 31, 2015.
• Negotiations. Once the proposal is submitted to CMS, California will begin its negotiations with CMS in earnest. It is not unusual for waiver negotiations to take several months.
• Special Terms and Conditions (STCs). When negotiations between the state and federal governments conclude on the major concepts, CMS will create the STCs, the legal document governing the waiver.
• Implementation. Finally, once the STCs are complete, state implementation of the waiver can begin. The goal is to begin implementation in November 2015.

The seven workgroups that are meeting related to the development of the waiver proposal are:

Disproportionate Share Hospital /Safety Net Care Pool Funding Reform. DHCS is interested in exploring ways to move away from volume-based and cost-based care and instead towards risk-based care for the remaining uninsured. DHCS is hoping to incentivize coordination of care for the remaining uninsured, including rewarding the provision of primary care. Disproportionate Share Hospital (DSH) funds currently provide reimbursement for uninsured costs and Medi-Cal shortfalls hospital-based services. Safety Net Care Pool (SNCP) funds provide reimbursement to public hospitals for uncompensated costs for services to the uninsured. DHCS is exploring a statewide pool of funding for the remaining uninsured by combining federal DSH and SNCP funds. They have presented a proposal to move away from cost-based claiming and shift to a global budget approach for the uninsured. DHCS is calling their proposal “global budget/coordinated care for the uninsured.” The workgroup’s final meeting has been postponed until February, pending the outcome of initial conceptual discussions between DHCS and CMS.

Managed Care Organization and Provider Payment Reform. The Managed Care Organization and Provider Payment Reform workgroup is scheduled to conclude its meetings on January 23. The workgroup discussed a number of proposals around how to incentivize health plans and providers to work together on achieving outcomes. The group heard eight straw proposals and most of the workgroup participants indicated an interest in behavioral health, specifically a shared-savings program to build infrastructure for care coordination between health plans and county mental health plans.

Delivery System Reform Incentive Program Successor. The Delivery System Reform Incentive Program (DSRIP) is a five-year, federal pay-for-performance quality improvement initiative for California’s 21 public hospitals in the existing waiver, which provides $3.4 billion over five years. DSRIP funding has been used to expand access to primary care, improve quality of care and health outcomes and increase efficiency at public hospitals. As California seeks to renew the “Bridge to Reform Waiver,” the state will be looking to create a successor to the existing DSRIP. To date the workgroup has been focused on concrete proposals with a number of priorities, projects and metrics. Many of these ideas align with the work that public hospitals have done in preparing for a successor DSRIP. The workgroup recently had discussions about how to more explicitly include behavioral health in the DSRIP and how to include cultural competency, racial disparities and workforce proposals. 

Federally Qualified Health Centers (FQHC) Payment Reforms. Currently, FQHCs are reimbursed via the Prospective Payment System (PPS) rate and, for a smaller number of patients, fee-for-service Medi-Cal. Both reimbursement mechanisms are based on volume, which incentivizes visits but not necessarily quality. The Administration is interested in payment reforms that improve patient care, improve population health and decrease overall costs. The California Primary Care Association (CPCA) and the California Association of Public Hospitals and Health Systems (CAPH) have met over the last year and worked together on payment reform pilot ideas, and they are working with DHCS. The two associations are interested in creating more flexibility for FQHCs to provide better care. Because of the work done by CPCA and CAPH leading up to the waiver renewal, there is not a formal workgroup meeting on FQHC issues.

California Children’s Services (CCS). The existing waiver included the development of five pilots to test new models for the CCS program, but, to date, only one pilot in San Mateo County has been implemented. DHCS wants to include a CCS proposal in the waiver renewal; however, the CCS workgroup is on a different timeline than the others, having started to meet in December 2014 and scheduled to conclude in July 2015. DHCS has stated that their goal is to improve care for children in the CCS program. It is unclear how the CCS workgroup will be integrated into the waiver proposal slated for submission in the spring.

Housing. DHCS is interested in obtaining federal flexibility to use Medicaid funds for supportive housing services. They have discussed two target populations – chronically homeless individuals and individuals residing in nursing homes. DHCS is interested in finding ways to incentivize health plans and local governments in participating in a housing pilot. The Administration is very clear that the goal of the group is not to get federal funds for housing subsidies, but for supportive housing services. The workgroup heard several options at its January 14 meeting. The workgroup meets for the final time on January 28.

Workforce. The Workforce Workgroup concluded their meetings this month. Topics of discussion included alternative methods for delivering care, training incentives, and technology as a workforce tool. The workgroup discussed several proposals and concepts including: 1) financial incentives to increase Medi-Cal participation amongst providers; 2) peer providers in behavioral health; 3) screening, brief intervention and referral to treatment (SBIRT); 4) expanding cross-training and multi-disciplinary teams; 5) training for In-Home Supportive Services (IHHS); 6) increasing residency training slots; and 7) expanding the use of telehealth. DHCS is very interested in addressing participation of providers in the Medi-Cal program.

Financing. Additionally, DHCS is convening a financing meeting on Friday, January 30 from 12:30 to 3:30 to share their plans for financing the waiver, including their proposal for calculating budget neutrality. DHCS anticipates providing additional updates at the February 11, 2015 Medi-Cal Statewide Advisory Group meeting in Sacramento.

CSAC will continue to provide updates on the development of the waiver, including the conclusion of the workgroups and other details as they become available. For additional questions, please contact Kelly Brooks-Lindsey at kbl@hbeadvocacy.com or 916.753.0844.

Senate Select Committee on Aging and Long-Term Care Report

Members of the Senate Select Committee on Aging and Long-Term Care released a report entitled “ A Shattered System: Reforming Long-Term Care in California ”, addressing California’s fragmented long-term care delivery system. The report presents 30 recommendations from the Select Committee addressing the challenges in the current system and strategies for creating a sustainable, efficient continuum of care for aging and disabled adults. Recommendations address eight key issues:

• State Leadership
• Legislative Leadership
• System Integration
• Fragmentation/Lack of Integrated Data
• Infrastucture
• Workforce
• Funding
• Federal Issues

The full report is linked above.

Alameda County Superior Court Judge Rules on Medi-Cal Backlog Suit

Yesterday, Judge Evelio Grillo, an Alameda County Superior Court judge, issued a preliminary injunction requiring the state to adhere to a 45-day limit for processing Medi-Cal applicants. The petitioners – Frances Rivera, Mark Mullin, Ebony Pickett, Groto Ni and Maternal and Child Health Access – filed their petition in the fall, contending that the Department of Health Care Services (DHCS) failed to determine timely eligibility for Medi-Cal applicants. The petitioners sought a preliminary injunction prohibiting DHCS from: 1) failing to provide provisional Medi-Cal benefits to applicants who have been pending longer than 45 days and appear to be eligible based on initial information and 2) failing to issue notices to backlogged applicants of their appeal rights.

Recall that as of spring 2014, approximately 900,000 applications were backlogged, largely attributed to problems with the state’s CalHEERs systems. Since then, DHCS, with assistance from county eligibility workers, has reduced the backlog, which currently stands at roughly 45,000 applications.

Counties continue to conduct the Medi-Cal eligibility work on behalf of the State and may be impacted by this ruling. CSAC will work in collaboration with our county affiliates to monitor this issue and will provide updates as information becomes available.

LAO report examining the Home Care Universal Assessment Tool

The Legislative Analyst’s Office examines the Universal Assessment Tool (UAT) and makes recommendations regarding the implementation in its recent report “ The Universal Assessment Tool: Improving Care for Recipients of Home- and Community-Based Services ”. Recommendations include:

• Pursuing UAT on a statewide level
• Pursing automated state-specific UAT to maximize efficiency and effectiveness
• Testing counties and managed care plans as UAT administrators
• Requiring an evaluation of pilots to inform the Legislature

The full report is linked above.

SB 128 (Wolk) – Pending 
As Introduced on January 20, 2015

SB 128 – as introduced by Senators Wolk and Monning and coauthored by Senators Jackson, Leno, Block, Hall, Hancock, Hernandez, Hill, McGuire and Wieckowski and Assemblymembers Eggman, Garcia, Quirk and Stone – would enact the End of Life Option Act. This act would authorize an adult, who meets certain qualifications and who has been determined to be suffering from a terminal illness by their attending physician, to request medication prescribed to end their life.

This bill comes on the heels of the medically-assisted death of Brittany Maynard, who chose to die at age 29, after being diagnosed as terminally ill with cancer. Ms. Maynard, originally a Californian, moved to Oregon, one of five states – Oregon, Washington, Vermont, New Mexico and Montana – allowing doctor-assisted suicide.

Similar legislation is being considered in other states including Colorado, Florida, New York and Nevada.

Earned Income Tax Credit

There has been discussion lately regarding the implementation of a state earned income tax credit to assist in pulling low-income families out of poverty. To date, two bills have been introduced related to a state earned income tax credit:

AB 43 , by Assemblymember Stone, is currently a spot bill with the intent to create a refundable earned income tax credit for low-income individuals working in California.

SB 38 , by Senator Liu, would allow a credit based on earned income equal to 15 percent of the federal earned income tax credit allowed by Federal law. SB 38 is similar to the first option in the Legislative Analyst’s Office’s (LAO) December report - Options for a State Earned Income Tax Credit. Recall that in this report the LAO provided three options:

• Piggyback on the Federal Credit
• Focus on Working Families with the Lowest Incomes
• Supplement Federal Credit for Childless Adults

The full report is linked above.