Budget Actions

This week, the Senate and Assembly met to hear May Revise budget proposals and to close out open issues. Senate Budget and Fiscal Review Subcommittee No. 3 concluded their budget discussions on Wednesday, May 21, while the Assembly Budget Subcommittee No. 1 concluded today, Friday, May 23. The full Senate Budget and Fiscal Review Committee also met today, Friday, May 23. Generally, the Legislature is adopting a number of the Governor’s health and human services proposals, as well as restoring cuts from previous years and augmenting funding for a number of services and programs.

One area of disagreement between the Legislature and Governor is the Medi-Cal budget. The May Revise includes $513 million General Fund above the January budget for people previously eligible but not enrolled in Medi-Cal. These individuals are eligible for the old matching rate of 50/50; the Administration refers to this group as the mandatory expansion. The Legislative Analyst finds the Administration’s costs are too high and believe the Administration is using a higher fee-for-service cost per enrollee (approximately three times higher than similar existing enrollees). The LAO is recommending that the Legislature reduce the Administration’s proposed Medi-Cal budget by $300 million. The Senate adopted the lower savings today.

Highlights of the actions taken thus far include:

• Overtime to In-Home Supportive Services (IHSS) Workers: Augmented $66 million for costs to implement payment for overtime to IHSS workers. The Legislature rejected the Administration’s proposal to prohibit the payment of overtime to IHSS providers.
• IHSS Services: Restores the 7% cuts to all IHSS recipients; estimated at $186.7 million GF.
• CalFresh Administrative Match Waiver Phase-Out: Reduces the county’s GF allocation by 20 percent per year over a 5 year period, after a county meets their MOE.
• Augmentation of Adult Protective Services (APS): Increases the GF support by $ 1.25m for statewide APS training.
• Commercial Sexual Exploitation of Children: Provides the first-year funding support of $40.6 m ($20.3 million GF) and $28.5m ($14.3m GF) annually for ongoing costs to enable child welfare agencies to service victims of commercial sexual exploitation.

Additionally, Senate Budget and Fiscal Review took up a number of items of interest today, including:

• Medi-Cal provider rate restorations
• Restoration of Medi-Cal optional benefits
• Restoration of the Black Infant Health program
• Elimination of the drug felony exclusion for CalWORKs and CalFresh
• Mental health parity enforcement

Another priority for the Legislature this year is early learning for California’s low-income children. Yesterday, Senate President pro Tempore Darrell Steinberg presented the Senate’s Fair Start proposal to Budget Subcommittee No. 1, which includes an expansion of pre-kindergarten to all low income 4-year-olds (an additional 234,000 children); full-day, full-year pre-kindergarten to families with at least one working parent (77,000 children); changes to early childhood education child care programs rates to increase the number of slots by 40,000. The ongoing rate and child care investment is $550 million in ongoing costs. Another $100 million was provided for one-time quality projects. Please note that the Legislative Women’s Caucus priority is to offer child care opportunities for more than 40,000 low-income children, largely focused on those ages from birth to age 3, starting this year. 

The Assembly also approved yesterday the following: $440 million to add 47,000 new early education spaces; increase reimbursement rates and family eligibility; elimination of the Preschool Family Fee; improvements to provider quality; and reinstated a state stipend for nutrition.

SB 909 (Pavley) – Support
As Amended on May 13, 2014

SB 909, by Senator Fran Pavley, would permit a social worker, in the absence of a standing court order, to authorize an initial noninvasive medical, dental, and mental health screening for children in temporary custody after an initial examination without parental consent or a court order, if reasonable attempts to notify the parent are made. 
SB 909 is sponsored by Los Angeles County and will assist all counties in expediting needed health care for the children in our custody. Further, this measure is not a mandate and may reduce county costs by allowing children to receive basic medical care before mounting a costly effort to gain parental or judicial consent. It was amended on May 13 to specify that reasonable attempts to notify a parent must be made and that authorization is only given in the absence of a standing court order . 
CSAC strongly supports SB 909, which was held by the Senate Appropriations Committee on May 23. 

SB 1029 (Hancock) – Support
As Amended on April 10, 2014

SB 1029, by Senator Loni Hancock, would authorize CalFresh benefits for individuals in the community who were convicted of a drug felony after December 31, 1997. CSAC supports the measure, which was amended in the Senate Appropriations Committee today to remove access to CalWORKs benefits by this population. 

The Senate Appropriations Committee passed SB 1029 with amendments off of the Suspense File on May 23.SB 1029 will now move to the Senate Floor.

AB 1733 (Quirk-Silva, Maienschein, Atkins) – Support
As Amended on May 23, 2014

AB 1733, by Assembly Members Sharon Quirk-Silva, Brian Maienshcein and Assembly Speaker Toni Atkins, allows a fee waiver for a homeless person to obtain a certified certificate of live birth from the county registrar or recorder or an identification card from the Department of Motor Vehicles (DMV). 
CSAC supports AB 1733. As the service provider of last resort for indigent Californians, counties deal with the effects of homelessness across our systems, including health, human services and public safety. AB 1733 will facilitate access for homeless people to services that are critical to helping them move towards self-sufficiency. Government and non-governmental entities fund a variety of services that help ensure the health and safety of homeless and low-income people. However, eligibility must be established in order to access these services, which often requires proof of identity with a birth record or valid identification card. Providing these services to homeless persons reduce costs to government and society overall, but particularly counties. 
This Assembly Appropriations Committee unanimously passed AB 1733 with amendments off of the Suspense File, on May 23. AB 1733 will now move to the Assembly Floor.

Emergency Medical Services

AB 1621 (Lowenthal) – Oppose
As Amended on May 23, 2014

AB 1621, by Assembly Member Bonnie Lowenthal, would create a State Emergency Medical Services Data and Information Systems (SEMSDIS), mandate the use of electronic patient care record systems, and require local EMS agencies to submit patient and system data to the EMS Authority.
CSAC and CHEAC are generally supportive of the concept of expanding the use of electronic emergency medical services data. However, this bill creates a costly regulatory mandate on counties and EMS providers. The cost of implementing an electronic patient care record system can be measured in the tens of thousands of dollars, and funds for this purpose are virtually nonexistent for most counties, most acutely in our rural counties.
For these reasons, CSAC has joined with CHEAC to oppose AB 1621. The Assembly Appropriations Committee unanimously passed AB 1621 with amendments off of the Assembly Suspense File on May 23. AB 1621 will now go to the Assembly Floor.

AB 1975 (Hernández) – Oppose
As Amended on May 7, 2014

AB 1975, by Assembly Member Roger Hernández, was amended this week, but the changes have failed to allay county concerns about the bill. 
AB 1975 would originally have required Local Emergency Medical Services Agencies (LEMSAs) which are implementing a trauma care system to commission the American College of Surgeons (ACS) to conduct a comprehensive assessment periodically of equitability and access to its trauma system. 
After the amendments on May 7, this would require local EMS agencies (LEMSAs) to commission regional assessments by an independent entity of their trauma systems. This bill would also require LEMSAs to incorporate regional trauma coordinating committee (RTCC) recommendations into their local trauma care plans. 
Counties oppose AB 1975. Local EMS agencies, with the oversight of the EMS Authority and the Commission on EMS, currently perform objective and independent trauma planning and system evaluation. While there may be value on a case-by-case basis for a local EMS agency voluntarily choosing to contract with an independent entity, counties oppose the significant increase in authority and roles for RTCC’s in the development of local trauma care plans. 
CSAC, along with the Emergency Medical Administrators Association of California (EMSAAC) and the Emergency Medical Directors Association of California (EMDAC), are currently in talks with the Author’s office to address our ongoing concerns. CSAC continues to oppose the measure based on the May 7 amendments. The Assembly Health Committee passed the measure on May 7 on an 11 to 6 vote; the Assembly Appropriations Committee held AB 1975 on May 23. 

Mental Health 

SB 1054 (Steinberg) – Support
As Amended on April 7, 2014

SB 1054, by Senate President pro Tempore Darrell Steinberg, would resurrect the Mentally Ill Offender Crime Reduction (MIOCR) grant program by providing $25 million for juvenile offenders and $25 million for adult offenders in 2014-15. 

The competitive grant program would be administered by the Board of State and Community Corrections and disbursements would be made from the Recidivism Reduction Fund to counties that expand or establish a continuum of swift, certain, and graduated responses to reduce crime and criminal justice costs related to mentally ill offenders over four years. 
CSAC strongly supports Senator Steinberg’s efforts to target funding for intensive services to those who suffer from mental illness in the criminal justice system. The Senate Public Safety Committee passed SB 1054 on April 22 with strong county and law enforcement support. The Senate Appropriations Committee passed SB 1054 off of the Suspense File on May 23 on a 7 to 0 vote. SB 1054 will now move to the Senate Floor.

SB 1161 (Beall) – Support
As Amended on April 29, 2014

SB 1161, by Senator Jim Beall, would require the Department of Health Care Services to expand substance use disorder (SUD) residential treatment capacity and medical detoxification services in California by pursuing a federal Medicaid waiver with the Center for Medicare and Medicaid Services.
SB 1161 seeks to ensure that residential care facilities for substance use disorder and medical detoxification services are available to Medi-Cal beneficiaries. Expansion of provider capacity is a critical component of ensuring that the Medi-Cal expansion meets the needs of those seeking substance use disorder treatment. As California looks to expand treatment capacity, it should partner with the federal government in seeking flexibility in the models for delivering care that will allow for the most cost effective expenditure of public funds. 
CSAC is also supportive of DHCS’s pursuit of a broad federal waiver to test a new model for better access and care coordination within the Drug Medi-Cal program and SUD services at the county level. The Senate Appropriations Committee passed SB 1161 off of the Suspense File on May 23 on a 6 to 1 vote. SB 1161 will now move to the Senate Floor.
Public Guardian

AB 1725 (Maienschein) – Oppose
As Amended on April 30, 2014

AB 1725, by Assembly Member Brian Maienschein, remains a concern for counties as it will increase costs and workload levels and hasten the erosion of county authority in conservatorship investigations should this measure move forward.
AB 1725 was amended April 30, and while the amendments reflect an improvement in the bill, counties remain opposed to the remaining provisions that would allow a Probate Court to make a recommendation of conservatorship to the county Conservatorship Officer (CO) and require the CO to conduct the investigation and file a report within 30 days of the probate court recommendation.
While the proposed language does not require the CO to recommend conservatorship to the Superior Court, it does compel the CO to conduct a conservatorship investigation. This is contrary to current law, whereby a CO retains the authority to determine whether an investigation is warranted upon receiving a referral by a medical professional. 
Should the mandate in AB 1725 become law, counties anticipate a significant increase in workload and county costs for conservatorship investigations. Further, the measure would also impose an arbitrary and frankly unrealistic 30-day mandated timeline for the investigation and submission of a report to the Superior Court. 
CSAC opposes AB 1725, and the Assembly Appropriations Committee held AB 1725 on May 23.

General Assistance

AB 2311 (Bradford) – Oppose
As Amended on May 23, 2014

AB 2311, by Assembly Member Steven Bradford, would alter locally-established General Assistance (GA) eligibility to allow honorably discharged veterans to receive GA benefits for a longer period of time. 
Each county establishes GA benefit eligibility and award levels to best serve the needs of their communities. While counties strive to serve veteran populations, AB 2311 would increase county-funded benefits for a specific population and remove local authority to set GA levels that meets the needs of each community. It was amended in the Assembly Appropriations Committee today; CSAC will review the amendments when they become available. 
The Assembly Appropriations Committee passed AB 2311 with amendments and off of the Suspense File on May 23. It will now move to the Assembly Floor.

Medi-Cal

SB 1150 (Hueso and Correa) — Support
As Amended on March 26, 2014

SB 1150 by Senators Ben Hueso and Lou Correa would allow Federally Qualified Health Centers (FQHCs) and Rural Health Centers (RHCs) to be reimbursed by Medi-Cal for two visits by a patient with a single or different health care professional on the same day at a single location. Specifically, SB 1150 would allow for billing for two visits when a patient has a medical visit and an additional visit with a mental health practitioner or a dental professional. It is sponsored by Orange County.

The Senate Approporiations Committee held SB 1150 on May 23

SB 1341 (Mitchell) – Support
As Amended on May 6, 2014

SB 1341, by Senator Holly Mitchell, would codify the existing agreement between the Administration, Covered California, and the counties regarding the respective roles of the State Automated Welfare System (SAWS) and the California Health Eligibility Enrollment and Retention System (CalHEERS). 
Specifically, SB 1341:

• Specifies SAWS as the system of record for Medi-Cal and that SAWS shall contain all Medi-Cal eligibility rules and case management functionality. The bill permits the MAGI rules for Medi-Cal to continue to be housed in CalHEERS as they currently are; and,
• Requires that Notices of Action (NOAs) for Medi-Cal be programmed into the Medi-Cal system of record: the SAWS systems.

The Senate Appropriations Committee passed SB 1341, off of the Suspense File, on May 23 on a 7 to 0 vote. It will now move to the Senate Floor.

SB 1005 (Lara) – Pending 
As Amended on April 22, 2014

The Affordable Care Act (ACA) has expanded health care coverage to millions of Californians who were previously ineligible for Medi-Cal or subsidized coverage. However, even though coverage is reaching a larger population of Californians, not all Californians have or will obtain health care coverage. There are three main reasons why Californians will remain uninsured:

1. Individuals eligible for Medi-Cal will not enroll;
2. Individuals eligible for subsidized coverage through Covered California will not enroll;
3. Individuals without documentation of legal residence are ineligible for coverage.

The UC Berkeley Center for Labor Research and Education and the UCLA Center for Health Policy Research released a report this week, A Little Investment Goes a Long Way: Modest Cost to Expand Preventative and Routine Health Services to All Low-Income Californians, , predicting that between 2.7 and 3.4 million Californian’s under the age of 65 will remain uninsured. Despite the ramped up outreach and enrollment efforts, there will continue to remain a population that does not enroll in health care coverage through Medi-Cal or Covered California for a variety of reasons.

Of the remaining uninsured, between 1.4 and 1.5 million individuals remain ineligible for federal coverage due to their immigration status. Undocumented immigrants make up 9 percent of the state’s workforce and pay more than $2 billion in annual state and local taxes. Currently, undocumented immigrants are eligible to receive limited scope Medi-Cal benefits, which include Emergency Medi-Cal and Pregnancy Only Medi-Cal. These are the only services eligible for matching funds under federal law, as well. However, there is much discussion in California and a current bill proposal and a budget in the legislature, surrounding the expansion of Medi-Cal primary and preventative care services to undocumented immigrants.

SB 1005, by Senator Lara, would extend Medi-Cal eligibility to individuals who would otherwise be eligible, except for their immigration status. SB 1005 would also create a new health benefit exchange to provide subsidized health care coverage to individuals who cannot purchase through health care coverage through Covered California due to their immigration status.

On May 19, SB 1005 the Senate Appropriations heard the bill and placed on the suspense file with a 7 to 0 vote. The bill is set to be heard on May 23.

Again, according to the UC Berkeley Center for Labor Research and Education and the UCLA Center for Health Policy Research, if undocumented immigrants were to receive primary and preventative care services, enrollment in public programs would increase by 7 percent, although costs would only increase by 2 percent – or between $355 million and $369 million. The unequivocal increases are due to various assumptions related to costs and utilization; which include the items listed below, however it should be noted that a level of uncertainty remains as the implementation of ACA progresses.

• The most costly services, emergency and pregnancy-related services, are already being covered by Medi-Cal.
• Access to primary and preventative care results in better health outcomes, thereby reducing the cost of care.
• Undocumented immigrant utilization is 15 percent lower than citizens and legal immigrants.
• The revenue generated through sales tax on the Medi-Cal Managed Care Organizations will increase as undocumented immigrants become eligible for coverage.

The report estimates that the new expenditures resulting from universal coverage would be offset by an increase in state sales tax revenue from managed care insurance plans (also known as the MCO tax) and by savings from reduced county spending on care to the uninsured. The chart below details their base and enhanced spending and savings assumptions in 2015 and 2019: