After nearly a year of discussion and negotiation, the federal government approved California’s five-year, Medicaid Section 1115 hospital financing waiver on Tuesday. Under California’s waiver, now dubbed the “Bridge to Reform,” the state will receive approximately $10 billion in federal funds over five years. These federal funds will be invested in California’s health care delivery system to prepare for national health care reform.

Counties have been discussing the waiver for the better part of a year and many of the elements remain unchanged:

• Mandatory enrollment of seniors and persons with disabilities into Medi-Cal managed care;
• Expansion of the coverage initiatives to all counties. This remains a county option;
• Expanded Safety Net Care Pool.

In addition, the waiver includes funding for public hospitals to improve their infrastructure and prepare for implementation of federal health care reform.

Of course, the devil will be in the details. The state will be releasing the terms and conditions, the legal document governing the waiver, in the coming weeks. As this information becomes available, CSAC will be providing additional information and analysis to counties.

For now, we know that there is an incredible amount of work to be done to implement the waiver – within state government, county government, public and private hospitals, health plans, clinics and providers. Over the coming weeks, counties must analyze how the federal requirements on the coverage initiatives impact their ability to finance this option. Financing mechanisms, including rates, will need to be developed and adopted. In addition, elements of the state budget are dependent on savings generated by the waiver, so there will be pressure to move quickly.

If we know anything from the last waiver, this process is only just beginning. Stay tuned for more information. The Health and Human Services Policy Committee will be discussing this topic in detail in Riverside.