CDCAN REPORT #044-2011: Senate Budget Committee approves 10% Medi-Cal provider rate cut

SENATE BUDGET COMMITTEE TAKES ACTION ON MEDI-CAL AND HEALTHY FAMILIES BUDGET PROPOSALS

Senate Budget Committee Approves Medi-Cal Provider 10% Rate Reductions and Co-Payments; Rejects Hard Caps or Limits for Doctor, Clinics and on Prescription Drugs for Adults – Rejects Limits on Durable Medical Equipment and Medical Supplies But Approves Limit on Hearing Aids

SACRAMENTO, CALIF  (CDCAN) [Updated 02/16/2011 – 03:20 PM  (Pacific Time)] – Moving the fast tracked budget process a major step closer to the March enactment deadline the Governor wants, the Senate Budget and Fiscal Review Committee, chaired by Sen. Mark Leno (Democrat – San Francisco, 3rd State Senate District) took final action on several of Governor Jerry Brown’s proposed cuts to Medi-Cal and Healthy Families, approving a permanent 10% reduction to nearly all Medi-Cal providers, that would go into effect June 1, 2011.  The reduction would also apply to Intermediate Care Facilities for the Developmentally Disabled (ICF-DDs) and to nursing facilities level B (sometimes referred to as AB 1629 facilities).

The Senate budget panel however voted divided on party lines to reject the Governor’s proposal for a hard cap or limit of 10 visits per year for adults in the Medi-Cal program for physician and clinic visits, and a limit of 6 prescription drugs per year for adults, and also the dollar limit for durable medical equipment and supplies.  The Senate Budget Committee however did approve the Governor’s proposal to establish dollar limits for hearing aids for adults.

The actions by the Senate Budget Committee – controlled by Democrats – is a signal of what they will likely do regarding the Governor’s other sweeping major cuts to other health and human services, including regional centers and other developmental services, SSI/SSP monthly individual grants, In-Home Supportive Services, CalWORKS, and Child Welfare Services.

The actions by both the Senate Budget and Fiscal Review Committee and its counterpart in the Assembly – the Assembly Budget Committee (which meets on Friday), still need final approval by both houses in a vote that will likely come during the last week of February.

Committee Republicans and Democrats Spar Briefly On Cuts

Senate Budget Committee Republicans expressed unhappiness at the rejection of the Governor’s spending reduction proposals – with Sen. Jean Fuller (Republican – Bakersfield) expressing concern that they were not being fully informed of alternative proposals and the overall direction the committee is moving toward.  She said Republicans wanted to work in a bi-partisan effort to solve the budget crisis, but found it difficult to do so without being informed about where the committee was going and also of different alternative proposals.

Sen. Leno, apologized for any miscommunications, but said Senate Democrats intended to meet the Governor’s target of $12.5 billion in cuts in State general fund spending and are looking for to find other ways if possible to save money without having to make certain drastic cuts in programs.  He mentioned that out of the $1.7 billion cuts to Medi-Cal proposed, only about $200 million was restored.

The Senate budget hearing ended after under 3 hours. 

Adult Day Health and MSSP Not On Today’s Agenda

As previously reported, the Governor’s proposal to eliminate Adult Day Health Care services and the MSSP or Multipurpose Senior Services Program, both Medi-Cal funded programs, were not on today’s agenda and could be heard by the Senate Budget Committee on Thursday (February 17).

The Assembly Budget Committee will hold only a single hearing on Friday, February 18th, taking final action on those and all other proposals by the Governor.

CDCAN Summary of actions taken by Senate Budget and Fiscal Review Committee February 16, 2011:

• Medi-Cal Provider Payment 10% Reduction including Intermediate Care Facilities and Nursing Facilities Level B (1629 Nursing homes).  Senate Budget Committee APPROVED the Governor’s proposal.
• Additional State General Fund Savings Identified by Department of Health Care Services and Senate Budget Subcommittee staff of $77.9 million State General Funds.  Senate Budget Committee APPROVED this adjustment. 
• Hard Cap: 10 Visits for Physicians and Clinics for Adults (children 21 years or younger, pregnant women and persons in long term care facilities exempted from cut).  Senate Budget Committee REJECTED the Governor’s proposal by vote of 10 to 3
• Mandatory $5 co-payments for doctors and clinic visits for all Medi-Cal recipients (including children, pregnant women and persons in long term care facilities)  Senate Budget Committee APPROVED the Governor’s proposal.
• Hard Cap/Limit of 6 Prescription Drugs Per Year for adults (children 21 years and under, pregnant women and persons in long term care facilities would be exempted).  Senate Budget Committee REJECTED the Governor’s proposal by vote of 10 to 4.
• Mandatory co-payments for Pharmacy services ($3 co-pay for generic drugs and $5 co-pay for bran name drugs) for ALL Medi-Cal recipients.  Senate Budget Committee APPROVED the Governor’s proposal (with “placeholder” trailer bill language”) without objection from either Democrats or Republicans
• Mandatory co-payments for Hospital Services ($100 co-pay for inpatient day – maximum $200)  and $50 co-payment for Emergency Room Services and mandatory $50 co-payment for non-emergency room use of Emergency Room Services.  Senate Budget Committee APPROVED the Governor’s proposal (with “placeholder” trailer bill language) without objection from either Democrats or Republicans. 
• Mandatory $5 co-payments for ALL Medi-Cal recipients including children, pregnant women, and persons living in long term care facilities and any remaining adults who still receive this service in managed care.  Senate Budget Committee APPROVED the Governor’s proposal (with “placeholder” trailer bill language), 14-0.
• Elimination of Over-the-Counter Cough & Cold Medicine for adults (children exempted) as a Medi-Cal benefit.  Senate Budget Committee APPROVED the Governor’s proposal (with “placeholder” trailer bill language) without objection from either Democrats or Republicans
• Limit Enteral Nutrition Products for Adults as a Medi-Cal benefit (would only be provided for adults who must be tube-fed).  Senate Budget Committee APPROVED the Governor’s proposal (with “placeholder” trailer bill language) without objection from either Democrats or Republicans. 
• Durable Medical Equipment (includes walkers, wheelchairs, oxygen and respiratory equipment, hospital beds, etc)  – Maximum Yearly Limit of $1,604 per person for adults (children, pregnant women and persons in long term care facilities exempt) as a Medi-Cal benefit.  Senate Budget Committee REJECTED the Governor’s proposal, vote of  11-4
• Medical Supplies – Maximum Yearly Limit for adults ($391 for wound care dressings; $1,659 for incontinence supplies and $6,435 for urological supplies including catheters) (Children 21 years or younger, pregnant women and persons in long term care facilities exempt from this cut).  Senate Budget Committee REJECTED the Governor’s proposal, vote of  11-4
• Hearing Aid Expenditures – Maximum Yearly $1,510 Limit for adults (children 21 years or younger, pregnant women and persons in long term care facilities exempt from this cut) .  Senate Budget Committee APPROVED Governor’s proposal (with “placeholder” trailer bill language) without objection from either Democrats or Republicans. 
• Proposition 10 California Children and Families First Act  $1 Billion Fund Shift to Medi-Cal.  Senate Budget Committee APPROVED with compromise to apply (“score”)  the shift for the 2011-2012 State Budget year but in the following state budget years would “not interfere with the revenue streams for the purposes of the First Five program” by a vote of 11 to 4. 
• Trailer Bill Language: Medi-Cal Rates for Lanterman Developmental Center Managed Care Clients.  Senate Budget Committee APPROVED Governor’s proposal without objection from either Democrats or Republicans.
• Trailer Bill Language: Medi-Cal Eligibility Processing by Counties.  Senate Budget Committee APPROVED Governor’s proposal without objection from either Democrats or Republicans
• Trailer Bill Language: 250% Working Disabled Program Change (rescinds premium changes – not considered controversial).  Senate Budget Committee APPROVED Governor’s proposal without objection from either Democrats or Republicans.

Healthy Families Budget Proposals

• Monthly Premium Increase (for families 151% to 200% of federal poverty level, increase of $14 per child, for a total of $30 per child per month with a family maximum of $90 per month for three or more children; and for families 201% to 250% of federal poverty level an increase of $18 per child for a total of $42 per child per month – family maximum would be $126 per month for three or more children).  Senate Budget Committee APPROVED Governor’s proposal without objection from either Democrats or Republicans.
• Increases Existing Healthy Families Co-payments for Hospital Services (aligns with co-payments for Medi-Cal) for Emergency Room Services (from $15 to $50) and Hospital Inpatient days would have a co-pay of $100 per day for a maximum of $200 per stay.  Senate Budget Committee APPROVED Governor’s proposal without objection from either Democrats or Republicans.
• Elimination of Vision Coverage for children in the Healthy Families Program.  Senate Budget Committee REJECTED Governor’s proposal and instead, approved an alternative proposal to reduce State general fund spending by $3 million resulting from both glass frames and lenses designed for the Healthy Families program, and at a lower fee schedule.  Senate Budget Committee approved this alternative with “placeholder” trailer bill language.

Senate Budget Panel Also Meeting February 17th and 18th

As previously reported the Senate budget committee is also meeting on February 17 and 18th to take final actions – including any health budget issues not taken up or acted on February 16th), and the Adult Day Health Care issue could be taken up on either of those dates.

Budget issues impacting regional centers and other developmental services likely will be taken up on Thursday (February 17).

The Assembly Budget Committee, as previously reported earlier today, will take up all open budget issues – including Medi-Cal, regional centers, In-Home Supportive Services, CalWORKS, in one single hearing scheduled for Friday (February 18).  See  below for details.

FINAL BUDGET COMMITTEE HEARING SCHEDULED

Full Senate Budget Committee Set To Meet 3 Times This Week

All hearings will be televised live and webcasted live on CalChannel). All hearing dates and times and agenda items are subject to change.

FEBRUARY 17, 2011 – THURSDAY    ***UPDATED***
SENATE BUDGET & FISCAL REVIEW COMMITTEE
09:00 AM – State Capitol – Room 4203
Budget Items On Agenda:

• Human Services - including Office of Systems Integration (OSI); Department of Social Services (DSS) that includes In-Home Supportive Services, SSI/SSP; Department of Child Support Services (DCSS); and California Department of Aging (CDA) that could include the Multipurpose Senior Services Program or MSSP budget item.
• Other Health Programs (could include regional centers and other developmental services and other remaining “open” health budget items)
• Public Safety budget items
• Higher Education budget items (includes community colleges)

PUBLIC TESTIMONY TAKEN: No – all these issues were previously heard with public testimony taken
CDCAN COMMENT:  Senate Budget Committee staff says the bulk of human services budget items still “open” will be part of the hearing on February 17 (Thursday).  The hearing dealing with “realignment” (shifting State programs to the counties) proposals for Child Welfare Services, Adoptions Assistance Programs, Drug Medi-Cal and Adult Protective Services is part of the hearing agenda for Friday (February 18th)
PRIORITY: EXTREMELY HIGH

FEBRUARY 18, 2011 – FRIDAY
SENATE BUDGET & FISCAL REVIEW COMMITTEE
09:30 AM (or whenever the State Senate floor session, which convenes at 09:00 AM on Friday, adjourns – which is expected to be around 09:30 AM)
State Capitol – Room 4203
Budget Items On Agenda:

• Revenues
• Redevelopment budget items
• Realignment budget issues (includes certain mental health related community-based services)
• Education – K-12 budget items
• And other remaining “open” budget items

PUBLIC TESTIMONY TAKEN: No – all these issues were previously heard with public testimony taken
CDCAN COMMENT:  While the main focus of this hearing is non-health and human service budget items, the agenda could include health and human services budget items that the Senate committee does not take action on Wednesday or Thursday.
PRIORITY: EXTREMELY HIGH

FEBRUARY 18, 2011 – FRIDAY
ASSEMBLY BUDGET COMMITTEE
Meets Upon Adjournment of Assembly Floor session – which could be anywhere from 09:30 AM to about 10:00 AM
State Capitol – Room 4202
Budget Items On Agenda:

• ALL “open” budget items proposed by the Governor including health (Medi-Cal, Healthy Families, regional centers and other developmental services), human services (In-Home Supportive Services, CalWORKS, SSI/SSP, Child Welfare Services, etc), education, realignment, revenues, etc.

Public Testimony Taken: No – all these issues were previously heard with public testimony taken
PRIORITY: EXTREMELY HIGH

NEXT STEPS

NO MAJOR ACTION YET FROM EITHER HOUSE

• As of February 15th,8:00 PM, both the Assembly and Senate Budget Subcommittees completed their subcommittee budget hearings on all of the Governor’s major proposed reductions in hearings that began the week of January 24th and ended last week on February 10th, including taking in public comment.
• Nearly all of the Governor’s major proposals have been kept “open” for later action this week by the full budget committees in both houses.  Those actions where the Assembly and Senate disagree on will likely go to a Budget Conference Committee (composed of members from both houses) to resolve sometime during the week of February 21st.

WHEN WILL LEGISLATURE TAKE FINAL ACTION

• As reported, the full budget committees in both houses have scheduled what will likely be final hearings this week (see above for details) to close out most  “open” budget items (meaning those budget items previously heard in subcommittee hearings but where no action was taken). The Senate Budget and Fiscal Review Committee was the first to hold a hearing, meeting today (February 16) and took final action (“closed out”) several Medi-Cal, Healthy Families and other budget issues. 
• This process by the full budget committees is scheduled to be completed by the end of this week – February 18th in what is a unusually fast paced compressed process.
• Those items not closed (final action taken) or those items where the Senate and Assembly took different action will likely then go to a budget conference committee (which would be chaired by Assemblymember Blumenfield this year) – and then for a final vote by the entire Assembly and Senate.
• It is not certain yet when a final vote by both the full Assembly and State Senate will take place – though the Governor wants the Legislature to send him a budget bill and budget trailer bills by March.

BUDGET PROCESS ON FAST TRACK

• As previously reported, the Governor and Legislature – at the Governor’s urging – have put his proposed 2011-2012 State Budget spending plan on a fast track, to take action on his major proposals before March 1st. 
• The normal State budget process takes usually a half a year or longer  – with subcommittee hearings normally spread out from late February to May. 
• Governor has urged the Legislature to move quickly because a key part of his plan is to place on a special election ballot in June for voter approval his proposal to extend for five years temporary tax increases that are scheduled to expire this year. 
• The Governor also wants quick action on his spending reduction proposals in order for the State to be able to move to implement them by July 1st – and in some cases, within a few months – in order to achieve the greatest savings in State general funding from the cuts.

MORE BUDGET HEARINGS LIKELY IN MAY OR JUNE

• While last week was likely the final time for public comment at a budget subcommittee or full budget committee hearing (people can still contact their own legislators or write letters to members) before the Legislature takes final action on the Governor’s proposals , there will likely be additional budget hearings in May or early June. 
• Those hearings – which will likely take public comment – will likely hear  whatever details the Brown Administration submits to the Legislature on how it plans to achieve whatever reduction amount is targeted for regional centers and other developmental services. 
• Other issues – possibly In-Home Supportive Services – might come up for hearing at that time as further details on various proposals become available.