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CDCAN Report #093-2010: Senate Budget Panel Rejects Governor's Mental Health, Medi-Cal Cost Containment and Healthy Families Cuts - Assembly Rejects IHSS Cuts & Pushes Forward IHSS Provider Fee Proposal to Increase Federal Funding

Wed, 2010-05-26 23:44 — chris
  • Senate Budget Committee Rejects Governor’s Mental Health Community Services Cut; Medi-Cal “Cost Containment” and Healthy Families Reduction Proposals; Assembly Subcommittee Rejects Governor’s IHSS Cuts; Approves Lanterman Developmental Center Closure
  • Senate Budget Panel Rejects Section 1115 Medicaid Waiver Proposals – Assembly Budget Subcommittee Will Take Action On These Issues Thursday

SACRAMENTO, CALIF (CDCAN) [Updated 05/26/2010  10:49 PM  (Pacific Time)] -  The Senate Budget and Fiscal Review Committee in another marathon long hearing that ended at 7:44 PM Wednesday evening, voted to reject the Governor’s proposal to reduce by $602 million funding to the counties for mental health community services and the Governor’s Medi-Cal cost containment proposals that included capping several benefits and imposing co-payments on several services.   The State faces a nearly $20 billion budget shortfall projected by the end of the 2010-2011 State budget year that ends June 30, 2011.

No action at this stage – or even later, especially with an enormous budget shortfall that remains largely unresolved -  is absolutely final until a budget is actually passed by the Legislature and signed into law by the Governor.  However when both the Senate and Assembly take identical actions to reject a proposal, that usually is a strong indication that the issue would face major problems if the Governor – or anyone in the Legislature – attempted to resurrect it later in the process.

Assembly Budget Subcommittee Rejects IHSS Cuts and Approves Closure of Lanterman Developmental Center

The Assembly Budget Subcommittee #1 on Health and Human Services, which met for about 2 and half hours at the same time the Senate budget panel was meeting, took action on several health and human service budget issues – mostly items it previously had heard – rejecting the Governor’s proposed cuts to In-Home Supportive Services (IHSS) and approving the Governor’s closure plan for Lanterman Developmental Center.

The Senate Budget and Fiscal Review Committee approved the closure plan (and several draft language dealing with closure transition issues to be included in a budget related bill to follow the main budget bill)

Assembly Budget Subcommittee Scheduled to Meet Thursday at 09:00

The Assembly Budget Subcommittee #1 on Health and Human Services is scheduled their final hearing on Thursday (May 27th) at 09:00 AM at the State Capitol in Room 4202 and will take up the same issues the Senate Budget and Fiscal Review Committee voted on today.  Those items will be taken up in the Assembly subcommittee as a “for vote only” agenda items – meaning no further discussion by the subcommittee or public testimony, which was previously taken on earlier this month.  Budget subcommittee is recommending rejection of the Governor’s proposals that would mirror what the Senate Budget and Fiscal Review Committee did today.

AB 1629 Medi-Cal Quality Assurance Fee for Nursing Homes On Assembly Budget Subcommittee Agenda for May 27th

The Assembly Budget subcommittee agenda (the last item on a 99 page agenda) will also hear for discussion and public testimony, the proposed reauthorization of the Medi-Cal Quality Assurance Fee for free standing nursing facilities that was originally authorized by AB 1629 in 2004.  The Department of Health Care Services is seeking to renew and expand the fee to cover Multi-Level Retirement Communities.

The issue then – and now – has raised major concerns by many disability and some senior advocates and others who are concerned about improvements of quality of care that was supposed to be linked to increased reimbursement rates to nursing homes.

The quality assurance fee is a fee on specified providers – in this case free standing nursing homes – that they pay to the State that is matched by federal Medicaid funds.  The State then gives a portion of that increased federal funding back to the providers including a small increase in their rates.  The legislation in 2004 – AB 1629 made other requirements that included improvements in quality of care, that many advocates contended  did not go far enough – a claim that nursing home providers disputed. 

Other providers have raised concerns and opposition to the fee because while they are required to pay the fee there is no increase in reimbursements because they largely do not serve Medi-Cal recipients.

The Senate Budget and Fiscal Review Committee heard the issue today (May 26th) and adopted “placeholder” (draft) budget trailer bill language to continue the discussion of the issues surrounding the Quality Assurance Fee for nursing homes (and multi-level retirement communities).

The Assembly budget subcommittee agenda for May 27th does not contain any recommendation by subcommittee staff on this issue.

Senate Budget Committee Also Will Meet on Thursday

The Senate Budget and Fiscal Review Committee, chaired by Sen. Denise Ducheny (Democrat – San Diego) will close out the Senate budget subcommittee process with a final hearing also on Thursday (May 27th), at the State Capitol in Room 4203.  The committee hearing will begin immediately following the adjournment of the Senate Appropriations Committee hearing, likely sometime in the early afternoon.  The Senate Appropriations Committee is scheduled to meet upon the adjournment of the Senate floor session – which is scheduled to convene at 09:00 AM Thursday morning.

The Senate floor session could last anywhere from 30 minutes to 2 hours, and the Senate Appropriations Committee hearing on Thursday will be long because it will be announcing (with a vote taken for each bill) which Senate bills will be held in committee and which bills will be approved to go to the Senate floor for further action.  Persons interested in attending the Senate Budget and Fiscal Review Committee hearing can call the budget committee office at (916) 651-4103 late Thursday morning or early Thursday afternoon to get an idea when the budget committee will be meeting (don’t call earlier on Thursday morning because they will not know until the Senate Appropriations Committee hearing actually gets underway).

The agenda for the Senate budget hearing will cover education and other issues and any remaining health and human service budget issue that remain “open”, including the Governor’s proposal to suspend the AB 3632 special education requirement or mandate for the counties to provide mental health services for students with special needs.

CDCAN SUMMARY OF SOME ACTIONS TAKEN TODAY

This is a CDCAN summary of some of the key actions taken today by the Senate Budget and Fiscal Review Committee and the Assembly Budget Subcommittee #1 on Health and Human Services. 

Not all actions are listed below – a more detailed CDCAN Report covering all of the major actions will be issued later tonight including actions regarding SSI/SSP (Supplemental Security Income/State Supplemental Payment) grants, CAPI (Cash Assistance Program for Immigrants), CFAP (California Food Assistance Program), CalWORKS (the state’s “welfare to work” program that includes thousands of children and parents with special needs and disabilities).

MENTAL HEALTH

Mental Health Community Services: Governor’s proposal to reduce by 60% ($602 million state general funds) funding to the counties for mental health community services.

  • SENATE action as of 05/26/2010:  On May 26th the Senate Budget and Fiscal Review Committee REJECTED the Governor’s proposal by vote of 10 to 0.
  • ASSEMBLY action as of 05/26/2010:  Assembly Budget Subcommittee #1 on Health and Human Services will vote on this issue May 27th (Thursday).  Subcommittee staff is recommending that the subcommittee reject the Governor’s proposal.  This issue was heard in this subcommittee on May 20th with public testimony taken and no further discussion or public testimony will be taken on May 27th.

AB 3632 Special Education Mandate for Students with Mental Health Needs: Governor proposed suspending this mandate (requirement) and eliminates $52 million (State general funds) that would have gone to the counties for this purpose. 

  • SENATE action as of 05/26/2010:  On May 26th Senate Budget and Fiscal Review Committee will take up this issue on May 27th (Thursday). 
  • ASSEMBLY action as of 05/26/2010:  Assembly Budget Subcommittee #1 on Health and Human Services will vote on this issue May 27th (Thursday).  Subcommittee staff is recommending that the subcommittee reject the Governor’s proposal.

MEDI-CAL

Medi-Cal “Cost Containment” Measures: Governor proposed in January and provided in May details that would implement yearly caps on certain Medi-Cal benefits such as prescription out-patient drugs, durable medical equipment, various medical supplies including wound dressings, incontinence products, urinary catheters for adults not residing in a long term care facility; hearing aids; eliminate selected over the counter drugs; impose a cap of 10 office visits per year for both Med-Cal “fee for service” and managed care recipients; establish mandatory co-payments of $5 for doctor and Federally Qualified Health Centers, Rural Health Center office visits; mandatory co-payments of $5 for dental office visits;  mandatory co-payments of $100 per hospital inpatient day (up to maximum of $200 per admission); mandatory co-payments of $50 for each emergency room visit; mandatory co-payments of $50 for non-emergency use of emergency room visits; mandatory co-payments of $3 per prescription for preferred drugs (generics) and $5 per prescription for non-preferred drugs (brand) at point of service; and limit enteral nutrition products to only adults who must be tube-fed (limit would not apply to adults in long term care facilities, children under age of 21 and pregnant women)

  • SENATE ACTION  as of 05/26/2010:  On May 26th the Senate Budget and Fiscal Review Committee REJECTED the Governor’s proposal by vote of 8 to 1.
  • ASSEMBLY ACTION  as of 05/26/2010:  Assembly Budget Subcommittee #1 on Health and Human Services will vote on this issue May 27th (Thursday).  Subcommittee staff is recommending that the subcommittee reject the Governor’s proposal which the Senate rejected today (May 26th).  This issue was heard in this subcommittee on May 20th with public testimony taken. No further discussion or public testimony will be taken on May 27th

Medi-Cal Optometry Optional Benefit Reinstatement:  The Governor’s budget revision released May 14th indicated that the previously eliminated optometry Medi-Cal optional benefit for adults (eliminated as of July 1, 2009, as part of the 2009-2010 State Budget passed in February 2009) would be reinstated – at least temporarily – in order to comply with federal law which prohibits the elimination of this service if physicians could still provide the services and the State previously funded these services.  The 2009-2010 State Budget included provisions that specified that the elimination of any of the 10 Medi-Cal optional benefits could be made (effective July 1, 2009) to the extent that federal law allowed it.  With that provision, no change in State law is required to reinstate the optometry Medi-Cal optional benefit for adults (the eliminated 10 optional benefits applied only to adults and not to children or to persons living in long term care facilities).  This reinstatement does not apply to the other 9 optional benefits that were eliminated for adults as of July 1, 2009. 

  •  SENATE ACTION  as of 05/26/2010:  The Senate has not taken up this issue (technically no action is required by either house because no change in state law is required)
  • ASSEMBLY ACTION  as of 05/26/2010:  Assembly Budget Subcommittee #1 on Health and Human Services will vote on this issue May 27th (Thursday).  Subcommittee staff is recommending that the subcommittee approve the Governor’s proposal.  This is listed as one of several “for vote only” agenda items, with no discussion or public testimony to be taken on May 27th

Section 1115 Medicaid Waiver – Governor proposed last year and the Legislature approved as part of the 2009-2010 State Budget as revised in July 2009, authorization for the Department of Health Care Services to take steps to develop and submit to the federal government, a proposal to renew and dramatically expand the existing Section 1115 Medicaid Waiver to shift existing hundreds of thousands of Medi-Cal recipients who are people with disabilities, mental health needs, and seniors into different models of health care.  [Note: “Section 1115” refers to a specific part of the federal Social Security Act that governs the Medicaid program. That section gives authority to the federal government to allow states to waive certain Medicaid rules to conduct a pilot or demonstration project].  Since the fall the Department of Health Care Services has held extensive public outreach, including formation of a stakeholder advisory committee, technical workgroups, with meetings open to the public and documents available for the public to access and review via a website dedicated to this issue on the department’s website.  On May 13, 2010 the Department of Health Care Services released a draft implementation plan that called for a phase in approach, that many advocates have raised concerns about.  The existing waiver is set to expire August 2010 and currently only covers financing to hospitals that provide health care services to the uninsured.  The Department of Health Care Services proposed three budget related bills (referred to as “budget trailer bills” because the bills make changes or additions to state law that follow or trail the main budget bill) dealing with the phase in of the Section 1115 Medicaid Waiver:  (1) development of pilot projects for children with special health care needs; (2) development of pilot projects for Dual Eligible Service Integration Projects – “dual eligibles” refers to persons who are eligible for the federal Medicare and Medicaid (called “Medi-Cal” in California) programs; and (3) development of the Coverage Expansion and Enrollment Projects.  Note: for more information about this waiver, go to the CDCAN website at  www.cdcan.us  or to the Department of Health Care Services waiver website at http://www.dhcs.ca.gov/provgovpart/Pages/WaiverRenewal.aspx

  • SENATE ACTION  as of 05/26/2010:  On May 26th the Senate Budget and Fiscal Review Committee REJECTED “without prejudice”  by vote of 11 to 0 the Governor’s proposed three trailer bill language and referred it instead to policy committee for further review.  The budget committee noted it was not rejecting the policy itself regarding the proposed waiver.
  • ASSEMBLY ACTION  as of 05/26/2010:  Assembly Budget Subcommittee #1 on Health and Human Services will vote on this issue May 27th (Thursday).  Subcommittee staff is recommending that the subcommittee reject “without prejudice” all proposed Section 1115 Medicaid trailer bill (which the Senate rejected today - May 26th) and would direct the Department of Health Care Services to “pursue development and establishment of the new [Section] 1115 Waiver  through policy bills and through the legislative policy process”.  This issue is listed as a “for vote only” agenda item.  No further discussion or public testimony will be taken on May 27.  The Assembly subcommittee, if it takes this action, appears to be going further than the Senate action and would (if passed by the full Legislature and approved by the Governor) likely stop the current version of the proposed Section 1115 Medicaid Waiver from going forward.

DEVELOPMENTAL SERVICES

Lanterman Developmental Center – Closure: Governor proposed in February, closure of Lanterman Developmental Center and submitted a proposed closure plan to the Legislature – as required by State law (and as was done with the closure of Agnews Developmental Center) on April 1, 2010. 

  • SENATE ACTION  as of 05/26/2010:  On May 21th the Senate Budget and Fiscal Review Committee APPROVED the Governor’s proposal to close Lanterman Developmental Center, approving 6 budget related language (referred to as “budget trailer bill language” because the bill the language will be in follows or trails the main budget bill).  The 6 different budget trailer bill “placeholder” (draft) language covers (1) expanding the “SB 962 Homes”; (2)  provide outpatient clinic services throughout the closure process; (3) provide authorization for Lanterman Developmental Center state staff to be contracted out – if they choose – to work in the community; (4)  requirement the Department of Developmental Services to provide to the Legislature a comprehensive status report of the closure of Lanterman by January 10th and May 14th each state budget year; (5) require the Secretary of the California Health and Human Services Agency to verify protocols for the health and safety of persons transitioning from Lanterman and (6) provide for cost-based reimbursement for health plans. 
  • ASSEMBLY ACTION  as of 05/26/2010:  Assembly Budget Subcommittee #1 on Health and Human Services  APPROVED the same budget trailer bill language as passed by the Senate Budget and Fiscal Review Committee on May 21st.  With the exception of the trailer bill language dealing with “SB 962 Homes” and contracting out Lanterman state staff to the community (which were approved by identical votes of 4 to 2),  the other 4 trailer bill language were approved by the subcommittee by a 6 to 0 vote.

Regional Centers - Additional Reduction of $48.2 Million ($25.3 State general funds): Governor proposed in January an additional reduction to regional centers of nearly $50 million ($25 million in State general funds) with specifics on how that reduction would be achieved to be provided later. In late April the Governor proposed achieving that reduction  by imposing an additional 1.25% cut to the payments to most regional center providers and to regional center operations, to go into effect July 1, 2010 through June 30, 2011. That cut would be in addition to the existing 3% reduction in payments to most regional center providers and regional center operations that was enacted February 1, 2009 through June 30, 2011. To help regional center providers impacted by this additional reduction, the Governor also proposed temporarily suspending some provider related requirements (except for licensed or certified residential providers). 

  • SENATE ACTION as of 05/26/2010:  On May 26th, the Senate Budget and Fiscal Review Committee APPROVED the Governor’s proposal by vote of 8 to 2 with “placeholder” trailer bill language [note: placeholder language means “draft” language for a budget related bill that – in this case – makes changes to existing state laws to implement the policy change and/or reduction].
  • ASSEMBLY ACTION as of 05/26/2010:  Assembly Budget Subcommittee #1 on Health and Human Services will vote on this issue May 27th (Thursday).  Subcommittee staff is recommending that the subcommittee reject the Governor’s proposal which the Senate approved today (May 26th).  This issue was heard several times in this subcommittee with public testimony taken. This is a “vote only” agenda item, with no further discussion or public testimony to be taken on May 27th

CDCAN COMMENT: If the subcommittee ends up rejecting the Governor’s proposed 1.25% reduction, the issue will go to the budget conference committee to resolve because the Senate action was different.

HEALTHY FAMILIES

Healthy Families Program Reductions: Governor proposed increasing monthly premiums paid by families (effective September 1, 2010); imposing two new co-payments effective February 2011 ($50 co-payment for emergency room use that does not result in patient being hospitalized) and $100 per day (maximum $200) for hospital in-patient days; and elimination of vision coverage for children, effective as of September 1, 2011.

  • SENATE ACTION as of 05/26/2010:  On May 26th the Senate Budget and Fiscal Review Committee REJECTED the Governor’s proposal by vote of 10 to 3.
  • ASSEMBLY ACTION as of 05/26/2010:  Assembly Budget Subcommittee #1 on Health and Human Services will vote on this issue May 27th (Thursday).  Subcommittee staff is recommending that the subcommittee reject the Governor’s proposal.  This issue was heard in previous subcommittee hearings, including on May 20th with public testimony taken. No further discussion or public testimony will be taken on May 27th  The Assembly budget subcommittee agenda appears to omit the proposal by the Governor to eliminate vision coverage that the Senate rejected today (May 26th).

IN-HOME SUPPORTIVE SERVICES

IHSS Unspecified $750 Million Reduction – Governor rescinded his previous proposed reductions to the IHSS program that he made in January (using functional index scores to narrow eligibility for services under IHSS to only persons whose scores were “4” or more and to cut State participation toward IHSS worker wages to the minimum wage) and instead proposed a reduction of $750 million in state general funds with details on how that cut is to be achieved to be presented to the Legislature by July 1, 2010, after the Schwarzenegger Administration convened a stakeholder advisory group to review proposals. 

  • SENATE ACTION  as of 05/26/2010:  On May 25th the Senate Budget and Fiscal Review Committee REJECTED the Governor’s proposal and instead directed the Department of Social Services to create an inclusive budget advisory group to look at ways to contain costs in the IHSS program, with a target savings of a minimum of 10% (of the total IHSS program budget). 
  • ASSEMBLY ACTION  as of 05/26/2010:  Assembly Budget Subcommittee #1 on Health and Human Services previously rejected the $750 million reduction on May 19th by a vote of 4 to 0 (the two Republican members abstaining).  On May 26th the Assembly Budget Subcommittee #1 approved 6 to 0 draft budget trailer bill language (called “placeholder” because it is subject to further changes) as follows, to be added to the California Welfare and Institutions Code (the exact section to be determined): “Upon enactment of this section, the State Department of Social Services shall convene a Budget Advisory Workgroup for the In-Home Supportive Services (IHSS) program to consider options and develop proposals for maximizing federal financial participation, containing costs, and examining IHSS as part of the long term care continuum. The Budget Advisory Workgroup shall include statewide organizations representing the interests of consumers, family members, service providers, county welfare directors and county public authorities, and statewide advocacy organizations, as well as policy and fiscal staff of the Legislature.  Details on the meeting schedule, composition, and topics for the Budget Advisory Workgroup shall be publicly available on the department’s website.  The department and the Budget Advisory Workgroup shall provide information regarding a proposal to the Assembly Committee on Budget  and the Senate Committee on Budget and Fiscal Review at least 30 days prior to a proposal or request for IHSS is formally submitted to the Legislature.  This information shall include the methodology and cost benefit analysis of the proposal.”

IHSS Provider Fee – Included as part of Assembly Speaker John Perez (Democrat – Los Angeles) California Jobs Budget package, this proposal would seek approval from the federal government to establish a “modest” fee that would be paid by IHSS workers (providers) to be matched by federal Medicaid dollars that the State would receive. The State in turn – like the nursing home and Intermediate Care Facilities for the Developmentally Disabled (ICF-DD) “quality assurance fees” – return to the IHSS worker the amount of money they paid for the fee.  The remaining amount of money would go to the State general fund to help reduce IHSS program costs by an estimated $150 million (state general funds). Details on how this would work would be developed by the Budget Advisory Workgroup (see above) .  

SENATE ACTION  as of 05/26/2010:   The Senate Budget and Fiscal Review Committee did not specifically take up this issue at its May 25th hearing when it covered IHSS issues. 

ASSEMBLY ACTION  as of 05/26/2010:  Assembly Budget Subcommittee #1 on Health and Human Services APPROVED 4 to 0 (the two Republican members abstained) draft (“placeholder”) budget trailer bill language “to institute a [IHSS] provider fee in IHSS to generate $150 million in program savings in 2010-2011. This proposal shall be developed further and implemented through and with the IHSS Budget Advisory Workgroup.”

CDCAN COMMENT: “Placeholder” trailer bill language means it is draft language – still to be developed – that states an intent of the subcommittee (or full budget committee).  In this case, there is no actual detailed language yet developed – but it will be at some point in this budget process, possibly in the next phase – during the budget conference committee, which this issue might be referred to (in part because the Senate actions on the IHSS issue differed in detail, including the specific issue of a IHSS provider fee, which the Senate did not take up). 

A IHSS provider fee, besides needing final approval of both houses of the Legislature and approval of the Governor as part of the 2010-2011 State Budget – would also need approval from the federal government.