CDCAN REPORT #049-2011: Assembly Budget Committee releases subcommittee report detailing actions full committee will likely take on February 18th

• ASSEMBLY BUDGET COMMITTEE SUBCOMMITTEE REPORT SHOWS ACTIONS FULL COMMITTEE WILL TAKE ON FEBRUARY 18TH
• Some Recommended Cuts Similar to Senate Budget Committee Actions – SomeIHSS Cuts Recommended for Rejection – Some Major Differences In Developmental Services Overall Reduction Recommended  – Medi-Cal Actions Largely Would Be the Same As Senate Budget Committee

SACRAMENTO, CALIF  (CDCAN) [Updated 02/17/2011 – 08:55 PM  (Pacific Time)] –   The Assembly Budget Committee released a 56 budget subcommittee report dated February 18th that lists out the recommended actions for the full committee to approve when it meets Friday morning, February 18th, at the State Capitol in Room 4202.  Unlike the Senate Budget and Fiscal Review Committee, which scheduled hearings over a 3 day period, ending Friday – the Assembly Budget Committee decided to only meet one day to take final action on the entire budget proposed by the Governor.

In some cases actions recommended by Assembly Budget Committee staff through the various Assembly Budget Subcommittees are identical or similar to the actions taken by the Senate Budget and Fiscal Review Committee, such as the cuts in the Medi-Cal program.

Some of the IHSS Major Cuts Recommended for Rejection

• The Senate budget panel has not yet taken up In-Home Supportive Services or CalWORKS – but will do so on Friday. 
• The Assembly Budget Committee recommended actions for the IHSS program appear to reject – at least for now – the Governor’s proposed additional reduction of 8.4% in IHSS recipient hours and the elimination of domestic and related services. 
• Those cuts would be replaced by new federal funding from a new federal program and also possibly by identifying later, new or different alternatives to save State general funding.

Many Developmental Services Cuts Recommended By Assembly Budget Staff Same As Senate Action – But Some Major Differences

• The Assembly Budget Committee staff recommends nearly identical actions in the Governor’s proposed cuts to developmental services in terms of the accountability and transparency measures that total about $109 million in cuts in State general fund spending, and approval of continuing the existing 4.25% cut in payments to most regional center providers and regional center operations. 
• The Assembly Budget Committee staff also makes recommendation that is similar to the Senate budget committee today in terms of a $150 million target for development of a statewide standards for purchase of services that would limit spending on regional center community based services. 
• The Assembly committee however would differ – at least for now – in details of what it would include in the budget trailer bill dealing with how those standards would be developed.
• The Assembly Budget Committee staff recommendations also differ in terms of how the overall $750 million reduction in State general fund would be achieved, by including what appears to be a $226.5 million unallocated reduction to developmental services.  It is not clear if that amount includes the $150 million in State general fund reduction to be achieved by imposing statewide standards for purchase of services.

CDCAN SUMMARY OF ASSEMBLY BUDGET COMMITTEE STAFF RECOMMENDATIONS THAT COMMITTEE WILL ACT ON FEBRUARY 18

MED-CAL MAJOR PROPOSALS

The Assembly Budget Committee staff analysis is recommending that the committee on February 18th to take the following actions:

• MEDI-CAL MANDATORY CO-PAYMENTS -  Assembly  Budget Committee staff recommends that the committee APPROVE the Governor’s proposals requiring Medi-Cal recipients to pay co-payments as follows: 1) $5 for every physician or clinic visit; 2) $3 (generics) or $5 per prescription; 3) $50 for emergency room visits (for emergencies or non-emergencies) and $100 per day, with a maximum of $200 per admission, for inpatient services; and 4) $5 for every dental visit. 
• MEDI-CAL PROVIDER RATE 10% REDUCTIONS – Assembly  Budget Committee staff recommends that the committee APPROVE the Governor’s proposal for 10% rate reduction for nearly all Medi-Cal providers including physicians, clinics, pharmacies, intermediate care facilities for the developmentally disabled, nursing homes under AB 1629. 
• MEDI-CAL BENEFITS LIMITS – Assembly  Budget Committee staff recommends that the committee APPROVE the Governor’s proposal by the Governor  to eliminate coverage of over-the-counter cough and cold products as a Medi-Cal benefit, limit coverage of enteral nutrition products to tube fed, and impose an annual dollar maximum on hearing aids of $1,510 per year.
• MEDI-CAL HARD CAP ON PHYSICIANS, CLINICS, DURABLE MEDICAL EQUIPMENT & MEDICAL SUPPLIES - Assembly Budget Committee staff recommends that the committee REJECT the Governor’s proposals to impose hard caps or limits on these benefits. 
• ADULT DAY HEALTH CARE – Assembly Budget Committee staff recommends that the committee REJECT of Governor’s proposal to eliminate the entire program and instead recommends approval of a $28 million reduction in State general fund spending to the program  by enforcing existing medical acuity eligibility criteria, consolidating state administration of the program, and making other reforms to the program, without eliminating the benefit.\
• MULTIPURPOSE SENIOR SERVICES PROGRAM (MSSP) -  Assembly Budget Committee staff recommends that the committee REJECT the Governor’s proposal and maintain the program at its current $19.9 million State general fund level.  [Action rejecting the elimination proposal is identical to the Senate committee action 2/17 but maintaining the funding level would differ from the Senate committee action]
• MEDI-CAL MANAGED CARE TAX  - Assembly Budget Committee staff recommends that the committee APPROVE  this proposal that would secure on-going revenue by making permanent (with a 3-year sunset) the tax on Medi-Cal managed care organizations.

DEVELOPMENTAL SERVICES (REGIONAL CENTERS & DEVELOPMENTAL CENTERS)

The Assembly Budget Committee staff analysis is recommending that the committee on February 18th to take the following actions:

• UNALLOCATED REDUCTION – Assembly Budget Committee staff recommends that the committee APPROVE alternative funding to backfill the Governor’s $750 million unallocated reduction by $374.5 million by achieving the savings or reductions in the following ways: (1)  $13 million in Federal Funds for Porterville Developmental Center  consumers; (2) $50 million in Proposition 10 funds;  (3) $60 million in Federal 1915 (i) Medicaid Waiver funds; (4) $10 million from the “Money Follows the Person” Federal Grant; (5) $15 million savings from the rejection of the Governor’s proposed Medi-Cal hard caps on physician visits; and (6) $226.5 million General Fund.  [This action appears to be different from action taken by Senate budget committee 2/17 with what apparently is a $226.5 million unallocated (or not specified) reduction.]
• OTHER REDUCTIONS – Assembly Budget Committee staff recommends that the committee APPROVE (as proposed by the Governor) budget reductions of $91.5 million in State general funds by adopting trailer bill language to extend the 4.25% reduction to regional center operations and to most regional center providers; $13.2 million reduction in State general funds from Developmental Center reductions, and $11.2 million from Regional Center Operations savings.  [Senate budget committee 2/17 approved similar action]
• ACCOUNTABILITY AND TRANSPARENCY TRAILER BILL LANGUAGE & RELATED TRAILER BILL LANGUAGE – Assembly Budget Committee staff reccommends that the committee APPROVE (as Governor proposed) budget reduction of $109.6 million in State general funds from increased Administrative Accountability and Transparency at regional centers through various trailer bill language.  The Assembly Budget Committee staff recommends that the committee approve “placeholder” trailer bill language to achieve this reduction for Regional Center Conflict of Interest, Third Party Liability, Audits, Contracts and Direct Services and Regional Center Accountability and Transparency. [Senate budget committee on 2/17 approved similar action]
• STATEWIDE STANDARDS FOR PURCHASE OF SERVICES -  Assembly Budget Committee staff recommends that the committee APPROVE “placeholder” Assembly budget trailer bill language to specify the parameters and process to achieve the $150 million reduction from imposing these standards, including allowing the Department of Developmental Services to use subject area workgroups to develop recommendations, submitting a report to both Assembly and Senate Budget committees no later than May 15, 2011 and implementing statewide standards pending Legislative approval. [this action in terms of the amount of $150 million is the same as the Senate budget committee 2/17 action, but would differ in terms of the action laying out what would be in the budget trailer bill language. It is not certain from this recommendation if the $150 million is coming from the unallocated reduction amount of $226.5 million or if the $150 million is in addition to that amount]

IN-HOME SUPPORTIVE SERVICES

The Assembly Budget Committee staff analysis is recommending that the committee on February 18th to take the following actions [Senate budget committee has not yet taken up any of the IHSS issues but will do so on February 18th]

• Assembly Budget Committee staff recommends that the committee approve reductions to the IHSS program, to achieve the Governor’s combined savings level of $486.1 million in State general funds (the Governor’s original proposal called for $500 million reductions in State general fund spending).
• MEDICAL CERTIFICATION – Assembly Budget Committee staff recommends that the committee APPROVE the Governor’s proposal to require a certification that personal care services are necessary to prevent out-of-home care, with resulting General Fund savings of $120.4 million
• CASELOAD SAVINGS – Assembly Budget Committee staff recommends that the committee APPROVE the caseload adjustment that would cut $83.4 million General Fund from the program due to caseload savings both in 2010-2011 and 2011-2012 State budget years, adjusting caseload trends for the current and budget year based on demonstrated and more recent numbers of IHSS recipients and hours paid.
• COMMUNITY FIRST CHOICE OPTIONS – Assembly Budget Committee staff  recommends that the committee APPROVE a new proposal from advocates that would save $121 million in State general funds in the IHSS program due to expected approval of an additional 6% in federal matching funds as a result of IHSS program qualifying under the new federal “Community First Choice Options”.
• ADDITIONAL SAVINGS – Assembly Budget Committee staff recommends that the committee APPROVE  “placeholder” trailer bill to include consideration of additional savings proposals that would total $161.4 million in reductions in State general fund spending that would meet the Governor’s overall reduction amount. These may include, but are not limited to, proposals regarding medication compliance, nursing home intervention and diversion, and expanded goals for the Community Transitions Program but would appear to replace the Governor’s proposals regarding additional 8.4% cut in IHSS hours and elimination of domestic and related services. 
• IHSS ADVISORY COMMITTEES – Assembly Budget Committee staff recommends that the committee APPROVE a reduction of $1.4 million in State general funds from IHSS Advisory Committees and eliminates the mandate, while retaining $3,000 for each of the 56 Public Authorities (PAs) to support the continued operation of Advisory Committees within the budget for the Public Authorities.   This action would differ slightly from the Governor’s proposal which would have made a reduction of the entire $1.6 million.
• OTHER ISSUES – the Assembly Budget Committee recommends that the committee defer (delay) without prejudice (without making a judgement) additional proposals forwarded by advocates for consideration during the usual Spring Budget Subcommittee process, including, but not limited to, methods to reduce program costs by successfully transitioning consumers to similar or higher models of care, such as the creation of a pilot program with the Veterans Health Administration for eligible veterans

SUPPLEMENTAL SECURITY INCOME/STATE SUPPLEMENTAL PAYMENT (SSI/SSP):

The Assembly Budget Committee staff analysis is recommending that the committee on February 18th to take the following action:

SSI/SSP INDIVIDUAL GRANT CUT – Assembly Budget Committee staff recommends that the committee APPROVE the Governor’s proposal to reduce monthly SSP grants for individuals to the federally required minimum payment standard, for a reduction in State general fund spending of $14.7 million in the 2010-2011 and $177.3 million in the 2011-2012 State budget years.  [Senate budget committee took similar action 2/17]

OTHER HEALTH ISSUES

The Assembly Budget Committee staff analysis is recommending that the committee on February 18th to take the following action

• PROPOSITION 10 FUND SHIFT TO MEDI-CAL – Assembly Budget Committee staff recommends that the committee APPROVE the proposal to shift Proposition 10 funds to the Medi-Cal program with $1 billion in Proposition 10 reserves and eliminates the State Proposition 10 Commission for on-going savings of approximately $89 million annually, to cover Medi-Cal services for children 0-5 years of age. Committee staff recommends the committee REJECT proposal to shift  50% of local funding on an on-going basis
• PROPOSITION 63 FUND SHIFT TO STATE MENTAL HEALTH PROGRAMS – Assembly Budget Committee staff recommends that the committee APPROVE the Governor’s proposal that would cut $900 million in State general funds primarily from Medi-Cal by replacing it with $861 million in Proposition 63 funds for: AB 3632, EPSDT (Early, Periodic, Screening, Diagnosis and Treatment Program), and Mental Health Medi-Cal Managed Care.
• AIDS DRUG ASSISTANCE PROGRAM (ADAP) COST SAVINGS – Assembly Budget Committee staff recommends that the committee APPROVE reduction of  $77 million in State general funds resulting from: $7 million in administrative savings and an increase in federal funds; and a $70 million allocation from the Safety Net Care Pool. Directs the Administration to expand eligibility in the CARE/HIPP Program and facilitate enrollment of ADAP clients into the HIPP Program, the Pre-Existing Condition Insurance Program, and Low-Income Health Insurance Programs for additional General Fund savings in ADAP. Achieves equivalent savings without increasing cost sharing for ADAP clients.

HEALTHY FAMILIES

The Assembly Budget Committee staff analysis is recommending that the committee on February 18th to take the following actions:

• HEALTHY FAMILIES PREMIUMS – Assembly Budget Committee staff recommends that the committee APPROVE the Governor’s proposal to increase monthly premiums that would result in a $22 million reduction in State general funds to the program. [Action would be similar to the Senate budget committee action 2/17]
• HEALTHY FAMILIES CO-PAYMENTS – Assembly Budget Committee staff recommends that the committee APPROVE the Governor’s proposal to increase co-payments (the same as the Medi-Cal co-payments) that would result in a $5.5 million cut in State general fund spending to the program.  [Action would be similar to the Senate budget committee action 2/17]
• HEALTHY FAMILIES VISION COVERAGE – Assembly Budget Committee staff recommends that the committee REJECT the Governor’s proposal to eliminate this coverage and instead  APPROVE a $3 million reduction in State general funds.  [Action would be similar to the Senate action 2/17]

CALWORKS

The Assembly Budget Committee staff analysis is recommending that the committee on February 18th to take the following actions [The Senate budget committee has not taken up any CalWORKS issues but will do so on February 18th]:

• The Assembly Budget Committee staff recommends that the committee approves the following reductions to the CalWORKs program, which total approximately $1.2 billion State general fund savings, and the adoption of placeholder trailer bill language to effectuate the changes.
• LIFETIME TIME LIMIT REDUCTION – Assembly Budget Committee staff recommends that the committee APPROVE the Governor’s proposal to cut CalWORKs from 60-months to 48-months for adults effective June 1, 2011, without altering policies regarding those adults' exemptions, for a savings of approximately $13 million in the 2010-2011 and $158 million in the 2011-2012 State budget years. This action does not include cuts to children and reflects the Governor’s proposals related to the 2009 reforms.
• CALWORKS GRANT CUT – Assembly Budget Committee staff recommends that the committee REJECT the Governor’s proposed CalWORKS grant cut and instead recommends that the committee APPROVE a 5% grant cut effective June 1, 2011 to save approximately $195 million in State general funds. This will reduce the maximum grant for a family of three in a high cost county from $694 per month to $659.
• SINGLE ALLOCATION REDUCTION – Assembly Budget Committee staff recommends that the committee APPROVE proposal that cuts funding of the Single Allocation for child care, welfare-to-work, and administration costs by $476 million in State general funds, approximately $100 million higher than proposed by the Governor. Correspondingly, extend the statutory changes and exemptions for parents of young children that were enacted in 2009-2010. To the extent necessary, expand upon the existing statutory exemptions to provide direction regarding the implementation of this reduction.
• EARNED INCOME DISREGARD – Assembly Budget Committee staff recommends that the committee APPROVE the Legislative Analyst Office (LAO) alternative proposals to simplify the earned income disregard to include 50 percent of all relevant earnings and to expand the state’s participation in the subsidized employment program created by AB 98. Savings from the earned income disregard change, effective June 1, 2011, would be approximately $17 million in 2010-11 and $200 million; the subsidized employment program changes would be cost neutral.
• ADDITIONAL REDUCTIONS – The Assembly Budget Committee staff recommends that the committee APPROVE proposals that would make further reductions resulting from: 1) $20 million in the CalLearn Program, 2) $5 million for substance and mental health services for CalWORKs recipients, 3) $5 million across the SAWS automation systems (allocation for automation reduction to be determined through collaboration of the administration, legislative committee staff, LAO, and the counties).
• STAGE 1 CHILD CARE – The Assembly Budget Committee staff recommends that the committee APPROVE reductions of up to $69 million for Stage 1 child care conforming to actions taken in the child care package.

File Attachments: 

2011-02-18 - Assembly Budget Sub Committee Reports.pdf