CDCAN REPORT #183-2011: Department of Health Care Services releases Medi-Cal provider rate cut documents

DEPARTMENT OF HEALTH CARE SERVICES RELEASES MEDI-CAL PROVIDER RATE REDUCTIONS DOCUMENTS INCLUDING ANALYSIS ON THE CUTS IMPACT TO ACCESS TO SERVICES BY MEDI-CAL RECIPIENTS & MONITORING PLAN

Releases 82 Page Report Outlining Monitoring Plan to Track and Review Outcomes and Impact of Cuts - Disability and Senior Advocates Still Critical of Massive Reductions Including Elimination of Adult Day Health Care; Lawsuits Likely To Block New 10% Cuts - Court Hearing Next Week on Adult Day Health Care

SACRAMENTO, CA (CDCAN)  [Last updated 10/28/2011 08:20 PM]  - The Department of Health Care Services under the Brown Administration, released late this afternoon, several documents including several reports on the analysis of the impact of rate reductions on access to services and a 82 page plan outlining how the department will monitor the outcomes of the Medi-Cal provider cuts . The documents also include various communications and approval letters or request to and from the federal Centers on Medicare and Medicaid Services (CMS), the federal agency responsible for both programs nationally, though the letters do not contain the attachments which contain more details.

Yesterday (October 27) the Department of Health Care Services announced that the Obama Administration gave approval to the State's request for Medi-Cal provider rate reductions that will total  over $623 million in State general funds by June 30, 2012.  Some providers were previously exempted in the 2011-2012 State Budget as passed in March and late June. Some providers who were originally authorized for reductions in the 2011-2012 State Budget such as Home Health agencies, and Physicians and Clinics that serve children - will not see an additional reduction because the Department of Health Care Services has determined - from its own analysis, that such a cut would impact access to their services.

The Department of Health Care Services held a brief public conference call yesterday at 4:30 PM to announce the approval of the State's requested Medi-Cal provider reductions, but could not take any questions due to the size of the audience that reportedly numbered over 500 people across the State. Toby Douglas, director of the Department of Health Care Services said that a public stakeholder meeting will be set-up for next week in Sacramento for people to ask questions.  No details of that meeting have been released [CDCAN will issue a report with details as soon as information becomes available].

Advocates Critical of Cuts - And Worry About More Budget Reductions

Disability and senior advocates - along with Medi-Cal provider advocacy organizations - continue to be strongly critical of the reductions, which they say is on top of other massive health and human services cuts that have continued year after year for the past decade.  Legal action to stop some or all of the Medi-Cal provider cuts as announced yesterday, are expected to be filed in court next week.

Meanwhile other lawsuits that seek to stop, delay or reverse various community-based supports and services for people with disabilities will be heard in the coming weeks, including a hearing scheduled November 1st (the date could change) that seeks to block the elimination of Adult Day Health Care as a Medi-Cal benefit.

Advocates are also worried about the still unresolved State budget deficit - that could mean one or more of the State budget "trigger cuts" could be pulled in December, resulting in possibly $100 million reduction in State general fund spending to In-Home Supportive Services, effective January 1, 2012 through an across the board additional 20% cut in service hours; and a $100 million reduction State general fund spending to developmental services. The additional reduction to developmental services - if the trigger is pulled - presumably would take effect sometime in 2012, though the budget related bill did not specify what would be cut - or when the cuts would be effective, unlike IHSS.

And major issues that could impact the State budget - and the Medi-Cal program loom ahead in the coming months at the federal level, with a critical potentially landmark case waiting a decision from the US Supreme Court, dealing with 3 Medi-Cal provider related lawsuits that originated in California, including one with lead plaintiff Independent Living Center of Southern California and attorney Lynn Carman of the Novato-based Medicaid Defense Fund.  A decision by the nation's highest court on that case, which was heard on October 3, could come as early as December or sometime next year before June.

In addition to the federal lawsuits before the US Supreme Court, the budget cutting decisions by Congress and the President - depending on what is done in the coming months - could have dramatic impact on federal funding for health and human service programs across the nation and in California.

SUMMARY OF CURRENT MEDI-CAL PROVIDER REDUCTIONS

The following is a CDCAN compiled summary based on information from the Department of Health Care Services released today (October 28, 2011) that outlines the status of the various rate reductions to Medi-Cal providers.  The summary is listed in order of provider type.

The most current rate reduction - one that technically is in effect, as approved by the Obama Administration October 27, 2011 - are highlighted in red. Medi-Cal rate reductions that were or still remain blocked by a court order are highlighted in the color blue.

MEDI-CAL OUTPATIENT MEDI-CAL PROVIDERS

PHYSICIANS (CHILDREN), CLINICS (CHILDREN) AND LOS ANGELES COUNTY CLINICS (CHILDREN)

Rate Reduction: 01%   Effective Date:  03/01/2009 to Forward (on-going into next budget year)
CDCAN Note: As of October 27, 2011 the Department of Health Care Services decided not to implement additional rate reduction based on analysis that such a reduction would have an impact on access to this service  The 1% cut was imposed as part of the 2008-2009 State Budget.

PHYSICIANS (ADULT), CLINICS (ADULT) AND LOS ANGELES CLINICS (ADULT), OPTOMETRY AND DENTAL

Rate Reduction: 01%   Effective Date: 03/01/2009 to 05/31/2011
Rate Reduction: 10%   Effective Date: 06/01/2011 to Forward (on-going into next budget year)

OTHER MEDICAL - ALL OTHER

Rate Reduction: 10%   Effective Date: 07/01/2008 - 02/28/2009
Rate Reduction: 01%   Effective Date: 03/01/2009 - 05/31/2011
Rate Reduction: 10%   Effective Date: 06/01/2011 - Forward (on-going into next budget year)

HOSPITAL OUTPATIENT DEPARTMENTS

Rate Reduction: 10%   Effective Date: 07/01/2008 - 02/28/2009
Rate Reduction: 01%   Effective Date: 03/01/2009 - 04/05/2009
Rate Reduction: 01%   Effective Date: 01/01/2011 - 04/12/2011 ***Reduction currently blocked by court injunction***

NON-EMERGENCY MEDICAL TRANSPORTATION PROVIDERS

Rate Reduction: 10%   Effective Date: 07/01/2008 - 11/16/2008
Rate Reduction: 01%   Effective Date: 03/01/2009 - 05/31/2011
Rate Reduction: 10%   Effective Date: 06/01/2011 - Forward (on-going into next budget year)

EMERGENCY MEDICAL TRANSPORTATION PROVIDERS

Rate Reduction: 10%   Effective Date: 07/01/2008 - 02/28/2009
Rate Reduction: 01%   Effective Date: 03/01/2009 - 05/31/2011
Rate Reduction: 10%   Effective Date: 06/01/2011 - Forward (on-going into next budget year)

HOME HEALTH PROVIDERS

Rate Reduction: 10%   Effective Date: 07/01/2008 - 11/16/2008
Rate Reduction: 01%   Effective Date: 03/01/2009 - Forward (on-going into next budget year)
CDCAN Note: As of October 27, 2011 the Department of Health Care Services decided not to implement additional rate reduction based on analysis that such a reduction would have an impact on access to this service

PHARMACY - DRUGS

Rate Reduction: 05%   Effective Date: 03/01/2011 - 05/31/2011 ***Reduction currently blocked by court order***
Rate Reduction: 10%   Effective Date: 06/01/2011 - Forward (on-going into next budget year)

PHARMACY - NON-DRUGS

Rate Reduction: 10%   Effective Date: 07/01/2008 - 02/28/2009
Rate Reduction: 01%   Effective Date: 03/01/2009 - 05/31/2011
Rate Reduction: 10%   Effective Date: 06/01/2011 - Forward (on-going in next budget year)

ADULT DAY HEALTH CARE

Rate Reduction: 05%   Effective Date: 03/01/2009 - 03/08/2009
Rate Reduction: 05%   Effective Date: 03/01/2011 - 05/31/2011 ***Reduction currently blocked by court order***
Rate Reduction: 10%   Effective Date: 06/01/.2011 - Forward (on-going) ***Reduction currently blocked by court order***

CDCAN Note: This service is slated for elimination as a Medi-Cal "optional benefit" effective December 1, 2011. A hearing on a lawsuit that seeks to block the elimination, is scheduled for November 1, 2011 in federal district court in Oakland (date is subject to change).  
In the Department of Health Care Services October 27, 2011 summary of Medi-Cal provider reductions, the department indicated that the Medi-Cal payment reductions for Adult Day Health Centers will be applied only in specified metropolitan areas.  The department - in that summary - did not list out those areas.

MEDI-CAL LONG TERM CARE PROVIDERS

NURSING FACILITY (NF) LEVEL A

Rate Reduction: 10%   Effective Date: 07/01/2008 - 02/28/2009
Rate Reduction: 05%   Effective Date: 03/01/2009 - 05/31/2011
Rate Reduction: Froze at 08/09 Rate & Reduced by 05%   Effective Date: 08/01/2009 - 05/31/2011
Rate Reduction: Froze at 08/09 Rate & Reduced by 10%   Effective Date: 06/01/2011 - Forward (on-going to next budget year)

DISTINCT PART (DP) NURSING FACILITY (NF) - LEVEL B

Rate Reduction: 10%   Effective Date: 07/01/2008 - 02/28/2009
Rate Reduction: 05%   Effective Date: 03/01/2009 - 04/05/2009
Rate Reduction: Froze at 08/09 Rate  Effective Date: 08/01/2009 - 02/23/2010
Rate Reduction: Froze at 08/09 Rate & Reduced by 05%   Effective Date: 03/01/2011 - 05/31/2011 ***Reduction currently blocked by court order***
Rate Reduction: Froze at 08/09 Rate & Reduced by 10%   Effective Date: 06/01/2011 - Forward (on-going to next budget year)

DISTINCT PART (DP) ADULT SUBACUTE

Rate Reduction: 10%   Effective Date: 07/01/2008 - 02/28/2009
Rate Reduction: 05%   Effective Date: 03/01/2009 - 04/05/2009
Rate Reduction: Froze at 08/09 Rate   Effective Date: 08/01/2009 - 02/23/2010
CDCAN Note: As of October 27, 2011 the Department of Health Care Services decided not to implement additional rate reduction based on analysis that such a reduction would have an impact on access to this service

DISTINCT PART (DP) PEDIATRIC SUBACUTE

Rate Reduction: 10%   Effective Date: 07/01/2008 - 02/28/2009
Rate Reduction: 05%   Effective Date: 03/01/2009 - 04/05/2009
Rate Reduction: Froze at 08/09 Rate   Effective Date: 08/01/2009 - 02/23/2010
Rate Reduction: To Be Determined   Effective Date:  To be determined
CDCAN Note: As of October 27, 2011, the Department of Health Care Services is still reviewing whether to go forward with the rate reduction for this facility type provider.

INTERMEDIATE CARE FACILITY FOR THE DEVELOPMENTALLY DISABLED (ICF/DD)

Rate Reduction: Froze at 08/09 Rate   Effective Date: 08/01/2009 - 05/31/2011  ***This freeze was blocked by a May 2011 court order - but that was not noted on the Department of Health Care Services Summary sheet***
Rate Reduction: To Be Determined   Effective Date:  To be determined

CDCAN Note: As of October 27, 2011, the Department of Health Care Services is still reviewing whether to go forward with the rate reduction for this facility type provider. Not mentioned on the Department of Health Care Services Medi-Cal provider sheet reduction summary was the rate freeze (at 08/09 level) for Intermediate Care Facilities for the Mentally Retarded (ICF-MR) which also was blocked by the same May 2011 court order.

FREE STANDING (FS) PEDIATRIC SUBACUTE FACILITIES

Rate Reduction: Froze at 08/09 Rate   Effective Date: 08/01/2009 - 05/31/2011 ***This freeze was blocked by a May 2011 court order - but that was not noted on the Department of Health Care Services Summary sheet***
Rate Reduction: To Be Determined   Effective Date:  06/01/2011 - Forward (on-going)

CDCAN Note: As of October 27, 2011, the Department of Health Care Services is still reviewing whether to go forward with the rate reduction for this facility type provider.

RURAL SWING BED

Rate Reduction: 10%   Effective Date: 07/01/2008 - 10/31/2008
Rate Reduction: Froze at 08/09 Rate   Effective Date: 08/01/2009 - 02/23/2010
Rate Reduction: Froze at 08/09 Rate   Effective Date: 03/01/2011 - 05/31/2011   ***Reduction currently blocked by court order***
Rate Reduction: To Be Determined   Effective Date:  To be determined

CDCAN Note: As of October 27, 2011, the Department of Health Care Services is still reviewing whether to go forward with the rate reduction for this facility type provider.

MEDI-CAL HOSPITALS - INPATIENT PROVIDERS

NON-CONTRACT HOSPITALS (17 in Santa Rosa, CA)

Rate Reduction: 10%   Effective Date: 07/01/2008 - 09/30/2008
Rate Reduction: Lesser of 10% or average CMAC (California Medical Assistance Commission) Rate minus 05%   Effective Date: 10/01/2008 - 04/05/2009
Rate Reduction: 10%   Effective Date: 04/06/2009 - 11/17/2009
Rate Reduction: Lesser of 10% or average CMAC (California Medical Assistance Commission) Rate minus 05%   Effective Date: 01/11/2011 - 04/12/2011 ***Reduction currently blocked by order***

NON-CONTRACT HOSPITALS (All Others Not Contained In Other Categories)

Rate Reduction: 10%   Effective Date: 07/01/2008 - 09/30/2008
Rate Reduction: Lesser of 10% or average CMAC (California Medical Assistance Commission) Rate minus 05%   Effective Date: 10/01/2008 - 04/05/2009
Rate Reduction: 10%   Effective Date: 04/06/2009 - 12/31/2010
Rate Reduction: Lesser of 10% or average CMAC (California Medical Assistance Commission) Rate minus 05%   Effective Date: 01/01/2011 - 04/12/2011 ***Reduction currently blocked by order***

NON-CONTRACT SMALL AND RURAL (Critical Access Hospitals and Federal Rural Referral Centers)

Rate Reduction: 10%   Effective Date: 07/01/2008 - 10/31/2008

NON-CONTRACT SMALL AND RURAL HOSPITALS (Non-Critical Access Hospitals, Non-Federal Rural Referral Centers)

Rate Reduction: 10%   Effective Date: 07/01/2008 - 10/31/2008
Rate Reduction: 10%   Effective Date: 07/01/2009 - 02/23/2010
Rate Reduction: 10%   Effective Date: 01/01/2011 - 04/12/2011   ***Reduction currently blocked by court order***

NON-CONTRACT HOSPITAL IN OPEN AREAS (with less than 3 hospitals)

Rate Reduction: 10%   Effective Date: 07/01/2008 - 04/12/2011

LINKS TO MEDI-CAL BUDGET RELATED DOCUMENTS

The following are links on the Department of Health Care Services website to the documents that the department released late today dealing with the Medi-Cal provider rate reductions - and also other reductions that the federal government still has not yet given approval with some comments by CDCAN.

RATE REDUCTION ANALYSIS

CDCAN Note: The following documents with the department's analysis on the impact of a rate reduction to access for that service. These documents can be very useful in helping to understand how the Department of Health Care Services determined the impact of a certain reduction - and the impact to access to that service - and whether or not the data and analysis is accurate.

This is the first time that the Department of Health Care Services has conducted such a formal - and public - analysis (they officials have previously claimed they had done so before internally), driven in large part by previous federal court rulings that blocked previous Medi-Cal reductions because this step was not done.

• Medi-Cal Access Analysis (6 services) - 12 pages :  http://ww2.dhcs.ca.gov/Documents/Rate%20Reductions/Medi-Cal%20Access%20Analysis%206%20services.pdf
• Long Term Care Access Analysis - Skilled Nursing and Subacute Services (16 pages): http://ww2.dhcs.ca.gov/Documents/Rate%20Reductions/LTC%20Access%20Analysis%20Skilled%20Nursing%20and%20Subacute%20Services.pdf
• Physician Clinic Medi-Cal Access Analysis (84 page report): http://ww2.dhcs.ca.gov/Documents/Rate%20Reductions/Physician%20Clinic%20Medi-Cal%20Access%20Analysis.pdf
• Hospital Inpatient and Outpatient Medi-Cal Access Analysis (7 pages): http://ww2.dhcs.ca.gov/Documents/Rate%20Reductions/Hospital%20Inpatient%20and%20Outpatient%20Medi-Cal%20Access%20Analysis.pdf
• Pharmacy Medi-Cal Access Analysis (2 pages): http://ww2.dhcs.ca.gov/Documents/Rate%20Reductions/Pharmacy%20Medi-Cal%20Access%20Analysis.pdf
• Adult Day Health Care Medi-Cal Access Analysis (7 pages): http://ww2.dhcs.ca.gov/Documents/Rate%20Reductions/ADHC%20Medi-Cal%20Access%20Analysis.pdf

POTENTIAL IMPORTANCE OF THESE DOCUMENTS:  VERY HIGH

MONITORING PLAN

CDCAN Note: The following document deals with the department's plan to monitor the outcomes resulting from implementation of the various rate reductions and its impact to access to those services by the people who need them.  Presumably other policy changes in Medi-Cal, such as elimination of Adult Day Health Care, imposing caps on certain services, implementation of co-payments (some of these changes are still waiting for federal approval) will also be part of the monitoring plan.

This plan - which the Department of Health Care Services says is "groundbreaking" could be a useful tool - depending on how it is applied and depending on how it is received and used in actual policymaking and advocacy.  
Never before has there been a formal process or plan by state government to actually review the impact of a major policy change or a major budget reduction. California Health and Human Services Secretary Diana Dooley earlier this year expressed a strong concern and interest in monitoring outcomes - especially those impacted by budget cuts and policy changes.

CA - Developing A Healthcare Access Monitoring System (82 page report): http://ww2.dhcs.ca.gov/Documents/Rate%20Reductions/Developing%20a%20Healthcare%20Access%20Monitoring%20System.pdf
POTENTIAL IMPORTANCE OF THIS DOCUMENT:  VERY HIGH

APPROVAL LETTERS FROM FEDERAL GOVERNMENT & ACTUAL STATE PLAN AMENDMENTS (TO CALIFORNIA'S MEDICAID STATE PLAN)

CDCAN Note: these are formal - usually 1 page - letters to the Department of Health Care Services from the Centers on Medicare and Medicaid Services - the federal agency under the Obama Administration that oversees nationally those two programs, notifying the State of approval (or rejection or delay) of a change in the State's Medicaid State Plan (called a "State Plan Amendment" or SPA).  Similar letters are also used to notify the State when a proposed waiver or program is submitted for approval. The letters don't provide much information other than the approval notice (or rejection or other concern) and if approved, the effective dates.  Attachments to the letters are not provided on the department's website.

• Approval  Letter (Non-institutional providers rate reduction) - CA SPA 11-009 (2 pages): http://ww2.dhcs.ca.gov/Documents/DHCS%20Budget%20Actions/SPA%20docs/SPA%2011-009%20Ten%20Percent%20Reduction%20for%20Outpatient%20Services/CA%20SPA%2011-009%20Approval%20Letter.pdf
• Companion Letter from Federal Government to CA SPA 11-009 (4 pages): http://ww2.dhcs.ca.gov/Documents/DHCS%20Budget%20Actions/SPA%20docs/SPA%2011-009%20Ten%20Percent%20Reduction%20for%20Outpatient%20Services/SPA%2011-009%20Companion%20letter.pdf    [CDCAN Note: this letter contains among other things certain issues that the State is not in compliance with certain federal regulations]
• Approval Letter for Nursing Facilities Level A and Distinct Part Nursing Facilities Level B rate reduction - CA SPA 11-010) (2 pages): http://ww2.dhcs.ca.gov/Documents/DHCS%20Budget%20Actions/SPA%20docs/SPA%2011-010%20Reductions%20to%20Various%20Long%20Term%20Care%20Facilities/CA%20SPA%2011%20010%20Approval%20Letter.pdf
• Approval Letter for freestanding skilled nursing facilities level-B and freestanding subacute skilled nursing facilities level-B rate reductions - CA SPA 11-011 (2 pages): http://ww2.dhcs.ca.gov/Documents/DHCS%20Budget%20Actions/SPA%20docs/SPA%2011-011%20%20Freestanding%20SNFs%20Level%20B%20and%20Subacutes/CA%20SPA%2011%20011%20Approval%20Letter.pdf
• Approval Letter for freestanding skilled nursing facilities level-B and freestanding subacute skilled nursing facilities level-B regarding freezing rates (2 pages): http://ww2.dhcs.ca.gov/Documents/DHCS%20Budget%20Actions/SPA%20docs/Federal%20Approval%20of%20Medi-Cal%20Rate%20Reductions/CA%20SPA%2009-020.pdf
• Approval Letter for freestanding skilled nursing facilities level-B and freestanding subacute skilled nursing facilities level-B changes to rate methodology, lifting of rate freeze and approval of rate increases (1 page): http://ww2.dhcs.ca.gov/Documents/DHCS%20Budget%20Actions/SPA%20docs/Federal%20Approval%20of%20Medi-Cal%20Rate%20Reductions/CA%20SPA%20TN%2010-015.pdf
• Approval Letter for rate reduction for prescription drugs (1 page): http://ww2.dhcs.ca.gov/Documents/DHCS%20Budget%20Actions/SPA%20docs/Federal%20Approval%20of%20Medi-Cal%20Rate%20Reductions/CA%2010-024%20Reimbursement%20for%20Drugs.pdf

POTENTIAL IMPORTANCE OF THESE DOCUMENTS:  HIGH

TRANSMITTAL NOTICES

CDCAN Note: The following are transmittal notices (forms) that are used by the states as a cover sheet for proposed changes to a state plan.  The attachments referred to in the transmittal notices by the Department of Health Care Services are not currently available on the department's website - only the 1 page notice (cover sheet) and by itself, is not very useful.
Transmittal Notice - CA SPA 11-009 (1 page): http://ww2.dhcs.ca.gov/Documents/DHCS%20Budget%20Actions/SPA%20docs/Federal%20Approval%20of%20Medi-Cal%20Rate%20Reductions/Transmittal%20and%20Notice%20CA%20SPA%2011-009.pdf
POTENTIAL IMPORTANCE OF THESE DOCUMENTS:  LOW - UNLESS ATTACHMENTS ARE ALSO AVAILABLE

MEDI-CAL PROVIDER RATE REDUCTION CHART

CDCAN Note: This is a four page spread sheet type document that summarizes the various rate cuts to Medi-Cal providers and the current status of those reductions.  The information from his chart is used in the CDCAN summary above.  
Medi-Cal Provider Rate Reduction Chart (as of October 27, 2011) (4 pages): http://ww2.dhcs.ca.gov/Documents/DHCS%20Budget%20Actions/SPA%20docs/Provider%20Rate%20Reduction%20Chart.pdf
POTENTIAL IMPORTANCE OF THIS DOCUMENT:  HIGH

DEPARTMENT OF HEALTH CARE SERVICES NEWS RELEASE ON MEDI-CAL PROVIDER CUTS

CDCAN Note: This is a 2 page news release from the Department of Health Care Services that was released late Thursday afternoon (October 27, 2011).  The information in the release was the same as the information provided during the public conference call hosted by the Department of Health Care Services at 4:30 PM that same day.
News Release by Department of Health Care Services on Medi-Cal Provider Cuts (2 pages): http://ww2.dhcs.ca.gov/formsandpubs/publications/opa/Documents/11-06%20SPA%20Approvals.pdf
 POTENTIAL IMPORTANCE OF THIS DOCUMENT:  HIGH