CDCAN REPORT #035-2011: $10 billion 5 year Medicaid project moves forward in California

• $10 BILLION FIVE YEAR MEDICAID PROJECT MOVES FORWARD IN CALIFORNIA – STAKEHOLDER ADVISORY COMMITTEE PUBLIC MEETING FEB 10tH
• 8th Public Meeting of Department of Health Care Services’ Stakeholder Advisory Committee – Feature Update on Next Steps of the State’s Implementation of the Section 1115 Medicaid Waiver That Will Impact Hundreds of Thousands of Children, Adults with Special Needs and Disabilities, Seniors In Medi-Cal Program Across the State

SACRAMENTO, CALIF  (CDCAN) [Updated 02/08/2011 – 02:30 AM  (Pacific Time)] – Under the shadow of a still unresolved State budget crisis, the implementation of a new 5 year $10 billion federal Medicaid funded project in California is moving forward with a February 10th stakeholder advisory committee public meeting, from 09:30 AM to 12:30 PM, at the Sacramento Convention Center Room 204 in Sacramento.  (A toll free call in number is available – see below).

When fully implemented over 5 years, the demonstration project – known as the “Bridge to Reform” Section 1115 Medicaid Waiver,  will mean sweeping changes in how hundreds of thousands of Medi-Cal recipients with disabilities, and seniors.  [CDCAN Note: a 13 page summary of a November 2010 public “webinar” by the Department of Health Care Services is attached to this CDCAN Report that provides a good overview on the approved waiver and next steps, saved as a document pdf file (which persons who are blind or sight impaired can read using screen reading device) titled “2010-11-04 - Department of Health Care Services WaiverWebinar Summary.pdf”]

Hundreds of thousands of children with special needs and disabilities, persons with disabilities, the blind and seniors – including persons in Intermediate Care Facilities (ICFs) in the Medi-Cal program who are not also “dually eligible” for Medicare will be impacted as the waiver is implemented in phases in the coming year.  It will impact existing programs and services – such as In-Home Supportive Services (IHSS), regional centers – whose services will need to be coordinated for people they will continue to service, but who will be placed – or eventually will be placed – under the new expanded Section 1115 Medicaid Waiver.

Public Stakeholder Advisory Committee Meeting February 10th

As part of the next steps forward, the Department of Health Care Services, the state agency that is responsible for overseeing the federal Medicaid program in California – called “Medi-Cal” in the State, will hold the 8th “Medicaid Section 1115 Comprehensive Demonstration Project Waiver Stakeholder Advisory Committee:

WHEN:  February 10th, Thursday morning
TIME:  09:30 AM to 12:30 PM
WHERE:  Sacramento Convention Center in Room 204, a few blocks from the State Capitol (on J Street between 15th and 13th Streets).
CALL-IN NUMBER:  (877) 572-0754
PASSCODE: 2221753
AGENDA: Reprinted below
CDCAN PRIORITY: VERY HIGH
CDCAN COMMENT:  There is a conflicting Senate Budget Subcommittee #3 Health and Human Services hearing on the Governor’s proposed $750 million cuts in State general fund spending to developmental services (including regional centers) scheduled also for February 10th, at 09:30 AM at the State Capitol in Room 4203.  CDCAN has issued a major Action Alert for this hearing.

Waiver Authorized As Part of 2009-2010 State Budget Revised July 2009 – But Money Doesn’t Close Current Projected Deficits

• The original proposal by the Schwarzenegger Administration was authorized as part of the 2009-2010 State Budget as revised in July 2009 and was meant, in large part, to control and contain costs in the Medi-Cal program.
• The new federal funds however does nothing to cut the current projected $25 billion deficit the State is facing or the on-going projected $20 billion shortfalls because the additional federal revenues were already added into the budget projections.

Key Elements of the Approved Section 1115 Waiver

David Maxwell-Jolly, who was director of the Department of Health Care Services, but now serves as Under Secretary of the California Health and Human Services Agency, said back in November, after the federal government approved the State’s proposal that the main elements of the expanded Section 1115 Waiver are:

Expanded Coverage of Health Care

• Coverage for as many as 500,000 persons
• Require transition plan to prepare for enrollment of those persons into the Medi-Cal program in 2014
• Funding to support expanded coverage through 2013  ($2.3 billion for eligibles 0-133% of Federal Poverty Leel  or FPL; not funded from Safety Net Care Pool, and  $600 million for eligibles 133-200% of the Federal Poverty Level or FPL; funded from the Safety Net Care Pool
• Requirements for covering 0-133% of the Federal Poverty Level or FPL  eligibles include:  1) Benchmark-like benefits, 2) Due process for eligibility and benefit access,  3) Network adequacy standards; contract with at least one Federally Qualified Health Clinic or FQHC, 4) Out of network hospital emergency care, 5) Prospective payment system rates required, and  6) Mental health and substance abuse parity rules will apply according to forthcoming Medicaid rules

Preserving the Safety Net

• $3.8 billion available in new federal funding for this part of the waiver over 5 years
• Continuation of existing Safety Net Care Pool structure based on certified public expenditures
• Covers uncompensated care costs in public hospitals
• Up to $400 million annually for designated state programs

Better Coordinated Care For Vulnerable Populations

• Mandatory enrollment of Seniors and Persons with Disabilities including requiring assessments of plan networks; phased-in enrollment over 12 months; requiring risk assessments of new enrollees; and poviding additional consumer protections
• Pilot programs for children with special health care needs
• CDCAN Note: persons who are “dual eligible” for both Medicare and Medicaid are not part of the approved waiver – however some of the 1.1 million dual eligibles in California could be part of a four county pilot program as a first step in moving the entire population under the waiver (an amendment to the waiver would be necessary to fully accomplish that –see below for details)

System Transformation

• Creates the Delivery System Reform Incentive Pool within the Safety Net Care Pool to support improvements in public hospital systems
• Reform projects fall in four categories:  1) Infrastructure Development,  2) Innovation and Redesign, 3) Population-Focused Improvement, and 4) Urgent Improvement in Care
• $3.3 billion in new federal funds for this part of the waiver available over 5 years

Budget Neutrality

Sources of savings to support budget neutrality achieved through:

1. Public hospital reimbursements below the applicable upper payment limit,
2. Savings achieved by enrolling existing beneficiaries in managed care, and
3. Savings projected from additional managed care enrollments

Persons Who Are Dual Eligibles: Pilot Project In Up to Four Counties For Persons Dually Eligible for Medicare and Medicaid 

• The 1.1 million persons in California who are eligible for Medicare and Medi-Cal (Medicaid) – often referred to as “dual eligibles” or “Medi-Medis” are – at this stage – not part of the approved Section 1115 Waiver, because, according to the Department of Health Care Services, in part because the federal government (as represented by the Centers on Medicare and Medicaid Services or CMS) is not yet ready to move forward on this issue because of unresolved next steps regarding dual eligibles and implementation of the federal health care reform act. 
• However “dual eligibles” in up to four counties could be part of a pilot to test out integrating Medicare and Medicaid (Medi-Cal) services.
• As authorized by SB 208 as passed by the Legislature and approved by Governor Arnold Schwarzenegger as part of the 2010-2011 State Budget in October 2010, and as one of the Section 1115 Waiver goals to provide organized systems of care for “vulnerable populations”, the Department of Health Care Services will identify pilot projects to “test integration of Medicare and Medicaid services including long-term services and supports (LTSS) for dual eligible beneficiaries in up to four counties”.
• The Department of Health Care Services indicated in December that this would be a “first step toward  California’s goal of providing better coordination and integration of services” for all of the 1.1 million persons who are dually eligible for Medicare and Medicaid in California eventually shift them into the Section 1115 Waiver’s Medi-Cal managed care health plans. 
• The State would need to submit an amendment to the approved Section 1115 Waiver to shift the entire dual eligible population in California under the Section 1115 Waiver.

SB 208 requires the Department of Health Care Services, not sooner than March 1, 2011, to:

• Identify health care models that may be included in a pilot project
• Develop a timeline and process for selecting, financing, monitoring, and evaluating these pilot projects
• Provide this timeline and process to the appropriate fiscal and policy committees of the Legislature.
• SB 208 as enacted also allows the Director of the Department of Health Care Services to enter into exclusive or nonexclusive contracts on a bid or negotiated basis, and allows the pilots to be implemented in phases.

Waiver Proposal Was Submitted June 2010 & Approved by Federal Government Last November

• The project – submitted in June 2010 by the Schwarzenegger Administration as a renewal and expansion of an existing Medicaid Section 1115 Waiver among other things, is meant to be a cost cutting and cost containment measure for the Medi-Cal program, by significantly reducing costs of persons with disabilities, the blind and seniors in the program, by mandatory enrollment for many – but not all – into existing Medi-Cal managed health care plans or into new organized systems of care. 
• The Section 1115 Waiver proposal submitted  by California was approved by the federal government on November 2, 2010 and is effective from November 1, 2010 through October 31, 2015.  Details – called “terms and conditions” still need to be worked out and finalized by the State – and approved by the federal government. 
• The Legislature, as part of the 2009-2010 State Budget as revised in July 2009, gave the Schwarzenegger Administration approval to submit to the federal government a proposal to renew and dramatically expand the State’s existing  Section 1115 Waiver that was set to expire in August 2010. 

What Is A Section 1115 Waiver?

• A waiver is an exception to existing rules that – in the case of Medicaid – allows a state to implement a project or program that normally would not be allowed by federal Medicaid (or Social Security) laws or regulations.  A waiver is an agreement between the federal government (in this case the Centers on Medicare and Medicaid or CMS under the US Department of Health and Human Services and the State of California – with the Department of Health Care Services as the lead agency)
• Those federal laws and regulations set minimum standards for how states must operate their Medicaid programs. 
• Sections 1115 and 1915 of the federal Social Security Act spell out specific cases in which the federal government may authorize or “waive”, at a state’s request, certain parts of the federal Medicaid laws.
• The waiver includes special terms and conditions that must be approved by the federal government, that spells out and defines the strict circumstances under which and for whom the state is exempt from the provisions of federal Medicaid laws.
• There are several different types of Medicaid waivers – and California has several that are in effect – under 1115 and under 1915, including a home and community-based services waiver for persons with developmental disabilities that helps provides federal matching funds to many regional center community-based services and programs.
• Some Section 1115 waivers – such as the one approved in California - are statewide, comprehensive demonstrations. These can include Section 1115 waivers that require people to enroll in a managed care plan or that expand coverage to all state residents with incomes below a certain level. Other demonstration projects are more limited in scope.
• Section 1115 waiver projects are generally approved for a 5 year period and must maintain “budget neutrality” (as the California Section 1115 Waiver was), which means that the waiver program cannot cost the federal government more than the state would have spent on Medicaid for people covered by the waiver if the waiver did not exist.

FOR MORE INFORMATION ABOUT THE SECTION 1115 WAIVER

The Department of Health Care Services has been widely praised (including by CDCAN) for its outreach efforts on the proposed and approved Section 1115 Waiver.

Please email questions, comments, or concerns to WaiverRenewal@dhcs.ca.gov

To get on e-mail updates from the Department of Health Care Services on the Section 1115 Waiver:  http://apps.dhcs.ca.gov/listsubscribe/default.aspx?list=DhcsStakeHolders

Also available, presenting a overview of the waiver as approved by the federal government is David Maxwell-Jolly’s (the director of the Department of Health Care Services) presentation:

http://www.dhcs.ca.gov/provgovpart/Documents/Waiver%20Renewal/Waiver_Approval_Webinar_11_41.pdf

A public webinar by the Department of Health Care Services following the approval of the waiver, was held on November 4, 2010.  The 13 page summary of that entire presentation, including questions and answers is available at (and is attached to this CDCAN Report):

http://www.dhcs.ca.gov/provgovpart/Documents/Waiver%20Renewal/WebinarSummary11-4-10.pdf

General information about the waiver, stakeholder advisory committee notices, minutes, documents and other information:

http://www.dhcs.ca.gov/provgovpart/Pages/WaiverRenewal.aspx

AGENDA - SECTION 1115 STAKEHOLDER MEETING

SECTION 1115 COMPREHENSIVE
DEMONSTRATION PROJECT WAIVER
STAKEHOLDER ADVISORY COMMITTEE (SAC)
Meeting #8
Thursday, February 10, 2011
9:30 AM  – 12:30 PM

SACRAMENTO CONVENTION CENTER, ROOM 204
Call in Telephone Number: (877) 572-0754
Passcode: 2221753

Each section of the agenda will include a short presentation followed by comments, questions and discussion with the Stakeholder Advisory Committee. Public Comment will occur at the end of each meeting. Each meeting will begin and end on time.

09:30 – 09:35 AM

Welcome, Introductions and Purpose of Today’s Meeting

(Bobbie Wunsch, of the Pacific Health Consulting Group)

09:35 – 09:45 AM

Stakeholder Advisory Committee Process and Future Meetings

(Toby Douglas, Director, Department of Health Care Services or DHCS)

09:45 – 10:15 AM

Update on Implementation Efforts on Seniors and People with Disabilities (SPDs), Low Income Health Program (LIHP) and California Children’s Services (CCS)

(Toby Douglas, Director, Department of Health Care Services, and Tanya Homman, Jalynne Callori, Luis Rico, all from the Department of Health Care Services or DHCS)

10:15 – 11:30

Small Groups Discussions on Seniors and People with Disabilities (SPD) Enrollment and Low Income Health Program (LIHP) Expansion

• Seniors and People with Disabilities (SPD) Discussion led by SAC Member Richard Chambers
• Low Income Health Program (LIHP) Discussion led by Stakeholder Advisory Committee (SAC) Member Judith Reigel

11:30– 12:15 PM

DSRIP: Hospital Incentive Payments – Examples from Local Public Hospitals

Melissa Stafford-Jones, California Association of Public Hospitals (CAPH) and Susan Ehrlich, MD, CEO, San Mateo Medical Center

12:15 – 12:25

Public Comment Time

• One Comment per person and per organization
• Comments limited to 1 minute only

12:25 – 12:30 PM

Next Steps, Next Meetings and Adjourn

(Bobbie Wunsch, of the Pacific Health Consulting Group)

File Attachments: 

2010-11-04 - Department of Health Care Services Waiver Webinar Summary.pdf