Update on Health-Related Legislation
Governor Brown has signed two bills into law since the legislative session ended on September 9. SB 335 (Hernandez) extends a hospital fee to increase funding for Medi-Cal through 2013 and ABX 1 21 (Blumenfeld) extends a fee on Medi-Cal managed care plans for another year. SB 335 is estimated to generate $2.2B in annual fee revenue paid by private hospitals, $320M of which will be used for children’s coverage. The remaining $1.9B will be matched by new federal dollars, generating approximately $3.7B in new payments to private hospitals. ABX1 21 is estimated to raise $207M in 2011-2012. Approximately half will be used to help fill a $130M funding gap in the Healthy Families Program caused by state budget cuts. Read more about SB 335 and ABX1 21 here.
Many health-related bills remain on the Governor’s desk, including bills related to autism coverage (SB 946), Medical Loss Ratios (SB 51), maternity care as a basic benefit in individual plans (SB 222), and establishing a standardized application for individual public and private coverage (AB 1296). Governor Brown has until October 9 to sign or veto these bills.
The rate regulation bill, AB 52 (Feuer), and Basic Health Plan bill SB 703 (Hernandez) have been put over for consideration in next year’s legislative session.
California Receives Grants to Boost Medi-Cal and CHIP Enrollment
California received grants from HHS to coordinate the enrollment and renewal processes of the Medi-Cal and CHIP programs. Five California entities received grants worth $4.9M, including the Fresno Healthy Communities Access Partners ($1.3M), the Los Angeles Unified School District ($982,170), the Alameda Health Consortium ($850,000), and the Mendocino County Office of Education ($769,313). The entities plan to use funding to enhance outreach and enrollment efforts within their respective county. The fifth grant went to the American Association of School Administrators ($1M). For more information, see this post on California Healthline.
Cuts in Provider Rates
In its June application, the state sought federal approval to cut Medi-Cal provider rates by 10% across the board. CMS and federal courts have blocked Medi-Cal rate cuts, but DHCS said it would study the effects of cuts on access to care. In October, the Supreme Court will hear California’s appeal of the 9th Circuit’s decision to uphold the injunction against the across-the-board rate cuts. DHCS has yet to report their findings, and rejected a Public Records Act request by the Sacramento Bee to obtain access to the study.
The California Health Benefit Exchange
Executive Director Selected
Peter Lee, the current Deputy Director for the Center for Medicare and Medicaid Innovation at CMS, has been appointed by the Board as the first Executive Director of the Exchange. He will oversee planning, development and ongoing administration/evaluation of the HBEX beginning October 17, 2011.
CHCF’s Options for the Exchange
The California HealthCare Foundation (CHCF) has outlined three visions for how the Exchange could purchase coverage. These include: 1) Price Leader – The Exchange as a negotiator of lowered premiums; 2) Service Center – The Exchange as a consumer destination; and 3) Change Agent – The Exchange as a catalyst of payment and delivery system reform. Read more about these visions from CHCF.
Notice of Proposed Rulemaking
On July 11, HHS released the first set of proposed regulations for state-based health insurance exchanges. The California Health Benefit Exchange board accepted stakeholder input through August 18. The Board has produced summaries of proposed rules for establishment of exchanges and qualified health plans and reinsurance, risk corridors and risk adjustment. Comments are due to the federal government by September 28.
Basic Health Program
SB 703 (Hernandez), which would establish a Basic Health Program in CA, has been carried over to next year. The BHP could insure as many as one million low-income Californians with family incomes between 134-200% of FPL. Read more about BHP’s implications from a recent Urban Institute study, including the 23% federal funding increase a BHP could generate for states and the drastic subscriber savings, here.
Blue Shield Grant
Blue Shield of California Foundation (BSCF) is seeking grant proposals to support California counties to implement their Low Income Health Programs (LIHPs). Proposals are due Tuesday, September 27, 2011 by 5:00 pm. A LIHP may enroll adults not otherwise eligible for Medi-Cal or Medicare in a coverage program transitioning to Medi-Cal. Interested applicants are invited to submit proposals through BSCF’s online application system.
ADAP/Ryan White and the LIHP
As a part of the waiver, the federal government will finance half the cost of LIHP beneficiaries, including those with HIV or AIDS, while counties will finance the other half. This also means that eligibility for the county and federal funded LIHP program takes precedence over the federal and state funded Ryan White program. Some counties are considering paring back LIHP eligibility due to the shift in cost of caring for AIDS patients from the state to the counties. Three sets of guidance/FAQs have been released on this issue.
Fresno Rejects LIHP
Fresno County’s LIHP application originally stated that it would put up $56M ($28M/year) to cover 12,000 Medically Indigent Adults (MIAs) under 114% FPL for two years, starting January 1, 2012. Yesterday, the Fresno County Board of Supervisors voted against drawing down a federal match. The reason stated was due to a 30-year contract with Community Medical Centers (CMC) to manage the Medically Indigent Services Program (MISP), their current program for MIAs. The contract is in its 15th year. Read more here.
Adult Day Health Centers
The California Legislature appropriated $85M for a scaled down version of the ADHC program through December 1. On December 1, up to 300 ADHC centers will close, affecting approximately 35,000 seniors and persons with disabilities. About half of the $85M will fund the transition of these beneficiaries into managed care health plans, while the other half is being used to keep the centers alive from September 1 to December 1. Plans will receive a $60 per person incentive to take on the ADHC patients. DHCS recently sent out letters to patients notifying them of their plan options. Read more here.
A web-based application (Health-e-App) is now available to help families apply for children’s coverage through Medi-Cal and Healthy Families. This online-app was developed by CHCF with MRMIB and DHCS.
Pre-Existing Condition Insurance Plan
As of September 1, enrollment for California’s high-risk pool reached 4,000. Read about last month’s eased eligibility requirements here.
A new health survey finds that nearly 1M more young adults (19-25) gained insurance in the first three months of 2011. Gallup reports that the uninsured rate among adults 18-25 dropped from 28% to 24.2% between Fall 2010 and Summer 2011. Credit is being attributed to the ACA provision that allows young adults to stay on their parents coverage until age 26.
Budget Cut Risks
News reports show the use of overstretched hospital emergency rooms has increased for patients with serious mental illness due to reductions in state and local mental health services.
The US Court of Appeals for the Ninth Circuit has ruled that a woman’s treatment for anorexia was medically necessary and must be covered by her healthcare plan as stipulated by the federal parity laws. The treatment for anorexia at issue included an extended inpatient stay. The ruling may not have immediate effect, because Blue Shield could petition the court for a rehearing of the case or request a review from the US Supreme Court.
The California Department of Public Health received four funding installments totaling $1.7B from HHS to help improve local health programs. The funding included $756,000 to increase public health immunizations, $381,103 to monitor the effectiveness of vaccines, $340,245 for tobacco cessation hotlines, and $216,151 for an emerging infections program. The grants were a part of $137M of federal funding, allocated from the Prevention and Public Health Fund and the Substance Abuse and Mental Health Services Administration, to improve public health infrastructure nationwide.
California received two grants, each worth $2.16M, for the California Department of Insurance and the Department of Managed Health Care. The grants are meant to help the state review health insurance premium increases. California does not currently have authority to reject increases, but AB 52 (Feuer) would give California prior approval authority. The bill will be considered next year.
On September 22, HHS announced $224M to support evidence-based home visiting programs to help parents and children. California received an $11.5M formula award and a $9.4M competitive expansion award for maternal, infant and early childhood home visitation programs.
Uninsurance and Poverty
According to Census data, 7.2 million Californians (19.4% of residents) lacked insurance in 2010, ranking eighth among all states for the highest rate of uninsured. The poverty rate also rose to 16.3% last year, the highest level in more than 10 years, while household incomes fell by 5%.
A study by AARP’s Public Policy Institute, the Commonwealth Fund and the SCAN Foundation shows that CA ranks 15th best in the US for providing long term care to Seniors and Persons with Disabilities. Rankings take into consideration affordability, access, patient choice, quality of life/care, and support for family caregivers.
The Gallup-Healthways 2010 Well-Being Index shows that California ranks highly in self-reported healthy behaviors (top quintile), well-being, life evaluation, and physical health (second quintile). The state ranked in the fourth quintile in basic access. Cities such as San Jose, San Francisco and San Diego ranked highly overall, while Modesto, Bakersfield, Stockton and Redding ranked in the lowest quintile with respect to basic access.