Author: John Connolly

California’s Drug Medi-Cal Waiver Is a Big Deal: Here’s Why

On August 14, 2015, The California Department of Health Care Services announced federal approval of the State’s Drug Medi-Cal Organized Delivery System (DMC-ODS) waiver.  This report summarizes expanded Substance Use Disorder (SUD) benefits and describes the importance of the DMC-ODS waiver in the transformation of the SUD system of care.

Download the full summary here: DMC Waiver ITUP Summary

New Study Emphasizes the Value of Medi-Cal Adult Dental Benefits

A new study from researchers at the University of Iowa examined the effect of the 2009 elimination of Medi-Cal adult dental benefits on service utilization and cost. Adult dental benefits are an optional benefit in Medicaid, and many states have eliminated or reduced these benefits when they have budgetary difficulties, such as the gaping deficits that California experienced during the recent Great Recession.


The results of the study indicate that, among the 3.5 million California adults who lost dental coverage, emergency department (ED) use increased. This increase in ED utilization both reduced savings from eliminating the benefits in the first place, as well as drove greater use of suboptimal care, and potentially delayed care, in an inappropriate setting. This group of adults had 1,800 additional ED visits annually after the 2009 elimination of benefits, and that represents around $1.3 million in additional ED spending on dental problems. That’s an additional 4.4 ED visits per month for dental reasons per 100,000 program beneficiaries.


Compounding this problem of ED use, which is a much more expensive place to receive care than an outpatient office, is that most EDs cannot perform tooth extractions or root canals that would ultimately address underlying dental issues. EDs can typically only prescribe medication to relieve pain or control infections until patients can find a dentist who will see them.


Other states have experienced similar patterns in utilization after eliminating or reducing dental benefits. Oregon and Maryland both saw increases in ED use for dental issues after eliminating Medicaid benefits. Oregon ultimately elected to restore its benefits.


Fortunately, California has partially restored adult dental benefits in Medi-Cal, and this research suggests that was a positive move, both for beneficiaries and how the state makes investments in the Medi-Cal program.

New White House Report Highlights Benefits for Medicaid Expansion States


A new report from the White House outlines the major benefits of the Medicaid expansion for the states that opted to extend the new ACA coverage. The paper marshals the best available data and evidence, and highlights improved access to care, better health outcomes and longer life expectancy, greater financial security, a higher standard of living, better state economies, and healthier and productive workers.

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New Medicaid enrollees have greater access to care, including preventive care, with an estimated 609,000 beneficiaries able to get an annual cholesterol check. Another 626,000 would also receive this test if all states expanded their Medicaid programs. In fact, another estimate shows that expanded Medicaid coverage prevented 5,200 deaths annually, with another 5,000 potentially avoided if all states opted in.

Another important piece of health coverage is households’ financial security. Medicaid coverage has prevented 594,000 people from difficulty paying bills because of medical costs, and if all states expanded their programs, they would prevent 611,000 more people from having that trouble.

States that opted into the expansion have reaped substantial economic benefits as well. Billions of dollars in new federal funding—roughly $4.4 billion in lower uncompensated care costs—continue to flow into their economies through their health care systems. New beneficiaries have lower medical costs, and they can dedicate more of their household income to purchasing other goods and services, which boosts states’ economies. Providers also have a larger and more reliable payment source. Further, the states that have not expanded their programs would have $4.5 billion less in uncompensated care costs.

Importantly, workers newly enrolled in Medicaid have greater access to needed care, which could allow them to be healthier and improve productivity on the job. An increase in worker productivity could also provide boost in economic activity and lift states’ economies. In sum, recent research demonstrates that the benefits of Medicaid expansion are both wide-ranging and sizeable. As more and more states choose to expand their programs, their residents and economies could see these benefits as well.

Governor Brown’s May Revision for State Budget Shows Revenue up $6.7B and Proposes Full-Scope Medi-Cal Coverage for DACA and DAPA Immigrants

Governor Jerry Brown released the May Revision of the California state budget, and he had mostly positive news to share. The biggest news from the new estimates is a $6.7 billion increase in General fund revenues. Given this increase, the Governor proposes new spending for three purposes:


  • Extending full-scope Medi-Cal coverage (as well as In-Home Supportive Services and Cash Assistance Payments for Immigrants) to state residents who gain Permanent Residence Under Color of Law (PRUCOL) status under President Obama’s executive actions to expand the Deferred Action for Childhood Arrivals (DACA) program and to establish the Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) program, at an annual cost of $200 million ($62 million for 2015-16) and an additional $5 million dedicated to application assistance for these groups


  • Creating the state’s first-ever California Earned Income Tax Credit, a refundable tax credit for the state’s lowest income workers (earning up to $6,580 for households with no dependents, and up to $13,870 for households with three or more dependents) that would assist 2 million residents with an average household benefit of $460 and a maximum of $2,653


  • Holding tuition flat for California State University and University of California undergraduates for two more years.


Proposition 98 requires that $5.5 billion of the overall increase in revenue go to K-12 education and community college spending. Further, Proposition 2 requires that an additional $633 million go to the Rainy Day Fund, which will reach $3.5 billion by the year’s end, and $633 million go to debt repayments. The May Revision also includes $2.2 billion in one-time spending for the state’s emergency drought response, which includes protecting and expanding local water supplies and conservation efforts.

Specifically regarding the Health and Human Services Agency, the overall funding in the May Revision was $140.5 billion ($31.6 billion in General Fund and $108.9 billion in federal and other funds), which represents a $121 million reduction from the Governor’s Budget released in January. The most notable adjustments in spending for the Department of Health Care Services were a savings of $381 million from federal reauthorization of the Children’s Health Insurance Program (CHIP), as well as an additional $61.6 million in federal and non-state spending for payments to health plans to create Health Homes for Medi-Cal beneficiaries with complex needs.

The May Revision highlights that more than 5 million Californians have enrolled in health coverage through Medi-Cal or Covered California since January 2014, the beginning of enrollment into these Affordable Care Act (ACA) coverage expansions. Medi-Cal enrollment is estimated to reach 12.4 million in 2015-16. Spending for increased enrollment of residents previously eligible for the program is expected to be $2.9 billion ($1.4 billion General Fund), and spending for the for the newly eligible is estimated to be $14 billion, which is 100% federally funded through 2015-16. The General Fund share of spending for the newly eligible group is estimated to reach $1 billion in 2018-19.

Other noteworthy provisions include $125 million in General Fund for Medi-Cal managed care rate increases and an increase of $150 million ($48.8 million General Fund) for the eligibility determination workload at the state and county levels for ACA coverage expansion programs.

Finally, on a humorous note, the final question of Governor Brown’s press conference this morning pressed him about one thing in his career that he’d like to take back or do over again. Brown quipped, “The only thing that seems pretty clear was continuing to run for president in 1980 after Kennedy got in against Carter. That was a very dumb move.”

Peruse the full budget summary here.

Medicare Pioneer ACO Program Reports a Second Year of Savings

U.S. Health and Human Services Secretary Sylvia Burwell announced today that the Medicare Pioneer ACO program saved $344 million in its first two years of operation. That amount equates to roughly $300 in savings for each of the 600,000 beneficiaries receiving services through the participating ACOs. The savings represent another positive milestone for the Pioneer ACO program that pilots a new model of organizing and paying hospitals and physicians for Medicare services to improve quality and control costs.

The Pioneer ACO program is unique for providers because it provides both an opportunity for hospitals and affiliated physicians to share savings and financial risk with the federal government. So, if a Pioneer ACO beats spending targets, it receives a share of the savings. At the same time, if it misses the spending target, it absorbs a share of the losses. This level of risk has caused the number of participating organizations to remain fairly small because the demands and risks are higher in this ACO model. The program started with 32 ACOs in 2012, and that number dropped to 19 in its second year.

While the overall amount of savings dropped from $297.7 to $104.5 million between the first and second years of the program, the continued savings suggest that high-performing ACOs can successfully meet spending and quality targets. With just two years of results to report, however, it remains to be seen if the participating Pioneer ACOs can continue these successes, or if additional ACOs will adopt the model in the coming years.

The Medicare Pioneer ACO program is part of a broader movement of Medicare toward alternative value-based payment models that emphasize quality performance and cost control. HHS plans to implement reforms of this type by moving 30% of Medicare provider payments to alternative payment models by 2016, and increasing that share to 50% by 2018.

Didn’t Know about the Obamacare Tax Penalty? Enroll in Covered California by April 30 to Avoid the Full Penalty.

Regular open enrollment may have ended for Covered California, but if you or someone you know wasn’t aware of the tax penalty for not having health coverage, you can still avoid the full penalty by enrolling by this Thursday, April 30. So, enroll now!

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While you won’t be exempt from the penalty for the part of the year that you’ve already been uninsured, you can avoid paying a larger penalty for not having coverage for the whole year. You can start the enrollment process by clicking here, and click here to remind your friends who are in this situation to check out their options.

Importantly, anyone who attempts to enroll during the special open enrollment period that ends April 30 must attest that they were unaware of the penalty during the enrollment process. And the penalty is getting more important to know about because it’s getting bigger this year. For 2015, it will be $325 per person or 2% of your annual income, whichever is higher. Next year it goes up again. It will be the higher of $650 or 2.5% of your annual income.

It’s important to take advantage of the special enrollment period now, not just because of the penalty, but also because the next chance to get Covered California coverage (maybe with some financial help with premiums, co-pays, and deductibles) won’t come until the next open enrollment period starting on November 15. The only exceptions are for certain life-changing events (such as job changes, births, deaths, divorces, or moving to a new state) that result in a loss of health coverage. For more information about these rules, click here.

Covered California knows that picking a plan and understanding your coverage options can be confusing. Luckily, Covered California Certified Enrollment Counselors are still out there ready to help your or someone you know through the process. You can look for a Certified Enrollment Counselor near you by clicking on this link.




LA County CEO Report Outlines Opportunities and Risks of Proposed Unified Health Agency

The Los Angeles County CEO’s office just released a report under the Board of Supervisors’ direction to explore the creation of a new unified health agency that would include the three County health departments, including Health Services (DHS), Mental Health (DMH), and Pubic Health (DPH). The report considers benefits, risks, and possible structures of the health agency. While weighing important benefits, risks, and stakeholder comment about the proposal, the document also offers an outline of potential service alignments and improvements. Some of these improvements are very needed in the near future, and others are more ambitious longer-term goals.

One of the primary objectives of the agency would be to align and integrate services. For example, the report suggests that integrating population and personal health missions through a unified vision and coordinated service delivery would be a core goal. Connecting, coordinating, and co-locating providers of physical and behavioral health services through data sharing, information technology, and facility planning improvements would be a major aim of the agency. Moreover, aligning the departments’ data collection and analysis activities would be instrumental to improving studies of population health, efficacy of service delivery, and strategic planning.

The unified health agency would also pay particular attention to improving services for vulnerable populations that need the services of all of the departments, as well as other county agencies. These groups include transition-age and foster youth, people involved in the criminal justice system and reentering communities from incarceration, people experiencing homelessness, and people who experience psychiatric emergencies.

One very interesting possibility that the document raises is the creation of new risk-sharing and contracting arrangements with the State and managed care plans. The report offers the option of pursuing a consolidated County contract with Medi-Cal managed care plans for all of the Medicaid services that the departments provide. The County would pursue “these arrangements within a highly integrated model of care that includes a full-spectrum of mental health (mild to severe), physical health, substance abuse, and select public health services.” The report additionally identifies the need to consult with the California Department of Managed Health Care to determine whether or not the County would need to seek a full Knox-Keene license in this scenario.

The CEO also discusses potential risks involved with pursuing the agency model. The main risks include sacrificing the focus of DMH and DPH on community and population health when attempting to coordinate or integrate the clinical services of all departments. The CEO’s office consulted many stakeholders when developing the report, and some mentioned that when the departments were consolidated or merged in the past (1972-1978), population and public health activities were sacrificed to support the needs of clinical and health services facilities. Moreover, mental health stakeholders expressed concern about being relegated to a secondary position behind physical health, and substance use disorder service stakeholders also expressed concern about being subsumed beneath mental health practitioners who might not appreciate the needs of their clients.

Yet, the CEO report responds specifically to the Board of Supervisors’ direction to explore an agency model that retains a separate director and budget for each department. Under this model, while the agency director and a lean staff would lead in setting policy, strategy, and legislative advocacy for the departments, the Board of Supervisors would retain full control over departments’ budgets, and the departments’ leadership would remain in place. With regard to broader programmatic or structural changes in the future, the report recommends that the agency maintain a continuous and robust stakeholder process, and move slowly toward “long-term opportunities that must be carefully considered and planned for in order to avoid disrupting ongoing operations and services.”

On January 13, 2015,  the Board of Supervisors directed the County Chief Executive Office, County Cousel, and the Department of Human Resources to draft the report. The public comment period for this draft is from April 1 through May 15, and the CEO’s office will submit the final report to the Board of Supervisors no later than June 30.

Access full text of the report: Health agency_public release draft_March 30 2015.

Long Waits Feared with Obamacare Fail to Materialize

Many consumers, healthcare providers, and other market observers feared that the increase in health coverage through Obamacare would cause access problems in the form of long waits for appointments and a lack of hospital beds. So far, it appears that this fear has generally not materialized. According to several studies, the volume of traffic in health care practitioners’ offices has not increased substantially since January 2014, the start of new ACA coverage through health insurance marketplaces and Medicaid.

The first study of the issue came from Athenahealth with support from the Robert Wood Johnson Foundation, and it found that the share of physician office visits that were new patients had only risen from 22.6% to 22.9% from 2013 to 2014. Further, many were concerned that new patients would be sicker than existing patients due to forgone treatment because of a lack of coverage. Yet, the study also found that new patients were not in worse health than existing patients.

With regard to wait times inside physicians’ offices, the average length was down by about a minute, and the drop was even a bit larger for primary care physicians’ offices. The difference could be a result of lower demand or a shift toward urgent care or nurse practitioners. Regardless of the cause, the flood of patients and long waits do not seem to have occurred. A recent Commonwealth Fund report also predicted only modest increases in demand for services if all states expanded their Medicaid programs through the ACA.

Yet, CNBC reports that one counterpoint to all of these findings came from hospitals. A report from Premier, a healthcare improvement company that works with 3,400 hospitals, found that hospital discharges have increased noticeably in the last two years.

These findings demonstrate that the U.S. health care system appears to be absorbing newly insured consumers fairly well overall. However, it is still unclear if all who have coverage are using their coverage optimally by seeking appropriate and timely preventive and primary care. As we continue to build a culture of coverage and expand health literacy, it will be important to monitor consumers’ unmet needs to understand how well our health care system is serving us.


New Survey Explores Behavioral Health Needs and Preferences of Californians with Low Incomes

Screen Shot 2015-03-12 at 10.06.10 AMThe Blue Shield of California Foundation just released the results of a recent survey report by Langer Research Associates that highlights the behavioral health experiences, needs, and attitudes of Californians with low incomes. The main findings are that many Californians with lower incomes are not receiving needed behavioral health services, and that many prefer to receive behavior health services either from their primary care providers, or from a counselor located in the same facility as their primary care provider.

The Affordable Care Act (ACA) offers new insurance coverage that holds the potential to provide many people critical access to behavioral health services. The report cites a study that suggests that in California around 300,000 people will newly access mental health care, and 200,000 will newly access substance use disorder services through the ACA coverage expansions.

The report shows that, for Californians with low incomes, roughly three in ten felt a need to speak with a health care professional about behavioral health issues. In fact, Californians with incomes below $16,000 were most likely to say that they had a need for behavioral health services. However, only half of individuals who reported a need for these services actually received them. That share is simply too low.

At the same time, many respondents offered some clues about why they did not receive needed services, and what would make them more likely to use these often-stigmatized services. As you can see in the figure below, large majorities of this group felt that having access to both mental health and substance use disorder (SUD) services at their primary care facility was very important. Yet, half or fewer said that these services were available in that location. The same pattern was true for team-based care that included behavioral health services, referrals to social services, and health navigators.


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The survey findings suggest that having co-located physical and behavioral health care providers increases access to behavioral health services. Importantly, among those who said that they needed behavioral health services but did not receive them, 6 in 10 said that they did not know whom to speak to about it. Yet, individuals who said that a counselor was located within their primary care facilities were two times as likely as other respondents to have spoken with a provider about behavioral health issues.


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Of those who said that they needed to talk to a health care provider about behavioral health issues in the previous year, 6 in 10 of those who had on-site counseling available received the service, while the share was around one third for those who did not have that option.


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These results suggest that the competency of primary care practitioners in sensitively engaging their patients about behavioral health needs can have a considerable impact on access to behavioral health services for people with lower incomes. Moreover, having integrated care teams can effectively link individuals to the right professionals at the right time, and California’s health policies and coverage programs should prioritize these models to improve the health and wellbeing of people with low incomes.

Gallup Survey Shows Uninsured Rate Plummeting in U.S., California

A new Gallup survey released today found that the uninsured rate in the U.S. dropped from 17.3% to 13.8% over the last year. This share is the smallest recorded by Gallup in 7 years. States across the country recorded reductions in the uninsurance rate, and California was no exception. Gallup found that in the Golden State the figure fell from 21.6% to 15.3%. Another survey released by the Commonwealth Fund last summer showed an even more dramatic drop from 22% to 11% among working age adults in California.

Gallup reported that California’s drop was the sixth largest as a share of its population. While California previously had an uninsured rate that was among the highest in the nation, it has fallen out of the top 10, now ranking 14th.

Arkansas and Kentucky also had impressive reductions in their uninsurance rates, with both roughly cut in half over the last year. These two states are notable because their rates were also very high, over 20%, before the rollout of the Affordable Care Act (ACA) coverage expansions in 2014. These states also both opted to expand their Medicaid programs, while many other Southern states did not. In fact, Texas, Mississippi, Georgia, Oklahoma, and Florida had the five highest uninsured rates, respectively, ranging from 24.4% to 18.3%.

Massachusetts continues to have the lowest uninsured rate, at 4.6% according to Gallup. The Bay State was followed by Connecticut, Minnesota, Hawaii, and Vermont—all falling in between 6.0% and 7.4%.

In sum, Gallup highlights the impact that the ACA has had on coverage nationwide, and these findings further underscore the success that California has had.

Still, California has the opportunity to do even more to reduce its uninsured rate in the coming years. President Obama’s recent executive order expands Deferred Action for Childhood Arrivals (DACA), and creates Deferred Action for Parental Accountability (DAPA) for new groups of undocumented immigrants. With enrollment in these new and expanded programs, many more California residents would be eligible for full-scope Medi-Cal coverage under California law because they would be Permanently Residing Under Color of Law (PRUCOL). As the DACA expansion and DAPA are implemented, it will be important to make sure that everyone who is or may become eligible for health coverage is aware of the programs that are available for them.