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CaliforniACA November Newsletter Now Available!

Provider Rate Cuts Approved
Despite already having some of the lowest Medicaid reimbursement rates in the country, California was recently cleared by the Centers for Medicare & Medicaid Services (CMS) to cut an additional 10% from many providers’ Medi-Cal reimbursements (including physicians, dentists, clinics, pharmacies, and most nursing homes).  The Medi-Cal program costs California’s General Fund $14B per year and serves 7.6 million of California’s low-income families, individuals with disabilities, and elderly.  The anticipated cuts are expected to save the state $623M in General Fund (and save the federal government an equal amount). Read more here.

Medical Professionals File Lawsuit
On November 21, the California Medical Association, the California Dental Association, the California Pharmacy Association, the National Association of Chain Drug Stores, and the National Community Pharmacist Association filed a lawsuit against HHS and the State Department of Health Care Services. The lawsuit is in response to CMS’s approval of the State’s 10% cut to Medi-Cal reimbursement rates for providers. The litigation claims CMS did not follow the proper protocol for approving the cuts. The California Hospital Association filed a separate suit. Read more here.

§1115 Waiver
Low Income Health Program
The ten “legacy” counties (counties that implemented Coverage Initiatives under the 2005 waiver) executed their contracts on September 30, 2011 and implemented their Medicaid Coverage Expansion (coverage for those up to 133% FPL, or $14,484 for an individual and $29,725 for a family of four) programs on July 1, 2011. The latest available data indicates that legacy counties have enrolled 196,471 people. The non-legacy counties are only implementing MCEs and have implementation dates ranging between January 1, 2012 and July 1, 2012. Five counties have pending applications. Read more here.

California Children’s Services
Four CCS pilots are aimed at improving health outcomes, improving cost-effectiveness, creating clearer accountability, improving satisfaction with care, and promoting timely access to care and family-centered care. Five counties were awarded grants to carry out the four pilots on October 12, 2011 and will include nearly 19,000 CCS children. All pilots eliminate the current Medi-Cal Managed Care Carve-out for CCS children. The contractors will manage all patient care to provide improved coordination of care, to align incentives and to optimize health outcomes. Read more here.

Seniors and Persons with Disabilities
The one-year transition of SPDs into managed care involves 380,000 SPDs across 16 counties in California. Continuity of physician services has increased 20% since June, mainly as DHCS has increased its ability to link SPDs to previous providers. DHCS is finding the number of dual eligibles transitioning into managed care is also increasing. This is likely a result of the closing of Adult Day Health Centers (ADHCs) and the transition of some ADHC beneficiaries to managed care. Read more here.

Dual Eligibles
DHCS Prepares to Release Request for Solutions
California recently received a $1M grant from the federal government to better coordinate care for dual eligibles. In December, DHCS will release its Request for Solutions (RFS) for organizations interested in participating in demonstrations. Up to four counties will participate; at least one of which will be a two-plan model and one of which will be a county organized health system. The solutions piloted under the RFS process will primarily pursue enrollment of duals into a managed care plan. Applicants must propose solutions that include synergies between all stakeholders, including health plans, providers, community organizations and beneficiaries. Read more here.

The California Health Benefit Exchange
Progress to Date
California is quickly moving forward in creating the California Health Benefit Exchange. This recent ITUP report summarizes the progress the state has made to date, including legislation, vision and mission statements, options for IT, related legislation, information about the Basic Health Plan, etc. The paper will be regularly updated as the Exchange develops. This recent Children’s Partnership report provides recommendations for covering families through the SHOP Exchange and this recent  Community Venture report describes small business owner behavior and decision making processes when offering and purchasing coverage for employees.

Summary of the October Board Meeting
The October Exchange Board meeting included revising the vision and mission statements, an update of the final comments on the federal notice of proposed rulemaking, and a presentation by Pat Powers on the “California Affordable Coverage Enrollment System Design Plan” to discuss potential IT systems. Read more here.

Summary of the November Board Meeting
The November Exchange Board meeting included a presentation by Peter Lee on a yearlong decision roadmap (including the development of an IT RFP by firm ClearBest this month and the plan to hire an IT vendor by April 2012), an update on personnel hiring, a proposed organizational structure, and a presentation by UX2014 on a proposed consumer IT interface. Shortly after the meeting, the Board announced the hiring of David Maxwell-Jolly as COO, Sharon Stevenson as General Counsel and David Panush as Director of Government Relations. Read more here.

Pre-Existing Condition Insurance Plan
Risk of Enrollment Cap
Unless more federal funding is allocated for the Pre-Existing Condition Insurance Plan (PCIP), enrollment may have to be soon capped. PCIP was expected to accommodate up to 23,000 California enrollees. This figure, however, is looking exceptionally optimistic, as enrollment may soon be capped at 7,000. Enrollment currently stands at 5,290. Unless the federal government provides more funding, current enrollment cap estimates would only allow for only 1,500 more subscribers. Read more here.

CW Files Two Ballot Initiatives
After AB 52, Mike Feuer’s insurance rate regulation bill was shelved at the end of the last legislative session, Consumer Watchdog filed paperwork for two ballot initiatives, one including and one excluding large-market insurance rates. In the former ballot measure, DOI would take over rate review from DMHC, which traditionally manages the large-group market. Read more here.

Small Employers
Website as Comparison Tool
A renovated healthcare.gov website is available to provide small business owners a review tool to see health insurance plan choices, with the ability to sort by out-of-pocket limits, average cost per enrollee, prescription drug/maternity/mental health coverage and other factors. Smaller businesses, which do not have the large purchasing/negotiating power of larger ones, will be provided with more transparency in the insurance marketplace. Read more here.

Public Health and Prevention
Grants Under ACA
HHS has awarded approximately $42.7 million in grants to organizations in California through ACA’s Prevention and Public Health Fund. The Fund, which will distribute $15B over 10 years, is aimed at focusing on wellness and prevention and preventing chronic disease. California has received $9M for community and clinical prevention, $7.2M for public health infrastructure, and $26M for primary care training. Read more here.

Community Transformation Grants
To date, the CDC has awarded $103M in Community Transformation Grants (CTGs) to 61 states/communities to serve approximately 120M Americans. The CTG grants focus on 5 priority areas: 1) tobacco-free living; 2) active living and healthy eating; 3) evidence-based quality clinical and other preventive services; 4) social and emotional wellness; and 5) healthy and safe physical environments. Ten grants totaling over $23M – over one fifth of the national total — were awarded to California entities, including seven counties, one foundation, one tribe, and the Public Health Institute (which will serve the rest of the state). Read more here.

Closure of Emergency Departments Serving African-Americans and Medi-Cal Beneficiaries
A study published in the in the Annals of Emergency Medicine found that California emergency departments serving a high volume of African-Americans and Medi-Cal beneficiaries face a greater risk of closing. Data for the study was collected from the Office of Statewide Health Planning and Development between 1998 and 2008, during which time 7% of California’s emergency departments were closed. Closures were particularly concentrated in Los Angeles County and among for profit hospitals. Read more here.

Premature Birth Rates Decline
According to the March of Dimes 2011 Premature Birth Report Card, California’s premature birth rate fell from 10.9% in 2007 to 10.3% in 2009, and fewer women smoked while pregnant. California received a “B” grade, with Vermont receiving the only “A”; the US received a “C” grade overall. Read more here.

Obesity Rates Increase in Many Counties
A UCLA study showed that the rate of overweight and obese children increased from 2005 to 2010 in many CA counties, but the state’s overall rate fell slightly (1%) to 38%. Hispanic children had the highest rates of obesity at 46.2%, compared to black (29.3%), white (26.1%) and Asian (23.9%) children. Read more here.

Premium Cost Increases
The Commonwealth Fund found that premium costs for family health insurance in CA increased by 52% from 2003 to 2010 ($9,091 to $13,891 annually). Annual premium costs comprise an even larger share of their income, growing from 14.9% in 2003 to 21.5% in 2010. Data on   insurance trends come from the federal government’s annual surveys of employers, conducted for the insurance component of the Medical Expenditure Panel Survey (MEPS). Income data comes from the U.S. Census Bureau’s Current Population Survey of households. Read more here.

Shift of Nonviolent State Prison Inmates to County Jails Could Be Costly to Counties
A study by RAND examining trends in Alameda, Los Angeles, Kern and San Diego counties indicates that the shift of nonviolent state prison inmates to county jails could strain local health care and social services programs that have already been hard-hit by budget cuts. The study highlighted the needs of newly released prisoners, who have a high need for mental health care and substance abuse treatment that may not be available these individuals. Read more here.

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