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CaliforniACA July Newsletter

State Budget
Special Funds Discrepancy Between State Controller and Dept of Finance
A review of the state controller’s records and the Department of Finance found a $2.3 billion discrepancy in Special Fund accounts. The state spends about $40 billion annually on special fund programs, which include mental health services and hospital construction.

CBO Announces Health Advisors Panel
The Congressional Budget Office announced its Panel of Health Advisors, who will provide expertise on a variety of health care issues. The five Californians are: Kim Belshé (Public Policy Institute of California), Richard Chambers (Molina Healthcare of California), Alain C. Enthoven (Stanford University), Dana P. Goldman (University of Southern California), and Elizabeth McGlynn (Kaiser Permanente).

The California Health Benefit Exchange
July Board Meeting Details QHP Policies, Service Center Options
During the July Exchange board meeting, Exchange staff presented on preliminary recommendations on Qualified Health Plan (QHP) policies, as well as on revised service center options. The board is soliciting stakeholder feedback on QHP recommendations; comments must be submitted by August 6. Additionally, the board is soliciting feedback on the 2012 eValue8 Request for Information by August 6.

The next board meeting will be held on August 23 in Sacramento, where potential action may be taken on the SHOP exchange, premium payment options, agent payment options, and service center options.

Patients Experience Difficulties in Managed Care Switch
The state’s plan to shift Medi-Cal beneficiaries into managed care has forced some low-income seniors and disabled patients (SPDs) to switch physicians, delay treatment and travel long distances for specialty care. Beneficiaries who require ongoing care for serious illnesses and want to stay on fee-for-service plans can apply for temporary exemptions, but only 18% of the 19,684 exemption applications were approved. Almost 32% were denied, and the rest were told they had incomplete paperwork. As of July, about 330,000 beneficiaries have been transitioned into managed care plans.

MedPAC Asks CMS to Revise Dual-Eligible Pilot Programs
In a letter to CMS, the Medicare Payment Advisory Commission (MedPAC) calls for improvements and adjustments of pilot programs to coordinate care for those eligible for both Medicaid and Medicare. MedPAC recommended a reduction in the scope of the demonstrations, that beneficiaries should be provided more opportunities to opt out in the passive enrollment process, and separate evaluations for Medicare and Medicaid costs, and setting reasonable capitation rates.

Inland Empire Provider Shortages Loom Ahead of Medi-Cal Expansion
The Daily Press reported that while inland communities will add more Medi-Cal patients than wealthier coastal communities, Riverside and San Bernardino counties suffer from a shortage of primary care physicians due to uneven distribution of physicians. The 2011 County Health Rankings found that there is one primary care physician for every 1,201 San Bernardino residents, compared to one for every 847 state residents statewide. Rural CA regions face similar problems attracting and retaining physicians.

Healthy Families
MRMIB Concerned By Healthy Families Transition Timeline
During their July board meeting, the Managed Risk Medical Insurance Board (MRMIB) expressed concern over the transition timeline that would move 900,000 Healthy Families children into Medi-Cal. The MRMIB board recommends that first phase, which calls for 415,000 children to be transitioned by January 1, 2013, to be split over the first three months of 2013. They also recommended that subsequent phases also be split to stagger the transition across several months.

§1115 Waiver
Low Income Health Program Transition Plan Draft Released
DHCS released a draft of their plan to transition LIHP beneficiaries into Medi-Cal when the program is expanded in 2014. This report, which was prepared by the DHCS Medi-Cal Eligibility Division, LIHP Division, Managed Care Division, the UCLA Center for Health Policy Research and the UC Berkeley Center for Labor Research and Education, outlines strategies for pre-enrollment, Medi-Cal managed care plan assignment, and Exchange Plan selection. Stakeholder feedback was due in early July, and DHCS will submit a revised plan to CMS for review.

Mental Health
Mental Health Special Funds Spending Raises Controversy
An Associated Press review found that some Proposition 63 county mental health funds were spent on wellness programs that have tangential mental health ties, such as acupuncture, art and drama classes, sweat lodges, parenting courses and massage chairs. The 2004 Mental Health Services Act (Proposition 63) directs 20% of the proposition’s tax revenues to preventive mental health programs that are “effective in preventing mental illnesses from becoming severe” and “reducing the duration of untreated severe mental illnesses.”

Insurance Commissioner Denies Blue Shield Plan to Close Policies
CA Insurance Commissioner Dave Jones denied a proposal by Blue Shield of California that would have closed several of its policies to new customers. Jones said that the proposal violated state rules that aim to protect policyholders from large rate increases.

DMHC Ordered Anthem Blue Cross to Stop Seeking Overpayment Reimbursements
The Department of Managed Health Care (DMHC) ordered Anthem to stop seeking millions in reimbursements for old health care claims that the insurer believes were overpaid. State law allows insurers to seek reimbursements for overpaid claims within 1 year of the payment date; claims over 1 year old must demonstrate fraud or misrepresentation. Between 2008 and 2011, Anthem sought to collect from 535 providers for claims that were more than 1 year old. Anthem alleged that providers had improperly coded claims, but could not produce evidence of fraud or misrepresentation by providers.

CA Residents to Receive $73.9M in Insurance Rebates
About 1.8 million Californians will receive $73.9 million in insurance rebates through the ACA’s medical-loss ratio rule, which mandates private insurers to spend at least 80% of premium dollars in the individual market and 85% in the group market on direct medical costs. Insurers that do not comply with these rules must issue rebates to consumers. The average rebate is $65 per family.

Information Technology
Rx Drug Monitoring Database Funding to Expire This Year
Due to budget cuts, California’s prescription drug monitoring database (Controlled Substance Utilization Review and Evaluation System; CURES) funds are set to expire by the end of the year. Established in 2009, CURES tracks patients’ drug history in an effort to curb illegal sales and misuse of prescription medication; over 8,000 physicians and pharmacists have signed up to use the system, which has information on over 100 million prescriptions for controlled substances.

Vaccination Requirements Lower Rates of Whooping Cough
The San Jose Mercury News reported that CA avoided an outbreak of pertussis (whooping cough) partly because of mandatory vaccination requirements for 7th grade students. In 2010, CA faced a record-breaking epidemic with more than 9,100 reported cases and 10 infant deaths; this year, the Department of Public Health recorded only 400 cases so far, and is not anticipated to reach 1,000 by the end of the year.

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