California State Budget Update June 16, 2015 California Legislation, Legislation, Medi-Cal, Resources 2016, Budget, California, Medi-Cal 0 Today, the Governor and legislative leaders announced an agreement on the 2015-16 State Budget Act and have settled the major issues and spending priority differences between the administration and the Legislative branch. A few key points and dollar amounts for the budget year include: $40 million to expand Medi-Cal to cover all low-income undocumented children effective May 1, 2016 ($132 million when fully implemented) $265 million to fund 7,000 additional preschool slots and 6,800 child care slots, plus a rate increase for all providers. $97 million over the January budget for the California State University to expand enrollment and focus on increased success. $226 million on a one-time basis to restore the 7 percent reduction in service hours for In-Home Supportive Services. The budget bills that will be voted on over the next several days will not contain an increase to Medi-Cal Provider Reimbursement rates. In a typical year, the conclusion of budget negotiations would mean the end of our hopes of improving access for over 12 million Californians who rely on the Medi-Cal program for the next 12 months. However, the Governor made an additional important announcement this afternoon – he is calling a Special Session of the Legislature to address “Health Care Financing,” i.e. the Medi-Cal program. He specifically called for the need to address the budget hole created by the failure to pass a new managed care organization (MCO) tax and called on the Legislature to enact a permanent and sustainable funding source to fund “additional rate increases for providers of Medi-Cal and developmental disability services.” If you recall, since 2005, the state has had some form of a tax on managed care plans used to fund payments to Medi-Cal providers and reduce the state’s general fund exposure while drawing down federal matching funds. However, recently the federal government found California’s MCO tax structure fails to comply with new federal requirements that such a tax be broad-based and not limited narrowly to Medicaid plans. In his January budget, the Governor proposed a new MCO tax that conforms with the new federal requirements, however the Legislature did not adopt the proposal largely due to objections from health plans. In response, the Governor is proposing that the Legislature enact permanent and sustainable funding to provide at least $1.1 billion annually to the Medi-Cal program. His announcement states the funding could come from an MCO tax and/or alternative sources in the special session, such as a tax on tobacco products. While the failure to address provider rates in the state budget is regrettable, the special session of the Legislature provides a new opportunity for RCMA/CMA and other stakeholders to push through a permanent and significant funding increase dedicated almost exclusively to providers of health care services and ensure the health care infrastructure exists to care for the Medi-Cal population. The Governor’s special session announcement was made on the same day, perhaps coincidentally, that the State Auditor released a report finding Medi-Cal managed care provider networks are severely lacking integrity and are resulting in barriers to accessing care. The State Auditor found that not only were managed care plans providing the state with inaccurate data on availability and participation of in-network physicians, it found the state was not verifying whether the data from the plans was accurate, and thus could not reliably determine whether the Medi-Cal networks meet California’s stringent network adequacy standards. A summary of the audit’s findings can be found at this link here. The announcement of the special session allows the Governor and legislative leaders to bypass the traditional legislative and budgetary calendar. RCMA/CMA continues to work with its legislative allies and coalitions to push this issue over the finish line. Comments are closed.
