California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

LAO: Brown’s Expansion of Managed Care Pilot Would Be ‘Premature’

Gov. Jerry Brown's (D) plan to rapidly expand a four-county pilot program that shifts individuals eligible for both Medi-Cal and Medicare into managed care plans is "premature," according to a report from the non-partisan Legislative Analyst's Office, California Watch reports. Medi-Cal is California's Medicaid program.

According to LAO estimates, the state has about 1.9 million so-called dual eligibles (Jewett, California Watch, 2/22).


In 2013, California plans to begin shifting several hundred thousand dual eligibles into managed care plans. Some health care advocates have expressed concern that the shift could limit beneficiaries' choice of physicians (California Healthline, 11/14/11).

Brown's administration has estimated that shifting patients faster would improve care and reduce state spending by $679 million in 2012 and by $1 billion in subsequent years.   

LAO Recommendation

After reviewing Brown's plan, LAO said state lawmakers should reject the expansion of the pilot program "before the results from the demonstration have been properly evaluated, but proceed instead with the four-county demonstration." 

State Official Supports Consolidation Plan

In related news, Toby Douglas, director of the Department of Health Care Services, testified during a legislative hearing that he supports a plan to transfer most functions of the state mental health and alcohol and drug departments to DHCS, which oversees Medi-Cal.

He said the plan would eliminate a "silo" approach to treatment and coordinate physical, mental and drug rehabilitation therapy.

However, patient advocates who also testified criticized the plan as a political maneuver that would not save the state money. Others said it would hinder accountability for those treating patients with mental health and substance misuse problems (California Watch, 2/22). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.