State Scales Back Medicaid Waiver Request From $17 Billion to $7 Billion

On Tuesday, a policy analyst from the state Legislative Analyst’s Office said the state has revised its 1115 Medicaid waiver request, trimming it from $17 billion to about $7.25 billion.

LAO analyst Felix Su said federal officials have balked at some of the funding options laid out in the state’s waiver request, and that officials from the Department of Health Care Services recently made it clear to stakeholders that the full plate of payment and delivery system reforms in the state’s request have been scaled back.

The final waiver proposal to CMS officials seeking changes in federal Medicaid rules for California’s Medi-Cal program was roughly $7.25 billion, Su said.

“What they indicated is that the $7.25 billion was final proposal to CMS and it’s not clear how much of that will be approved,” Su said.

DHCS officials confirmed those numbers are accurate but didn’t have time late Tuesday afternoon to comment on details of the new proposal.

There are four major components that remain in the state’s waiver request, Su said:

  • About $4 billion for a public hospital incentive program, to include hospitals operated by municipalities and health care districts;
  • $1 billion to care for the remaining uninsured;
  • $750 million to improve dental health programs; and
  • $1.5 billion for the state’s whole-person care pilot.

“In the worst case scenario, you’d have no more managed care savings,” Su said, because federal officials would assume California would run managed care plans to save money whether there was a waiver in place for it or not.

“But if CMS meets the state partway, this could maybe be a go,” Su said. “We just don’t know yet. No one knows yet.”

The current 1115 federal waiver expires Oct. 31.

That’s also the deadline for CMS to make up its mind on the new waiver. However, state health officials can request an extension of the current waiver if they don’t have an answer from CMS by the end of the month.

Categories: Capitol Desk, Medi-Cal