Lawmakers Consider Federal Medi-Cal Agreement, Other Health Care Measures

Lawmakers have one month in the legislative session to approve legislation to implement changes to Medi-Cal that were approved earlier this summer under an agreement between the state and federal government, the Sacramento Bee reports (Benson, Sacramento Bee, 8/14).

The agreement, which Gov. Arnold Schwarzenegger (R) announced on June 22, would increase federal matching funds for Medi-Cal by as much as $3.3 billion over five years and enroll more than 500,000 beneficiaries in managed care plans.

Under the plan, California would receive a five-year waiver from federal rules regarding hospital payments for Medi-Cal. The waiver would allow the state to continue contracting with 230 hospitals for Medi-Cal services, rather than pay the 600 hospitals statewide. State officials say the agreement would save California money and help it to comply with federal accounting requirements.

The federal government would provide the state with an additional $671 million annually for the program over five years. Of that money, $360 million has been earmarked to shift low-income beneficiaries to managed care plans. According to state officials, 554,000 elderly, blind and disabled state residents would be moved to managed care plans between January 2007 and mid-2008 under the plan (California Healthline, 7/15).

A provision of the agreement calls for some beneficiaries to be shifted to managed care plans or the state would lose part of the federal funding, the Bee reports.

The beneficiaries would not have to be moved to managed care immediately, but the state would have to demonstrate that it is taking steps to increase managed care enrollment in order to receive the first installment of $90 million this year. The federal deadline to begin shifting beneficiaries to managed care is January 2007.

Lawmakers this spring rejected Schwarzenegger's plan to shift elderly and disabled beneficiaries to managed care. They will reconsider the issue in a hearing scheduled for Tuesday.

Lawmakers also must approve legislation governing how the state would distribute funding to hospitals that serve Medi-Cal beneficiaries. Critics of the new funding arrangement say hospitals might not receive as much money as in the past because they are now required to spend their own funds before they can qualify for federal dollars, according to the Bee.

Hospital officials want legislators that would approve a plan to guarantee hospitals the same level of funding they received the previous year. The Schwarzenegger administration has proposed a funding formula, but it would not guarantee exact funding levels (Sacramento Bee, 8/14).

Legislators are expected to address other health care-related bills:

• AB 73, by Assembly member Dario Frommer (D-Glendale), would create a state Web site with information on how consumers can buy drugs from Canada, Ireland and the United Kingdom;
  
  
• AB 1674, by Assembly member Keith Richman (R-Granada Hills), would create a Center for Quality Medicine to conduct state-funded medical and technology research and develop guidelines on ways to reduce health care costs through increased efficiency;
  
  
• AB 1676, by Richman, calls for state health agencies to develop guidelines for executing the wishes of coma patients and other procedures for end-of-life care; and
  
  
• SB 840, by Sen. Sheila Kuehl (D-Los Angeles), would create a new state agency, headed by an elected official, that would provide health insurance for every state resident (Sheppard, Los Angeles Daily News, 8/13).
  
  

Although a number of issues remain on the legislative agenda, "some of the year's most contentious issues ... likely will be settled on the ballot rather than in the Capitol," the Bee reports. If lawmakers pass some of the high-profile measures, such as Kuehl's bill, Schwarzenegger likely will veto most Democrat-sponsored bills, according to the Bee.

Assembly Speaker Fabian Nunez (D-Los Angeles) said, "I think everybody is going to have one foot on the special election and the other foot on the Legislature. It would be wrong to say that legislative actions in the next couple of weeks are going to have everybody's undivided attention" (Yamamura, Sacramento Bee, 8/15).

In related news, USA Today on Monday looked at spending by pharmaceutical companies related to prescription drug measures on the Nov. 8 special election ballot. Drug companies have contributed $72 million toward their campaign, and "the stage is set for one of the costliest initiative battles ever," USA Today reports (Schmit, USA Today, 8/15).