Legislators Delay Action on Plan To Move Medi-Cal Beneficiaries to Managed Care
Legislators on Tuesday agreed to suspend until January consideration of a proposal that would have shifted more than 500,000 Medi-Cal beneficiaries to managed care plans as part of a proposal to restructure Medi-Cal in exchange for increased federal funding, the Sacramento Bee reports (Benson, Sacramento Bee, 9/7). The move will decrease by $90 million the $360 million the federal government had offered the state if lawmakers passed a plan to move beneficiaries to managed care by certain deadlines (Rau, Los Angeles Times, 9/7).
Lawmakers initially intended to vote on the proposal before this year's legislative session ends on Friday but instead agreed to shelve the issue to consider other measures, including a bill (SB 1100) that would restructure distribution of Medi-Cal funds to hospitals (Sacramento Bee, 9/7).
Both measures were part of an agreement Gov. Arnold Schwarzenegger (R) made with federal officials in June to increase federally matched funds for Medi-Cal by as much as $3.3 billion over five years. Under the agreement, the federal government would have provided the state with an additional $671 million annually for Medi-Cal over five years, with $360 million of those funds allocated for the shift of low-income beneficiaries to managed care plans.
In addition, California would receive a five-year waiver from federal rules related to Medi-Cal hospital reimbursements. The waiver would allow the state to continue to contract with 230 hospitals for Medi-Cal services, rather than pay the 600 hospitals statewide.
With legislative deadlines looming, some hospital officials earlier this week urged lawmakers to draft separate bills for the restructuring of hospital funding and the enrollment of beneficiaries in managed care, a move they said would prevent hospital funding from becoming tied to managed care in legislative debates (California Healthline, 9/6).
Under an agreement between lawmakers and Schwarzenegger, legislators agreed to approve legislation that would endorse the waiver, which guarantees that hospitals funding cannot decrease over the next five years.
The Legislature is expected to approve the bill by Friday, the Times reports (Los Angeles Times, 9/7).
Even with the $90 million decrease, the arrangement does not represent a funding cut because the additional federal money would increase current Medi-Cal funding levels, the Bee reports. Under the terms of the agreement with the federal government, the state is losing the first $90 million of the $360 million in federal funds that would be allocated for shifting beneficiaries to managed care (Sacramento Bee, 9/7).
However, the state could lose more of the funding if lawmakers do not approve a plan for the managed care shift in next year's legislative session.
Health and Human Services Secretary Kim Belshe said, "This will be one milestone that the state will not meet, but we'll se how far we can go in the new year," adding, "The administration and the Legislature determined that our beneficiaries would be better served if we spent more time refining our strategies for access to care."
Alternatively, Schwarzenegger could renegotiate the deadlines of the initial agreement with the Bush administration to avoid the funding penalties, according to the Times.
Health officials plan to continue working through the fall with the aim of presenting legislators next year with a plan for the transfer of beneficiaries to managed care (Los Angeles Times, 9/7).
Belshe said the state must ensure that health care providers are prepared to handle the new patients as beneficiaries shift to managed care (Sacramento Bee, 9/7). Officials also must address how to help beneficiaries transition to new providers when they are enrolled in managed care plans (Los Angeles Times, 9/7).