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State Under Fire for Adult Service Denials, Appeals

Dana O’Callaghan, a social worker for Americare Adult Day Health Center in San Diego, accompanied a young mentally ill patient to an appeals hearing last week — one of the first of approximately 1,800 scheduled appeals of denial of Medi-Cal eligibility for California’s new Community Based Adult Services program for adult day health care.

O’Callaghan wasn’t prepared for what she saw and heard.

“I expected something informal, but when I got there, the attorneys [for the state] were so meticulous about every little thing, every word,” O’Callaghan said. “They questioned the validity of this document [I had written], they questioned my intent. It was not, let’s hear what you have to say, it was more like grilling you on what you do, the dates of your paperwork, that kind of thing.”

O’Callaghan said she had the feeling the state wanted to win and deny eligibility for her client rather than find out if that person qualified for the CBAS program.

According to Norman Williams, deputy director of public affairs for the Department of Health Care Services, that wasn’t the state’s intention. “The intention is to provide a fair hearing for the participants, to make sure the right decision is the outcome of the hearing,” Williams said.

Disability Rights California attorney Elissa Gershon said she has been to quite a few appeal hearings  but has seen nothing like this.

“In my experience, I have never seen the Department of Health Care Services put so much energy into an appeal defense,” Gershon said.

According to Williams, the first appeal hearings are liable to be a little more contentious than the bulk of the hearings that will follow.

“Typically with fairness hearings, we don’t send attorneys to these cases,” Williams said. “But these are test cases, and we want to make sure the outcome is effective for everyone, while also expediting the process.”

Williams said the state was prompted to bring its attorneys because of the unusual presence of advocacy lawyers, but Gershon said it’s not rare at all for advocacy lawyers to attend fairness hearings, since the clients often are too debilitated to speak for themselves.

Williams said once test cases are heard, state attorneys won’t attend the hearings any longer. After precedent has been set, he said, “It should go much more smoothly, going forward.”

The contentious tone of the hearings is not the only concern for advocates, Gerson said. Based on reports she has received from providers — mostly from the Bay Area so far –  she said the percentage of denials appears to be rising.

A little background: When the state  launched the CBAS program and started assessments to determine eligibility, two large groups of beneficiaries were set aside — the categorically eligible, and the presumptively eligible. The state estimates ther are more than 9,000 people in those two groups — generally the sickest, most frail of the adult day health care population. The roughly 5,900 categorically eligible participants automatically get into the CBAS program. The remaining 3,500 presumptively eligible still need to be assessed, but were thought to be likely candidates for CBAS eligibility.

“From reports I have gotten from providers, my understanding is that they’ve denied between 75 and 90% of the presumptively eligible participants,” Gershon said. “It’s pretty shocking. And the new enrollees also are being denied at a pretty high rate.”

State health officials said denial rates for the presumptively eligible are between 10 and 20%.

“The approval rate is a preliminary figure, but it’s between 80% and 90% approval,” Williams said. “That’s from what we have right now.”

It’s too early to estimate the approval or denial rate for new enrollees, Williams said.

Appeal hearings started May 30. State officials said 1,800 appeals have been filed so far. More appeals are possible from new enrollees or presumptively eligible, who may still receive notices of denial.     

The number of denials could represent significant savings for the state.

At $70 a day for services, one previous estimate of likely CBAS cost is about $9,000 per person, per year. When you factor in the 1,800 appeals and the thousands of presumptively eligible participants, as well as all of the new enrollees, the state could be looking at millions of dollars at stake in the denial and appeal process.

Williams said saving money is not a consideration. “The goal of this program remains as it always was, to help people remain independent in the community,” Williams said. “The budget does not drive any of this process.”

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