Health Care Battles Focus on What’s Left Out of Budget, Not What’s in It

When the California budget was approved four hours before the midnight deadline Sunday, there was relatively little debate, no close votes and much congratulation and self-congratulation.

Before the final hours however, there was less of the “kumbaya” accord among legislators and the governor. As it became clear that several health care issues would take a bit of a beating in this budget, the rancor grew thick.

Both houses had crafted bipartisan legislation to restore a Medi-Cal provider rate that had been cut during the 2011 budget crisis. Medi-Cal is California’s Medicaid program. Both plans failed to remain in the budget. There also were proposals to restore public health programs, to reverse a reduction in In-Home Supportive Services hours, to make a type of autism therapy a Medi-Cal benefit. All were tabled.

“I feel the frustration beginning, and it’s still early in the day,” Sen. Holly Mitchell (D-Los Angeles) said at a Sunday hearing of the Senate Committee on Budget and Fiscal Review, which was approving more than a dozen trailer bills hours before the Legislature would convene to pass the budget.

Mitchell said the cumulative effect of several decisions — to cut health services and reimbursements, to keep those reductions in place after the fiscal picture brightened and to launch a massive shift of Medi-Cal beneficiaries into managed care over the past few years — have taken a heavy toll on Medi-Cal beneficiaries and providers. She said the state’s policy moves have put access to care at risk in California.

“We have compromised the core infrastructure of the Medi-Cal delivery system,” Mitchell said. “We knew that the people left in fee-for-service would be those who are most vulnerable, the most at-risk. … The frail and elderly are not going to be able to find access to care in their communities.”

Medi-Cal Reimbursement Was Lightning Rod

The Medi-Cal provider reimbursement rate drew the most ire. California was ranked 47th in the nation in Medicaid reimbursement before the state reduced its rates by 10% in 2011.

Democrats and Republicans in the Assembly and the state Senate supported higher Medi-Cal reimbursements.

“There seems to be a significant difference of opinion between members of both sides of the aisle and the Administration with regard to these rates,” said Sen. Mark Leno (D-San Francisco), chair of the Senate budget committee.

Sen. Mark Wyland (D-Escondido) said providers have changed business practices because of Medi-Cal cuts.

I’ve heard stories of people who would shut down their office for a period of time so they could relocate their services to a nearby hospital where they could adequately bill for Medi-Cal services. They couldn’t afford to do it otherwise,” Wyland said.

Legislators clearly were miffed that Democratic Gov. Jerry Brown’s administration made only two main health care concessions — to abandon a plan to eliminate overtime for home health care workers and to restore $4 million in funding to the Black Infant Health Program.

State Backs Off Matching Foundation Grant

And then there was the California Endowment grant.

The not-for-profit foundation offered $6 million to the state to help with Medi-Cal renewals and enrollment.

In the past, California officials have made sure to include Endowment grants in the budget so they could be used to draw down federal matching dollars. The foundation’s $6 million grant would have generated $6 million in federal funds.

This year, the state declined to do that.

“I have no idea why they would do that,” said Kevin Prindiville, deputy director of the National Senior Citizens Law Center, a national legal advocacy group with an Oakland office. “They also didn’t take the opportunity to restore cuts, and we’re disappointed just like everyone else.”

The foundation grant was “rejected in an apparent compromise” with the Brown administration, said Elizabeth Landsberg, director of legislative advocacy for the Western Center on Law & Poverty. “We’re very disappointed that as we’re trying to make health reform work, we’re not going to be helping people through this confusing process.”

Anthony Wright, executive director of Health Access California, put it pretty succinctly. “I do know why they’re doing that,” he said. “They don’t want more people in the Medi-Cal program.”

Officials at the California Endowment had no comment.

Access Is the Big Issue

At the budget-day committee hearing, Keely Bosler, chief deputy director of the Department of Finance, said the Medi-Cal provider rate cuts are somewhat temporary because the state has been shifting Medi-Cal beneficiaries to managed care plans.

About 70% of the Medi-Cal population is now in managed care, she said, and that number will continue to climb this year with implementation of the Coordinated Care Initiative and the rural managed care program.

“A vast majority of those cuts have been on the fee-for-service side that — as a state — we have made a policy decision to stay away from,” Bosler said.

Managed care plans’ rates are negotiated differently from Medi-Cal fee-for-service rates. In the time of transition for the remaining fee-for-service Medi-Cal population to managed care, the state will be closely monitoring access, she said.

“There have been access problems identified, there have been targeted rate restorations provided … and that will continue through this year,” Bosler said.

One of those targeted restorations was Stepping Stone, a collection of four facilities in San Francisco serving a frail and elderly population. Those centers were about to close until Leno stepped in to help.

“I’ll tell you the process,” Leno said. “You call Toby Douglas (director of the Department of Health Care Services) … and ask that they go into your district and do a new survey.”

That’s what happened with Stepping Stone, and the department eventually restored the rate reduction there.

“If any of us have a strong belief or certainty that there is lack of access as a result of our low reimbursement rate — which is among the lowest, if not the lowest in the country — make your case and don’t stop making it to the Department of Health Care Services till they go into your district and do a new review and find out what you already know. It may be a cumbersome way to do the job, but that’s what we’re left with,” Leno said.

Sen. Loni Hancock (D-Berkeley) said she had a different experience with DHCS officials.

“You can tell me your process, but I have spent many, many hours with the department,” Hancock said. “We did not have such good luck.”

Sen. Norma Torres (D-Pomona) was incredulous.

“So now our offices, with our limited staff, have to go out and force the department to do its job?” Torres said.

Mitchell put it a different way.

“You know I would be the first to step up and make the case,” Mitchell said. “But I harken back to when [Sen. Nancy] Skinner had data showing that certain segments of her population should’ve qualified for a newly created program because the administration eliminated another program, and why weren’t her people receiving services.”

Skinner never got a satisfactory response, Mitchell said.  

“Sometimes as a legislator,” she said, “I have concern that the administration blows smoke up my skirt when we raise these issues of access to care.”

“We do track and we do monitor access. This is something we will all continue to monitor,” Bosler said.

“At the Department of Finance we feel that is one of our full-time jobs and focuses. … There will continue to be revisions and information gathering and changes in policy where appropriate,” Bosler said.

On Sunday afternoon, more than a dozen budget trailer bills were passed, all of them on the first vote except for one — the health trailer bill. On its first call, it had a 7-4 vote — with six abstentions. It eventually passed on a 10-4 vote.

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