Waiver Approval a Strong Start, Now Time for Long-Term Vision, Expert Says

The agreement between California and CMS officials on a federal waiver for California’s Medicaid program means $6.2 billion worth of delivery and payment reform projects for Medi-Cal.

That good news for the state shouldn’t be an end, but a beginning, according to an essay released Tuesday by Christopher Perrone, director of Improving Access at the California HealthCare Foundation, which publishes California Healthline.

State officials originally submitted a waiver request for $17 billion worth of initiatives. The federal rejection of about two-thirds of that request is not an indictment of those initiatives, Perrone said, but rather a rejection of the funding formula proposed by the state, based on managed care savings.

“The big challenge is there weren’t the funds to support those initiatives,” Perrone said. “CMS rejected that [funding formula], so those pieces of the puzzle had to be dropped.”

Perrone said CMS officials have consistently supported those kinds of forward-thinking initiatives but have become wary of the growing reliance by states on the support of federal waivers.

“They are looking for a long-term vision. They want to know, how do we make these kinds of initiatives sustainable outside of waivers?” Perrone said. “What they wanted to see is a vision for how waivers will carry on when waivers go away.”

That means a stronger state commitment to the Medi-Cal program, he said. It’s a two-step process, he said, to map out the vision of what Medi-Cal should be and then decide how the state might get there.

“California should invest in its Medicaid program if it wants to see a successful, impactful program,” Perrone said. “Those [Medi-Cal] payments, many of them are at the bottom of what is federally allowed.”

Sometimes in the political world the process is counter-productive, he said, by focusing on the cost first and then trying to fit program elements into that structure. A better approach, he said, is to start with an idea of what the program can and should be.

“We need to look at what it is we’re trying to do before we get to how are we going to pay for it,” Perrone said.

 “We neither know the vision of the path forward, nor the way to get there,” he said. “It is primarily a better access, better care argument. If it’s all about the money, there’s lots of things to cut. And yet we choose to invest in our Medi-Cal program.”

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