Medi-Cal: 

A Proposal for the Mandatory Enrollment of All Medi-Cal Eligible Seniors and People With Disabilities into Managed Healthcare  

Introduction

Since 2009 CFILC is working in collaboration with the Disability Health Coalition (DHC) and other disability advocacy organizations to monitor an important issue affecting people with disabilities. The State of California is currently in the process of submitting a Federal Medicaid waiver application for approval by the Federal government to implement major changes in the Medi-Cal Program. 

If approved, the waiver would authorize the State to make a number of changes in the program. Among other things, it would allow the State to move Medi-Cal eligible seniors and people with disabilities (SPD) out of the current fee-for service system and into new and existing managed care plans or county-administered alternative models of care.

Governor Arnold Schwarzenegger has strongly advocated for this change for several years. In support of this proposal, the Schwarzenegger Administration claims that Medi-Cal caseloads are growing at a non-sustainable rate every year and that the costs associated with the existing fee-for-service system will soon exceed the State’s capacity to reimburse health care in the overall Medi-Cal Program. requires immediate action that arguable would  achieve overall cost savings and provide a better quality of care by moving the SPD population into mandatory Medi-Cal managed care systems. 

The Administration argues that this growth trend and the rising costs of health care require immediate action in the form of a pilot program authorized by a Section 1115 Waiver to mandate managed care for SPDs. They claim that controlling costs simply cannot be achieved under the fee-for-service system. It is argued that managed care will be more cost-effective and will provide a better quality and continuity of care for this population.

The data does indicate that because of their unique health care needs and often complex and multiple medical conditions, the SPD population utilizes a disproportionate share of total Medi-Cal expenditures. Although SPDs comprise 10 percent of the Medi-Cal population, they absorb 75 percent of the total overall Medi-Cal expenditures. 

Historically, the disability community has opposed prior proposals to move people with disabilities into managed care. Serious concerns were expressed as to whether managed care plans have the capacity to absorb such a massive influx of new enrollees and that managed care will result in the “rationing” health care. 

Another major concern has been that managed care will not be capable of providing the promised improved quality of care, especially if they do not have a sufficient network of medical specialist providers who are experienced in treating some of the unique health care needs of people with disabilities. Under the existing fee-for-service system, many people with disabilities have developed relationships with a number of specialists. 

Since many people with disabilities are Medi-Cal recipients, many managed care plans do not have relatively large numbers of enrollees with disabilities. There were concerns that under a mandatory managed care system, the majority of existing plans do not have a network of these providers and it may be challenging to do so if there is a sudden influx of new enrollees with disabilities.

This report will highlight other related issues and concerns about the proposed transition from fee-for-service to mandatory managed care systems. The arguments can be found in the documents added to the LINK section of this report.

The Current Status of the Section 1115 Waiver Application

In order to implement a mandatory managed care system for SPDs, the State must submit what is known as a “Section 1115 Waiver” application to the Federal government. As of the time of the posting of this report, the waiver process is still under way. However, it is important to keep in mind that regardless of what is finally submitted in the waiver application, the exact terms and conditions of the waiver are subject to negotiation with the Federal government. The State bears the burden of proof to in convincing them that mandatory managed care for SPDs is viable health care delivery system and will adequately meet or improve the health care needs of SPDs. 

California is currently operating under a Section 1115 Waiver that is set to expire on August 31, 2010. The existing waiver has exempted the State from certain Federal requirements in order to reform and reorganize the State’s hospital financing and uninsured care systems. 

The new Section 1115 Waiver application has been moving forward since December 2009. If approved, it would authorize a number of other Medi-Cal programmatic and structural reforms beyond the scope of the SPD managed care proposal. 

CFILC, DHC, and Disability Advocacy Organizations Build and Maintain a Coalition to Protect the Needs and Interests of

People with Disabilities

Given the potential impact of this transition on people with disabilities, the disability community has mobilized since the Administration’s concept proposals were released in late 2009. CFILC has joined and worked in close cooperation with DHC and other disability advocacy organizations to take proactive actions to protect the interests and health care needs of people with disabilities. 

As part of the Fiscal Year 2009-2010 state budget agreement, the Legislature enacted legislation authorizing the State to apply for a new Section 1115 Waiver. However, as a condition for pursuing the waiver application, the Legislature required the Department of Health Care Services (DHCS) to convene Stakeholder Advisory Committees to engage in a waiver application public review process.

Representatives of CFILC and this disability community advocacy coalition were appointed as members of the various stakeholder advisory committees and were otherwise active participants in the stakeholder review process. The coalition has also partnered with the Western Center on Law and Poverty, which is representing the interests of low-income Medi-Cal recipients on other portions of the waiver application. The coalition partners testified at public hearings and submitted letters and position papers that outlined specific program and policy recommendations.

The Review of the Section 1115 Waiver in the California State Legislature

In the legislative arena, two separate Section 1115 Waiver-related bills are currently moving forward through the legislative process. Assembly Speaker John A. Perez introduced AB 342, a bill that prescribes statutory requirements for the waiver application, including the mandatory managed care proposal. Senate President Pro Tempore Darrell Steinberg introduced a companion bill, SB 208.

CFILC, DHC, and allied partners have collaborated in reviewing the two bills and have submitted several sets of proposed amendments. Although the coalition has submitted several sets of recommended amendments and retain their shared OPPOSE, UNLESS AMENDED positions it is clear that many of the disability community’s recommendations offered during the stakeholder review process were incorporated into both bills.

The additional amendments are designed in include stronger guidelines and protections because mechanism for the administration overview and the enforcement of all of the requirements and consumer protection is critically important. Nevertheless, while the bills are far from being a finished product, they are significant improvements over the Schwarzenegger Administration’s original proposal.   

The OPPOSE, UNLESS AMENDED positions taken by coalition members are strategically important because it ensures that the Assembly and Senate Leaders will remain open to further discussions and negotiations. This position indicates that the coalition is working cooperatively with the authors to make key programmatic and public policy improvements. Maintaining a collegial relationship with these legislative leaders and their staff ensures that they are aware that the coalition is protecting the needs and interests of people with disabilities.

Moreover, maintaining these lines of communication is also important because the Section 1115 Waiver application is a long way away from being completed. It is likely that the waiver application will be part of the “Big Five” negotiations on the current state budget deficit. If that is the case, it is important for the disability community to give the leaders the facts and arguments necessary to protect the disability community. 

The Waiver Application Process Remains a Work in Progress

Regardless of whether AB 342 or SB 208 emerge as the legislative vehicles for the waiver application or it is part of the state budget negotiations, the outcome has not been finalized. The Federal government has the ultimate decision making authority on the waiver application and negotiations will continue even after the waiver application is submitted. 

The State must convince the Federal officials that the mandatory managed care system is a viable cost-savings measure that will not jeopardize the health care needs of SPDs. Given Governor Schwarzenegger’s “lame duck” status, it is possible that the ultimate responsibility for the negotiation of the terms and conditions of the waiver will be the responsibility of the next Governor.   

Finally, there are plans for the coalition to discuss the waiver application as it applies to the mandatory managed care system for SPDs directly with the appropriate Federal agency officials. In addition, there has been some discussion about pursuing a legal strategy to slow down the review process and require the State to provide more substantive proof about the proposed implementation of the mandatory managed care system for SPDs.

The Coalition’s Guiding Principles and Recommendations

As previously discussed, CFILC, DHC, and other members of the coalition have collaborated in identifying core issues and concerns about the Administration’s proposal. There was agreement upon voicing issues of mutual concern throughout the stakeholder and legislative review processes. 

The following is a representative sampling of some, but not all, of the core issues that were identified throughout this process:  

• Timeline for Program Implementation:  Concerns were expressed about the feasibility of the proposed one-year timeframe for DHCS to move SPDs into managed care. It was suggested that this time period is insufficient and that the transition period, if the waiver is approved, should be phased-in over a 3-year period. 
• Plan Readiness: Questions were raised as to whether the new and existing managed care plans and county alternative models were prepared to absorb a massive influx of an estimated 380,000 new enrollees. DHCS must ensure that full compliance with Federal disability law must be a minimum threshold and that plans and county models must have specific policies, practices, and procedures in place prior to being authorized to enroll SPDs. Minimum standards for network readiness and an effective facility site review process also must be included. Providers should be required to meet the performance standards for managed care systems published by the California Health Care Foundation.
• Capacity of Managed Care to Provide High Quality Health Care and a Continuity of Care for People with Disabilities: In a letter to submitted by CFILC and DHC to DHCS, a number of core requirements for managed care for people with disabilities were discussed in detail. It referenced some major academic studies that examined whether managed care was capable of meeting the unique health care needs of people with disabilities. It also identified The letter examined some of the systemic flaws identified in managed care systems utilized in other states and questioned whether California could produce any discernible improvements on those outcomes. This was used to support the argument in favor of adapting the managed care model to the unique needs of people with disabilities in California and to set into place, appropriate standards, active state agency monitoring, consumer protections, and appropriate enforcement mechanisms for the standards.
• Enforcement: Plans and county alternative models must comply with all State and Federal legal requirements protecting the rights of people with disabilities. Investigations of alleged violations must be completed on a timely basis and strong sanctions must be imposed, wherever appropriate.
• Basic Principles for Organized Health Care Delivery: A series of core principles regarding managed care have been emphasized throughout the review process. They evolved over time but shared the common objective of preserving choice, guaranteeing the delivery of quality care, ensuring access to Durable medical Equipment and Assistive Technology as a right, assessing an enrollee’s health care needs and developing a service delivery plan, ensuring access to specialist care, and other similar protections. Enrollees should be able to “opt in” to a managed care plan and should remain in their fee-for-service system if managed care cannot deliver the improved services and health outcomes that are the basis for the waiver.
• Preserving Self-Direction by Enrollees, Physical and Programmatic Accessibility, and Cultural Competence: People with disabilities must be active, and not passive, participants in their health care. Plans and county alternative models must ensure that all facilities and medical equipment are physically accessible; that all medical information is offered in accessible formats; that medical staff in every facility is adequately trained in meeting the needs of people with disabilities and using accessible medical equipment; and ensuring that they understand the importance of providing medical information in accessible formats.  Cultural competency is an equally important requirement. Medical specialists who successfully provide health care to people with disabilities but who are not part of a plan’s network of providers should be allowed to join the network if they are to agree to the plan’s standards and payment schedules.
• Holistic Health Care and Integrated Service Coordination: The managed care systems must deliver a comprehensive and seamless schedule of benefits and a scope of coverage that includes all relevant health care services. The plans and county models must provide organized health care delivery and a continuity of care including medical home providers, care management and member support, home and community-based services, provider supports, and value based purchasing. Maintaining adequate health care records and identifying specific health care needs is also important to ensure that all health care needs are met and that the enrollee is encourage to seek preventative care and testing.
• Promotion of Independent Community Living: Plans and county models must interact with the existing home and community-based systems and offer community-based services such as those provided by Independent Living Centers. Enrollees who have successfully accessed these systems must be allowed to continue those relationships.
• Adequate Provisions for Consumer Feedback, the Filing of Grievances, and the Investigation of Complaints: Given the dramatic impact of the proposed change, plans and county models must enable people with disabilities to submit grievances and recommendations to improve the delivery of care. Enforcement of ADA/504 violations must be a priority. DHCS should be required to collect data about new enrollees and submit periodic reports to the Legislature that are also available for public inspection to assess the true human and fiscal impact of mandatory managed care.

Links        

The above listed core concepts are only a representative sample of some of the issues that have been under discussion in the stakeholder review process. Although numerous letters and concept papers were submitted or published from individual organizations, we are only linking in this section documents that were published by CFILC as an individual organization or as a jointly sponsored letter or position paper to which CFILC was a party.

Please note that the links are offered in chronological order, with the most recent documents provided first and the earlier ones offered after that listing. Additional documents may be added and existing ones may be deleted periodically.

A brief description of the documents is provided just before the link: 

Joint letter signed by CFILC and DREDF to Assembly Speaker John A. Perez and Senate President Pro Tempore Darrell Steinberg explaining the OPPOSE, UNLESS AMENDED positions taken on AB 342 and SB 208, respectively.

CFILC letter to Assembly Speaker John A. Perez and Senate President Pro Tempore Darrell Steinberg on CFILC’s OPPOSE, UNLESS AMENDED position on AB 342 and SB 208

March 31, 2010 letter from DHC (.pdf) to DHCS expressing concerns and outlining principles on the Section 1115 Waiver Renewal Process

March 2010 Concept Paper submitted by CFILC, the Corporation for Supportive Housing, DREDF, DRC, the Western Center on Law and Poverty, and other organizations title “Consumer Protections for Seniors and People with Disabilities on Medi-Cal Proposed for Mandatory Enrollment into Organized Delivery Systems” (.pdf)