MediCal and Covered California in the May 2020 Revise
The Medi-Cal budget is $99.5 billion ($22.7 billion General Fund) in 2019-20 and $112.1 billion ($23.2 billion General Fund) in 2020-21.
The May Revision assumes that caseload will peak at 14.5 million in July 2020, or about 2.0 million above what caseload would have been absent the COVID-19 pandemic.
The following proposals are withdrawn from the Governor's Budget:
· California Advancing and Innovating Medi-Cal (CalAIM) delayed, resulting in a decrease of $695 million ($347.5 million General Fund) in 2020-21. $45.1 million General Fund in 2020-21 and $42 million General Fund in 2021-22 in funding for the Behavioral Health Quality Improvement Program removed.
· Full-Scope Medi-Cal to Undocumented Older Adults withdrawn for a savings of $112.7 million ($87 million General Fund.
· Medi-Cal Aged, Blind, and Disabled Income Level Expansion for aged, blind, and disabled individuals with incomes between 123 percent and 138 percent of the federal poverty level, for a savings of $135.5 million ($67.7 million General Fund).
· 340B Supplemental Payment Pool to provide payments to non-hospital clinics for pharmacy services for a savings of $52.5 million ($26.3 million General Fund) in 2020-21, growing to $105 million ($52.5 million General Fund) in 2021-22 and thereafter withdrawn.
· Postpartum Mental Health Expansion withdrawn for a savings of $34.3 million General Fund in 2020-21.
· Hearing Aids for children without health insurance coverage in households with incomes up to 600 percent of the federal poverty level withdrawn for a savings of $5 million General Fund.
· 2019 Budget Act Reversions -- behavioral health counselors in emergency departments, Medi-Cal enrollment navigators, and the Medical Interpreters Pilot Project. These changes result in General Fund savings of $25 million in 2019-20 and 2020-21, and $10 million in 2021-22.
Absent additional federal funds, the COVID-19 Recession makes the following reductions necessary to balance the state budget. These reductions will be eliminated if the federal government provides sufficient funding to restore them:
· Adult Dental and Other Optional Benefits — reduce adult dental benefits to the partial restoration levels of 2014, eliminate audiology, incontinence creams and washes, speech therapy, optician/optical lab, podiatry, acupuncture, optometry, nurse anesthetists services, occupational and physical therapy, pharmacist services, screening, brief intervention and referral to treatments for opioids and other illicit drugs in Medi-Cal, and diabetes prevention program services, for a total General Fund savings of $54.7 million.
· Proposition 56 Adjustments -- shift $1.2 billion in Proposition 56 funding from providing supplemental payments for physician, dental, family health services, developmental screenings, and non-emergency medical transportation, value-based payments, and loan repayments for physicians and dentists to support growth in the Medi-Cal program compared. $67 million in Proposition 56 funding would support rate increases for home health providers, pediatric day health care facilities, pediatric sub-acute facilities, AIDS waiver supplemental payments, already awarded physician and dentist loan repayments, and trauma screenings (and associated trainings).
· Community-Based Adult Services (CBAS) and Multipurpose Senior Services Program (MSSP) eliminated. Effective date for CBAS would be January 1, 2021 for a General Fund savings of $106.8 million in 2020-21 and $255.8 million in 2021-22 (full implementation). The effective date for MSSP would be no sooner than July 1, 2020.
· Federally Qualified Health Centers (FQHC) Payment Adjustments for a savings of $100 million ($50 million General Fund).
· Estate Recovery reinstated for a General Fund savings of $16.9 million beginning in 2020-21.
· Martin Luther King, Jr. Hospital supplemental payment eliminated, which results in $8.2 million General Fund savings in 2020-21 and $12.4 million ongoing.
The May Revision proposes efficiencies, as follows:
· Managed Care Efficiencies -- various changes to managed care capitation rates to include various acuity, efficiency, and cost containment adjustments, starting January 1, 2021, for General Fund savings of $91.6 million in 2020-21 and $179 million in 2021-22. The May revision assumes a 1.5 percent rate reduction for the period July 1, 2019, through December 31, 2020, for General Fund savings of $182 million in 2020-21.
The May Revision also contains the following adjustments:
· Enhanced Federal Funding -- a decrease of $5.1 billion General Fund, associated with the assumed receipt of an enhanced Federal Medical Assistance Percentage (FMAP) through June 30, 2021.
· Managed Care Organization (MCO) Tax— a decrease of $1.7 billion General Fund in 2020-21 due to the April 2020 federal approval of a revised MCO tax.
· Drug Rebate Reserve—A decrease of $181 million General Fund due to not restoring a drug rebate volatility reserve.
· County Medical Services Program (CMSP)—the May Revision proposes to shift $50 million of the CMSP reserves in each of the next four fiscal years to offset General Fund CalWORKs costs.
· Skilled Nursing Facilities (SNFs)—To improve COVID-19 safety response in SNFs, the May Revision assumes a 10-percent rate increase for four months, at a General Fund cost of $72.4 million in 2019-20 and $41.6 million in 2020-21.
The May Revision maintains expanded subsidies in the Covered California Marketplace, including the extension of subsidies to individuals who are between 400 and 600 percent of poverty, up to approximately $75,000 for individuals and $150,000 for a family of four.
· Covered California Adjustments—A decrease of $164.2 million General Fund in 2019-20 and $90.3 million General Fund in 2020-21 to reflect lower-than-projected enrollment in state subsidies.