Kaiser Permanente Whacked Again on Lack of Timely Access

From our legislative and policy advocate Beth Capell:

The Department of Managed Health Care has again taken Kaiser Permanente to task for lack of timely access to mental health care.

DMHC did a follow-up survey after its enforcement actions last year, which included a $4 million, one of the biggest fines ever. But apparently $4 million is not enough to get Kaiser to fully fix the problem. Apparently Kaiser is doing better but not well enough to comply with the law. DMHC found that in Northern California 22% of patients waited too long for treatment and in Southern California 9% did. California regulations specify that non-urgent appointments must be made available in 10 days for most mental health professionals or 15 days for a psychiatrist. (Urgent appointments must occur within 48 hours for mental health care.)

Kaiser has a new system for tracking mental health appointments, one of the requirements imposed by DMHC last year. But at a recent public meeting on enforcement of timely access, mental health providers from Kaiser Oakland described how Kaiser scrubs its books by deleting the original appointment request if a patient fails to follow up within five days of receiving a call back to schedule the appointment—whether the patient is suffering debilitating depression or even expressing suicidal thoughts. In contrast, patients seeking physical health appointments can often schedule such appointments over the telephone or on-line.

Kaiser also failed to provide accurate information about what mental health benefits are covered. Adding mental health and substance abuse treatment to coverage in the individual and small employer market was one of the important improvements wrought by the Affordable Care Act but as with many other changes, consumers (and sometimes providers) are confused about what is covered when. Getting the information right is important so consumers know what care they should be able to get.

DMHC found some improvements but as DMHC Director Shelley Rouillard said, “That is not a good performance. Fundamentally it comes down to there are not enough providers in the Kaiser system to serve everyone who needs mental health services.”

Health Access sponsored the original legislation that required timely access to care in 1997, almost twenty years ago. When the law governing HMOs and most PPOs passed in 1975, forty years ago (when Jerry Brown was governor the first time), the law required that “all services shall be readily available at reasonable times to each enrollee consistent with good professional practice”. Forty years later DMHC is still trying to enforce that promise.

Assembly Budget Subcommittee #1 Hearing on DHCS and Medi-Cal

On Monday, February 23, the Assembly Budget Subcommittee #1 on Health and Human Services held its first hearing on the 2015-16 budget. The hearing focused on the Department of Health Care Services and the Medi-Cal program. The Committee left all agenda items open and did not take any action at the hearing. This provides the Committee with more time to get information and input from the Department and from advocates.

Mari Cantwell, Chief Deputy Director for Health Care Programs, gave an overview of DHCS and the programs it’s responsible for. DHCS has expanded in recent years, a result of health reform implementation, new Medi-Cal initiatives, and the transfer of programs from other agencies.

Medi-Cal Estimate
The Governor’s budget assumes total annual Medi–Cal caseload of 12.2 million for 2015–16. This is a 2 percent increase over the revised caseload estimate of 12 million for 2014–15. Health Access agrees with the Legislative Analyst Office‘s (LAO) that actual caseload information, not estimates, would help the Committee make better decisions. We believe the Administration’s estimates are too high because they don’t fully account for people leaving Medi-Cal for other coverage and IT difficulties in getting more accurate data. Health Access joined the LAO in asking the Committee to require monthly caseload reporting from DHCS and not just estimates.

County Eligibility Administration Cost of Living
The Governor’s proposed budget includes a budget trailer bill proposal to permanently eliminate the annual cost-of-living (COLA) adjustment for reimbursements to counties for administering Medi-Cal eligibility. The State is in the midst of crafting a new reimbursement methodology, but the new methodology is not yet in place. Until then, Health Access, along with the County Welfare Directors Association (CWDA), believes it’s premature to eliminate the COLA. The Legislature and Governor currently have the ability to suspend the COLA on an annual basis, which is what has been done the past several years. In the meantime, counties are getting supplemental funding from the state for the increased workload as a result of ACA implementation.

Health Reform Implementation – Transition Between Covered California and Medi-Cal
The Subcommittee heard testimony about concerns with the process for individuals transferring from Covered California to Medi-Cal (and vice versa), which will continue to occur as people’s income and eligibility changes. There were challenges ensuring continuity of care when about 100,000 enrollees were transferred from Covered CA to Medi-Cal in January 2015. Health Access has heard many reports of people getting incorrect and late notices, which made it difficult for them to transition to new coverage and continuing getting the care they need. We joined Western Center on Law and Poverty and other stakeholders in calling on the Administration to better plan for smooth transitions between these programs.

Hepatitis C Drugs Proposal
The Governor’s proposed budget sets aside $300 million to cover the cost of Hepatitis C drugs in several state programs, including Medi-Cal. Several new drugs that treat and cure Hepatitis C have recently become available at a very high cost. The administration plans to convene a stakeholder group to advise the state on treatment protocols, which will impact state costs. The Administration hopes to have a more definite cost estimate in time for the May Revise. Patient and consumer advocates, along with members of the Subcommittee, strongly encouraged DHCS to include patient advocates in the workgroup.

Child Health and Disability Program Dental Referral
DHCS has proposed to require local Child Health and Disability Prevention programs and providers to refer all Medi-Cal eligible children participating in the program to a dentist beginning at age one instead of at age three. Health Access supports this proposal because it makes California responsive to direction from CMS for the state to improve the rate at which young children receive dental services. This proposal was supported by consumer advocates and dental providers.

Mandatory Open Enrollment for Medi-Cal Managed Care
DHCS is proposing trailer bill language that would lock some Medi-Cal beneficiaries (those under family and child aid codes) into their managed care plans for a full year and only allow them to change plans during a mandatory open enrollment period. Health Access opposes this proposal because it limits consumer choice and access–while health plans can continue to change their providers mid-year. The difference between Medi-Cal managed care plans and their commercial counterparts make mandatory open enrollment inappropriate. First, many beneficiaries are enrolled into a plan by default and don’t know right away that they’ve been defaulted into a plan. As a result, they may not be able to continue seeing their providers if they can’t change to a plan that provides access to their provider. Second, Medi-Cal managed care plans have lower quality ratings than commercial plans, and beneficiaries should have the option of changing plans to get better care. Third, the proposed trailer bill and federal regulations allow people to “disenroll” for cause. While well-intentioned, we are concerned beneficiaries will have a difficult time navigating this process, which is challenging for most consumers. As a result, people will not get the care they need when they need it. Finally, the proposal exempts a large portion of the Medi-Cal population so that it only applies to those in the family and child aid code. Unfortunately, most beneficiaries do not know what eligibility category or aid code they are in and we are concerned this policy would simply create a lot of confusion for counties administering the program and amongst beneficiaries. Other advocates, including Western Center on Law and Poverty, testified in opposition to this proposal.

Limited Scope Program Proposal
Genetically Handicapped Persons Program (GHPP)
Health Access opposed the Department’s proposal to require individuals in GHPP to enroll in other forms of coverage, including Medi-Cal and Covered California. Health Access and the Hemophilia Council of CA are strongly opposed to this proposal because although comprehensive coverage programs cover prescription drugs, many Covered California plans have high cost-sharing for drugs that are out of reach for consumers. GHPP participants include folks whose condition (such as Hemophilia) requires them to adhere to an expensive drug regiment. While we support getting people covered through comprehensive programs, Health Access also believes access to continuous and affordable coverage needs to be prioritized for this community. We asked the Committee to consider requiring GHPP to provide primary coverage for medication and care that is related to the health condition that makes patients eligible for GHPP.

Every Woman Counts, Family Planning Access Care and Treatment, and Improving Access, Counseling, and Treatment for Californians with Prostate Cancer.
Health Access supports the intent of the proposal to give consumers in these programs information about how to get care from a comprehensive coverage program if they are eligible, with the caveat that limited benefit programs should continue for those who aren’t eligible for comprehensive coverage programs and for services not covered under other programs, such as confidential reproductive services.

Major Risk Medical Insurance Program Proposal (MRMIP)
Health Access supports the intent of the proposal to maintain MRMIP for people with Medicare-ESRD (end stage renal disease) individuals can purchase supplemental coverage, and maintain MRMIP as an option for non-ESRD people who are in MRMIP today. MRMIP was originally set up to provide health insurance to Californians who were unable to get affordable coverage due to a pre-existing condition. The need for this high-risk pool has been greatly reduced due to the ACA, which bans denying coverage to people due to a pre-existing condition. While this program now serves a very small amount of people with ESRD, the services are important and should be maintained. The Administration previously proposed to eliminate the MRMIP program in its entirety.

The subcommittee left all these issues open and will revisit them in the coming months as more information becomes available. Assembly Subcommittee #1 will have weekly hearings in March and April. The April 20th hearing will focus on, among other things, Medi-Cal rates, coverage of immigrants, and issues/proposals not in the Governor’s budget.

Kaiser Reversal on Rx Cost-Sharing Highlights Need for AB339

Earlier this morning Kaiser Permanente announced it will stop charging more for HIV drugs and will be refunding patients starting today (get details in this Bay Area Reporter story).

Kaiser’s reversal is a good first step for HIV/AIDS patients, but more is needed to help patients deal with high cost-sharing for critical medications. Kaiser’s decision highlights the growing concern about the high cost of specialty medications used not only for HIV/AIDS but for various cancers, multiple sclerosis, and other chronic conditions. This is why we need legislation to limit the use of these highest cost-sharing tiers.

In response to insurers increasing cost-sharing burdens on patients who need specialty drugs, Assemblymember Rich Gordon at the urging of Health Access California, the statewide health care consumer advocacy coalition, has introduced AB 339 (Gordon) to define and limit the specialty prescription drugs that are subject to such high cost-sharing.

The bill is prompted by health plans and insurers seeking to impose high copays and coinsurance on these drugs, forcing Californians with HIV/AIDS, hepatitis, cancer, multiple sclerosis, or other serious conditions to face costs of thousands of dollars for necessary and oftentimes life-saving medication. Such high cost drugs are often on a “fourth tier” of a drug formulary with coinsurance of up to 20% so a patient may exhaust their annual out-of-pocket limit of $6,500 with a single prescription in the first month.  When patients cannot afford their medication, research shows that they skip doses, they cut pills in half, and they don’t fill their prescription.  As a result, Californians live sicker and could die younger without medication adherence.

Insurers shouldn’t impose such high cost-sharing that patients can’t access medically necessary medications. While the cost of specialty drugs is high, the solution isn’t for insurers to make them cost-prohibitive to patients—that just defeats the purpose of getting covered. We can’t let insurers, now prohibited from denying patients with pre-existing conditions, discriminate against theses patients by imposing such high cost-sharing. The ACA puts some overall limits on out-of-pocket costs, but this bill would place specific guidelines for these specialty drugs.

AB 339 (Gordon) would do the following:

  • Require health plans and insurers to cover medically necessary prescription drugs, including those for which there is no therapeutic equivalent
  • Require that cost sharing be reasonable so as not to deter access and not to reduce compliance with drug regimens
  • Require coverage of single tablet regimens like the HIV/AIDS drug cocktail if they are clinically as effective or more effective than requiring someone to take multiple drugs—and say the cost sharing to the patient is the same
  • Require coverage of extended release drugs if equally or more clinically effective than nonextended release drugs
  • Prohibit placing most or all of the drugs to treat a condition on the highest cost tiers of a formulary
  • Require formularies and limitations to be based on clinical guidelines and peer-reviewed medical and scientific evidence
  • Direct the Department of Managed Health Care and the Department of Insurance to develop a definition of specialty drugs that is based on clinical guidelines and peer-reviewed medical and scientific evidence rather than on the cost of the prescription drug to the health plan


AG Approves–With Conditions–Prime Takeover of 6 CA Hospitals

Earlier today, California Attorney General Kamala Harris approved the sale of 6 Daughters of Charity hospitals to Prime Healthcare, with significant conditions, including keeping key services open for 10 years, ensuring charity care levels at historical levels, reforming Prime’s problematic debt collection practices, and ensuring access for LGBT Californians and women reproductive health services.

Health Access California and other consumer, community, and health care groups had submitted written and oral testimony in opposition to the sale–in part because Prime’s original commitments to the community were short-term, limited, and conditional. So we support the AG’s decision to impose strong conditions on the sale of the Daughters of Charity Health System, to ensure that patients and communities served by these hospitals will continue to have access to critical services. Given Prime Healthcare’s perturbing past practices, we call on the Attorney General to closely monitor this transition and Prime’s action after the sale. She should use her enforcement authority to ensure that Prime Healthcare honors its commitments to the community and abides by the conditions of the sale.

The conditions require that Prime Healthcare:

* maintain current services at the hospitals (beyond what is minimally required of acute care hospitals, which is emergency care and some basic services) for ten years (instead of five). This goes beyond the terms of the Definitive Agreement, which was limited and conditional (subject to physician availability, changing community needs and financial viability). 

* contract with Medi-Cal and Medicare for ten years instead of just five. The Definitive agreement only included Medi-Cal FFS and Medicare. The AG’s condition includes Medi-Cal managed care. (Health Access had also asked that Prime be required to contract with Covered California plans, but such a requirement is not included.)

* maintain community benefits at current levels, and after year 2 the amount spent on community benefits is tagged to the Consumer Price Index.

* commit the necessary investments required to meet and maintain OSHPD seismic compliance requirements through 2030.

It is telling that another of the requirements is that Prime must revise all its debt collection practices and procedures in order to comply with state and federal law. The Attorney General must keep a close and ongoing eye on Prime, given its past practices, on all these important issues.

New Tax-Time Enrollment in Covered California

Californians doing their taxes and realizing the tax implications of going uninsured will have a new opportunity to shop for, compare, and sign-up for health coverage through Covered California, the state’s health insurance marketplace set up under the Affordable Care Act. Starting Monday, February 23rd through April 30th, Californians will have the opportunity to sign up for coverage–during the time that many Californians will first learn the tax implications of going uninsured, when filing their taxes.

This announcement made this afternoon is close on the heels of the Obama Administration’s announcement earlier today it will re-open enrollment in the 36 states with FFM (Federally Facilitated Marketplace) exchanges (see details here: http://thehill.com/policy/healthcare/233308-administration-gives-second-chance-to-sign-up-for-obamacare).

This is the right call: Covered California should help Californians in whatever way not just avoid the tax penalty, but to take advantage of the tax subsidies available for getting the benefits of coverage. Let’s remember, the biggest financial penalty of going uninsured is not the tax penalty, but the risks of living sicker, dying younger, and being one emergency away from financial ruin.

Californians should take advantage of this new opportunity to sign up, avoid the tax assessment, and get the access to primary and preventive care and the financial security against medical debt. This new enrollment period will be good not just for those who sign-up but for insurers and their rates, since many of those who enroll will be generally healthy. Getting more Californians enrolled is good for them, but for everyone and the system as a whole.

Today’s developments remind us that the ACA is indeed a learning process for everyone–and not least for consumers, who need time adjusting to the notion that carrying insurance should be a personal responsibility so long as there are affordable options. The fact is there are affordable options, whether it’s Medi-Cal or subsidized plans, but it has taken longer than we’d like to get the word out, particularly to communities that are hard to reach.

California law permits a special enrollment period if the federal government publishes notice of “any other events” listed in title 45 Section 155.420 (d)—which says “a qualified individual demonstrates to the Exchange, in accordance with guidelines issued by HHS, that the individual meets other exceptional circumstances as the Exchange may provide.” That is precisely what took place today and what made it allowable by state law.

Insure the Uninsured Project Conference: Highlights

This year’s ITUP gathering, fittingly dedicated to Peter Harbage, featured many key insights and “take homes” for advocates. Rather than lament the absence of consumer voices from any of the plenary and workshop sessions, here’s our report with comment and reflection on most of the sessions in italics.

Actionable News from Covered California

Covered California Director Peter Lee announced that 474,000 Californians have newly enrolled in coverage in the second open enrollment period that ended Sunday–and expressed confidence that Covered California would meet the 500,000 target when stragglers are brought in and the final numbers are tallied. But just to be sure and to compensate for the long wait times to get help enrolling by phone (800-300-1506), open enrollment has been extended through Sunday, February 22, 2015 for those who are already “in line.”

  • With his staff and state officials, Peter Lee is considering a proposal to allow a SEP (Special Enrollment Period, i.e. outside the open enrollment season) for individuals facing fines when they file their taxes. Given the challenges of enrolling and educating the community about their new options, not to mention the advantages of having the largest possible risk pool, Covered California should adopt this proposal. California law permits a special enrollment period if the feds publish notice of “any other events” listed in title 45 Section 155.420 (d)—which says “a qualified individual demonstrates to the Exchange, in accordance with guidelines issued by HHS, that the individual meets other exceptional circumstances as the Exchange may provide.” So if the feds decide that tax season (at least this year) is an “exceptional circumstance” (because it is the first year of the penalty presumably) then Covered California may say it as well. We should learn more about these efforts at the next Covered CA Board Meeting on March 5.
  • Since Covered CA is planning for higher enrollment through the special enrollment opportunities around life-changes than in the next open enrollment, we should do more to ensure such life changes have clear paths to enrollment.
  • On average 94% of consumers decided to keep their current plan. This may or may not be a good thing. If Covered CA had better transparency tools to compare plans on cost and quality, for example, consumers might be a bit more choosy about their plans from one year to the next.
  • We rather liked hearing about Covered CA plans for the coming year to go quite a bit further as an “active purchaser” exchange, to “lean in,” as Lee likes to say, and contract with clinical analytics vendor (Truven) to compare plans on clinical outcomes and find answers to burning questions like: what difference does it make to get care in a medical home? How do network designs affect care and outcomes? This direction for Covered CA builds on our early successes with standardized benefit design. We see many critical opportunities in the use of analytics to address disparities and improve equity. Right now plans and providers are all over the map in terms of who is collecting what data on disparities, as we learned in the EHR(Electronic Health Records) session later in the afternoon; but by recent estimates only about 10% are making meaningful use of these data. We cannot think of a more meaningful use for the data than to guide Covered CA’s decisions as an “active purchaser”  and its emerging efforts to bring better value plans to consumers, plans that are equipped to serve diverse communities.  

Public Payer Session on Remaining Uninsured
It’s always a treat to hear from forward-thinking counties like Alameda, Los Angeles, and San Francisco on what they are doing for the remaining uninsured in their communities—and the many lessons from this work for state-level campaigns like SB4 or the Medi-Cal waiver.

* Mitch Katz, MD (Director, LA Department of Health Care Services) framed hot-button issues like reimbursement rates (they are way too low to ensure access to cost effective, well-coordinated care, especially for those who need it most and this problem can be addressed in the budget process, outside the waiver) and the Medi-Cal waiver renewal in ways that challenge all of us to ask harder questions and want more from these areas of policy. Katz is right to ask, do we really need a Medicaid waiver to do the things contemplated thus far in the state’s waiver renewal? Section 1115 “research and demonstration” waivers should be about pushing the envelope to build on what’s working to cover and care for the remaining uninsured. It was also gratifying to hear that MyHealth LA enrollment is already past 81,000 with space to cover 146,000. In this case, it’s the county providing a model really for the nation.

* Alameda County’s director Alex Briscoe echoes Katz’s call for higher reimbursement rates emphasizing their importance for attracting enough physicians to serve the Medi-Cal population. Briscoe’s visionary talk closed with a show stopper: “The only way to really control costs in Medicaid is to have fewer poor people.” That’s exactly right—and a timely reminder that health reform 2.0 should work to lift people out of poverty, addressing the social determinants of health and poverty (and where you live, what sort of access to educational opportunity do you have, etc.).

Healthy San Francisco (HSF) is once again digging new ground on affordability issues, this time honing in on the 4,500 (25%) of the county’s estimated 18,000 remaining uninsured who, were it not for the high cost of living in SF, would be eligible for Medi-Cal or Covered CA. With funding provided by California Health Care Foundation, HSF is doing a feasibility study on ways they might leverage SF’s own employer responsibility ordinance to subsidize premiums in Covered California for some of this group, says Deputy Director Colleen Chawla. Even with all the financial assistance provided in the Affordable Care Act, we know many Californians need more help–and are committed to working on this, especially in this high cost-of-living state.

View from DC

Speaking (via Skype) of costs, Neera Tanden of the DC-based Center for American Progress touched on mounting voter anxieties about the “middle-class squeeze” and as part of that, the cost of care–which is puzzling in that health care spending and costs are actually on the descent. The problem, she points out, is that the benefits of lower expenditures have gone to all (stakeholders) except the consumers. We agree that as we seek additional payment and delivery system reform, the “shared savings” mantra should extend to consumers: How will consumers benefit from these changes—maybe by reinvesting some of the savings in better access or care for the remaining uninsured?

The view from the beltway is that California leads the nation on ACA implementation. Where Tanden sees opportunity for California and the small handful of states that have active purchaser exchanges is in the Section 1332 super waiver option build into the ACA—might this be a mechanism for a state-level approach to a public plan option? We’re still cogitating on this idea—and starting to think also of the county initiatives (described above) as a precursor to a public plan option or something like it. 

Representative Xavier Becerra also spoke, congratulating California for its leadership in implementing the Affordable Care Act and getting millions enrolled. His talk turned to the judiciary, talking about the politicization of Supreme Court from Bush v. Gore to the NFIB v. Sebelius case that narrowly upheld the ACA but allowed states to reject the Medicaid expansion. He also touched on the current threat of King v. Burwell, which threatens to take away subsidies for those in federally-run exchanges–based on a theory of Congressional intent that was understood by nobody. He also referred to the recent Texas ruling on President Obama’s executive order on immigration. Becerra expressed confidence that the injunction was temporary, and that the President’s policy would prevail in the end–but thought the credibility of the judiciary was being tested.

Closing Plenary: Future of Reform and Lessons from Massachusetts for CA

In its payment and delivery system reform legislation (phase 2 of its 2006 state-based reforms), codified in Chapter 224, Massachusetts took a number of bold steps to rein in its spending on health care, from its starting point as the highest spending state (learn more here). The foundation and mechanism for compliance with cost growth benchmarks is the state’s Health Policy Commission. Starting this year, if a provider entity does not meet minimum cost growth benchmarks they can be fined $500K and must submit to a performance improvement process. As California refines or develops new payment incentives for providers to redesign care, the state can draw important lessons from Massachusetts experience: that payment structures and incentives need to be adjusted to reflect the disproportionate risk that certain providers (i.e. safety net and county providers) are taking on by virtue of the communities they serve. Massachusetts is still paying for early mistakes in this area, says Thomas Traylor of the Boston Medical Center, and we do well to learn from these mistakes as we design our own payment incentives.

Assembly Budget Subcommittee No. 1 on Health and Human Services Informational Hearing: State and Community Perspectives on Gaps and Opportunities in Health and Human Services

The Assembly Budget Subcommittee No. 1 held its first informational hearing on “State and Community Perspectives on Gaps and Opportunities in Health and Human Services” on February 16, 2015. Assemblymember Tony Thurmond, the new Chair of the Subcommittee, convened the hearing to discuss issues that are likely to receive a lot of attention in this year’s budget process. They include developmental disabilities, health, and child welfare.

Dr. George Flores, the California Endowment’s Program Manager for Prevention, testified about investing in prevention as both an opportunity and gap in health care policy. Americans, compared with other countries, spend far more for health care and have poorer health outcomes. To be healthier and reduce spending, we need to expand our focus and address how to stay healthy in the first place. Our greatest opportunity is to invest in prevention, particularly the prevention of noncommunicable, preventable, chronic health conditions that comprise the greatest share of healthcare spending. For example, reducing and limiting smoking in California has led us to save money and save lives.

Because our health largely depends on conditions where we live, learn, work and play and not just on the medical treatment we receive, investing in prevention means addressing disadvantages and social determinants of health. We should focus our resources on prevention, which includes investments in our safety net and infrastructure. Dr. Flores emphasized that we need a collaborative approach to improving the health of all people by incorporating health considerations into decisionmaking. This effort will require collaboration by people across different sectors – government, businesses, community organizations, and individuals—to consider how decisions can affect health. We need to view our decisions affecting education, environment, and communities through a health lens. Investing resources in creating greater social and economic equity will lead to better health.

Jennifer Kent, Director of the Department of Health Care Services (DHCS), shared her thoughts on the opportunities and gaps in Medi-Cal program. She sees 2015 as the year we take a “deep breath” after everything we did to implement the basic provisions of the ACA. Kent said California is a state that has “leaned in” to the ACA, went into it “with our whole heart.” Our Medi-Cal program now supports 12 million Californians and covers half of the births in California. The system provides mothers and children with quality care and check-ups.

Kent said the renewal of the California’s 1115 waiver is a big opportunity in health policy, and it’s the story that we (the state) tell the federal government: “Let California flex and bend the rules, we’d like to do something different, and here’s what we’d like to do.” The previous 1115 waiver gave us $10B to help us get ready to implement the ACA. The new waiver, Kent said, will take us to the next frontier. Individuals that utilize multiple systems should not be treated in a silo, and the waiver will test new approaches to invest in and demonstrate new and exciting ways to pay for and deliver care.

Kent identified the Managed Care Organization (MCO) tax as a gap that needs to be addressed. The MCO tax draws down critical federal dollars to support the Medi-Cal program. The Governor’s budget includes a proposal that conforms with federal requirements to make the tax more broad-based. The Department plans to work with health plans on this issue, which will create a big gap in the budget and the program if it is not resolved.

DHCS will continue monitoring Medi-Cal managed care to make sure beneficiaries are getting access to care at the right time and the right place. This includes ensuring there are enough providers to serve beneficiaries and meet timely access requirements. DHCS is also implementing Medi-Cal quality monitoring measures, and Kent believes what we’re doing today will make California a national leader because no other state is doing what we’re doing. DHCS will continue working with its county partners to improve systems and automation issues for Medi-Cal enrollment. The IT system we have now, Kent said, “is not perfect” and there are refinements that need to be made to make the state and county systems work better (CalHEERS).

After the formal presentation, there was discussion about a couple issues on the minds of legislators:

Public hospitals: Assemblymember Thurmond expressed concerned about hospitals facing financial trouble, particularly Doctors’ Hospital in his district.

Director Kent stated the 1115 waiver will help us to work with hospitals to move from a cost-based payment approach to a payment mechanism that encourages hospitals to do things that encourage better behaviors, improve health and require fewer medical interventions.

Medi-Cal Provider Reimbursement Rates: Assemblymember Bonta expressed hope that we will make some progress on rates this year. He asked Director Kent what are the hurdles and obstacles to increasing provider rates? Kent explained that we have two systems in Medi-Cal: managed care and fee for service (FFS). 75 percent of Medi-Cal beneficiaries are served in managed care, and rates in managed care, which are actuarially sound, are not tied to the FFS structure.

With regard to FFS provider rates, Kent said the Department can provide technical assistance to the Legislature and the Governor’s office and help folks understand needs to be incentivized or what access problems might need to be addressed. Kent said any increase in Medi-Cal, given the 3 million people in FFS, will build onto the base on an-going basis and add up quickly.

Assemblymember Bonta then asked if there is an informal connection between FFS rates and managed care rates? Would financial models change if the FFS rates increased? Kent said if FFS rates were dramatically increased for a provider (like non-emergency medical transportation), then you might have an indirect effect where providers might ask managed care plans to increase their rates. But that scenario would only occur if the FFS rate increase is significant enough to create the cost pressure.

Assemblymember Bonta then asked what tangible steps could be taken to increase access to Medi-Cal. Director Kent said the fundamental problem with a FFS system is there is no way to examine data and problems. The system shows a payment was made, but doesn’t tell you how many patients the physician sees, and whether they produced quality outcomes. On the managed care side, we have information about encounter data and quality measures, which helps us know whether there is adequate access.

Dr. Flores said we need to test payment reform models to show us whether there are other things we can do other than FFS. With payment reform, we can make payment for value, not payment for individual service. One model is a health home where a team approach is used to help patients get well and stay well. Another model is accountable communities for health, where community providers and members are engaged to bolster health and wellness around the patients. Dr. Flores said these different payment arrangements are what will make a difference in the long run, not FFS rates.

The Budget Subcommittees begin formal hearings on the budget next week. Health Access will provide updates on this blog.


We are now in the last hours to help get your loved ones covered-the best Valentine you can give, at http://www.coveredca.com.

But if you are already covered, we offer the Valentine’s Day edition of Health Wonk Review, this week hosted by Peggy Salvatore at Health System Ed (It leads with our tribute to our colleague Peter Harbage, but then goes into several other policy issues of note.

On a lighter side, over the last few days, health policy reformers and wonks and experts were having some fun on Twitter with #healthpolicyvalentines, amusing ways to express one’s love and health nerdiness at the same time. Posts from us and others even got some press.

Our most retweeted posts were:

* My love for you is a pre-existing condition that can’t be denied.

* There’s nothing generic about our love, but I would still put you on the first tier of my formulary.

* Roses are red, violets are blue, we’ll express our feelings as often as opponents will sue.

* My love for you needs no documentation.

Here’s some more fun #healthpolicyvalentines that we came up with. You can search of Twitter for many, many more from all over the Internet:

* Let’s get together in a small group, just the two of us… I’ll meet you at any attachment point.

* I don’t need the CBO to independently confirm my love for you. #healthpolicyvalentines

* You like to explore your options and play the field, but this weekend is the time to pick a plan and get some care.

* Roses are red, some states are too, but Medicaid is now for everyone, even in states that aren’t blue.

* Like a tobacco tax, I’d be good for your heart and body.

* #50ShadesOfRateRegulation I’ll let you charge me with a premium with prior approval.

* To me, you are like essential health benefits: a perfect 10.

* Let’s close the deal this weekend, and pick a plan.

* Roses are red, violets are blue, sign up for coverage this weekend, for you and your boo.

* Let’s go out on a individual mandate, and rate review a new movie: Love, Actuarially.

* For you, there’s no wrong door to my heart.

* Like FFP for newly eligibles, our match is 100%. (In a few years it’ll go down to 90%, but that’s still pretty good)

* This weekend, let’s take some quality time together with http://healthcare.gov under the covers to get covered.

* I’d never sell you substandard health coverage-our relationship is 100% actuarial value, certainly not less than 60%.

* My valentine’s card is true about all the ways I care for you, unlike my plan’s provider directory.

* Roses and red, violets are blue, sign up for coverage, if already enrolled then renew.

* If the definition of flirting is inordinate attention, then the GOP has a huge crush on #Obamacare.

* I got a peek at your 1095A and your subsidies were very impressive.

* You’ll always have timely access to me.

* Mi medical casa es su medical casa.

* Let’s be friends with essential health benefits.

* Don’t worry about expensive cost-sharing. I’ll be the #singlepayer on Valentine’s Day and everyday.

* I want to see you the way California passes laws implementing #Obamacare: early, often, and trying to go further.

* Valentine, you can take the express lane to my heart in a SNAP.

* We will not waiver in our love for Medicaid.

* My passion for you is even more unsustainable than the price of Sovaldi.

* I remember our first meeting even more clearly than the Congressional intent that FFE states should get subsidies.

* My love for you is bigger than a pharmaceutical company marketing budget.

* I love you like Medi-Cal does now–not just because of our child, but after they grow up, and when we get old.

* While I have been in Health Affairs in the past, I will now only put out papers with you.

* Like an adequate provider network, I will care for you, when you need it & where you need it.

* If Sutter and Blue Shield can make up, we can, too.

* Unlike this open enrollment period, our love goes beyond this Sunday. You’ll always be in a special category for me.

* Our relationship has Platinum benefits but with only Bronze premiums. #healthpolicyvalentines

* Our love is like #Obamacare, so deep-rooted that is impossible to undo. #healthpolicyvalentines

First DHCS Stakeholder Advisory Group of 2015

Yesterday the Department of Health Care Services (DHCS) held its first Stakeholder Advisory Committee of 2015, which coincided with new DHCS Director Jennifer Kent’s third day on the job. Ms. Kent, who has held other roles at DHCS, said this new role will be “the greatest job” and “the hardest job” she’ll have in her career. Kent committed to working with stakeholders and improving the department’s stakeholder engagement process, including overhauling the website and posting meeting materials ahead of time. Ms. Kent also expressed a desire to continue the Stakeholder Advisory Group beyond this year.

Highlights of the Meeting

President’s Executive Order on Immigration: Medi-Cal Director Mari Cantwell stated the Administration is still assessing the impact of the President’s Executive Order on Medi-Cal and reminded folks that DHCS is not proposing changes to existing eligibility processes. Anthony Wright, Executive Director of Health Access California and a member of the Stakeholder Advisory Committee, emphasized that having clarity around what California will or will not do with respect to Medi-Cal coverage for the immigrant families that are touched by the Executive Action would be helpful.

Update on California’s Section 1115 Waiver Renewal: This discussion began with a look back to California’s “Bridge to Reform” (2010-2015) Waiver, which was critical to our successful implementation of the Affordable Care Act. California’s uninsured rate was cut by 50%, and the Medi-Cal expansion led to a 29% increase in Medi-Cal enrollment. The state also was first in the nation in implementation of the DSRIP (Delivery System Reform Incentive Payment) program, with 21 public safety net systems taking part in this comprehensive effort to improve health care delivery and realign incentives for providers.

Cantwell then shared the Department’s current thinking about the proposed waiver renewal. The waiver will build on the state’s efforts in transforming care delivery; integrating physical and behavioral health; and improving people’s health and quality of life. The next waiver should also make the program more sustainable in the long run without the continued use of 1115 waivers. DHCS hopes the waiver renewal will include a $15-$20 billion investment from the federal government—considerably more than the $10 billion investment from the Bridge to Reform waiver. Consumer advocates, including Health Access, CPEHN, and SEIU urged DHCS to make health equity a more explicit goal of the waiver. In addition to offering incentives to improve quality of care, we should be focusing on addressing health disparities amongst low-income communities and communities of color in California.

Health Access has developed recommendations for a waiver which supports our safety net; improves care and provides a medical home for Medi-Cal enrollees and the remaining uninsured; and moves California toward the “quadruple aim” of better care, better health, lower cost, and reduced disparities. (See our issue brief on Health Access Priorities for California’s Next Medicaid Waiver here.) Some advocates’ input on the waiver was incorporated in Ms. Cantwell’s presentation—for example, core strategy 3 transforms California’s public safety net for the remaining uninsured [our emphasis] by unifying DSH and Safety Net Care Pool funding streams into a county-specific global payment system”–a proposal advanced by public hospitals that we support. However, we and other advocates were not seeing the detail on disparities we should expect at this stage of the process.

Next steps: DHCS is still working through all the input it received through its stakeholder workgroup process. The department is working on a draft proposal that will be available for public review before it submits the final proposal to CMS in March. Cantwell emphasized that much of the proposal will change substantially between now and when the feds approve it.

Details about the waiver update can be found here: 1115 Waiver Renewal Update

Other Updates

DHCS also gave updates on the following efforts:

  • Medi-Cal Enrollment and Renewals: DHCS has seen a significant increase in Medi-Cal enrollees during Covered CA’s open enrollment period. As of early February, a total of 881,937 Medi-Cal eligible individuals have signed up. DHCS says of these, 83% are being determined eligible in real-time, though advocates questioned the accuracy of this figure. DHCS says return rate on 2014 renewals are lower than 2013. They are doing additional outreach to increase the return date. We expect a formal report on 2014 renewals to be available in March. DHCS is working on improving renewals for 2015, including the use of ex-parte reviews and pre-populated forms with MAGI (Modified Adjusted Gross Income, the new formula used to determine eligibility for lower costs in the marketplace and for Medicaid and CHIP) Medi-Cal populations. DHCS’s temporary policy for Covered CA enrollees transitioning to Medi-Cal will remain in effect until system changes are implemented to allow folks to keep their Covered CA coverage until final Medi-Cal eligibility is confirmed. This will hopefully allow people to avoid gaps in coverage.DHCS is also working on implementation of the expansion of full-scope Medi-Cal for pregnant women with incomes between 60 and 138% of the FPL. They will be enrolled in a Medi-Cal managed care plan unless an exemption applies. Advocates requested that women in their second and third trimesters not be defaulted into a plan in order to avoid affecting continued access to a provider for the remainder of their pregnancy. DHCS expects federal approval of the relevant state plan and 1115 waiver amendments this month.
  • Coordinated Care Initiative: DHCS gave an update on enrollment numbers in the counties that are participating in CCI. 122,908 individuals were enrolled as of January 15, with an additional 31,000 projected enrollees by the end of March. DHCS also shared data showing many people are opting-out of CCI before actually enrolling. DHCS believes an integrated delivery system is better than a fractured one and is working on better education and outreach to beneficiaries, plans, and providers. This will be a subject of significant discussion in the budget hearings, given concerns with the program and the opt-out rate. DHCS stands by its commitment to CCI and will work to improve enrollment and retention and attain cost-effective changes.
  • AB 361 Health Homes: DHCS provided an update on implementation of Senator Mitchell’s AB 361 (2013), which authorizes the Department of Health Care Services to apply for the Section 2703 Health Homes option under the Affordable Care Act to create health homes for Medi-Cal enrollees with chronic conditions, in addition to developing a model that targets the homeless population who use the emergency room as their primary source of care.  DHCS is in the midst of program design and has been soliciting stakeholder feedback. They plan to hold a stakeholder event in March and share a draft concept paper for review and feedback. DHCS expects to submit the State Plan Amendment to CMS in August.
  • Behavioral Health Treatment Benefit. – California is implementing a federal directive requiring Medi-Cal to include behavioral health therapy (BHT) as a covered Medi-Cal benefit for people under the age of 21. DHCS has directed all Medi-Cal Managed Care Plans to include medically necessary BHT services such as Applied Behavior Analysis (ABA) and other evidence-based behavioral intervention services that develop or restore, to the maximum extent practicable, the functioning of a beneficiary with Autism Spectrum Disorder. The BHT State Plan amendment was submitted to CMS in September, and DHCS is working with stakeholders on transition and implementation issues.

Videos for your week

Some new videos on health care came out this week:

President Obama was interviewed by Ezra Klein, who asked broad questions about the economy, and health reform came up several times: both as a needed remedy to changes in the economy as more people have non-traditional jobs that don’t include health care benefits, and as a way to reduce the overall cost of health care. There are short viral video versions of this interview that include infographics, but the extended interview also includes a final question about what President Obama would like to do next on health care, with the ACA as a platform:

President Obama address the high cost of prescription drugs in the United States, and has his explanations and solutions. John Oliver had a more pointed critique in his show Last Week Tonight, especially on the issue of marketing directed to doctors (and issue that we have worked on in the past):