CABudget Finalized! But With Continued Cuts to Medi-Cal, Public Health, Etc.

HEALTH ACCESS ALERT: Friday, June 13, 2014

BUDGET JUST FINALIZED TODAY; CONFERENCE COMMITTEE APPROVES BUDGET COMPROMISE THAT CONTINUES MAJOR CUTS TO MEDI-CAL, PUBLIC HEALTH PROGRAMS, AND SAFETY-NET

MANY RESTORATIONS REJECTED; BUDGET ON TRACK TO BE APPROVED SUNDAY

*       Budget would restore Black Infant Health Program ($4M) and funds HIV Prevention Programs, but neglects key investments, leaves in place cuts made in past years, to Medi-Cal rates and benefits, public health programs, and the safety-net. 

*        Budget deal leaves in place health cuts made in the depths of the recession, including a 10% reduction to some of the lowest Medicaid provider reimbursement rates in the nation, making it harder for patients to access doctors and specialists they need. Compromise also rejects effort to restore Medi-Cal benefits. ABA services for autism treatment to be added only if/when federal requirement kicks in.

        Lost opportunities: budget doesn’t restore many other public health programs that invest in prevention, mental health, children’s health, school health centers, and other areas. The budget also rejects foundation money offered to help enroll/renew people in Medi-Cal, denying California federal matching funds. Finally, the budget continues formula that will reallocate $725 million from county safety-net and public hospitals, limiting services to the remaining uninsured.

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Just this afternoon, the Governor and Legislative leaders announced they have finalized a California state budget for 2014-15, dealing with the last outstanding items, beyond the Budget Conference Committee’s actions last night. Then, in evening session, the Conference Committee went through the health and other areas of the budget, agreeing to a “compromise” version worked out between the Governor and legislature. Those votes and discussion indicate that the 2014-15 California state budget would continue many of the recession-era cuts made to Medi-Cal rates, public health programs, and the safety-net for the remaining uninsured, despite legislative proposals for restoration.

In the main bright spot on health care, the budget restores the Black Infant Health Program and funds HIV Prevention programs, and prevents a proposed cut to the overtime of IHSS home care workers. But the budget deal leaves in place major health cuts made in the depths of the recession, including cuts to other public health and prevention programs, to Medi-Cal benefits like podiatry, audiology and speech therapy, and most notably a 10% reduction to some of the lowest Medicaid provider reimbursement rates in the nation, making it harder for patients to access doctors and specialists they need. Health providers and patients rallied to cancel the provider rate cut, with bipartisan and bicameral support, but to no avail.

MEDI-CAL RATES: The most discussion last night was focused on the Medi-Cal rate cut, which got nearly every member of the Budget Conference Committee to speak against it, from the Assembly and Semate, from both the Democratic and Republican caucuses. Assemblymembers and Senators talked about the need to ensure timely access to care, especially as more Medi-Cal patients come in under the expansion in the ACA. Sen. Leno, Assemblywoman Skinner and others asked about who should get the calls that will come their way both now and when additional problems arise–at one point Sen. Hancock semi-seriously asked if they should refer complaints to the Department of Finance. Given that both houses had included the rate restoration in their budgets, Sen. Lara said this compromise felt more like a “smackdown,” but vowed to keep working on this issue, as well as that of getting care for the remaining uninsured, including the undocumented.

The recession-era 10% cut to Medi-Cal fee-for-service reimbursement rates were made during the recession, but were stayed until the court approved them in the last year. In its January budget, the Brown Administration did give up on collecting the rate cut retroactively, and has cited other adjustments to adjust rates to specific services when access issues have been proven. They also cite that 70% of the Medi-Cal population is now in Medi-Cal managed care plans–but legislators pointed out that leaves 3 million in fee-for-service under these rates, which were some of the lowest in the nation even before the cut.

MEDI-CAL BENEFITS: Also disappointing to health advocates and providers was the lack of restoration of key Medi-Cal benefits cut in the depths of the recession. These included acupuncture, audiology, chiropractic, incontinence creams and washes, optician and optical labs, podiatry, and speech therapy–restorations proposed by the Senate but ultimately not included in the Budget Conference Committee.

The Senate had also proposed to add Applied Behavioral Analysis (ABA) services for children with autism as a benefit in Medi-Cal, to align with requirement for private health insurance. No money was budgeted for this purpose, although trailer bill language would begin the implementation process if and when the federal requirement required such coverage, as is expected.

MEDI-CAL ENROLLMENT: The Governor announced his budget in May by trumpeting high enrollment numbers in Medi-Cal, taking pride in the Budget’s major investment in health care–even if it was overwhelmingly federally financed and a result of implementing the federal law. A small but important action in the newly-approved budget suggests his Administration may now be taking the foot off the gas pedal, if not putting on the brakes, of that successful momentum. To the incredulity of some legislators on the Budget Conference Committee, the Administration requested that the state turn down money offered by the California Endowment to assist Medi-Cal enrollment and renewals–a renewal from a grant offered and accepted in the budget last year. Not accepting these free foundation dollars, offered at no cost to the state, means California won’t be able to get federal matching funds for this purpose as well. The Committee reluctantly agreed to reject the California Endowment grant.

PUBLIC HEALTH AND PREVENTION: Perhaps the biggest bright spot for those in public health was the $4 million restoration of the Black Infant Health Program, as well as the funding of HIV prevention pilot projects. The Black Infant Health Program was seen as particularly significant, given its good track record addressing the high infant mortality in that community, at least until it was eliminated during the recession.

However, many other public health programs were rejected, even though they also would have been cost-effective investments in prevention. The Assembly had proposed to fund and/or restore efforts like the Early Mental Health Initiative, Drug Overdose Grant Program, School-Based Health Centers, Public Health Laboratory Training Program, Dental Disease Prevention Program, Asthma Public Health Initiative, Syringe Access Programs, and other initiatives on Adolescent Family Life, STD Prevention, Teen Pregnancy, Injury Control, and the Office of AIDS. While these were all modest investments of $1-$15 million, none of these were funded in this year’s budget.

A $1 million vision outreach pilot project in Los Angeles, using mobile vision providers at school sites, was included in the Governor’s May budget revision, and was included in the approved budget by the Conference Committee.

Finally on public health, the Budget Conference Committee rejected staffing for the Health in All Policies Task Force.

THE SAFETY-NET: While not discussed in Conference Committee because it was approved in last year’s budget and assumed by both legislative houses, the budget includes a formula that reallocates $725 million dollars from county safety-net providers and public hospitals, which limits the services available to the remaining uninsured, including the undocumented. A bill to cover the remaining uninsured, SB1005(Lara), was held in Senate Appropriations Committee last month. Even with the ACA expansions, this budget leaves that ongoing issue unresolved and awaiting future action.

PROCESS: While many of the Budget Conference Committee expressed disappointment at the lack of restoration in health care and other areas, they voted for the items, saying they were supporting the broader “compromise.” The Budget Conference Committee ended its work and adjourned last night.

Governor Jerry Brown and legislative leaders Senate President Pro Tem Darrell Steinberg and Assembly Speaker Toni Atkins today announced they have come to a final deal on the budget, resolving outstanding issues. Those final issues will be heard in committee on Sunday afternoon, and the full legislature is scheduled to reconvene Sunday (even though it is Father’s Day) and have floor votes on the final budget Sunday evening, June 15th.

The Legislature has a constitutional deadline to pass a final Budget by June 15th; the Governor has until the end of June to sign the measure (with whatever “blue pencil” line-item vetoes he decide that are within his discretion), so the spending plan is in plan when the new budget year begins on July 1.

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