Medi-Cal and IHSS Budget Reductions Kathryn Smith, RN, DrPH January 4, 2012

1. Medi-Cal and IHSS Budget ReductionsKathryn Smith, RN, DrPHJanuary 4, 2012

2. Overview of Presentation • Medi-Cal and IHSS budget cuts • Potential impact of trigger cuts • Areas for advocacy

3. Special thanks… • To Laurie Soman, Senior Policy Analyst at Lucile Packard Children’s Hospital, for development and dissemination of a brief providing an overview of the trigger cuts

4. An overview of the trigger cuts • Trigger cuts have been activated as a result of the State’s failure to receive $4 billion of anticipated revenue included in the current budget, specifically, the Department of Finance estimates the revenue deficit to be $2.2 billion • Originally there were tier 1 and tier 2 cuts, based on the actual revenue deficit, because the deficit was not the total $4 billion, not all tier 2 budget cuts have been triggered • Cuts of approximately $1 billion took effect Jan. 1, 2012, could have been up to $2.5 billion so not as bad as originally thought

5. An overview of the trigger cuts • Cuts in the following areas • Medi-Cal provider rates • Department of Developmental Services budget • In Home Supportive Services reductions • Home to school transportation cuts

6. Medi-Cal cuts • Total reduction- $8,642,000 • On 10/27/11 California received approval from the Centers for Medicare and Medicaid to implement some of the requested 10% Medi-Cal provider rate reductions; the rate reductions were approved for most adult services, but many important pediatric services were protected • Providers for the following will continue with the current rate reduction of 1%: physician visits for children (including CCS), clinic visits for children (including CCS), home health services and pediatric sub-acute facilities

7. Medi-Cal cuts • Providers for the following will see a 10% rate reduction: dental services, durable medical equipment and clinical lab services for children, retroactive to June 1, 2011 • Cuts for pharmacy services for both adults and children were approved by CMS, but the state has determined that all the cuts in this area may not be necessary, and therefore children’s services may not be as adversely affected • CA Department of Health Care Services (DHCS) will use a phased in implementation approach to reductions and recoupment of overpayments • Will apply to the following programs: CCS, CHDP, CCS/Healthy Families, State-Only Family Planning and GHPP

8. Department of Developmental Services cuts • Total reduction- $100,000,000 • In March 2011, there was a previous reduction of $576.9 million from the DDS budget that resulted in: • 4.25% payment reduction to RC vendors • New Annual Family Program Fee of $150 to $200 for families of minor children with income over 400% of the FPL, although some families may be exempt • Elimination of the RC Prevention Program and effective July 1, 2011, those “at risk” will be referred to a Family Resource Center • Requirement to provide RC with a copy of the child’s insurance card • Requirement to access education-funded day services, rather than RC-funded services, for those 18-22 years • Requirements for adult day services to be offered on a flexible or part time schedule

9. Department of Developmental Services cuts • The recently announced reduction is expected to be achieved this year without further funding cuts in services or operations as a result of lower than expected spending during the current fiscal year • There is an existing 4.25% provider rate reduction in place • Not yet known what kinds of budget reductions will need to be put into place to achieve the required reduction by June 30, 2012, more information expected to be provided with the Governor’s budget to be released in mid January

10. In Home Supportive Services cuts • Total reduction- $101,481,000 • 20% across the board reduction in service hours for many clients, although a temporary restraining order, issued 12/1/11, is in place to prevent this reduction from being implemented, and remains in force until a hearing in a federal district court • The 20% reduction is based on the most recent assessment of need • Elimination of funding for local anti-fraud efforts • March 2011 budget reductions approved by the Legislature include the following: • Requires that a medical provider document that a person needs IHSS in order to stay in their own home

11. In Home Supportive Services cuts • Reduction is on top of a previous 3.6% reduction • An application can be made for an IHSS Care Supplement if an individual is at risk of out of home placement • It is still up to the consumer to prioritize the tasks to be completed by the caregiver after the 20% reduction • If an individual is on a Home and Community Based Services Waiver (AIDS waiver, DD waiver, In Home Operations waiver), then s/he is exempt from the service reduction

12. Home to School Transportation cuts • Total reduction- $248,000,000 • Equals half of the current appropriation, so if a school district has already received 50% of what the state allocates to them for transportation, it may mean no more funding is available for that district • Expected to hit low income children, those living in rural areas or with special needs especially hard • Up to 1 million children may be affected • Districts may file lawsuits against the State, saying State is in violation of equal protection guarantees