Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services

Number three on Health and Human Services will come to an order. Good morning, everyone. Happy Wednesday. We continue to welcome the public in person. For those who can't make it in person, you can provide your public comment during the teleconference portion of it. Today's number is 877-226-8163, with an access code of 736-2834. As always, we're in the 1021 street building in room 1200. I ask the rest of the committee members to please join me so we can establish a quorum.

Today's second hearing on the May revision will include hearing budget proposals in two different parts like yesterday. Today. We'll start with part A on Department of Health Care Services and Department of Public Health. Then part B will include childcare proposals from the Department of Social Services. So we'll start since we can establish a quorum, we'll start with DHCS on issue number one. Welcome. Good morning.

Good morning, Chair, Members. Michelle Baass, Director of the Department of Healthcare Services. Starting with issue one, the May Revised Local Assistant Estimate. The May revision requests a total of 156 billion, 38 billion from the General Fund for the department for 23-24, major changes in the department's budget in the May envision include, and we will highlight some of these for this item, then go into detail on some of these later in the agenda. Renewal of the MCO tax via trailer bill effective April 1, 2023, nine months earlier than planned at Governor's Budget, and an increase in the size of the annual MCO revenue as compared to the Governor's Budget.

The Department proposes to use the additional total net revenue as follows: use 2.5 billion of the additional net revenue in calendar year 2023 to continue supporting the Medi-Cal program and achieve a balanced budget, and use the remaining 11.1 billion to support Medi-Cal investments that will help secure access, quality, and equity in the Medi-Cal program over an 8 to 10 year period, including the May revision proposal to increase rates to 87.5% of Medicare for specified providers, and the remainder will be put in a special fund for future consideration.

The May revision continues to include funding for implementation of the Mobile Crisis Benefit, with slight updates to account for extended implementation timelines in rural counties. The May revision continues to include funding to begin implementation of BH Connect demonstration. This was formally referred to as the California Behavioral Health Community Based Continuum Waiver. We've renamed it for purposes of ease.

The May revision reflects updates to the HCBS spending plan timeline for certain initiatives to allow for additional time to fully expend the funds and complete initiative objectives, and this includes the Department's assisted living waiver program. The May revision includes a one time augmentation of 15 million, for a total of 19 million for California's 988 centers to main operations and services.

We have an additional 10 million to begin development of the implementation of the fee schedule for the Children and Youth Behavioral Health Initiative for a third party administrator. The May revision reflects extension of the Contingency Management pilot passed March 2024. We also are requesting 40 million total funds, 20 million General Fund, to support implementation, initial implementation, of the Behavioral Health Modernization proposal.

The May revision includes a few budget solutions in addition to the funding associated with the revised MCO tax proposal. We propose swapping 250 million in the Behavioral Health Bridge Housing Program and 50.5 million in the Cal Hope Program from General Fund to Mental Health Services Fund. We proposed to reduced the balance in the Medi-Cal Drug Rebate Fund Reserve, freeing up 222 million General Fund resources.

And then in terms of technical budget changes, the May revision reflects a decrease of 1.4 billion General Fund compared to the Governor's Budget in the current year, and this is primarily due to shifting of costs to later years with regards to multiyear implementation for Bridge Housing, the Behavioral Health Continuum Infrastructure Program, and the Children and Youth Behavioral Health Initiative.

The estimate reflects a decrease of 1.1 billion compared to the Governor's Budget in the budget year, primarily due to larger General Fund benefit as a result of the MCO tax renewal, increased projected drug rebate savings to the General Fund, and then, as I just mentioned, replacing the General Fund with the Mental Health Services Act. I'm happy to take any questions.

Thank you. Does LAO have any comments?

Thank you. Luke Koushmaro with the Legislative Analyst Office. We'll be speaking on a couple of topics during this issue. First, we'll be talking about caseload and COVID-19 policy updates relative to the January budget. And then I'll be turning over to my colleague Jason Constantouros to talk about the MCO tax updates in the May revision. On the caseload and COVID-19 related costs, in previous hearings this year we testified that we found that the caseload projections likely were overstated as well as caseload costs in 23-24.

Based on our own estimates of caseload and COVID-19 costs, which we had the advantage of additional information that was not available to the Administration at the time that they had put together their budget. They have since updated their estimates using this updated information, and we find that these estimates are reasonable at this time.

From what's included in the May revision. On the per enrollee cost estimates for undocumented residents, we note that the May revision roughly doubles the cost of the Medi-Cal expansions for comprehensive services to undocumented residents. This is primarily due to higher per enrollee costs, and this is associated with a corrective action plan from the Federal Government that required the state to develop capitated rates for these undocumented residents using actual claims data from past years.

In the past, the budget estimates have been based off of rough estimates using the costs of similar populations that are already enrolled in Medi-Cal who are documented. This change has resulted in significantly higher cost estimates. A lot of this, we think, could be due to this population having limited access historically to medical services. As a result, they have higher acuity and utilization in the immediate years following an expansion.

We think that it's possible that, as time goes on, these per enrollee costs could go down as these populations stabilize and get established with primary care providers. However, under the May revision, overall budget deficits likely are going to be around 15 billion each year through 2026-27. And to the extent Administration sees continued risks of increased costs for these expansions, the Legislature may want to build an additional budget capacity.

That being said, because the cost could go down, we recommend that the Administration, I'm sorry. We recommend that the Legislature closely monitor the associated costs with these expansions and the future capitated rates to determine to what extent this is going to create General Fund cost pressure in future years. Thank you, and I'll turn it over to my colleague, Jason.

So as my colleague noted, I'll speak on the MCO tax proposal, and there really are two issues involved with the MCO tax proposal. The first is whether to renew and increase the tax, and then the second issue is how to spend the associated funds from doing so. So on the first issue as to whether to renew and increase the tax, we think this continues to warrant serious legislative consideration given the strong fiscal benefit of the tax for the Medi-Cal program and for the state, and also the relatively low cost on the health insurance industry. That said, we are still working with the Administration to get some key information on the proposed tax, including the multi-year impact of the tax and analysis demonstrating it meets federal guidelines.

We recommend the Legislature continue to work with the Administration to release this information. As to the second issue as to how to spend the funds, we understand the desire to want to use the funds to increase or augment Medi-Cal's budget. We do note this comes with trade offs. Our office's initial revenue projections suggest that revenues are billions of dollars lower through 23-24 than the administration assumes. And under the administration's multi-year analysis, there are deficits in the out years.

And so the legislature is facing a relatively constrained budget. Using the MCO tax funds to augment Medi-Cal's budget constrains the Legislature and gives it less flexibility to adjust, for example, where the state's budget situation to further deteriorate. Given that, we recommend the Legislature consider exploring possible one time or limited-term uses of the funds rather than ongoing. This could include, for example, adopting supplemental rate increases or other limited-term uses.

Under that approach, for example, using supplemental payments, the Legislature could, in a few years, revisit the issue. It'd have more information on its overall budget capacity, it would have better information on the impact of the rate increases, what those would have on access to Medi-Cal services, and it could make a decision at that time whether to incorporate it into the base. Now, to the extent that the Legislature desires to increase provider rates, we think the administration's recommendation or proposal to further study the issue and come back next year with a more detailed analysis is reasonable and recommend taking that approach.

We do recommend the Legislature ensure it's an active participant in that process. One approach would be to adopt a reporting language in this year's budget that would set some parameters for the Department to report on. For example, the existing level of rates and the potential impact the increases would have on access and how the Administration came to recommend which rates to increase. With that, I'll leave it to questions. Thank you.

Thank you. I do want to know, and thank you so much, Jason, for the in depth information, but we will be diving further into the MCO Tax next week. I don't want that to monopolize our conversation for today. So if we can hold off on questions on the MCO Tax until next week. Any other questions? Thank you.

I was wondering if we're diving in.

Perfect. So we're going to hold that item open and move on to issue number two.

This is the family health local estimate. The May revision. 2023 Family Health Estimate includes 238 million in 22-23, including 197 million from the General Fund. This reflects a decrease of 16 million General Fund compared to the Governor's Budget. And this adjustment is primarily based on treeing up projections to align with more recent actual expenditures. The Family Health Estimate includes 253 million for 23-24, including 220 million General Fund. This reflects an increase of 21 million compared to the Governor's Budget, primarily from the CMS not approving California's claim on drug rebates on state only health programs. And this was expected. Happy to answer any questions.

LAO, and I'm sorry, Department of Finance. I didn't even ask comments on the first one. Sorry.

Yeah. Kendra Tully from the Department of Finance. No comments to add.

On issue or one or two?

Not right now. Thank you.

LAO?

We don't have any concerns with these adjustments. Thank you.

Great. Any questions on our end? Seeing none. Thank you so much. We're going to hold the item open and move on to issue number three.

So this is proposed trailer bill language regarding Doula Services Implementation Evaluation. The Department proposes to extend the timeline for the SB 65 workgroup to examine implementation of the doula benefit in the Medi-Cal program from April 1, 2022 until December 31, 2023 to actually April 1, 2023 until June 30, 2025. This proposal will also extend the publication of the evaluation report by one year from July 2024 to no later than July 2025.

These revised dates align with implementation of the benefit one year later than originally anticipated and allow time for review and comment on the required evaluation report before it's published. The revised dates also fulfill the intent of SB 65 by giving the Department the same amount of time as envisioned under SB 65 to implement the benefit and collect data to provide analysis of the benefit in order to make informed recommendations in the report. Happy to answer any questions.

LAO, any comment?

We don't have any concerns with this proposal. Thank you.

Sorry, Department of Finance. No additional comments at this time.

Thank you so much. Holding that item open. Moving on to issue number four, please.

This is a request for trailer bill language regarding the Medical Interpreter Pilot Program. The Department proposes to extend the expenditure authority of the Medical Interpreter Pilot Project for a period of 12 months from June 2024 to June 2025. The program's inoperative date would also be extended from July 2024 to July 2025, as well as the sunset date from January 2025 to January 2026.

Extending the dates will allow Medical Interpreter Pilot Program services to continue for a period of an additional 12 months to compensate for the delayed implementation. Although there is no definitive evaluation time period required, the Department believes the extension will allow adequate time to complete the pilot project for a final evaluation report. This proposal is cost neutral and no additional funding is required with the extension.

I hope the PT, during her year and a half left here, gets to see this finished. LAO, any comment?

We have not raised concerns with this proposal.

Department of Finance?

Department of Finance, no additional comments at this time.

Nothing else on our end. Thank you. We're going to hold the item open. We'll move on to issue number five.

Good morning. The May revise removes the three single plan counties Alameda, Contra Costa, and Imperial, from the Whole Child Model proposal based on counties and stakeholder feedback regarding the readiness of the transition to Whole Child Model by these particular counties. These changes were made in response to stakeholder engagement after the release of the Governor's Budget and proposed trailer bill.

And, for example, we have received from the County Health Executive Association of California, CHEAC, representing local health departments who oversee the CCS program in partnership with the Department, that they have removed their opposition to the trailer bill as of May 15. However, we continue to have conversations with our Children's Hospital colleagues who've engaged with us. They reached out, and we will be meeting with them on Friday to continue to discuss any concerns that they may have and to be able to help address their concerns. Happy to take any questions.

Jason?

This proposal addresses some of the concerns that we heard from stakeholders, particularly around some of the financial impact to children's hospitals. For that reason, it's a reasonable modification to consider. That said, as we noted in our analysis, the Legislature is at a critical juncture with the CCS program and deciding long term how to integrate it into Medi-Cal Managed Care. And so we recommend keeping that in mind when deciding whether to adopt this proposal. To the extent the Legislature is interested in further expanding the integration of CCS into Medi-Cal Managed Care, this would be a reasonable proposal to adopt. But to the extent the Legislature has other long term plans, that would be something to consider with this proposal. Thank you.

Thank you. Department of Finance.

Aditya Voleti, Department of Finance. No further comments.

Just a few questions here. You know, last time we spoke, the evaluation was just on the brink of coming out, and after that, and I resonate with what LAO mentioned, I do appreciate the modification after hearing the stakeholders concerns. Just wondering could you just talk a little bit more about how we will be addressing some of the concerns that the evaluation showed in related to enrollment going down. Just some kids not being able to get connected to services.

Sure. So while we did see a 1% reduction in enrollment, the Department is very committed to ensuring that any child who is eligible for CCS is enrolled in CCS. So we are actually going to be releasing for comment and APL updating the Whole Child Model requirements based on feedback from our stakeholders and our CCS Advisory Committee to increase the accountability and responsibilities of our managed care plans to ensure that they are always making those referrals over and then including changes to our oversight of the managed care plans in regards to those referral for CCS eligibility determination.

That should be coming out for public comment in a week or two, and happy to engage with stakeholders on that. We also have been working very closely with our CCS Advisory Committee in regards to a number of things. Some of them have to do with CalAIM. In CalAIM, we propose to reevaluate across the entire CCS program both quality measures and metrics and standards that we think would ensure that children are getting access to services.

We will continue to engage the CCS Advisory Committee and that CalAIM workgroup on CCS to fine tune those measures and metrics for how we hold both our county partners, the Department, and our managed care plans accountable to ensuring CCS children have access to all services.

The main one that we're looking at based on the evaluation is the case management. So today, dominantly, case management is done either by the county for CCS Classic, by the managed care plan or by providers. And so we'll be looking across all of those areas because one of the things the evaluation showed is that we need improvement for case management, not just in Whole Child Model for managed care plans, but also in our Classic CCS program. So we'll be looking across the entire program to make sure that we make improvements moving forward.

Thank you, Madam Chair. We're quick to express concerns here, and I did express some concerns about the Whole Child Model during the last time this came up, but I hope we're also quick to express appreciation. So I want to thank the Department and thank the Administration for stepping up to the plate here and working diligently with the stakeholders who I think have some legitimate concerns and sounds like you're addressing those legitimate concerns.

I hope you'll continue, as you've indicated, to work with them, particularly on those issues identified in the report. You've mentioned drop in enrollment, make sure we have access to the appropriate levels of care. And I look forward to the final product because I know you'll work hard to get there. So thank you very much. Thank you, Madam Chair.

Just a quick follow up. Could you, just for my education here, the trailer bill language proposal on the mandatory enrollment for foster children. Were they not included before?

No. So our proposal included for foster care, mandatory for COS and Single Plan, and our proposal stayed the same for foster care. We did not make any changes in regards to our foster care proposal for mandatory managed care enrollment.

Okay, thank you. We're going to hold the item open, move on to the next issue, issue five.

Great. The Department proposes to shift reimbursement for specified long term care facilities from August to a July rating period to a calendar year period, effective January 1, 2024. Existing law carves these facility types into managed care effective January 1, 2023, through. The Department has proposed trailer bill to delay the carve in for ICFDDs and subacute facilities for January 1, 2024. Managed care rates are set on a calendar year, and aligning facility and managed care rates will reduce administrative complexity for the Department and for our facility colleagues.

The transition to calendar year rate will not result in any facilities receiving a lower rate than they would have otherwise received under current law. DHCS will set facility rates for dates for the service period of August 1 through December 31 for 2023, and for dates of service on or after January 1, 2024, making necessary modifications to the applicable rate setting methodologies to account for the change in the calendar year shift.

Rates for freestanding skilled nursing facilities, level B, and freestanding adult subacutes were transitioned to a calendar year rate effective January 1, 2021. So we're essentially just shifting dates to align with managed care to calendar years. Happy to answer any questions.

Can you quickly remind me your name?

I'm Jacey Cooper, the State Medicaid Director. I apologize for that. Introduce myself.

LAO. Any comments?

We do not have any concerns with this proposal. Thank you.

Department of Finance?

Hersh Gupta, Department of Finance. No additional comments on this technical cleanup.

I'm hoping to memorize.

Don't ever worry about that.

Seeing no other comment, we're going to hold that item open. Move on to issue number seven.

Great. The Department requests the conversion of 15 limited turn resources to permanent positions for the administration, operational, and monitoring and oversight of the expansion of the Assisted Living Waiver program and to support the expansion of the growing beneficiary population using these services. And happy to answer any questions that you have.

LAO, any comments?

We have not raised concerns with this proposal. Thank you.

Hersh Gupta, the Department of Finance. No additional comments.

Nothing our end. Holding the item open. Moving on to issue number six.

This is a technical adjustment regarding Control Section 4.05 from the Budget Act of 2021. This is a net zero technical adjustment to shift 650,000 from a reduction from a special deposit fund associated with the local education agency billing option program to federal funds. This shift allows the Department to continue to Fund a 1.5 million contract, which we've had since 2005, to support this program.

LAO, any comment?

No concerns with this one.

No additional comments at this time.

It's going to help fund the 1.5 million for what program?

It's for the Local Education Agency Medi-Cal Billing Option Program. LEABOP is how it's referred to.

Thank you. Nothing else. We're going to hold the item open. Move on to issue number nine.

The Department is requesting resources for dental procurement, a conversion of four limited term funded resources to permanent and two permanent new positions, and contract expenditure authority of 1.8 million in budget year and ongoing. These resources support a major procurement effort, contract transition, and related efforts to secure a new fiscal intermediary contract in support of dental services for Medi-Cal members. This contract is for purposes of paying dental claims and adjudicating prior authorizations for the Dental Fee for Service program.

Ryan Miller, LAO. We have no concerns with this proposal.

Aditya Voleti, Department of Finance. No further comments.

No further comments are on our end. Holding open. Moving on to issue number 10.

Thank you. Turn on my mic. Thank you. So, as Director Baass mentioned earlier, we have updated the name of our waiver to BH Connect or the Behavioral Health Community Based Organized Networks of Equitable Care and Treatment Demonstration to really make it easier for people to say BH Connect. We look forward to coming out. We did extensive stakeholder engagement on the waiver proposal and concept earlier, at the end of last year and beginning of this year. We'll be coming out in June with updates.

But we did want to give you some updates that are reflected in the May revision as well. Two main items that are reflected and proposed. One is a new workforce proposal and initiative under BH Connect that will make targeted long term investments in a robust, diverse behavioral health workforce. New investments will be directed towards strengthening the pipeline of behavioral health professionals needed to staff existing and new behavioral health treatment settings, as well as towards improving short term recruitment and retention efforts.

The Department anticipates the BH Connect Workforce Initiative to include 480 million total funds each year. Of that, 36 million would be from the MHSA funds, and it would equate to, over the five years, $2.4 billion for BH workforce. We think this is critical given the behavioral health workforce needs across the entire State of California.

We also think it's critical to be maximizing federal funds in regards to our workforce dollars to make sure that we are stretching those dollars as far as we possibly can to meet the need of the behavioral health services across the state. The May revision also includes some minor updates to the waiver as previously proposed in the Governor's Budget.

The fiscal estimate for Centers of Excellence has also been revised to reflect training and certification activities for statewide children's therapy benefits, as well as acknowledging the federal funds being reflected in the budget for those Centers of Excellence, as well as the cross sector incentive pool. Happy to answer any questions regarding BH Connect.

LAO, any comment? Hi, Will.

Yes. Will Owens, LAO. So broadly, we've commented on this, formerly the CBC demonstration before, and generally the proposal appears to fit within the state's broader efforts on expanding access to behavioral services. And many of the proposals, or many of the proposals within demonstration rather, such as expanding the number of community based services counties can receive federal reimbursement for, have merit in that context. However, given that we have yet to see the final submission to CMS, as well as the new workforce initiative that is a part of this, we haven't been able to do a full assessment at this time.

Department of Finance?

Department of Finance, Diana Vazquez. Nothing further.

Thank you. A couple of questions. Yes, critical, right? We talked about workforce. Probably every single issue that came up, it was connected to it, right? So I do appreciate that. Can you talk if you have more information on the short term recruitment and retention, what kind of ideas we're looking at to address how to straighten the pipeline?

Sure. We're trying to kind of use two different pieces. The first one is really create a pipeline. So working with our HCAI partners and others who would be able to partner with educational agencies to really increase the behavioral health pipeline. The second is working with our local partners who also need to be able to retain behavioral health providers, recruit behavioral health providers.

This is a common practice that we work with our county partners and other locals in regards to being able to do those retention type payments, and we would do a stakeholder engagement process to determine what that looks like, develop a program, and then work through both of those pieces. I would say the majority of the funds will most likely go towards the pipeline because we really need to see the number of workforce significantly increase in California, being available in the various facilities, for example, that we are lifting up with the Behavioral Health Infrastructure Continuum Program where we're funding the renewal and expansion and building of many facilities, as well as other new facilities coming up. And so it's a little bit of both, and I don't know if you want to add anything, Michelle.

No, I would just also kind of add the linkage to the modernizing the behavioral health system proposal where there's the General Obligation Bond that's being proposed to, $3-5 billion, to really build out 6000 or so subacute and residential care facilities and just the workforce that's going to be needed to essentially provide services in those facilities. Since November, when we came out with our concept paper, the teams have been doing research on other states. Other states have been using waiver dollars to draw down for workforce efforts. So wanting to include this as part of our proposal to CMS to really significantly leverage federal dollars for workforce with really only 36 million annually in state dollars.

And this question might be for Department of Finance or LAO. We heard here earlier for the January budget, the proposal for a budget solution and delaying a lot of the behavioral workforce pipelines. We heard around psychiatrists in addiction, mental, I mean, MSW slots. Could either of you talk to me? We're still delaying that in this May revision, but then we're asking for this for the workforce pipeline. Are we looking at this as a supplement to that to address...

If I may add too, just these dollars won't go live till probably 2025, mid 2025, because we still need to submit this to CMS, get federal waiver approval. So this is not necessarily a budget solution, but kind of our vision for what we would want to propose to CMS as part of this.

Helpful. Thank you. Senator Roth.

Just a couple of questions. It occurs to me that one of the things we may need to look at going forward is the length of time that we require our behavioral health, I guess postgraduates, to spend in the postgraduate practicum portion prior to licensure and to make sure that whatever it is, the 3000 hours or the 2000, my colleague is a licensed...

And they don't even count the hours you do in school for social workers.

We may need to take a look at that as a state because it's not just the licensed clinical social workers, it's the other behavioral health practitioners that have to complete those requirements too, which of course delays the entry into the practice environment where they can actually provide care in a full scope setting. At least that's my understanding, number one.

Number two, one of the shortfalls, my understanding is, in talking to some of the schools is finding licensed individuals in the practice setting who are willing to take time away from their practice to mentor or precept or whatever the proper term is, these individuals, as they're completing their practical portion. Whether it's a physician assistant or an MSW or some other type of behavioral health counselor, I think we need to take a look at that.

We'll try to do so in the committee that I currently chair, assuming I continue to chair it. And if I don't, maybe my successor will pick it up. Lastly, I'm hoping that the bond that's being discussed includes, not only, includes a full scope of behavioral health facilities, including acute care psychiatric facilities, because at some point in time some of the folks in distress need the acute care setting where the residential and community treatment or even intensive outpatient won't work.

So in that regard, have we applied or are we going to apply for the waiver to secure approval to have more than 16 beds in an IMD? Because it's my understanding, and I stand to be corrected, that that certainly interferes with the opportunity to be reimbursed for the care that's provided.

So a part of the BH Connect is to seek and receive federal funds for an IMD stay if a county opts into all of the requirements, having the full continuum, building transition protocols, et cetera. But yes, that is a part of the BH Connect, and we do plan on coming out for our formal comment period in June of this year. We will have to do a few public hearings to finalize that final concept and then we plan to submit to the Federal Government in the fall. But yes, it would include that.

How long does that typically take? I mean, is that difficult to say because each waiver is different.

It is. However, there is very strong precedence for this particular type of waiver. So IMD waivers on the mental health side for mental health services, there have been many approved, and so some of the parts of our proposal will be considered very easy for the federal government to review and approve. We also, as California always does, like to press limits. So we also have the cross sector incentive pool for foster youth, for example. So some of those negotiations may take a little bit more time. But overall we do think it will be a relatively simple waiver negotiation with our federal partners.

Good. And the reason I asked the question, it would be nice if it happens to dovetail, assuming the bond, if it occurs passes and bonds are issued, it would be nice to have the waiver coincide with the time when bond money is rolling out. So individual, I mean entities, that are planning for facilities can plan appropriately to size them.

That is the goal. We think we would easily be able to have the waiver approved prior to the bond pieces moving out. That's the goal of the workforce initiative to have this rolling sooner, get the dollars in place, as well as get some of the infrastructure in place, so when those bonds, hopefully, all pass and come to fruition, we will have a nice tail into that.

A great response is we're lucky to have you all working. Thank you.

Of course. Thank you Senator. Nothing further on that item. We're going to hold it open and move on to issue number 11.

The May revision effectively eliminates the Governor's Budget proposed delay of 250 million in behavioral health bridge housing and includes 500 million in one time Mental Health Services Fund resulting in General Fund savings of 250 million in 23-24.

No complaints here. LAO?

In light of the General Fund budget condition, recently revised estimates showing a significant increase in Mental Health Services Fund dollars available for state purposes. We think that the adjustment is reasonable.

Thank you. Department of Finance.

Nate Williams with Department of Finance. Nothing further to add.

Great. Nothing further on our end. Holding the item open. Moving on to issue number 12.

Similarly, the May revision also replaces 50.5 million in temporary General Fund support for CalHOPE with Mental Health Services Fund Dollars.

Echo our comments on the prior item. We think that the adjustment is reasonable.

The minutes are going to say echo the comments. Department of Finance.

Diana Vazquez, Department of Finance. Available for questions.

Nothing further on our end. Holding the item open. Moving on to issue number 13.

The Department requests a budget chain proposal related to the Behavioral Health Modernization Initiative. We are requesting 40 million total funds, 20 million in General Fund in 2023 for initial support of this initiative. This request begins the process to modernize the behavioral health system to align goals and policies that support delivery system improvements. This initiative will seek to address fundamental challenges the state experiences with the current behavioral health delivery system and connecting those who are most vulnerable to quality services.

This request represents initial resources, as additional resources will be needed to implement this initiative pursuant to the statutory changes. The initial efforts include behavioral health policy development, data collection and reporting improvements, enterprise technology services, and accountability, quality and equity in behavioral health services. The Department anticipates using a combination of state staff and contract resources for initiative development and implementation activities. The need is urgent and the Department wants to be in place to implement as quickly as possible.

Will Owens, LAO. So at this time, specifically as it relates to the modernization proposal before you, the 20 million in General Fund, we have not seen the BCP or the trailer bill language yet for this. And given that this is new discretionary spending for a proposal that has yet to come forward at this time, we're recommending rejecting this BCP.

Diana Vazquez, Department of Finance We are working diligently to post the BCP as soon as possible.

Director Baass, I think at the end, when you closed, you mentioned the funding just to be able to start as soon as possible. Given that this won't be on until November 2024, what are the things that you need to get this approved for right now in preparation of that measure?

So there are many changes being proposed in the initiative and just the work that it takes once the ballot passes to go live immediately with some of the components of it, including some of the requirements with regard to the local categorical buckets for MHSA funding and all the changes that will need to be made in terms of policy development, technical assistance to the counties, IT system changes so that we can go live with these changes in the following year. And so it's the kind of the preparation work to make sure that it doesn't take again, like three or four years from the ballot passing to go live with some of these changes. There's a lot of preparatory work to get us in a place to go.

And pushing this to the next fiscal year and still having those couple of months just would be too much of a crunch.

Yes. I mean, it essentially delays our work for another year, so we would not get resources till July 2025 or 2024. Excuse me. And really wanting to start some of that work initially, particularly some of the IT work, and the preparation for what needs to happen with regard to the systems that will be need to need changes in terms of the, kind of the accountability, quality and transparency that is an important part of this initiative.

Senator.

Based on feedback from the state controller's office, the Department proposes amendments to the trailer Bill Language to authorize the Department, rather than the Department of Finance, to submit the offset and transfer schedule to the California State controller. Once counties elect to authorize the controller to transfer certain mental health service Fund and realignment funding into the medi Cal county behavioral health Fund, Additionally, the amendments further describe when the Department will provide the transfer schedule to the Controller and happy to answer any questions.

We have no concerns with the update to the trailer, but language.

Diana Vazquez, Department of Finance Nothing further to add.

Nothing further on our end. Holding the item open. Moving on to issue number 15.

These adjustments are requested to align current year expenditure authority with block grant award amounts from our federal partners. The increases in expenditure authority supports community mental health services block grant increase of approximately 15 million, substance abuse prevention and treatment block grant increase of a little under $6 million. The Substance Abuse and Mental Health Services Administration Sampsa provides grant funds to establish or expand on organized community based systems of care for nontitle 19 mental health and Sud services, and happy to answer any questions you may have.

No concerns.

Diana Vasquez, Department of Finance Nothing further to add to these technical adjustments.

No concerns on our end either. Holding the item open, moving on to issue number 15.

Great. As a part of the Children's and Youth Behavioral Health Initiative, DHCS, in collaboration with the Department of Managed Healthcare, will develop and maintain a school linked, statewide all payer fee schedule to reimburse outpatient behavioral health services. This fee schedule is currently scheduled to launch beginning in January of 2024 and will be phased in across the state in various publicly funded K through 12 schools, as well as higher education for anyone under the age of 26.

The May revision includes a new proposal funding request totaling $10 million in General Fund for fiscal year 23-24 to begin the development and implementation of a statewide infrastructure that will centralize provider management functions including credentialing and quality. Oversight and manage billing and claiming for the behavioral health services furnished to students by school based providers and school linked providers across the State of California. The goal is really to simplify reimbursement processes and administrative burden for the schools participating in the Children and Youth Behavioral Health Initiative.

Many schools do not currently have various billing mechanisms today. We really want to make this as easy as possible for them to participate in this program. It will also allow us to have additional oversight over the provider network, ensure quality, as well as reduce that administrative burden for our educational partners, and happy to answer any questions you may have.

Hello.

We have not raised concerns with this proposal.

Nothing further to add.

And so this is really exciting to see. I think you're completely right in simplifying and removing those burdens from the school. Does this funding include just the education component for the schools and how to transfer it over to the third party administrator?

So this will actually be the dollars paying the third party administrator to for example, each of the schools will have to tell us, here's our provider network. They would build that within their system so that when claims come up, we understand, okay, this is an allowable provider for this claim.

And then it will be the TPA's job, instead of the schools, to figure out which managed care plan that they need to send that Bill to work with the managed care plan to get reimbursement and then Fund that back to the school. So there will be some work by the schools, but there are other dollars in Cybhi that are going to help Fund that infrastructure, that startup and readiness for the schools.

And then this will Fund the third party administrator to reduce that administrative burden of them having to manage a network and do quality oversight and do that payment up and down. We're trying to reduce some of that burden on our schools.

Great, thank you. And then the higher education component for those 26 years in Odes. Are we talking community college? CSUs?

Correct. All UCS, all higher education are included in CYBHI, and they would also be able to avail themselves of the third party administrator as well.

Perfect. Thank you so much. Senator Roth.

You know, this was a significant concern during the two years that I chaired Education Finance, and I was listening to school districts talk about the frustrations in terms of trying to gain reimbursement for services provided. Do you think this third party administrator approach is going to work? And what level of activity are the school district personnel going to have to engage in at the district level?

Yes. So we do think this will significantly help. For example, it would be very hard for every individual school district or local education agency to be able to track who's enrolled in what managed care plan, because this is for all payers. This is both medical and commercial. They would have to be constantly spending a lot of money to download those rosters, for lack of a better description, into their systems to know who to Bill.

This will allow them to take a claim either by their provider that they contract with or the school themselves, depending on how they approach it, submit it to our TPA and then the TPA will do the rest of that work. They will tie it against to make sure it's a provider within the network that they provided. They will bounce it across the fee schedule to make it sure it's a service that is included.

And then they will send that claim to the commercial plan or the Medi Cal managed care plan adjudicate that receive the dollars from the managed care plan and then transfer those funds to the school district. So it takes a lot of that administrative burden. The other thing that's required, because we have to meet federal requirements as well, they would be responsible for the credentialing of those providers or the oversight of those providers to make sure that they're quality providers.

School districts don't manage healthcare networks and we shouldn't expect them to. So we do think that this third party administrator will significantly reduce the burden of what the schools have to do. However, they will still need to submit a claim either themselves or through their providers to us. A lot of school districts contract with providers and so they're used to submitting claims where they don't. That's where we'll be funding them.

Infrastructure to also help with getting that claim to the third party administrators to then take it from there.

It's a little beyond this hearing. I'll just mention it one of the things that I kept suggesting, it's probably possible, certainly depending on where you come from and where I come from, it's a high medical population that some families may not be enrolled.

I was trying to press or to suggest that the medical managed care plans where I come from participate a little more actively on school district campuses to assist in information and enrollment of families that are not and kids that are not currently enrolled in the program.

And then the other issue was the triage aspect where you have the educational piece that can take place on a district campus but in the behavioral health area, for example, making sure that we get the proper referral to those with the moderate conditions to either the commercial care plans or the medical rather managed care plans, or in the serious cases to the county. And we were talking about navigators on school district campuses released that they had access to.

I don't know if any of that's on your radar screen. It's beyond this hearing, so maybe we can talk about it later. But those are just my thoughts.

I would just note this would include, for example, community health workers to be on campus and it does include referrals to that. So if they need a higher level of service to both the medical commercial or the county as well. So it is included in this fee schedule, the requirements for everybody. So that piece, we would say, has been included and incorporated into this proposal.

You're five steps ahead of me. Thank you. Thank you, Madam Chair.

Thank you. We're going to hold line. I'm open. Move on to issue number 17.

The Department is requesting additional expenditure authority of $15 million in fiscal year 23-24 to Fund eligible 988 call Center Behavioral Health Crisis Services. This is in addition to what was requested in the Governor's Budget and happy to answer any questions.

Hello.

As Ms. Cooper mentioned, this builds on a proposal from January. The May request adds $15 million, and the BCP didn't include some of the workload data metrics that we would typically see. We've recently requested that from the Department. They've indicated that they'll provide it. So assuming that we are able to review that, we would have no concerns.

Nothing further to add.

Nothing further on our end. Holding it open. Moving on to issue 18.

The May revision includes $67 million in General Fund in fiscal year 23-24, 121,000,000 General Fund in 24-25 and 152,000,000 in 25 26, and ongoing to support estimated county Behavioral Health Department costs for the Care Act compared to Governor's Budget. This is an increase to account for additional activities required in draft rules released by the Judicial Council, changes in the hourly rate assumed for each activity performed by the counties, and updates to the length of time and hearings.

The May revision also includes 15,000,000 one time General Fund for Los Angeles County. Startup Funding given the December 1, 2023 implementation, the Department has been working closely with county stakeholders since the Governor's Budget release to refine the Care Act estimate. The Department has not yet come to agreement with the County Stakeholders Associations in regards to the total population that we think would be served by the Care Act process on an ongoing basis.

That is why the Administration is proposing to reimburse for these services based on an hourly basis. So essentially, what we've been doing is focusing on what are the types of services that should be reimbursed and then what is the amount of money that should be reimbursed per that service on an hourly basis. That way the claims can come in, we would be reimbursing based on that, and it gives us more time to understand the volume and population.

Of course, we have to have an estimate for the purposes of the budget, and so we have put assumptions around that for these purposes, but this would allow us to build that experience over time. As you know, we have a lot of experience with coming up with budget assumptions at the Department of Healthcare Services.

A lot of our services are utilization based in that way, and then we fine tune those estimates within Governor's Budget and May revision as we get more information and utilization data in to better inform that budget process. The May revision reflects those new cost. Counties will incur to implement the provisions of the Care Act. Absent changes in statutes, the state will be required to reimburse counties for the activities on an ongoing basis consistent with statewide budgeting practices.

And so we strongly recommend that we include these dollars in the ongoing way and we'll continue to fine tune them through the budget process. Happy to answer any questions.

Aleo?

Yes, Willow and Zelio. So broadly, we recommend adopting the administration's proposed updates to the estimates of the cost of this program. So however, as noted in our January analysis, given the Care Acts implementation has yet to begin, there still remains significant uncertainty both in costs as well as the actual population that will be served by the program and particularly in future years as the counties phase in. So the administration's proposed increase really kind of underlines this uncertainty and how costs can shift relatively quickly.

So we continue to recommend in addition to adopting this estimate, is we continue to recommend the Legislature continue or consider requesting the Administration to report on costs and programmatic data from the first cohort before the beginning of the implementation of the second cohort of counties.

We understand that data may be limited at that time, but having preliminary data on some basic programmatic and cost details as outlined in our January analysis, we believe can help the Legislature make better decisions around the budgetary and programmatic effects of this program moving forward prior to phase two implementation and the ongoing costs.

Department of Finance.

Department of Finance. Nothing further to add available for questions.

Could we talk a little bit? We know most counties are asking for way more money. We do recognize that. And with La County coming in and saying we're going to jump in cohort 115 $1.0 million, could it be utilized across the other counties that were in cohort one? How are we looking at this?

Just a decision to maybe not have these counties in the first original cohort be as successful as possible and bringing in one of the largest counties to join them and pulling away some of that Fund.

So this 15 million is in addition to so this isn't dollars that we took away from other counties and those allocations had already been set or recommended.

But it could have been in addition to them given their ongoing request for more money.

I think that's a separate part of our proposal where we have significantly increased the dollars going to counties for the Care Act, going back and forth with them to fine tune. Okay, what are those services that need to be reimbursed based on the final language? What is the hourly rate for those services? So that's a separate part of our augmentation understand your point.

I think from our perspective, having Los Angeles go live with a very critical priority for the Administration and jumping in to go live with the Care Act, we strongly support those dollars and we want to make sure that La County is successful in that initiative. And so we do think the startup funds for Los Angeles County is critical so that they can also be successful with a very important initiative 100%.

I mean, representing one of the centers in LA County. Of course I want them to be successful. Just wondering on that part. Senator Roth.

Well, I thank you, by the way for not only paying attention to La County but the others that signed up as well. We want them all to be successful. I just want to make sure that there's a commitment to devote whatever. I realize we're in a bit of a budgetary pinch but I think having started this we need to be committed to provide whatever resources are necessary for all of the counties.

La obviously is huge and problems in the other counties are magnified probably 10 times in La County. So there could be the possibility of a bottomless pit here. But I think we do need to make sure that we have the resources available to drive down to the counties as this care program rolls out and they identify needs and reimbursements that they need to have in order to be successful given the consequences if they're not.

So I take it that we're all committed to doing that and that reassures me for now. But I am concerned because this is a new effort for counties and they may not know at this point, frankly. Riverside County I encouraged Riverside County to jump in and I said you're not the only one. But you whine all the time about not having resources and not having enough money. I said, the proof's in the pudding here. It's one thing to whine.

It's another to deliver a Bill for services rendered and be prepared to deliver the Bill if you don't have the money to pay for what the state has asked you to do. So stick with me and stay with me and I hope you'll help us make sure these counties get the appropriate money that they need because this is a huge endeavor. So thank you.

I would note just even the Behavioral Health Bridge housing dollars eliminating the delay on that. Those dollars are intended to support these care implementation as well. And so kind of while not under this item those dollars eliminating that delay really was in recognition that we need to provide additional resources to counties for housing.

Thank you so much. We're going to hold the item open. And before we move on to the next issue, if we can establish a quorum yes.

Contingency right now.

Senators. Menjivar.

Here.

Eggman?

Eggman here. Menjivar here. Grove. Roth.

Here.

Here.

Roth here. We have a quorum.

Great. We can begin with issue number 19.

Sure. California is the first state in the nation to receive federal approval of contingency management as a benefit in the Medicaid program through the Calam 1115 demonstration. Contingency management is the only treatment that has demonstrated robust outcomes for individuals living with stimulant use disorder including reduction of substance use and longer retention and treatment. 24 drug Medical Organized Delivery System are what we call Dmcods counties covering 88% of the medical population have committed to implementing contingency management.

Providers in Los Angeles, Kern, Riverside and San Francisco counties have received approval to deliver the new benefit, and the Department anticipates a significant increase over the next few months as additional counties and provider sites complete their training and readiness assessments. In the May revision, the Department requests resources and expenditure authority to convert the Contingency management program from a pilot funded with the enhanced federal funding under the home and community based spending plan to a full opt in benefit.

For Dmcods counties covered through the end of the Calam demonstration period to convert the Contingency management program from a pilot funded only through the HCBS spending plan to a full Calam section 1115 demonstration opt in benefit. The Department is requesting 11 positions and 1.5 million, which is inclusive of 755,000,000 General Fund or sorry, $755,000 General Fund. Happy to answer any questions.

Going to say, I don't think we have that right now.

Elio, any comments?

No concerns.

Department of Finance?

Aditya Voleti, Department of Finance. No further comments.

No further comments on our end. Holding it open. Moving on to issue number 20.

The Department is requesting four year limited term expenditure authority to support the Department's Naloxone distribution project, or what's known as NDP. This proposal, in addition to the Governor's Budget proposal titled Opioid Settlement Fund, estate directed programs for a combined total of $90 million in fiscal year 23, 24, and then anywhere between 40 and 50 million ongoing in the years after that, requests for Naloxone have significantly increased over the last year. It is largely due to the rise in overdoses increased use of fentanyl.

To date, the NDP has distributed over 2.3 million units of Naloxone, with over 146,000 reported overdose reversals for the current fiscal year. NDP anticipates a total distribution of over 1.2 million units of Narcan costing approximately $60 million. Due to the unprecedented demand, the NDP expects to distribute over 1.8 million units of Narcan costing approximately 88 million in budget year. Happy to answer any questions you may have.

No concerns.

Department of Finance. Nothing to add.

What is the waiting period looking like right now? I mean, it's a constant ask.

Yeah, we did have some backlog at the beginning of the year, and we've worked diligently to reduce that backlog and get all the disbursements out. There is a process where they have to file with the Department, but we've significantly reduced that backlog.

Okay, thank you so much. Any other questions? We're going to hold on, I'm open. Moving on to issue number 21.

The Department is proposing trailer Bill Language to clarify its authority to regulate driving under the influence or DUI programs offering services. Virtually, the Department is responsible for the licensure and compliance monitoring of all DUI programs in California. As a result of the pandemic, the Department has observed a steady decline in the number of licensed DUI facilities in California due to decreased participants'enrollment and limited availability of qualified counselors to provide in person services.

In order to reduce the further loss of DUI programs and available services, the ability to offer these services virtually is imperative. However, the law does not provide DHCS any specific authority related to the provision of virtual DUI services. Currently, the Department is unable to establish clear compliance and oversight requirements that would ensure equitable and safe treatment services when DUI services are virtually provided. The Department is proposing trailer Bill Language to address this issue and happy to answer any questions.

We have no concerns.

Department of Finance. Nothing to add.

Nothing further on our end. Thank you so much. That was your last item, DHCS. Thank you for joining us this morning. We're going to move on to our next Department. Like to welcome up Department of Public Health.

Good morning. We can start with issue number one.

Good morning. Susan Fanelli, Chief Deputy for California Public Health. The first issue is on the COVID response. The May Revise does maintain 51.3 million in General Fund to continue the state's public health and safety response efforts against COVID-19 to support, in general, the most vulnerable communities as we move forward. In response, the funds will support priority pandemic response efforts through June of 2024.

This will include the consultants and redirected staff for activities related to county monitoring, testing strategies and support for our website and public information campaign services. CDPH will continue to purchase test kits for our vulnerable populations throughout the year. We will continue service agreements for our medical and health coordination center and receiving staging and storage warehouse, and they provide special services and technical services and deliver those products to the areas where we need them to go. It will also cover any legal settlements for COVID-related litigation.

It will provide grant incentive programs to support pediatric providers in continuing to administer vaccine for children age zero to five. We'll continue supporting the provider call center that will give support to providers enrolled in myCalVax program management communication activities, again for both LHDs and providers. And finally, it will support our IT infrastructure for the CAIR2 Immunization Registry.

As you know, the May Revise does include a reduction of 50 million in the Contingency fund, which would have potentially been used to support pandemic response efforts that were not included as individual line items. And that would include things like additional staffing needs, surveillance or therapeutics. But we believe the budget that we have, along with the federal funds that will expire in June will be enough to run our response.

Thank you. LAO?

We have no concerns for this proposal.

Department of Finance.

Shelina Noorali, Department of Finance. Nothing further to add.

Thank you. Senator?

Thank you. Good morning. Can you- So just, all the money that we've spent dealing with COVID money, well spent and some of the difficulties we had initially, right? I mean, the state was dealing with this for the first time in forever. Now we have electronics, we have everything. And so a lot of what we have funded is to address the crisis, but also to hopefully build up our system.

As we're eking out of the end of this, are we also prepared for the next thing that comes along and we've learned the most effective way to spend the money?

I think we've learned a lot of lessons throughout COVID response and I think one of them was the infrastructure, the core infrastructure for public health, and so building our information systems and continuing those which are funded in a separate BCP this year and line item.

I think the other piece we know is that we were short staffed and that we've over many decades being underfunded in public health. So we are building that up across the Department as well as our local health jurisdictions under the future of public health money. Cross training, some of the kinds of things that we know we need to do so that we're better prepared for the future.

And this 50 million will not impair us from going forward with the kind of resiliency that we're trying to build in our system?

Particularly with the federal funds, I'm not saying that we won't have an ask come June of 2024, but we'll be looking at that and deciding how we move forward with our future of public health funding, and then as we take stock of where we are with COVID response.

Thank you.

Thank you. Seeing no further questions, we're going to hold the item open and move on to issue number two.

I have issue number two as well. Very excited that we are restoring and have found a way to restore our pipeline and retention programs. We have put this money to work already in the current year, and we have many applications for additional efforts at the local level. And so we're excited. I can't say enough about how excited our partners are.

I saw the GACH announcement today that they are also very excited that the Administration found a way to, what was a very hard decision earlier on, to be able to restore. This is going to help our local jurisdictions and the state as we really use the pipeline programs for our laboratories, for our Pathways program, for a number of other things, and then retention.

So our nurse fees and our career letter and upscaling, it doesn't do us any good if we add new people, but we lose the people there. And we've seen across the state, the number of people that have been lost in public health, both at the leadership level and the staff level. And so anything we can do to help build that back up is much appreciated.

Definitely speaks to the lessons learned, right? Investment in the workforce here. LAO?

We have no concerns with this proposal.

Department of Finance.

Nick Mills, Department of Finance. Nothing further to add.

Nothing further to add on our end. Holding the issue open. Moving on to issue number three. Thank you so much.

Good morning, Madam Chair, Members of the Senate. My name is Sharisse Kemp, and I'm glad to be before you to provide an overview of the AIDS Drug Assistance May revision estimate. As a reminder, the AIDS Drug Assistance Program, most commonly referred to as ADAP, provides access to life-saving medications for eligible California residents living with HIV. We also provide assistance with costs related to pre-exposure prophylaxis for clients at risk for acquiring HIV and post-exposure prophylaxis for clients who may be exposed to HIV.

For current year, we are estimating that the budget authority needed will be 372.3 million, which is a 15.5 decrease from the Governor's Budget, where we requested 440.5 million. The 15.5 decrease is driven primarily by lower medication expenditures and premiums than what we previously estimated. Our budget year request is 398 million, which is a 9.6 decrease from the Governor's Budget, where we requested 440.1 million. The 9.6 decrease is driven primarily by lower medication expenditures and premiums than what we previously estimated. Lastly, I'll go over our revenue projections.

For current year, ADAP revenue is expected to be 284.3 million, which is 15.2% lower than what was reported in the Governor's Budget. The 15.2% decrease is driven primarily by decrease in rebates and lower medication expenditures than previously estimated. For budget year, ADAP revenue will be 365.3 million, which is 3.9% lower than what we reported in the Governor's Budget. The 3.9% decrease is primarily driven by lower medication expenditures. Happy to answer any questions.

We're available for questions on this.

Shelina Noorali, Department of Finance. Nothing further to add.

Nothing further to add on our end. Holding the item open. Moving on to issue number four. Thank you.

Thank you.

Good morning. I'm Leslie Gaffney, the Assistant Deputy Director at the Center for Family Health, which is over the Genetic Disease Screening Program. GDSP's budget supports the activities of two major programs: newborn screening and prenatal screening. In September of 2022, prenatal screening transitioned to a new method of testing called cfDNA to test for chromosome aneuploidy, specifically trisomy 20, 118 and 13.

Shortly thereafter, a lawsuit was filed challenging the prenatal screening program's exclusivity, meaning that only our laboratories could do that testing for both cfDNA and our Maternal Serum AFP program, which tests for neural tube defects. As part of the legal action, a preliminary injunction was put in place which removed the program's exclusivity, and as a result, we've seen a decrease in participation in the program from 72% of pregnant individuals participating down to 60%. So our current budget expenditures are $166 million.

This is a reduction of almost $8 million in local assistance spending attributed to that participation drop specifically. We used a different method to calculate participation for current year because of that, and so traditionally we've used a three year average, which has been hovering around 72%. But this year we used November to January participation, which was after the injunction, and then used that to project forward for the rest of the year. The combined state operations and local assistant budget expenditure for 23-24 is $188 million.

This is an increase of 3.2 million. It's the result of some increased contract rates as well as some caseload increases, not for the general public participating in the program, but for the follow up and follow up laboratory procedures that are a result of the testing. We have returned to the three year average percentage for calculating participation in the prenatal screening program for budget year.

The combined revenue for both newborn screening and prenatal screening projected for the current year is $158 million, which is a decrease of 15.2 million from Governor's Budget, and again is contributed to that decrease in PNS program participation due to the injunction. For 23-24, the combined revenue is 176 million, which is a decrease of 3 million. And that's attributed to a decrease in the projected billable caseload based on the decline in the DRU's projection of the birth rates.

So the birth rate is projected to go down. So we're projecting fewer participants for that reason. And then the last thing we wanted to bring to your attention is prenatal screening for sex chromosome aneuploidies. In December of last year, the American College of Medical Genetics and Genomics released an updated practice guideline that recommends cfDNA, the procedure we're using for Trisomy 20, 118 and 13, should also include screening for sex chromosome aneuploidies.

And so we are preparing to make the addition of that to our screening panel. The fiscal impact is unknown at this time. We'll provide an update in the November estimate as we move forward. We are expecting to add that in the fourth quarter of budget year, so sometime after April 2024. We will have more information for you in our November estimate. Happy to take any questions.

No comments, but available for questions.

Nick Mills, Department of Finance. Nothing further to add.

You lost me on that second one, of what's going to be added.

So the current method that we use for screening, it looks for Trisomy 21, Down Syndrome, and 18 and 13. But now that the recommended national standard is also to include screenings for sex chromo abnormality. Women who have something called Turner Syndrome, where you only have one X chromosome, or boys who have two Y's or two X's, so XXY or XYY. So variations of the sex, specifically the sex chromosomes.

And they're disorders that aren't necessarily as severe. Babies with, we all know what Trisomy 21 happens, and babies with 18 and 13 rarely survive, so they're very serious. People with sex chromo abnormalities, there might be some in this room now, you might not know. They do have some health risks and some problems, but they're less severe. And the testing method is a little different and has a little bit different ramifications.

When you get a positive, it might not actually be that. It's not as- and the positive predictive value is not as good. Pardon me?

When would that be included in the testing?

We're looking to add it in the fourth quarter of 23-24, so April '24 or later, that last three months. It's a little fluid right now, but that's our target.

And does including that, will increase the cost?

It may. We have to negotiate with the laboratories.

It's an add on, so it's not another specimen. It's not additional blood work. It's just doing a little tweaking what we're doing and adding a little bit more outcome. So it's not an extra process. There will be extra follow up costs. So the positive predictive value for 20, 118 and 13 is very good. So when you test it and you get a positive, it's more likely than not that it's something. That's not the same with sex chrome abnormalities. They're less positive.

And so we have more people to follow up on so that we throw a wider net, so we don't miss as many, and so there'll be more follow up costs. So it's likely that we will have a fee increase. But we'll have more information for you in November. We're not really sure what it exactly is.

Thank you. Seeing nothing else, we're going to hold the item open. Move on to issue number five.

Thank you. I'm Christine Sullivan, chief of the WIC Division in Public Health. WIC participation has been increasing slightly, and food costs are also increasing. The May revision estimate includes projections of more than 950,000 WIC participants served every month, and that's a slight increase over the previous estimate. The revision also includes increases to food expenditures of an increase of $16 million for the current year and $60 million for the budget year.

The majority of that increase is due to inflation and the increase in participation, but a portion of it is also attributed to the fruits and vegetable increase that has been implemented by USDA over the past few years. The new projections brings total food expenditures to $938 million for the current year and $1 billion for the budget year. Food expenditures are fully covered by federal and rebate revenue. I'm happy to answer any questions.

No comments, but we're available for questions.

Nick Mills, Department of Finance. Nothing further to add.

Nothing further on our end. Moving on to the next issue, issue number six. Thank you so much for joining us.

Good morning. My name is Maria Ochoa and I'm one of the Assistant Deputy Directors in the Center for Healthy Communities and I will be covering issue six for the Lead Renovation, Repair and Painting Program, SB 1076.

The May Revise reflects an increase of two positions and $546,000 in General Fund state operations and fiscal year 2023 to 2024 to implement the residential Lead Based Paint Renovation, Repair and Painting Program as mandated by SB 1076. This request is in addition to the first adjustment in the Governor's Budget, which included a request for one position and 615,000 in General Fund Authority in '23-'24.

The updated request in the May revise will now reflect a total increase of three positions at 1.2 million General Fund in fiscal year 2023 to 2024, 621,000 General Fund in fiscal years 2024 through 2027, and a total of 31 positions and 5.1 million from the Lead Related Construction Fund in '27-'28 and ongoing to implement the Residential Lead Based Paint Program. When the BCP was submitted at the Governor's Budget, Program planned to leverage and build new functionalities on the current lead related construction online system.

Since this submission, CDPH has conducted further analysis and has determined that the development of an online certification application platform to issue Lead RRP certificates and monitor certification status will need to undergo the project approval process, during which program needs to be evaluated and a solution will be developed.

The adjustment in the May revise was necessary to include the cost to cover the PAL Process needed to evaluate several alternatives, to determine the most appropriate solution to process and track this large volume of certifications, and to make permanent two additional positions. Because the regulated universe contains over 40,000 individuals and more than 5000 companies, CDPH cannot process certification without an online application system, and implementation will be delayed until a solution is identified during the PAL Process.

Therefore, Trailer Bill Language is submitted to address SB 1076 statutorily required implementation dates that cannot be met by July 1, 2023 for education and outreach and January 1, 2024 for certification. The Trailer Bill will extend the implementation dates to July 1, 2026 for education and outreach and July 1, 2027 for certification, and the Trailer Bill will also address consistency and terminology with existing statutes and federal regulations. Open to any questions.

We have not raised concerns with the proposal at this time.

Nick Mills, Department of Finance. Nothing further to add.

Thank you so much. We have nothing further. We're going to hold the item open. Thank you. For our next issue, we're going to turn to a Zoom participant. Issue number seven. I'd like to welcome Assistant Deputy Director Michelle Bell to present.

Good morning, everyone.

Good morning.

So, for our current year '22-'23, CHCQ projects a revised expenditure authority of 481.5 million, which is a 32.3 million increase from the '23-'24 Governor's Budget. This increase is due to an increase in the Federal Fund Expenditure Authority for potential title 18 and title 19 supplemental awards, an increased Hospice Impact award and potential supplemental Cares Act funding. For budget year '23-'24, CDPH estimates expenditures will total 462 million, which is an increase of 29.3 million, or 6.8% compared to the 2023 Governor's Budget.

Adjustments include a 4 million increase in General Fund Authority for skilled nursing facility staffing audits, a 25.3 million increase in the Federal Trust Fund Authority for potential title 18 and title 19 supplemental awards, and an increased hospice impact award and a $939,000 increase in reimbursement authority with a corresponding $939,000 decrease in authority for the Licensing and Certification Program Fund due to a technical adjustment.

As of April 2023, the vacancy rate at Chcq is 16.2% for health facility evaluator nurses, which is an increase of 13.3 percentage points since the beginning of the COVID pandemic in February 2020. This increase is due in part to these newly authorized positions, but also because of increased retirements and separations. CHCQ has made significant progress toward restoring normal operations as the state continues to recover from the public health emergency, while staffing shortages are likely to remain.

Given the nationwide nursing shortage, CHCQ is developing and implementing strategies to adapt and continue to deliver critical licensing and certification services. And with regards to complaint timelines, as of February 2023, CHCQ is completing 89% of long term healthcare facility complaints within 60 days of receipt, which is a 16% increase in timeliness since July of 2022. Through April of 2023, CHCQ has closed 14,322 long term care complaints in this fiscal year.

Furthermore, CHCQ has completed 92.1% of backlogged complaints that were submitted on or before April 1st of 2021, over 12,000 complaints in total. And as of May 2023, only 813 open long term care complaints remain in the backlog. Thank you.

No comments on this, but available for questions.

Nick Mills, Department of Finance. Nothing further to add.

Thank you, Nick. Nothing further on our end. Holding the item open. Moving on to issue number eight. Michelle, will you be presenting some of these?

Yes, actually, I start out with number eight.

Go ahead.

Okay, so the internal departmental quality improvement account, provisional language, state facility, spring finance letter. So, for any potential project that may exceed the existing account expenditure authority of 687,000, CDPH is requesting provisional language be included in the 2023 Budget Act that allows CDPH to request the Department of Finance to increase the expenditure authority from the account after review of a request submitted by CDPH that demonstrates a need for additional authority.

This language will allow CHCQ to identify quality improvement activities that it would like to fund with the account and request expenditure authority in the current year and is requested for one year only. Once projects are identified and the amount of the current year funding is known, CHCQ will submit a budget revision for additional expenditure authority from the account. CHCQ projects a fund balance of $18.5 million at the beginning of fiscal year '23-'24.

In fiscal year '22-'23, we've spent 2.7 million out of the 3.6 million appropriated. The traditional expenditures over the last three years have been approximately $3 million per year. In the three years prior to that, CHCQ had requested $2 million in expenditure authority. Historically, expenditures have been in the two to $3 million range. Thank you.

We have no concerns with this.

Department of Finance has nothing further to add.

Thank you. If the rest can join us for the other items on this issue.

Good morning. I'm John Roussel. I'm the CIO of CDPH. And I'll be speaking on the Information Technology Data, Science and Informatics Framework.

CDPH requests the Augmentation of 15.9 million to continue planning effort in the public health information technology and infrastructure and data associated with the critical foundational activities as described in the Information, Technology, Data, Science and Informatics Framework for the 21st century public health system, including urgently needed funding related to the data initiatives, which are key enablers for the data sharing analytics, such as accessing current state of our data ecosystem, understanding state and federal data policies and standards, and standing up enterprise data governance.

The components of the 15.9 million include documenting data sources, owners and users across CDPH related to surveillance, licensing and vital records, establishment of enterprise data governance defining data policies, standards and limitations on use of data across the ecosystem. Determining priorities for Enterprise data sets and workspaces defining cloud migration criteria and viability matrix to begin cloud migrations and develop data integration strategies based on California Health and Human Service Agency data framework and AB 133 priorities and define interoperability implementation activities across the Enterprise.

I'm available for any questions.

We have not raised concerns with this issue at this time.

Shalina Narelli, Department of Finance. Nothing further to add.

Thank you, Madam Chair. Senatel Patel, Department of Finance. Just to add on to Mr. Roussel's testimony, this proposal is for a budget Bill Language that would authorize an augmentation, and the budget Bill Language is identical to previous language included in the 2022 Budget Act. A new funding was appropriated during the current year, and this would just extend the opportunity to do so in the budget year.

Thank you for that clarification. I see no other questions. Moving on to the next item within the same issue.

I'll be presenting this next technical adjustment. Nick Mills, Department of Finance the Mayor revision reflects a technical amendment to a provisional language that specifies the amount to be reverted in order to reflect the $25 million reduction of the Climate and Health resilience planning grants in 22, 23, that was proposed at Governor's Budget. There is no change to the Governor's Budget proposal.

Given the ongoing State of the budget projections, we had no issues with this proposal earlier in January, and we continue to find that the reversion is reasonable.

Thanks, Will. Nothing further. Next item within this issue. Welcome back.

Thank you. So the next item is for the Domestic Violence Training and Education Fund workload adjustment, and the May revise reflects a shift of 135,000 in the Domestic Violence Training Education Fund from state operations to local assistance to fund community-based organizations and conduct community-level domestic violence primary prevention work. And this was simply a line item adjustment.

What does that look like? What are the resources that we're offering within our communities for DV prevention?

I will have to get back to you on that one.

Thank you.

Okay, I'm going to stay up here.

No concerns with this.

Nick Mills, Department of Finance. Nothing further to add.

Nothing further. Moving on to the next item. Who's ever doing the final one can also come up too.

That's me. Okay.

Are you doing increased resources? Okay, great.

Hi, I'm Terry Mcintyre, the assistant branch chief for the infectious diseases branch in the division of communicable disease control Center for Infectious Diseases. And we are asking for our program, our vector-borne disease program, for a $68,000 authority-only raise in our special fund to completely fund our one position that we have. In the past couple of years. We've had to move the position and have some of the funding done through General Fund because we didn't have enough authority in our funding. That's all we're asking for.

Perfect.

No concerns.

Department of Finance. No concerns.

No concerns on our end final section within this issue.

Okay.

No.

There we go. For our Proposition 99 accounts, the May revise reflects several adjustments to the budget as a result of updated cigarette tax revenue adjustments. So the first one is for our Prop 99 health education account, and it reflects an increase of about $5.3 million. And this money is used for program staffing, operating expenses or media campaigns, competitive grants, surveillance and communicating data, and competitive grants. And the next one is for our Prop 99 research account, which reflects a decrease of about $18,000.

And these revenues are used for tobacco related disease research and activities related to support our cancer registry. The next one is for an allocated account Fund two, three, six. And that is a decrease of $57,000. And this money is used for our California Health Interview survey. And the revenues are used to support tobacco education, tobacco prevention efforts, tobacco related programs, environmental protection and recreational resources.

And then the last adjustment is a decrease of about $27,000 to our breast cancer research account, which is also used to support activities related to support our cancer registry.

No concerns.

Nick Mills, Department of Finance. Nothing further to add.

Great. Moving on to the final item.

That was, I just covered that.

Yes, I apologize. I apologize.

Okay.

Perfect. We're going to hold every single item within issue eight open that closes out Part A of today's hearing.

Thank you.

Moving on to Part B of today's agenda. Today we'll be hearing information from one Department, the Department of Social Services on childcare. And we'll start with issue number one. Good morning.

Good morning, Madam Chair and Members. My name is Jennifer Troia, and I'm here on behalf of the Department of Social Services. The first item that you asked is for an overview of the May Revision with respect to our child care and development programs that are administered by CDSS. I'd be happy to provide that. I will address the second question related to the general child care savings at the same time.

Good morning.

The May Revision includes 5.8 billion total funds, 2.9 billion of which are General Fund for CDSS child care and development programs. This is a net decrease of 71 million dollars from the Governor's budget. The decrease is related to declines in the Stage Two and Stage Three CalWORKs child care caseloads and a reduction in the cost-of-living adjustment that is a technical adjustment.

In terms of caseloads, the average monthly CalWORKs Stage One caseload is projected to increase significantly by about 26 percent, while Stages Two and Three are projected to decline by 14 and 5.6 percent. Respectively, these are just changes in estimates on the natural related to actuals that we have updated information for. In terms of enrollment and funding for the Alternative Payment Program or CAPP program, as of April 2023, based on the data we collected between October 21 and March of 23, the Alternative Payment Program enrollment has increased by approximately 50,100 slots.

In other words, this is an 89 percent increase in the program. With respect to the general child care program--again, this is your second question--the May Revise reflects anticipated one-time savings. These savings are associated with the current year, the 2022-23 budget year, and they are 588,000,000 dollars. Although these savings are recognized, the expenditure authority remains so if we were able to expend additional dollars, the amount of the savings would be reduced.

The projected savings are based on the responses to our request for application for new slots and how much we believe we can put into contracts maximally as a result. So no one is receiving a decrease to what we were able to come up with through the RFA process or any decreases to contracts or disenrollments. This is savings that would have occurred on the natural, based on the time it's taking for such a large expansion.

We're just recognizing them a little earlier than usual in light of the deficit that the state is facing. The final item in the overview is with respect to the statutory cost-of-living adjustment or COLA. The May Revision includes 183,000,000 dollars General Fund to reflect the statutory COLA. It is estimated to be 8.22 percent and this amount reflects a technical adjustment to how the COLA is applied to the direct contractors.

Thank you. I'll pause there. I'll go ahead, then. Your third question was with respect to unspent federal relief funds for childcare, including ARPA funds, the May revision reflects a full obligation for all federal COVID relief funds. In addition to the stipends authorized through AB 179, CDSS is continuing to evaluate any anticipated unspent funding.

We do project unspent carissa and ARPA stabilization funds, or we did, and you all took early action in AB 110 to reallocate those funds so that we could provide a one time supplement to childcare providers using those ARPA stabilization funds. We also projected that there were some carissa funds that would be left over, and we utilize those for the three month extension of the family fee waiver. We will continue to work to ensure that one time federal Fund spending is maximized before the liquidation time frames.

It is possible that despite all of our collective best efforts, there could be some funding that reverts, but we are certainly interested, as are you, in minimizing any amount that would fall into that category.

LAO, any comments?

Jackie Barocio with the Legislative Analyst Office. We're still completing our analysis of the May revision and continue to work with the Administration. But we just wanted to flag four things as it relates to the Childcare budget.

First, just following up on the savings conversation. Yes, the budget includes current year savings associated with General Childcare and also the Alternative Payment Program funds that were not awarded or entered in contract. Those are one time savings, and we're working with the Department to just get further clarity on the total savings that we could expect and also requesting updated slot information to the extent that there's a possibility that we may see additional savings just due to lower slot takeup rate in funds that were awarded or put in contract.

And then to my second point, to the extent that there are additional savings and those savings are additional federal relief funds that expire September 2023, in our conversations with the Administration, it seems like the anticipation is that those funds will just revert back to the Federal Government just due to timing concerns and capacity concerns of reubligating those dollars.

The third point: the budget does assume a $46 million decrease in Proposition 64 funds that are not backfilled in the budget year for General Childcare. Meaning if a backfill isn't provided, we're not providing enough funding for all slots. But our understanding is that the Administration does intend to use current Proposition 64 carryover funds to backfill that decrease. It's just a matter of getting further clarity on when that backfill will occur. Will it occur in time to just be reflected in the budget, or will it be after? And then also, even with that $46 million backfill, there's still a remaining balance of 150,000,000 Proposition 64 carryover funds.

So just getting a better understanding of how those remaining carryover funds will be used. Will they be saved to possibly backfill future Proposition 64 shortfalls, or could they potentially be used to backfill shortfalls in other programs that rely on Proposition 64?

Last comment I will raise is that we're also, similar to the question outlined in the agenda, working with the Department to get backup to confirm that all available federal funds, including the federal childcare development funds that recently received an increase of 107,000,000, are being reflected in the budget. Thank you.

Department of Finance.

Hi, Diana Dominguez with Department of Finance. No comment at this time, but we're happy to answer questions. Thank you.

I've been trying to keep up with all the different funds and the early action, so I apologize if I still haven't been able to really secure that down. So a couple of questions and I might have missed it. Okay, so in the early action, the funds that we utilize, the federal funds, those are the ones that are going to expire in September 2023.

So it's imperative for us to release those out, cover some of the family fees, look at the rate reform and stipends that went out, right? Correct. Awesome. In that budget hearing, I asked of the remaining federal funds and approximately we've been hearing some numbers as conservative of 100 million to perhaps $1.2 billion of other federal funds. You've mentioned the full obligation in the mayor vision that there's a full obligation to the rest of the ARPA funds, but there is a possibility for some of them to be called back.

Are these also the ones that are to be liquidized to be expiring in September 23 or next year?

We have different pots of federal funds and there are different expiration dates, so there are those that do need to be expended by September 2023. There's also some that are a longer horizon. What I was referring to is that all of the funds at this point are obligated in the budget. So we have identified what we want to and expect to spend those funds on.

There are contingencies within that, though, that are not entirely in our control. So an example is that in order to receive the stipends that we have budgeted, providers have to fill out a survey that the Federal Government requires. We are obviously doing everything we can to get all of the providers to fill out that survey so that we can provide them with the funds that we have budgeted to give them.

But if there are some providers who do not complete that survey and we do not have time to take another action to change the rounds of stipends, it is possible that there could be some funds that we were not able to give to those who were entitled to them under the way we budgeted.

And in talking about those surveys, are we doing anything on our part? Is it technical assistance that's needed? Any campaign awareness? Hey, by this date . . .

We have had a number of webinars, we have a lot of information posted on our websites. We are working with our contractors. We have worked with CCPU. We definitely are doing a lot to try to campaign and make sure that folks are very well aware of what those requirements are and that they receive the funds that we intend for them.

So sounds like the possibility of that money coming back, it's not on the Department, it's on the providers to ensure that they fill that out. Yes. Perfect. So going back to the remaining federal funds, the ones that expire next year, have we looked at how that's going to be? We have all of them accounted for at this point. We have budgeted to utilize all of the federal funding. Got it. And that's what you mentioned that we don't have a specific breakdown of that.

Just a full accounting of all federal funds, including funds that we get from the regular Federal Childcare Development Block grant. I will flag that in our initial analysis of federal funds, there is one bucket of funding, Cares Act funding that expires September 2023, where we identified a remaining balance of 32 million, a remaining net balance of 32 million. And as of now, there's no action to reabligate those dollars. Yes, I will affirm that there is. The issue that was raised thank you for the reminder.

That was a technical error where we have double counted something and because we're past the obligation date, we cannot enact something new to obligate it differently. So there is that small amount of funding, obviously not small in the sense that we don't care about it, but small in the sense of the 5 billion of federal funding we received. It was a technical error in that one.

Okay. Just on the Prop 63 four money. So we know that is going down. So is the plan then to save for next year or what is the plan on that? LAO was saying that--

There is 150,000,000, yes. I'll let the Department of Finance mainly handle this, but I do want to say that it is, for this year, really sort of more of a display issue in the sense that that reduction is not an operational reduction to the program. So I'll say that and then turn it over to my colleagues from Finance to add more. Yes. Thank you.

Gabby Santora, Department of Finance to elaborate on my colleagues comments, affirming that we do have sufficient carryover in order to backfill that $46 million gap in the budget year. We do not have at this point in time a sufficient solution to address budget year plus one.

But we're continuing to evaluate to see what remaining funds we can use to access and make sure at the end of the day, that the fluctuation in Prop 64 revenues does not result in any impact to the field where we're not able to Fund slots that have been filled. Okay, thank you. And then one of my last questions is around those slots, the 50,001 slots increase in program. I remember earlier conversations around those slots not being able to be filled with workforce constraints and so forth.

Now that we're increasing these slots, now how are we looking to address to ensure that they all go out and are utilized?

We are working very closely with our contractors to ensure that the ramp up can occur. I do think there was an initial period where it took some additional time for us, given that we were more than doubling the system to both staff up and get the contracts out as needed for the contractors and in turn for the contractors to staff up and to work with the families, for the families to identify providers or to connect with the direct contractors.

So in all areas it has taken some time and the budgets did build in some amount of time, but it took even longer. We are now at the point though where things are certainly moving at a much faster pace. So the numbers I referenced with respect to the CAP program is that we have an 89% increase or the 50,100 new slots that have been enrolled. The 21 budget included 62 600 slots and the 22-23 budget included 32,000 slots for CAP.

So we are still not there all the way to the 21-22 and 22-23 increases because they were so large. So in 23-24 we will be continuing to work very closely with the contractors to support that additional enrollment on the CAP side.

Thank you. Any further questions? Great. We're going to hold the item open and move on to issue number two.

Thank you. Issue two is trailer Bill Language with respect to the use of the alternative methodology for reimbursement rates in the Childcare program. As just a quick reminder, in November of 2022 there was a Joint Labor Management Committee that had representatives of both the State and CCPU which presented a single rate reimbursement structure to the Department of Finance.

The JLMC's presentation was also consistent with the report of a stakeholder workgroup that CDSs in consultation with CDE, had convened in the summer and fall of 2022. Collectively, the presented approach toward a single rate structure consisted of an alternative methodology.

So rather than looking at a regional market rate, we would be looking at something that accounts for the actual costs of care to inform the rate system base rates and then some incentives enhancements and an evaluation of the rate structure. So we are relying on that presented approach and beginning to move forward. In order to do so, we need to adjust the statute now to allow for that alternative methodology to be utilized. The statutes currently only reference the regional market rate as an option.

So this will allow us to use the existing rate structure until the rates based on the alternative methodology are ready, but in the meantime give us both sets of options. So the statutory changes required just to allow for that replacement with the alternative methodology. You also asked about the timeline for adjusting to move to that alternative methodology.

We have already submitted to ACF, the Administration for Children and Families at the federal level, a request for pre approval to move to that alternative methodology, which is the beginning of the process. We've received some questions back from them and are having some back and forth with them to seek that pre approval. This will begin the launch of our alternative methodology study design.

So we now have a contractor on board called P Five Fiscal Strategies, and they are beginning to work on constituent engagement and data collection in order to assess that actual cost of care. This fall, in the fall of 2023, the Federal Government will release the preprint for the state plan for CCDF funding. We will be, during that period, continuing to engage with providers and stakeholders and to collect data and analyze that data.

Our expectation is that in the winter of 2024, we would then begin modeling scenarios and rate setting that would lead us into the spring budget process in next year 2024, in order to then, in the spring, revise our plan for the Federal Government. We have a due date of July 1, 2024 for submitting our new CCDF state plan to ACF.

We are expecting that state plan to reflect our use of the alternative methodology and to submit that to ACF on time by July 1, 2024, and as necessary, submit any amendments that might be required in order to reflect rates that then would be utilizing the alternative methodology when ready.

Hello. We're still reviewing the Trailer Bill language, and we'll follow up if we have any concerns with the Subcommitee. Thank you.

Department of Finance? No comment. Thank you. Thank you. So a couple of dates that were given out, I think it seems like the most important one is July 1, 2024 of the deadline to submit our state plan. Once that is submitted, what is the timeline we anticipate to get the feedback and then actually implement?

We have to submit that we also need to do the work to actually move to whatever the rate system is. So it will also be contingent on what it is that we identify and budget for. When that is accomplished, we will have to automate any changes in rates, do other work toward implementation.

So it's a little bit hard to say exactly what we will wind up agreeing to with respect to bargaining with CCPU and then the conversations with the Legislature about precise timing for implementation. But we are hoping that the July 1, 2024 plan will reflect the use of an alternative methodology, and then there will be a period of time for implementation. Again, depending on the complexity, we'll be able to say a little more specifically what that period of time is.

Perfect. I'm interested in seeing in the TPL just a little bit more clearer language on this path that you just explained to us the timelines, just to keep us accountable. So if we could look at that, we'd be happy to work with you to refine the trailer Bill Language. Great. Any other questions over here? Okay, holding the item open.

Moving on to our last issue: Issue Number Three.

Issue Three is trailer bill language as well. This is a proposal to reflect the Public Records Act exemption for collective bargaining related to child care, and just want to clarify that this is cleanup language. This is something that existed in the Education Code, but when we did the transition from CDE to CDSS of the child care programs, it's something that did not move over into the Code, the Welfare and Institutions Code that we operate under at CDSS. So this is really technical cleanup.

No major concerns, but we are still reviewing the language and we'll communicate back with the Subcommittee if that changes.

Department of Finance: no additional comments. Thank you.

No additional comments on our end. Thank you so much for joining us today. That ends our issues on our agenda. We are now going to be moved--thank you--we are now going to be moving into our public comment portion. For those who wish to provide a public comment in person, please step forward.

If you wish to provide public comment through our teleconference platform, today's number is going to be 877-226-8163 and your access code is 7362834, and we'll begin with those in person. Go ahead.

Hi, Madam Chair and Committee Members. My name is Justina Erpelding and I'm with EveryChild California. We are a statewide membership organization of ECE providers in subsidized care, and we thank you so much for being bold and courageous in listening to the early care and education field by putting forth a proposal that includes one billion in rates as well as waiving family fees through September 30th until an equitable fee schedule can be created.

These are incredible investments that we wholeheartedly support. In addition, we would request that contract earnings are paid on the maximum certified hours and are allowed flexibility for direct contracting programs. Thank you.

Thank you.

Good morning, Madam Chair and Committee. I'm Dr. LaWanda Wesley with Child Care Resource Center and also part of the ECE Coalition, and I just want to say and ditto everything my colleagues said, but I want to double down and say that we need cash out the door right now, immediately. I just was a part of an event yesterday and the week before that, and one particular provider lost someone--an educator out of the classroom the prior week and was losing one this week and is losing one next week.

And so, what's happening, because the wages are so dispiriting and not robust enough, folks are leaving the field to other workforce sectors. So while this is all being developed and we have this July 1st, 2024, we are literally losing folks out the door. I was an educator myself and understand you just can't live off the wages. Again, nationally, we're being paid $13.22 an hour, and if you think about what the cost of rent is, it's more than 2,000 dollars a month, and you could go on and on.

So we need money right now, out the door, immediately in this budget year, and we know the Assembly is on board. We know that the Senate is on board, but as we wait to prepare for this, we need the cash to our providers so that we can sustain all of those increased slots that we just talked about, which is great, but we need to make sure there aren't dark classrooms on the other side of it, and right now, dark classrooms mean there aren't educators or providers there to provide the care, but the facility is ready to go.

Thank you.

Okay, thank you.

Good morning, Chair and Members. Michelle Gibbons with the County Health Executives Association of California, representing local health departments, and here as part of the California Can't Wait Coalition as well. We want to thank the Administration for withdrawing their January proposed cuts to public health workforce training, and development programs.

Even more, we would like to thank this Legislature for your leadership in prioritizing public health and for the concerns that this Subcommitee expressed around that proposal, and we just ask that the restoration of those funds be approved in the budget. So that would be for CDPH, Issue Two, for DHCS, Issue Four. CHEAC appreciates the administration's removing the single-plan counties from the Whole Child Model proposal.

We look forward to continuing to work with the Administration to address the challenges within the existing Whole Child Model counties, including clarifying the roles and responsibilities between the counties and the plans and making sure that counties have sufficient resources to maintain their ongoing responsibilities. Thank you.

Thank you.

Hello. My name is Laurie Furstenfeld, Director of Legal Advocacy at the Child Care Law Center. I'd like to thank the Committee for their leadership on child care and the Legislature for the robust proposals in the state budget. I wanted to highlight some issues that are not included in the May Revise, and we implore on the Legislature to continue pressure on the Governor to release the spaces now for child care.

Families need child care now, they cannot wait, and those 20,000 spaces are not in the May Revise to be released this year. We also need a long-term solution to make child care more affordable by implementing an equitable fee schedule which we know the Senate is in support of, and so we implore on you to continue that pressure on the Governor to adopt an equitable fee schedule.

As my colleagues have highlighted, and as part of the ECE Coalition, we ask that the wages for providers be increased now. Dollars go out the door immediately because providers cannot wait to be paid, and we also urge all of you to ensure that the unspent federal funds are spent now and that we don't leave any money on the table. We were disappointed to hear that Care's money was left on the table, and that should not happen this year. Thank you.

Thank you.

Good morning. Glenn Backes for the National Harm Reduction Coalition. We commend the Administration for increased investment in overdose prevention through the Naloxone Distribution Project, but the May Revise still lacks a workforce to get that medication into the hands of people most likely to use it to save lives. The NDP to date distributed two million doses as described by the Administration.

31 percent of those doses went to harm reduction programs which are underfunded, volunteer-driven programs that work directly with drug users in homeless encampments, in SROs, in motels. They reach people where they live, they teach them how to use the medication. That's why there was 31 percent of doses accounted for 59 percent of the reported reversals. Everybody else who got naloxone from the state accounted for 41 percent. The harm reduction programs accounted for 59 percent of lives saved. 78,000 people were reversed from medications they got from harm reduction programs.

So it's absolutely imperative that we invest in the workforce that will deliver it to the people who need it, the people who will use it, and that the naloxone not stay on shelves of those who are not in contact with the at-risk community. Thank you.

Thank you, Glenn.

Chair and Members, Kathy Mossburg on a few clients here, but particularly want to echo the comments of Mr. Backes in regards to the San Francisco AIDS Foundation and APLA Health. Totally agree with what Mr. Backes has said. We are very concerned if you do not fund workforce, you will leave many of these doses on the shelves unused, and so encourage this Committee.

We know there's been leadership in the Legislature to further our request to use some of those opioid settlement dollars, 61 million over four years to continue the California Harm Reduction Initiative and that program that supports the workforce. Also under the Department of Health, Issue Three, there was a transfer of 400 million dollars from the AIDS Drug Assistance Program. Our organizations initially had some concern about that transfer. It's much larger than we've seen in the past.

We have had a lot of conversations with the Administration and with the Office of AIDS and others, and also with legislative folks to really be ensured that if this money does go out, it will come back due to having control section that says the money has to be repaid back to the account if it is needed, and we've also understood there is enough money in there to sustain current programs that are being funded out of that ADAPT program.

So appreciate the Legislature's concern and support of our interest here and really forcing the Department and Administration to have conversations with us quickly. We are no longer opposed--I'll get to my point there--we are no longer opposed to that idea, and then lastly, on behalf of the local health care or the Local Health Plans of California, support the changes in the May Revise to the Whole Child Model and the goals that are in there.

Really appreciate the support of the Administration to build on the success that our COHS counties have seen and really focus on just the COHS counties that are moving into new geographic expansion areas in 2024. Thank you.

Hi. Good morning, Member and Chairs. Beth Malinowski with SEIU California as part of the California Can't Wait Coalition. Appreciate deeply the Administration recommitting to public health workforce and ask the Legislature to guarantee these monies are in the final budget. Grateful to see the continued commitment to the Medi-Cal expansion timeline as well.

We support the MCO tax, urge Legislature to use the money to support Medi-Cal, ensuring funding is going directly towards coverage and access and our workforce that's doing that important work. With regards to other DHCS items, want to appreciate as well the movement on the CCS Whole Child Model expansion. Continue to evaluate the Whole Child Model as a whole, but again, really appreciate the movement there.

Lastly, I do want to bring up one item that was not on the agenda today, but does relate to the broader conversation of coverage. In particular, want to make sure that we're continuing to identify two million dollars to make sure Covered California can be successful in implementing AB 2530. That was last year's effort--excuse me--around coverage for striking workers, those absent from the May Revise, and again, look forward to working with Administration and Legislature to find those two million dollars. Thank you so much.

Thank you.

Good morning, Chair and Members. Janice O'Malley with the American Federation of State, County and Municipal Employees. Essentially ditto on what my colleague Beth Malinowski from SEIU had mentioned. Just really appreciate the Governor's investment in the public health workforce to adequately build the pipeline of the public health workforce. Also wanted to say that we're disappointed that the revised budget does not include commitments to increase reimbursement rates or invest in benefits for our state's child care workforce which is yet to recover from the pandemic.

And again, AB 2530--we'd appreciate funding that was inadvertently left out of last year's budget, and lastly, we are also disappointed that the Governor's budget remains unchanged on improving health care coverage affordability for those on Covered California. The clawback of 330,000,000 dollars meant for this program which was intended to help consumers eliminate deductibles and lower copays should not be diverted back to the General Fund, and appreciate ongoing further conversations with you all on the budget as it moves through the process. Thank you.

Thank you.

Good morning. Linda Nguy with Western Center on Law and Poverty here to comment on Part A on the health piece. Firstly, on the Department of Health Care Services, pleased that the Department worked with various stakeholders on the Doula Service Workgroup which was extended based on the workgroup's suggestions, so do support the extension of the evaluation.

I'll save my comments on the MCO tax for next week. On the Department of Public Health, we are concerned with SB 1076, a three-year delay as supporters of the bill. The bill set a timeline, a clear timeline because of the serious harm to children and their families due to lead exposure. Thank you.

Thank you.

Good morning, Chair and Members. My name is Raquel Yoffie on behalf of the California Alternative Payment Program Association or CAPPA, and we're aligned with the ECE Coalition. Although we believe Governor Newsom's May Revise is a solid starting point to build on, we are very concerned that a meaningful, permanent increase in child care provider rates was not included.

California desperately needs to eliminate the policy where parents with stable work hours receive a set amount child care voucher while parents with unstable work hours receive a voucher with no guarantees, resulting in less stable child care. All income eligible families deserve the same fair and equitable access to child care. We are appreciative of extending the family fee waiver until September 30th, 2023, but would ask that permanent elimination of the fee be considered moving forward.

Parents with young children must have access to child care in order to secure or maintain a job, making this issue critical to the economy rebounding and growing. We hope to work with the Governor and the Legislature to support fair and equitable access to subsidized child care by all income eligible parents. Thank you.

Thank you. See no one else in person, Moderator, if you could queue those who wish to provide comment through the teleconference, we're ready to begin.

Thank you. Thank you, Madam Chair. If you would like to provide public comment today, please press one zero at this time. That command again: one then zero. And first we will go to line 24.

Madam Chair and Members of Committee, Robert Harris on behalf of SEIU California, but just four little comments about the behavioral health aspects of the Department of Health Care Services. One: we're appreciative of the nine aa extra money because we think that's really, really critical that you can't provide this service without paying people good salaries and training them well, and we have some language for the Administration that we think would improve what they're working on. L.A. County, the CARE Court money, we're glad to see it in there.

We're glad to see that they paid attention to the counties about how much more that needs to be done and contingency management, Item 19. California has taken a bold, strong first step toward dealing with stimulant use disorder, which no other states are making the kind of move that California is, and this is the only evidence-based practice for stimulant use, but we're happy to see that, and we're also happy about increasing the now on distribution. So thank you so much for helping keep people alive.

Thank you.

Line 15.

Good morning, Madam Chair. Malik Bynum on behalf of Child Care Providers UNITED, a UDW and SEIU partnership representing over 40,000 family child care providers in our state. First off, want to acknowledge and thank the Administration and the Legislature for the passage of AB 100 and AB 110, the early action trailers that contain crucial child care provisions such as the waiving of family fees to September of this year and the temporary stipends you state. As for the May Revise, we appreciate the Administration's proposal for an 8.22 percent cost-of-living adjustment.

However, as Janice O'Malley shared, we'll recognize that this version of the budget does not adequately seek to address the reimbursement rate system that's currently failing our child care providers. Current rates remain severely insufficient, and with the demand for child care only increasing, providers can continue to come out-of-pocket providing care without being properly reimbursed.

Understanding that we're still working diligently at the bargaining table to land our second contract by the end of June, we respectfully urge the Administration to prioritize rate reform and the use of the methodology in which providers are rightfully paid for the true cost of providing quality parcels. Thank you.

Thank you.

Line 19.

Good morning. Nicette Short on behalf of Rady Children's Hospital and Loma Linda University Children's Hospital regarding the Whole Child Model expansion. While we sincerely gave the Department's changes to the item that are reflected in the May Revise, we do continue to have concerns with the programmatic expansion given the outcomes of the recently released evaluation. We look forward to our ongoing conversations with the Administration regarding our outstanding concerns. Thank you.

Thank you.

Line 12.

Thank you. Good morning, Madam Chair and Members. This is Kathy Van Osten on behalf of John Burton Advocates for Youth and a statewide coalition of 75 organizations seeking to prevent and end homelessness. We are seeking 16.7 million dollars in General Fund to bring in an additional 10.8 million in matching federal funds to provide a housing supplement for youth in foster care that are placed in--I'm sorry--youth in extended foster care placed in supervised independent living placements in high cost counties specifically.

We have done this for other transitional housing placements and these young adults need our assistance as well to remain off the streets. This is a request that is being championed by Assembly Member Ting and Senator Durazo, and we certainly seek your support on this request.

Thank you.

Line 27.

Morning, Madam Chair and Members. Jared Call with Nourish California commenting today on Part B, Issue One: child care, specifically the Child and Adult Care Food Program. First, just want to align ourselves with the comments from the ECE Coalition about the need for more funding overall for our child care system, but regarding the Child Care Food Program, the current eight meal reimbursement in child care is perpetuating an unfair two-tiered system that reimburses family-based child care providers for only 75 percent of the meals that are served to kids in their care.

And that's in contrast to child care centers and preschools which receive 100 percent reimbursement while they're also better resourced and can also take advantage of economies of scale when they're purchasing food and meal supplies. So that gap is unfair, and the family child care providers receive no state funding for one out of every four meals they serve.

So we--along with the CACFP Roundtable--are urging you to support a modest ongoing investment of just 1.5 million dollars to eliminate that eight meal reimbursement gap. It's underpaying and undervaluing family child care providers who are largely Black, Latina, immigrant, women of color--

Thank you. Thank you for calling in.

Poverty line. Thanks.

Line 28.

Good morning, Madam Chair and Senators. Rosanna Carvacho Elliott on behalf of the Early Care and Education Consortium which is a proud member of the ECE Coalition. We want to thank the Senate for their commitment to child care and urge you to continue to prioritize child care and specifically an increase in their reimbursement rates.

As you've heard from some other members of the ECE Coalition, the state reimbursement rates are way too low to allow for providers to continue to care for California's children. This issue has only been exacerbated by the expansion of transitional kindergarten which is having detrimental effects on child care providers. We'd like to reiterate our opposition to the expansion of transitional kindergarten to summer birthdays.

Unfortunately, we have not figured out how to address the loss of four-year-olds and the harmful effects that this has on access to care for the remaining age group within our care, and therefore, we believe that it is premature to expand PK eligibility at this time. Just lastly, unfortunately, the Early Action Budget Package only provided stipends for subsidy providers, which were appreciated, but this is only a small portion of the ECE ecosystem.

Given the shortage of providers and families' struggles to find care, we need to support all providers, not just subsidy providers, and we now know that there are additional federal funds available that must be spent or sent back. We believe this money should be spent to keep all providers afloat, which is the intent of the COVID-

Thank you.

Thank you very much.

Line 29.

Good morning, Madam Chair and Members. Stacie Hiramoto with REMHDCO, the Racial and Ethnic Mental Health Disparities Coalition. We wish to make comment on Part A, Issue 13: behavioral health modernization. REMHDCO is very concerned and does not support the part of the Governor's proposal to make certain changes in the Prop. 63 or MHSA funding requirements at the local level.

Although there is no actual bill language yet, if the description is implemented, counties and local communities would be forced to choose between cutting prevention and early intervention services or PEI, and other important components such as workforce training and education and other components.

BIPOC and LGBTQ communities could benefit most from those prevention and early intervention programs, and the Governor's proposal would very likely result in cuts to these programs. Children's Advocates and the mental health consumer community share these concerns. We hope that the Legislature will listen to our fears and help us modify the portions of the Governor's modernization proposal.

Thank you, caller.

To not harm our communities. Thank you.

Line 30.

Good morning, Madam Chair and Members. This is Jennifer Greppi with Parent Voices California, proud members of the ECE Coalition. We support Senate package that includes one billion dollars for child care, specifically a 25 percent increase to providers until we can move to a cost of care model and an equitable fee schedule that starts October 1st.

We need immediate rate increases and can't wait until a new rate structure is implemented to cash out. Stabilize the system now. Families cannot continue to pay such high family fees and we must start a more equitable fee schedule as soon as the waivers end. Thank you.

Thank you.

Line 32.

Good morning. Josh Gauger on behalf of the Urban Counties of California. The Health and Human Services workforce remains a priority. Urban Counties support the rescission of the public health workforce cuts and thank the Administration for including it in the May Revision. Also, we are interested in learning more details about the BH-CONNECT workforce proposal.

Finally, we thank the Administration for the conversations and incremental improvement on the CARE Act resources for counties, but counties are growing concerned that the proposal leaves a significant gap in resources for counties to successfully implement. Thank you.

Thank you.

Line 34.

Good afternoon. My name is Amarantha Silva. I'm a member of Parent Voices California. I'm calling in support for the one million towards child care. I also want to say that we want to thank you because you are taking action to suspend the family fees until September 30th, but this is just a little bit like a bread--like a little bit of help for families in California.

We need to make sure that our clients and providers are included on our budget with a big support. Together they represent the base of our workforce. We cannot turn our back on them. This is the time to save our child care system. We need to make sure that this billion dollars that is included on the budget so our providers can get this 25 percent increase, and our clients--they can start with a new structure for the family fees.

I'm asking you for your support on this on behalf of thousands of families that they cannot be on this school because their schedule and also because the lack of translation and language. So please take it a note that families need your support for coworkers when they need to go back--

Thank you so much, caller. We're going to go on to the next caller. We're going to do six more minutes of public comments, so please limit your comments to 30 seconds.

Line 38.

Hi. My name is Maria Luz Torre with Parent Voices. I'm calling in support of the one billion dollar package for child care and particularly the increased 25 percent rate for providers. Thank you for extending family fees up to September. Hopefully, we'll find a way to increase it beyond that date. Thank you very much.

Thank you.

Line 40.

Good morning, Madam Chair. Awet Kidane on behalf of the California Children's Hospital Association. I'm here to provide comments on Issue Number Five which is the Whole Child Model Trailer Bill to expand services to the Whole Child Model. We greatly appreciate the Department's hearing our concerns and removing some of the biggest counties: Alameda, Contra Costa, and Imperial from the proposal.

However, our remaining concerns which are still memorialized in the evaluation still remain. We look forward to continue working with the Administration and the Department in good faith. We offered amendments to the Department and we ask that the issues stay open so we can continue to address these issues.

Thank you so much.

Thank you.

Thank you for your time.

Bye bye.

Line seven.

Good morning, Madam Chair. My name is Bea Layugan. I'm a long-term care advocate with California Advocates for Nursing Home Reform calling in support of Part Eight, Issue Seven: assisted living waiver expansion permanent workload. This would allow DHCS to hire 15 additional positions to help support the very much anticipated expansion of the Assisted Living Waiver program. Thank you so much.

Thank you.

Line 11.

Thank you. Kelly Hardy with Children Now. I'm commenting on Issue Five around DHCS's trailer bills to expand the Whole Child Model for CCS. Like to align my comments with those of the California Children's Hospital Association and Children's Specialty Care Coalition. We do appreciate the scaled up proposal, but we are very concerned about expansion at all this year. Thank you.

Thank you.

Line 39.

Hi. Hello. My name is Ingrid Rivera-Guzman with Special Needs Network and we have concerns regarding Issue Five and the extension, particularly how it will impact foster youth and those vulnerable members on fee-for-service. We also want to make sure that ABA services are part of the reimbursement plan moving forward and as part of the third administrator party for Issue 16 to make sure that they're included in the services. Thank you.

Thank you.

Line 26.

Good morning, Madam Chair and Members. Jolie Onodera with the California State Association of Counties. Under Part A, DHCS's Issue 18 on the CARE Act, CSAC appreciates the updated level of funding proposed in the May Revision for counties to implement the CARE Act and acknowledge the revised proposal reflects progress made during our discussions with the Administration to refine those impacts. We have submitted a formal letter detailing our county estimates and would be happy to discuss those further with you and the Committee.

Second, under Part A, Department of Public Health, Issue Two, CSAC supports and very much appreciates the Administration's proposal to restore the 49.8 million dollar investment in public health workforce development programs. Thank you.

Thank you.

Line 20.

Thank you. Sumaya Nahar on behalf of the Children's Specialty Care Coalition. We have an opposed unless amended position on the Whole Child Model proposal and we look forward to working with the Department and the Legislature on this issue, and thank you so much for your time.

Thank you.

Line 35.

Madam Chair, Members, Analilia Garcia on behalf of the Public Health Institute and our 200 and plus organizations that support the Health Equity and Racial Justice Fund. We want to thank the Legislature for its strong support and recognizing the work of our community-based partners and for creating and funding the Health Equity and Racial Justice Fund program with the Office of Health Equity of CDPH over the past two years.

It was not covered in the May Revise and we ask the Budget Committee to include the fund in this year's budget as requested by champions and at minimum in this difficult budget year to create the framework in law. The pandemic has once again taught us that it requires broad partners who should successfully address the deep-seated health inequities. Thank you for your time.

Thank you.

Line 25.

Hi. Good morning. Josefina Ramirez Notsinneh on behalf of Children Now. As part of the ECE Coalition, we want to thank you for your leadership and commend you for developing a budget plan to provide the billion dollars to address child care rate increases and for waiving family fees until September.

We need to implement a cost-based grace system. We need to raise the rates now. Child care can't wait. Families with young children and providers are continuously being asked to wait to sacrifice, and businesses continue to struggle to find workers. Health care is essential for getting people back to work.

Thank you for calling in. Thank you. Next caller.

Line 41.

Hi. Raquel Morales on behalf of the Education Trust-West. We would like to thank the Legislature for their early action on continuing to waive family fees and we align ourselves with our colleagues in the ECE Budget Coalition and ask that wages for providers be increased now. Thank you.

Thank you so much. That concludes our public comment. If you did not--for those waiting--unfortunately, if you did not get your public comment in, you can still submit it through writing by visiting our website or to the Budget and Fiscal Review Committee. With that, thank you everyone. This concludes Budget Subcommittee Number Three in Health and Human Services.