Assembly Budget Subcommittee No. 1 on Health and Human Services

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Good afternoon. This is the Assembly budget Subcommitee Number One on Health and Human Services. Today's hearing is focused on the MediCal program. One note about today's hearing is that our hearing on April 17th will cover behavioral health issues, and therefore MediCal behavioral health issues will be covered at that hearing and not today. We will have panel presentations on the first 15 issues on today's agenda, while the remaining five are non-presentation items.

Members are welcome to ask questions on all issues on the agenda, including non-presentation items, and we welcome public comment on them at the end of the hearing, should there be any I want to remind everyone that all public comment on all issues in the agenda will be taken at the end of the hearing. After the last issue is presented, we will first take public comment from individuals who are here in the hearing room, followed by public comment from individuals who are on the phone.

The public call in number is on the Subcommittee's website, and it will also be on the live stream screen once public comment has started, and I will also share it right now. That phone number is 877-692-8957 and the public access code is 131-5127. With that, let us please begin with panel one. Our first issue is an overview of the DHCS budget and the November 2022 MediCal estimate, including Covid-19 impacts.

We will begin with DHCS Director Michelle Baass to present this issue, and please begin when you are ready.

Good afternoon. Thank you, Mr. Chair Members Michelle Baass, Director of the Department of Healthcare Services the Department helps millions of Californians gain equitable access to affordable, integrated, and high quality physical, behavioral health care, including medical, dental, pharmaceutical, mental health, substance use treatment, and long term services and supports. The Governor's Budget, proposes about 144 billion for the department and corresponding about 4,700 positions to support the Department. Of that, about 1.3 million is for our operations.

So for the operations to run the department. The department's largest program is the MediCal program, and it provides services to about 15 million Californians, income eligible, who are disabled, families and children, seniors and persons with disabilities, foster care, pregnant women and other individuals. California is transforming the MediCal program to ensure Californians get the care they need where they need it.

Many of these transformations will be spoken to later in today's agenda, including CalAIM, our long term commitment to offer person centered care that goes beyond the walls of a Doctor's office or a hospital and really meets our Members where they are to provide not only healthcare services, but some of those services that meet their social drivers of health.

Our comprehensive quality strategy, which includes quality metrics really specifically focused on all of our delivery systems, but with a clinical focus of primary care or children's preventive care, behavioral health integration, and maternity care. In our comprehensive quality strategy, we have our bold goals 50 by 2025, which really focuses on those clinical domains. Our new managed care contract that goes live in 2024 creates more value, transparency and accountability for our managed care plans, who come 2024 will be supporting 99% of the MediCal population.

We want to thank the Legislature for its partnership over these last few years. There's been a significant investment in the MediCal program over these years and want to thank the Legislature for its partnership on that. We also administer other programs for special populations, including the Genetically Handicapped Persons Program, California Children's Services Program, and the newborn screening program for low income and seriously ill children and adults with specific genetic disease.

Our Office of Tribal Affairs is responsible for coordinating and directing the delivery of care to Californians in rural areas and underserved populations through various programs. We have a licensing and certification program for driving under the influence, narcotic treatment programs, various mental health facilities, and we also oversee and conduct complaints for alcohol and other drug counselors.

Finally, we have our community mental health programs which will be covered at the April 17 hearing. And then various public health prevention and treatment programs such as the Every Woman Counts program, prostate cancer treatment program, and the family planning to access to care and treatment. As background for the Department, our local assistant estimate is done every twice a year for the January budget and the May revision, and our may revision will include updates to caseload and projections based on utilization and more recent data.

For the current year, the Governor's Budget projects 4.2 billion less general fund will be needed to support MediCal as compared to the 22 Budget Act.

This is a 12.9% decrease in General Fund expenditures compared to the Budget Act, and your agenda includes a detailed list of the factors that contribute to this. I will focus on the most significant we have a delay of about 481 million for round six of the Behavioral Health Continuum Infrastructure program, a delay of 378 million for the previously approved buyback of a long standing two week hold on a fee for service check write.

Some other technical changes are related to a delay in 2.4 billion in repayments to the federal CMS related to state only populations. 774 million net reduction in costs related to Covid-19. And then for the budget year we project 138.9 billion total funds for the MediCal program. This is a 1.2 billion total Fund increase and a 6.4 billion General Fund increase.

Some of the factors behind this include the expansion of our undocumented persons age 26 through 49. 375 million on a one time basis regarding the CalAIM behavioral health payment reform. A net savings of 113 million related to our designated state health program and then savings related to our managed care organization tax. The DHCS budget has a number of impacts related to Covid-19 pandemic and related federal and state policies.

This includes the impacts of increased caseload as the state has been under continuous enrollment requirement, significantly limiting the circumstances in which individuals are discontinued from MediCal, and I know that this is another topic for later today. The impacts of increased Federal MediCal Assistance Percentage or FMAP, which shifts cost for the MediCal program from the state to the Federal Government, and the impact of various program flexibilities such as increased rates for certain providers and services.

Based on the information available at the time of budget development, the Governor's Budget assumed that the federal public health emergency would continue through mid April 2023 and that redeterminations would start May 2023, with the caseload peaking in July of this year. Increased FMAP would be available through the end of June 2023.

In December the end of December, the President signed the Consolidated Appropriations act of 2023 and among other things, it decoupled the redetermination process, the continuous enrollment process from the end of the federal public health emergency. So we now know that eligibility redeterminations will start in April 2023, so of this year, and I know it's another agenda item for later today that we'll be getting into.

Additionally, in late January, the Federal Administration announced its intent to extend the public health emergency for the last time through May 11, 2023. Because these federal actions were not done in time to be incorporated into the Governor's Budget, we will be taking account to these actions as part of May revision. Happy to answer any questions.

Department of Finance?

Aditya Voleti, Department of Finance no further comments.

LAO?

Thank you, Luke Koushmaro with the Legislative Analyst Office. As the Administration noted, there were a number of federal actions that happened in December that occurred too late to be incorporated into the budget process. As a result of these federal actions, as well as our own assessment of caseload. Based on more recent caseload data than was available to the Administration at the time they put together the budget, we estimate that the General Fund need for MediCal will be about $1 billion lower on net in 23-24.

We do note, however, that while the General Fund need will be lower on this side of the spending, for MediCal, It's possible that the revenue forecast will be lower in May than what we anticipated, and as such, this may not translate into additional funding available to be spent. Thank you.

Thank you. We'll bring it up to the ... to see if any Members have questions. I will keep it here at the chair if I can. I'll get a little into the details. There was a bit of volatility we saw both in the Prop 56 expenditures as well as within Cal RX. Specifically, the estimate shows significant savings for Prop 56 in the current year and significant new expenditures in the budget year.

For CalRX, it shows increased costs in the current year with significant savings in the budget year that I'm trying to get a sense with that much volatility, how are we making our estimates, or is there a better way for us to be determining so we have more accuracy?

Thank you, Jacey Cooper, state Medicaid Director. So on the Prop 56, we have what's called the two sided risk corridor with Prop 56 between us and our managed care plans. It is a little hard from a data timing of when the Prop 56 is done.

There's 12 months after in order to file all of those claims, and then we have data on our side to then determine the risk order, which allows for us to know what we're clawing back if the managed care plans haven't paid all of those funds back. And so it usually is a timing thing, and that's what you're seeing, the shift between current year and budget year. We are actually putting in place a number of measures because it's also on our side.

We're feeling like it's not predictable enough, and so we will be releasing guidance actually to our managed care plans to improve some of the timeliness of reporting to us so that we can have some more information timely. We're hoping that will help with some of these pieces where we have to delay not having enough information for budget projections because we know those swings can be large.

On the MediCal RX, really, since we just finished our first year, it's just a delay, we think, at this point in regards to timing. Also, as you know, at the beginning of 2022, we had a pretty big disruption in regards to MediCal RX. There are impacts to that, in regards to some of the flexibilities we put in place to make sure that nobody had harm in regards to that transition.

As we're starting to, we've been announcing the phases of those to go away. We're seeing that this will probably change in 23. So right now you'll see those pieces earmarked in this year's budget and then next year, and we're hoping after a little bit more time we'll be able to be in a better place for budget projections since that is new.

I appreciate that. Just trying to figure out what the trajectory is and when you have those contrary funding streams, just appreciate that transparency. Next question I'd like to ask is going to be related to the Hospital Quality Assurance Fee. Within the agenda we talk about the transfer and you may not have answers for it today and really would just appreciate a follow up with my office. But I'm trying to understand the structure and funding of the distribution of the Quality Assurance Fee.

Is it contained within the system or is it with the hospital that it was generated at? As there is a significant difference between those two and shifting that may occur, I'd love to follow up offline and figure out.

I think an offline conversation would be great.

Perfect. With that, we will thank very much panel one and we will move on to panel two. Our second issue is an overview of the family health estimate. Director Baass, please begin when you are ready.

For the budget year, the Governor's Budget estimates expenditures of 87 million total funds for the California Children's Services Program, a 3 million increase compared to the current year. The CCS program, for background, provides diagnostic and treatment services and MediCal case management and physical and occupational therapy services to children under 21, with CCS eligible medical conditions. 136 million total funds for the genetically Handicapped Persons Program, a 4 million increase compared to the current year.

The Genetically Handicapped Persons Program is a healthcare program for adults with specific genetic diseases. 37 million total funds for the Every woman counts program, a 1 million increase compared to the current year. The Every Woman counts program provides free breast and cervical cancer screening and diagnostic services to California's underserved populations. The Family Health estimate projects 14 million less General Fund is needed to support the family health programs in the current year compared to the 2022 Budget Act.

And then this is because of the assumptions on the public health emergency end dates and so these will be adjusted at May revision. Happy to answer any questions.

Department of Finance.

Aditya Voleti, Department of Finance. No further comments.

No further comments. Thank you.

Bring it up to the ... No Members questions. We will thank very much this panel. We will move on to issue three. Our third issue is an oversight issue on the hearing aid coverage for children program. We will begin with Michelle Marciniak, who is the Co-Chair and Co-Founder of Let California Kids Hear. Welcome and please begin when you are ready.

Okay. Hi, my name is Michelle, and just to give a little bit of background, I have my master's in public health from UCLA and worked in the United States Senate. I worked for the Axelrod's Cure Epilepsy and most recently at Children's Hospital Los Angeles, and I left shortly after my daughter was diagnosed with hearing loss.

I want to thank the chair for his continued leadership and commitment to California's deaf and hard of hearing kids and all the legislatures that continue to stand with us to help families for their children. The Hearing Aid Coverage for Children Program was launched by DHCS in July 2021. In addition, we were happy that eligibility was expanded three months ago to include underinsured children and children up to the age of 21. Thank you.

When the HACCP program was launched in 2021, DHCS stated it would serve 7,000 California children. Three months shy of the program's two year anniversary, hearing aids have only been provided to 170 children. The low utilization numbers are a direct result of a slow program rollout and does not reflect the need of our California children and families. Our coalition is deeply concerned that these low numbers have been used to justify a huge departure from the prior 10 million budgeted for services down to 1.6 million.

While the program was launched in July 1, the bulk of reimbursement codes specific to pediatric audiology services were not in place for the first 12 months and it significantly hampered provider participation. While DHCS maintains that the medical fee for service providers are eligible to participate in the program, very few are qualified to see children have opted in to the directory or have provided care through the program.

While the program is making strides, there is still more work to do to ensure children can take this benefit to a local provider. For example, according to the HACCP provider directory, today there are no providers in Sacramento, zero in Central Coast, one in Central Valley, and the first Mazer Center just came on in January. And in LA, in the Central Valley, the hospital, they're taking kids from LA.

Additionally, Kaiser is the largest health system in California and does not directly provide hearing aids to the two state programs that provide hearing aids for children. HACCP, MediCal CCS referring children outside their medical home to an already overburdened community providers and creating delays in care. The administration's new financial estimates for the HACCP services will likely create financial issues that could impede success in ensuring access to qualified providers.

HACCP is still in its early stages of implementation and access to care is impacted by too few qualified pediatric providers participating in the program today. While the action plan DHCS released four weeks ago is a step in the right direction, they need time to execute on critical components before drastically cutting their estimates on the number of children that are in need. At the onset of the program, stakeholders asked them to coordinate with the newborn hearing screening program.

While we appreciate that is now incorporated into the action plan, it is imperative that DHCS have a detailed plan to coordinate with newborn hearing screening program and the early start interventionists that could be actioned immediately. These state sponsored programs support the children HACCP is targeted to serve, and the lack of training and cross promotion to date is the primary cause of low enrollment.

While we appreciate the plan outlines that it will translate materials into other threshold languages for the renewals, the plan also needs to translate the materials that promote the program to families. The Spanish flyer to promote the program was only available last month. Further, the entire social media campaign for outreach to parents is only in English, even though over 30% of California residents speak Spanish.

While the plan acknowledges a shortage of pediatric audiologists statewide and states that it is not program specific but does impact HACCP, there's no plan to overcome the barriers to participation now between HACCP and MediCal CCS, both run by DHCS, the majority of deaf and hard of hearing children in California qualify for hearing aids and state programs. Children across the state are facing three to six month wait times in both programs.

In California, CIA surveyed type a, b and c centers to find a 60% reduction in providers taking MedicCal and CCS for pediatric hearing aids. Provider state the largest reduction is insufficient medical reimbursements, which HACCP sorry, I need to go quicker, so I'm going to skip a couple. Okay. We need to examine how best to increase the pediatric audiology workforce that would benefit HACCP, MediCal and CCS. Our coalition has been working really closely with the Department, trying to get answers to certain items and reinsurances.

We haven't gotten those reinsurances. That's why I'm here today. I want to know they're doing everything they can to spend the 10 million effectively and deploying the 6 million Annaly they asked from the Legislator to administer the program. This includes having money there if it's necessary, coordinating with state agencies, proactively engaging these providers.

I worry that those kids won't be able to access this program, that families with a newly diagnosed infant or child who requires hearing loss in elementary school will not have access to the support and treatment this program was intended to provide. I want to know that DHCS will do everything they can to reach the children who need this program. There's 27 states that mandate this for children. There are 27 states that have it in their exchange. California has neither, and this program needs to work.

Our biggest concern when the Governor offered this program as an alternative to the mandate is it wouldn't be recession proof for the most vulnerable families. Dr. Dylan Chan at UCFS testified in 2019 there is overwhelming evidence that failure to provide appropriate intervention to deaf and hard of hearing children by six to three months of age leads to speech, language, cognitive, educational, social, emotional and permanent delays. For this reason, hearing loss is considered a developmental emergency, requiring timely intervention to prevent permanent delays.

The goal of this program is simple, to provide infants and children timely access to hearing aids and services by an appropriate pediatric provider. We need to measure ourselves against that goal, and we need to start with acts with some urgency so families know financial assistance is available and providers are in place to fit the hearing aids. Thank you for caring about our future.

Thank you for your advocacy as well. You did a great job. Jacey Cooper, State Medicaid Director, DHCS thank you.

First of all, thank you very much for your testimony, both of you. And I think what I would just start by saying is the Department is very focused on doing what we can to improve this program. Add more providers, and I'll give an overview of some of the actions that we're taking and how we're committing to continuing to improve this program.

As was mentioned, the program did launch in July of 2021, for 0-17, with household incomes up to less than 600% of the federal poverty level and not otherwise eligible for MediCal or CCS. In January 1 of this year, we increased that as well. So just mentioning that. Earlier this month, DHCS did work since last year, and all of the feedback that we received from advocates across the entire state to really think about what that action plan could look like.

And we tried to put actionable pieces on paper that we are committing to working towards and holding ourselves accountable to improving this program that was released in March. The beginning of this month, it included both an action plan as well as a communications toolkit.

As was mentioned, the action plan is really focused on how we can tailor programming, educational materials, including brochures for medical professionals and hearing specialists, collaborate with our communications with our children's services programs, newborn hearing programs, and really dedicate to those interventions, especially if we can do timely referrals coming out of those systems. Very important, and we're committed to that. We also updated new referral forms to make it easier for providers to be getting that information into us.

Many of these things just launched are in the process of being launched and so we are hopeful that many of these types of actions that we are putting in place will help increase the utilization of these services. The toolkits mentioned we have launched, we have printable materials such as flyers and distribution to our community partners, advocates, family agree that we currently need it to be translated into more threshold languages and we are in the process of doing that and committed to doing that.

Currently, the online application portal is live in seven threshold languages and the others will be coming up online as well. So really tried to work with our stakeholders even in regards to feedback to our action plan and in regards to steps that we are taking to improve this program. Really the goal is to get these services to children that need these services and we are committed to continuing to iterate on the programs, both policies, processes, education to providers and families to be able to achieve that.

We also want to make sure that we are making the program easier for enrollment as well as authorization. And we've been looking at a number of tweaks in regards to many of those pieces, including one of the examples of making it easier on those referrals, for example, that we mentioned earlier and putting those processes in place for our providers.

I do just want to note, but was as mentioned, as of March of 2022, 195 children have been enrolled in the program since its inception and 61 providers have opt in to the provider locator. I would mention though, as we're talking to providers, some have been hesitant to join the program. They want to know in advance how many referrals they're really going to get from the program and we don't really have a sense to be able to give those numbers to people.

We've also been actively engaging with Kaiser on a very regular basis over the last six months or so to see what barriers we can remove for Kaiser for them to join this program, because that has been one of the largest number of pieces that has been raised to us as a critical provider to be at the table. The Department is committed to continuing to work with Kaiser in regards to those pieces and as has been requested by advocates and families.

Additionally, when it comes to some of the barriers around the application data that was presented, we just wanted to notate. What we're also seeing is some of the duplication, new application, that is all applications, not unduplicated individuals. And so we'll be working on some better transparency in regards to application in service request data, so people are able to track that. In regards to your questions in the budget, on the budget itself, we did update the budget.

There was up to $10 million allocated to this program as originally appropriated in 2021. However, as you know, we typically right size our budget to actual utilization and we are projecting utilization within current year and budget year. We typically don't just earmark a dollar amount, as you are aware, in regards to how the budgeting works. And so as the utilization increases in the program, we would of course make those adjustments in the budget as well. I would notate though that was correct

In regards to the 6 million being spent in regards to administrative services, that also is being renegotiated with the vendor because that was also driven off of the original 7000 and that was 7000 total. We know that all Members will not be receiving services at one time in regards to the services. So we have renegotiated our contract with Maximus, the vendor, to also ricite their budget to be driven by caseload and those various factors.

And we will be making an update in the May revision once we have better numbers in regards to those particular pieces as well. They do, though are responsible for case intake, all operating call centers, all of the various materials related that we've been talking about, the provider oversight and various pieces discussed, and so that will drive those respective changes as well.

So really, at the end of the day, we are very committed to working with stakeholders, the Legislature, to see fruition and make sure that all children that need these services are receiving them.

Department of Finance?

Aditya Voleti, Department of Finance we have no further comments, but we do concur with DCHS and the Administration is aligned with achieving the goals of the program.

LAO?

Luke Koushmaro with the LAO we do not have any comments on this, but we are available for any questions you might have. Thank you.

Thank you. I'll bring it up to the dais. Assembly Member

You mentioned some of the providers not getting on board, or do you have any incentive programs to get them on board?

No, not necessarily. We've been trying to educate them on the program. Some of it is, we're trying to get, as was mentioned, many of our MediCal fee for service providers. They're familiar with the authorization process in MediCal, and that is required and that was agreed to with the Legislature that would use the MediCal authorization and the MediCal Fee Schedule.

And so we're trying to get more on board, get them, encouraging them to sign up for the locator. Technically, in the way it was in statute, they can provide the service and they would be reimbursed even if they don't opt to be on the provider locator list, which is those who have completely opted into the program. So we're going to continue to do that education.

But no, at this time we do not have incentive payments for that and would need to make sure we have the authority to do something of that nature.

Okay, and the other thing is just what's the major hold up on this? Why is there not so many kids getting the services or getting hearing aids that they should be getting?

I think we are trying to get the information out the best that we can. I think it's a smaller program, which is always harder to kind of get that infiltrated into physicians offices so that physicians understand how to refer. We also know a large number of referrals come from schools, but they don't always, when the application comes in, for example, oftentimes income information is left off of those applications, which is critical for us to have to evaluate for somebody to be eligible.

So we have to do back and forth. Or the ENT evaluation hasn't been completed at the time of the referral as well, which is also a required piece of the program. So we're trying to educate all the various referral points in regards to what's needed on either the application or the various authorization pieces to make sure we have everything to be able to approve that.

So we've really focused on these provider education materials, flyers, brochures, streamlining the application, and we're really hoping this will help see these utilizations increase in the future.

Okay.

I think the first 12 months there weren't pediatric codes in place, so they weren't able to dispense the hearing aids. We worked with the Department, they did an excellent job. We've got all the pediatric codes in place now. So I think the first year some providers disengaged, it's starting to get better. We just got UCLA on board. We're working on USC right now.

I think the other thing is that rates haven't, I mean, across the board, any issue that you talk about in MediCal, and that's what it's based on, rates haven't been increased in over 20 years and so it hasn't kept pace. So we saw a number of these clinics go bankrupt in Los Angeles a number of years ago. So rates are an issue in serving this population.

Thank you. Thank you chair.

I'll bring it up to the chair if I can. We heard about the action plan. How will we measure success with this action plan? How many people are we estimating will then enroll in the program because of that action plan?

Yeah. So we do anticipate an increase, and I would have to get you the exact numbers in regards to driving that. I mean, that's why we put the action plan out. We wanted to be able to hold ourselves accountable and have measurable pieces that we're willing to report. So we'll be reporting the number of providers, we're educating, the number of applications, and hopefully the goal is the number of children actually receiving services.

And so we are committed to reporting those outcomes based on the action plan that we released.

Earlier you said that the vendor would receive a decrease based on caseload. Will it be proportional based on the estimate? So if it was 175 out of 7000, will they be receiving a proportional amount?

I can't speak completely to where we are in regards to finalizing the negotiations, but the idea is to right size it with the actual caseload that we're seeing in the program. It was originally estimated based on the 7000 children, but I think that that was all the information that we had at the time. And we've dug into what drove that number significantly to better right size, the approximate number of children.

And so it would be driven by caseload similar to our utilization on the services side, but happy to, once we have it in a better place, it may revise, give you a better update as well.

Can I understand? Because I'd like to follow up. We heard that the Administration had some trepidation regarding the Affordable Care Act implementing a mandate for commercial plans, and yet we see so many other states that are doing this that I'd like to understand what is it that they're doing or being allowed to do that allows them to have this mandate that our state is not able, or thus far has been unwilling to do?

I'm probably going to need to take that one back and bring you a better answer in regards to the administration's positions in regard to that mandate.

I understand at the time in 2019 why that was discussed. But since we've been trying to run this out publicly and have not seen the success, I hope we can have an honest conversation about whether it's time to reopen the discussion about pursuing that mandate for commercial plans, as I'd like to really understand how those other states are allowed that freedom if we're not able to.

With that, I will thank very much this panel, and will elevate, if I can, that this is a developmental emergency that requires timely intervention and requires our urgency and focus. And I look forward to working with the Administration. But it takes real advocacy and advocates to stand up and give voice to it and want to appreciate the time that you took to come here today.

Thank you.

With that, we will thank very much this panel and move on to issue four. Issue four's oversight on CalAIM. First is Jacey Cooper, who will provide an overview on CalAIM. Please begin when you are ready.

Sure. So. Hello everyone.

I was asked to give a comprehensive update, so I'm going to do that as fast as I can to then turn it over to the other panelists so you can hear updates from other people as well. As you know, Cal Aim is a five to seven-year roadmap of just transformation for the Medi Cal program like we have never seen.

I try to remind people that Cal Aim, while certain pieces get a lot of airtime, it by far cuts over across almost every single part of our entire program to really see improvements in both access to care as well as just overall improving outcomes for the right now, 15.5 million beneficiaries that we serve in the State of California also would like to say that it was done over extensive stakeholder feedback from 2018 to 21 in a great negotiation with the Legislature and where we landed under AB 133.

So I'll kind of go through and provide various updates of where we are and the various pieces with numbers and outcomes just to emphasize where we've been going. I'm going to start with the population health management because it really is the cornerstone of Cal Aim and it was just launched in January 1 of 2023.

And really this is around focusing around how we are engaging members as owners of their own care, how we are ensuring they're getting the preventative services that they need, how we are doing early interventions for rising risk, and then, of course, those most vulnerable.

How are we connecting them to the enhanced care management community supports that they need, and really working to ensure that the full continuum is working as intended, and that we're infusing that into the delivery system, of course, in partnership with our managed care plans. So the Population Health Management program was launched in January of this year. Managed care plans built out a comprehensive population health strategy. This includes their own risk stratification, segmentation and tiering process.

And then, as you know, in the future, we'll also be doing a statewide risk stratification for all of our Medi-Cal members. So there is transparency in regards to who's high risk, medium rising risk, low risk, et cetera. And we'll continue to work with our managed care plans in regards to that.

We also rolled out new definitions in regards to what basic population health means, care management and the various tiers of care management, from kind of basic care management to complex case management, and then enhanced care management, really making sure that the coordination of services in our program is clear.

When somebody receives a big card, we know that they can be accessing up to six or seven depending on the complexity of that individual different delivery systems and making sure that we are coordinating that across our system is critical. We also announced in January this year a full reassessment of all medical reassessments. When we went across the state, one thing we heard from members and providers was this concept around assessment fatigue, asking our Medi-Cal patients over and over the same questions, and having duplicate assessments across.

We streamlined that and reduced and got rid of many of the old assessments, really relying on providers to do the work that they do every well with clear guidelines in regards to what we're expecting on preventative services, chronic disease management, et cetera. So we were really happy to have that roll out.

In order to do that, DHCS held 26 Allcomer Office Hours and public stakeholder engagements to really inform that work, to hear from provider groups, to hear from advocates, and to hear from our managed care plans. So now I'll go into an update in regards to enhanced care management and community supports. Just so everybody's tracking, and I'm sure we are, enhanced care management is your highest touch, highest need, most vulnerable individuals, individuals who are experiencing homelessness, being released from incarceration, high utilizers of emergency room offices and then community supports.

We have 14 community supports. Anything from housing transition services, caregiver respite services to home modifications or asthma remediation in the home. All things used to really prevent emergency room visits, skilled nursing facility stays or inpatient stays or in lieu of those various pieces, they can be preventive or they can be immediate.

Also, this approach was built off of our whole person care pilots and we recently rolled out an independent evaluation that demonstrated that these types of investments reduce emergency room visits, reduce inpatient stays, have an overall per beneficiary cost savings which is really good for us to have that independent UCLA evaluation demonstrating success of the pilot that we use much of to kind of build many of the pieces on this component within CalAim.

As of quarter 3, 2022, we have 956 enhanced care management providers and over 88,000 utilizers of enhanced care management across the State of California. First-time member enhanced care management enrollment increased since the enhanced care management benefit and we are seeing significant increases every quarter in regards to getting to individuals. Also through quarter three, we have 1212 community support providers across the entire State of California with over 27,000 members receiving those community supports across the state.

At least six community supports are available in every county and there are 38 counties with at least 10 of the 14 community supports and 13 counties with all 14 community supports. One of the biggest concerns that we heard from people when we rolled this out is since it was voluntary for managed care plans, that we wouldn't see the uptick.

And clearly you can see that managed care plans are committed to offering these community supports, and we have a schedule of them across every six months where we are lifting that up. What I would say is we've released massive guidance. We have probably held too many meetings for people in regards to these things to really lift them up.

But I do want to just focus on some challenges that we are hearing because I say that because the department is very committed to working through those various challenges on enhanced care management and community supports. Some of those large factors is workforce shortages. We are just hearing as we're doing this, that workforce shortages is something that is a barrier for our providers to get up and running to meet the demand that is out there.

Lack of affordable housing throughout the state in regards to some of the housing and homelessness transition pieces, as we know, and there's been many hearings where we've talked about those topics before, also community-based organizations not being as familiar with some of our requirements of what it means to be a Medi-Cal enrolled provider, how to bill for these services. The department has deployed extensive resources to provide technical assistance to those community-based organizations.

And then what we're hearing right now and spending a lot of time on is really a need to align authorization processes across the State of California. Oftentimes when a managed care plan has a service that they're authorizing, there is a standard national best practice in regards to if you need this surgery, you look for these types of things. That doesn't exist for enhanced care management and community supports. We had statewide eligibility criteria, but managed care plans had to figure out how to substantiate that with authorizations.

And we've seen some variation across. And so we're really working to standardize some of those authorization processes protocols, and we'll be rolling out a chunk of those pieces both in July of this year and then by the end of the year, another chunk of policy that our managed care plans will be meeting.

And that's really based off of both myself and Director Baass going around the State of California and a statewide listening tour, really listening to providers and understanding what are the barriers and our managed care plans in regards to barriers. So we're looking to address those variation in pieces very quickly.

And I would also note that we have kind of two main funding paths to improve infrastructure across the entire State of California when it comes to ECM, because that's the other thing is we just need more providers. These are first time any of these benefits have been made available in Medi-Cal. And so we need providers across the entire State of California.

While some of our urban areas have been able to come up quickly, we need to make sure it's also available in the Central Valley and in the rural north. And so we have deployed two programs. One is an incentive payment program that was approved in Cal Aim to incentivize the increased access. All of our managed care plans did a needs assessment and a gap-filling plan for the entire state and have been working very hard to close those gaps.

One of the other pieces that we committed actually to the Legislature to include in that incentive program was making sure that we were targeting individuals who had larger disparities amongst these populations. For example, the black and African American population, who we know proportionately is a higher rate of experiencing homelessness than the general population in California or even in our Medi-Cal program. And what I'd like to say is that at least through Q two, and I'm looking for to get updated Q three numbers.

Black members make up approximately 7% of the medical population, yet black members make up to 30% to 40% of the homeless population. Early data is showing that 22% of all enhanced care management and 33% of community supports are being provided to black members. And so really we think that these very clear incentives driving towards closing disparity gaps that we're seeing is working, but we still have a lot more work to do just to be frank.

Regards to path dollars we have deployed across the State of California. Large pieces. It's a $1.8 billion investment to do grants directly from the state to these providers to increase capacity. We also are doing local collaborative planning groups through that and that TA marketplace where community-based organizations can really go and access that. We received 237 applications totaling $559,000,000 for just round one of these grants. And we were able to announce January 31, $119,000,000 in funding to 98 organizations.

And on just on Friday, we announced 39 organizations will receive an additional 88.5 million. So now have received $207,000,000 directly out to providers to increase capacity across the State of California to 137 organizations. Round two is open now and we've already received applications. They'll be open in through May. I'll go over some of the other large transitions that just took place in January as well. The integrated care for dual eligibles and managed long-term services and supports.

We had successfully transitioned 112 Medi-Cal Medi Connect members to the Medimedi plans. So moving those we also in July of 22, DHCA raised a feasibility study report on the dual special needs plans for our dsnips to increase the Medimedi plans across the state, really making sure that we are doing everything we can for our dual individuals to have coordinated pieces and we're working closely with our managed care plans on bringing that to fruition as well.

Additionally, DHCS transitioned 325,000 dual-eligible members to medical managed care plans January 1 of this year. The transition does not impact Medicare benefits or enrollment and we are continuing to educate our providers across the State of California.

We did extensive provider education, cheat sheets, toolkits, but we're still finding pockets where people think that there is an impact on the Medicare billing and we've really been trying to educate all of our various providers in regards to that change to make sure that there is no disruption in care. We also transitioned the skilled nursing facility benefit to medical managed care plans in 31 counties. It was already carved into the other counties prior to that transition.

DHCS has convened a long term care skilled nursing facility workgroup through December of '21 through September of '22 to really have all of that transition informed by stakeholders for that transition. The carve-in of ICS and ICFDDs and subacute facilities proposed to transition to January 1 of 2024. That is a proposal in the Governor's budget for consideration based on extensive feedback from advocates in regards to that change.

We've been working very closely with the Department of Developmental Services and various advocates to have a slight delay from July to Jan. 1 of '24 to give us more time to really work on that transition. Given the vulnerability of that transition, we want to make sure that we are ready, our plans are ready and everyone is ready. We are doing a number of other pieces that I'll just highlight. I won't go through an outline of those.

We are still working on the CCS, the California Children's Services oversight improvements to make sure our fee-for-service CCS kids are getting all the same pieces in place, like authorization process timelines that we see in managed care for those kids and working closely with our county partners on that. We also are continuing. We'll look at the county eligibility and oversight pieces. We've delayed that until after the public health emergency, DNC, ODS, traditional healers and natural helpers is still pending with CMS.

We will continue to advocate to them in regards to seeing that move forward as we think it's so critical. And then there are some that will go live in the future and so I think I also will hold any of our pieces regarding the behavioral health outcomes for the April 17 and anything around the justice initiatives.

So really, as you can see, this is a massive effort across so many areas that doesn't even touch dental and some of the other pieces that have already gone live in Jan. 1 of 2022. A massive effort on behalf of the department and we're 100% committed to making sure that we meet the goals and objectives of Cal Aim. So sorry, that was a very long overview, but there's a lot packed into Cal Aim and so wanted to give an update to the committee.

Thank you. Next we will hear from Linda Nguy, senior policy advocate with Western center on Law and poverty.

Thank you. Good afternoon. Linda Nguy with Western Center on Law and Poverty. Cal Aim, particularly enhanced care management and community sports, can and has improved the lives of Medi-Cal members by providing coordinated care that addresses the needs of the whole person wherever they're located. However, our legal aid advocates report challenges accessing both enhanced care management and community supports. They report long wait times for assessment with no time frames on when they may receive assessment or services.

Therefore, it is unsurprising that the numbers of members receiving community supports from quarter one to quarter two of last year, instead of increasing, actually dropped, largely due to the number of whole-person care pilot participants receiving community supports during this time being cut in half. This is reported as a graduation of whole-person care participants no longer needing community supports, but we suspect this is likely due to long waits that result in people dropping out or narrower eligibility criteria that plans impose.

In addition, clients report difficulty accessing and being assessed for enhanced care management, which differs from community supports in that it is a benefit, not a plan option, for any member who qualifies, plans take referrals for assessment and clients report no response, even though enhanced care management might be urgently needed. We appreciate it takes time to build provider capacity, but considering the significant investments to do just that, how long are Members expected to wait to receive needed services?

Housing support services, which links individuals experiencing homelessness with housing through housing navigation and transition services. Housing deposits and tenancy-sustaining services have been shown to improve health outcomes and are particularly important considering the rise in homelessness and those experiencing homelessness with a disability. The department has shared its goal is to make all community supports a statewide Medi-Cal benefit, with housing support services being the furthest along.

We recommend requiring the state request federal approval to make housing support services a Medi-Cal benefit with AB 1085 by Assemblymember Maienschein being the legislative vehicle. In addition, we recommend the department articulate specific, measurable targets define a mechanism to hold plans accountable and publicly report on progress towards those targets. These measures should, at minimum, include providers, specifically trusted community partners who have experience providing services and the number of unique members receiving enhanced care management and community supports. Thank you.

Next we will hear from Linnea Koopmans, who is the Chief Executive Officer for the Local Health Plans of California.

Good afternoon. Thank you for having me. Linnea Koopmans with the Local Health Plans of California. We represent the 16 local community-based Medi-Cal managed care plans across the state, serving over 70% of all Medi-Cal managed care lives. So preparing for and implementing Cal Aim over the last year has been a tremendous effort involving multiple partners at a local level. So I'm going to share some of the early experience, including a successful transition from health homes and whole person care to ECM and community supports.

However, realizing the vision of Cal Aim, as you heard from Director Cooper, is going to take multiple years. It's a long-term effort. So I'm going to give you a sense of how plans are developing their ECM and community supports networks, the role of Cal Aim funding to support that work, how Medi-Cal members are being identified and connected to services, and then finally some challenges and considerations.

So, ahead of the Cal Aim launch in 2022, the starting point for a local plan to develop networks for ECM and community supports was really assessing existing relationships with community partners. So this required very close work with counties and other providers in the community that were delivering care. It also required that local plans who had provided some similar services pre-Cal Aim, through grants or other investments, work to transition those providers to become Medi-Cal contracted providers, not just through grant-funded projects.

So to expand capacity to deliver both ECM and community supports, local plans identify which providers are already serving ECM-eligible members, try to bring them into their networks, and then for community supports, plans are connecting with community organizations that provide community support like services in the community, but have historically not been a part necessarily of the Medi-Cal delivery system.

So that's been part of the big lift of Cal Aim, is bringing some of these nontraditional providers into the Medi-Cal delivery system in contracts with plans. But to support this implementation and all of this work that I've been describing the state investments through, most importantly for the plans and the dollars flowing through the plans through the Cal Aim Incentive Payment program, as well as the Housing and Homelessness Incentive program, those have been critical funding sources for this work.

So to get IPP dollars out into the community, local plans have been awarding grants to their providers and other community partners to help support staffing costs, data exchange, infrastructure, TA or training, and then physical infrastructure. So for example, to expand recuperative care and short-term post-hospitalization housing, some of those services require actual physical infrastructure. And then with the Housing and Homelessness Incentive program, it's really the beginning of that program, although it's a very compressed short-term program.

As a reminder, this is a program that's a part of the state's home and community-based spending plan. It's really supported strengthening relationships between housing partners and plans locally to get everyone around the table. And I think early progress and early success through that program has been that many local plans are now receiving data from their homeless management information system, HMIS, so actually can identify which of their members are homeless and identify them for eligible services such as ECM or community supports.

So then to engage members in ECM and community supports, local plans are using their available data and running eligibility lists, giving these to their providers to make outreach and try to get them in for assessments, let them know they're eligible to receive the services. But I would just note that those eligibility lists are limited by virtue of the data we have available to us.

So in the long term, we think the best source of referrals is going to be through our providers and others in the community. So there has been a process to educate providers and other community partners about the new benefits, the eligibility criteria, and how to refer. And then finally, I want to acknowledge the realities and some challenges with Cal Aim implementation. So, as has already been stated, Cal Aim is not immune to the workforce challenges that are being faced by the rest of the healthcare sector.

In many cases, workforce shortages have impacted providers'ability to contract or if they do contract, how many members they're able to serve. Second, rural areas that have historically had access issues and limited community resources are likewise challenged in Cal Aim and have very few providers or CBOs, so creativity and flexibility will be needed.

And then with respect to housing-related community supports, as Director Cooper mentioned, the statewide housing crisis is really a determining factor in whether navigation is successful if an apartment or a home is available for which a housing deposit can be provided, and then the ability to provide housing sustaining services. Lastly, although ECM and community supports are two Cal Aim initiatives, they actually represent 15 new services in Medi-Cal managed care over the last year and a half that require differing community resources and infrastructure.

So ramping up statewide will take time. So in closing, the work to implement these initiatives and services is critically important. Local plans are committed and it's also difficult. It requires multiple partners, systems and resources, and we're looking forward to continuing to work with our providers and other partners over the coming years. Thank you.

Thank you. Next we will hear from Kiran Savage-Sangwan, Executive Director for the California Pan Ethnic Health Network.

Great. Thank you so much for having me here today. Just to open I want to say we appreciate that equity has been a guiding principle of the development of Cal Aim throughout the process, and coupled with other Medi-Cal reforms, including the new contract in 2024, increased plan accountability, and expanded eligibility, we do believe it has the potential to be truly transformative for medical and thereby health equity. But intentionality is needed in every aspect of the design and implementation.

So at this point, I would say similar to the other speakers, one of our biggest concerns is the adequacy of the underlying service network, and particularly with the 15 new services that Lidea mentioned, because while appropriate referrals may be made if the services aren't available or aren't responsive to the unique language, cultural and other needs of the member, implementation will falter. So it isn't just the number of providers, it's also the type of providers and are they concordant with our Medi-Cal members.

We are very enthusiastic supporters of the community health worker benefit, which we think is a potential game changer for racial equity in Medi-Cal. That community health workers by themselves cannot solve that problem of the lack of available resources and services. For ECM and community supports to achieve equitable outcomes, there must be a robust and community-based service network.

And while there are many efforts underway, including the Path program, this also requires transparency and a level playing field for smaller racially and ethnically diverse community-based organizations.

Currently, community-based organizations that we work with who would be ideal ECM and community supports providers are struggling to become providers because of the uncertainty around whether plans will provide or continue to provide certain community supports because they can change their elections, low rates, limits on the number of billable visits, and in some cases, what the CBOs feel is the unwillingness of health plans to negotiate fair contracts with them.

This is a very heavy lift for these kinds of organizations who are going to need to convert their billing structures from grant-based systems that include administrative overhead to fee for service billing structures, which is much more sensitive to market changes.

One community-based ECM provider shared that they feel Cal Aim would be more successful if community providers were paid in a way in which they are also rewarded for improving the health of their members rather than only for the services they provide when their members are experiencing their highest needs and then losing the ability to provide services for those same members when they no longer qualify for ECM, but would still benefit from the relationship and support from that same provider.

In addition to building that equity-focused service and provider infrastructure, the population health management that, as Director Cooper mentioned, is really the cornerstone of the program must intentionally help to root out racial disparities by ensuring that every member gets what they need, when they need it, where they need it. We had early concerns about the risk stratification process in the population health management, and it's really too early to know what the outcome will be and whether there are disparities.

So it will be important for the Legislature to really continue to monitor this issue. The only data that we're aware of was referenced earlier that sort of accounts for the first half of 2022. And during this time period, to our understanding, most enrollments for ECM were members transitioning from whole-person care and health homes. So they'd already been identified, they'd already been connected with care management. So it's not necessarily reflective of the population health management risk stratification process.

And so the racial breakdown of the ECM population is similar to the whole-person care participants in most aspects. Some of the providers we work with who are ECM providers who specifically serve communities of color were previously health, home and whole person care providers have noticed that the outreach list they're receiving from health plans are smaller compared to what they were getting for health homes and whole person care, which raises concerns for us that some members are being missed in this program transition.

But I do want to say we appreciate the work that DHCS has been doing in prioritizing addressing racial bias in the risk stratification design, which is not easy to do. But we appreciate that DHCS has determined that risk tiers must be based not only on medical or behavioral health risk, but also social risk.

And most importantly, must consider underutilization of services, which will help to reverse bias in the algorithms, because the evidence shows that black patients in particular consistently generate fewer costs than white patients at the same level of health. So again, we think that DHCS is taking the right steps here, and this could be strengthened by having a publicly reported dashboard, robust demographic data requiring strong community engagement around the population health management.

And then I was so glad, finally, that Director Cooper did mention the traditional healers proposal. We wanted to raise as well that's the one outstanding component of Cal Aim with CMS, and appreciate the department's efforts and hope to continue the partnership with the Legislature to see that approved not only for the programs and services it will bring. But I think also for the example it will give for how to broaden culturally appropriate services in the future. So thank you.

Thank you. Next we will have Allie Budenz, who is the Director of population health management for the California Primary Care Association.

Alright. Thank you. Ali Budenz, Director of Population Health Management, California Primary Care Association. So I wanted to focus my remarks this afternoon on the workforce impact of those who are carrying out the mission of Cal Aim, and particularly providers at community health centers. CPCA represents 170 organizations, 1300 community health centers throughout the state, who serve a third of all Medi-Cal beneficiaries.

And in addition to integrated primary care, behavioral health, dental services, our Members are also ECM and community support providers and have built really incredible experience in this space through pilots like health homes programs and whole person care.

And I think it's really timely that I'm here this afternoon speaking with you, because last week I was at the Rural Roundtable, which is a bi-annual event organized by the consortium the rural north, and it brings providers together to share implementation best practices about emerging issues in Medi-Cal. And one session was on enhanced care management and community supports. It was offered in collaboration with the local managed care plan, Partnership Health Plan of California.

And at that event, I was bombarded by messages from enhanced care managers about the beauty of this benefit being available to them. It's work that they've wanted to do for years, and the system really hasn't allowed them to do this until now. One success story from a care manager named Cynthia was when she helped a member to access stable housing so that she could enroll in community college, so that she could manage her chronic health condition.

And that success story really infused this care manager with a sense of pride and joy and hopefully stamina to keep going. Right.

Because this is hard work, this is intensive and time consuming. And as you all know, as we've said, we're in a workforce shortage. Providers across the board in behavioral health and primary care, we just don't have enough supply. And Cal Aim is really the opportunity to think outside the box and to bring in nontraditional service providers like community health workers, care navigators, promatoras. And the goal, as we look at it, as the right care at the right time by the right person. And I would just say that in terms of ramping up these services, it takes time. Right.

It takes time to train some of these new staff, and we just look forward to integrating them into our care model. So at the same time that we hear all these benefits, I also hear some real challenges with the implementation of ECM in particular. So these same care managers will be the first to lament that the data burden is quite intensive with ECM, some care managers are spending up to 30% of their time just documenting services.

And really, it's because the systems, the technology systems, aren't interoperable, and across some instances, it's because the requirements aren't standardized. So, for an example, a provider may enter similar, in some cases, the same information, first in their electronic health record and then through that treatment authorization process, and also they have to document in the managed care plans, assessment, and care planning system, the same information. So the systems don't really communicate with each other.

And then this is multiplied exponentially if you're in a county with multiple health plans, because there are different requirements. And so I just want to underscore that. I don't think it's necessarily anybody's fault. I think it was just an unintended consequence of us wanting to demonstrate how wonderful the ECM benefit is. But it is something that needs attention to make sure that we're fully maximizing staff time, because that is a missed opportunity. It's not efficient or effective to be spending that much time.

The other thing is that with this high documentation burden, the rates do not cover the cost of the administrative burden. They are on par with health homes program and with whole-person care, which is good. But those programs were less administratively burdensome, and they had the benefit of having a wider eligibility population. So you could kind of distribute the cost across multiple intervention intensities, and it sort of came out in a wash.

So in terms of the things that we're excited about on the horizon, the population health Management service is one of the ones that we're eagerly awaiting for that, just to reiterate, is the ability to have all the functionality, to have data across different systems housed in one location. So state data, managed care plan data, CBO data provider data, et cetera. And that really has the potential to be a game changer.

We are also cautious about the data burden that that might come with, and so we're tracking that very closely. And then the other thing that we really look forward to is continued discussion with the department on strategies to align the goals of Cal Aim with a modernized payment system that really recognizes providers health centers for their population health, especially in primary care. So one example of that is the FQHC alternative payment methodology.

It'll launch in 2024, and it provides participating health centers with the flexibility to do this population health in a capitated model. So I'll just end by saying it's been a whirlwind. I think we all have hopefully acknowledged how much work has been done in a really short amount of time, and it's a monumental opportunity.

And we're just really excited to partner with the state and manage care plans and CBOs to continue prioritizing whole-person care, social determinants and population health, which are really the tenets of the community health center model. Thank you.

Department of Finance.

Andrew Duffy, Department of Finance. Nothing further at this moment, but here for questions.

LAO?

Will Owens, LAO. No comments on this item, but we're available for questions.

Thank you. I'll bring it up to the dais for Members' questions. I'll keep it here at the Chair for a second. Ah, Ms. Koopmans, if I can, we heard earlier that the Enhanced Care Management services should be ready and able to provide services by July 1 of 2023. But we also heard about long wait times on assessments that I'm trying to understand our ability to be ready by that date and hoping you can provide some comments on that.

Yeah, so I think ECM has been rolled out in phases based on different populations of focus. Of course, the first wave went last January in 2022. And to your point, there will be additional populations going live in July. When I've talked with the local plans wanting to put ECM in a different bucket than community supports, I think they are different. So with ECM, I've actually not heard that there's wait times.

Conversely, it's providers reaching out and reaching out and trying to get Members engaged, trying to get them in. And I think that we've heard from our providers takes a lot of time, a lot of outreach attempts to get someone in, not only assessed and then to start receiving ECM. So I think that's one perspective on the community supports and to kind of speak to the wait time issue.

The only thing that I've heard that I've been able to kind of piece back to potential wait times is on housing-related services. If someone's on a list for a waiting list for support of housing, it does impact what community supports you can provide to them while they're on that waitlist. So in my mind, that's where there's kind of a log jam and an issue happening. Again, it's a supply issue. So that's what I've heard from the local plan experience.

I'll ask a similar question for Ms. Cooper, if I can, related to the PATH Program. We were to have jails and prisons offer all the required services as of January of this year, and just wanted to get a sense of how we're meeting on that timeline and how jails and prisons are prepared.

So the path does a few things, so it does the enhanced care management, but it also is going to be the startup funds for the justice initiative. We just got approval from CMS in January of this year, and so we are building the path application for our prisons, our jails, and our juvenile facilities to respond to get some startup funds to be able to start the implementation of those in-reach services.

At this time, based on the long negotiation with CMS, we're anticipating that no one would really start those in-reach services until April of 2024 at the earliest, and then counties will be able to elect to go live over a two-year period. And the Committee has asked for me to do a full overview of the Justice Initiative timelines and pieces at the April 17 meeting. So I'll give you more details then.

But those path dollars, some dollars have gone out for Medi-Cal enrollment and eligibility already to our county partners, and then the next round will be released shortly for them to apply for additional startup funds.

Perfect. And I'll ask one last question if I can. And this is we've been approached by some of the skilled nursing facilities regarding the issues with payment and managed care plans, and I'm hoping to have the plans talk a little bit about can you just shed some light on this problem? Is there a contract that needs to be signed with the SNFs with the plans to ensure that you get payment? Why are we struggling to get payment to our skilled nursing facilities currently?

So I think to speak to the transition that Director Cooper spoke about during her testimony in January. As you know, the counties where long-term care wasn't already carved in, of course, newly carved in SNF services. And so in terms of the contracting efforts, plans were required to demonstrate network adequacy and want to, and are incentivized to have as many SNFs in their network as possible. They need to be able to demonstrate access and provide access.

So it is in the plan's interest to be contracting with these facilities, and there's been a lot of efforts to bring those facilities into their networks. From what we have heard, one of the considerations for the SNFs is that there is a payment policy in place for the first few years of the carbon, wherein they are receiving fee-for-service rates from the plans.

However, there's also new directed payments for quality and other kind of staffing-related measurements, and so those are only available to SNFs that contract with plans. And we have been having conversations with the SNFs about that being another reason to come into network. So I hope that answers some of your questions.

There's been a lot of efforts to bring SNFs into the network. and then in terms of the payment piece, we have heard some challenges that I think are a normal part of being three months, four months into a new benefit.

And so many of my plans have had TA and training sessions and have had a dedicated sort of liaison that's available to help problem solve and troubleshoot to ensure that claims that need to be fixed in order to be paid, to kind of walk them through that process so that they can be paid and the dollars can flow for.

From Ms. Cooper, can you comment on whether or not you're hearing similar complaints from the skilled nursing facilities and what's our plan to work through this transition and growing pains?

Yeah, so we have started hearing some similar complaints, the biggest ones being kind of what Linnea just walked through, delay on payment being one of them, some of that's due to, you know, plans educating them on prior authorization, or to get a clean claim through. So if they're not used to billing the managed care plan, just making sure they understand.

And we've been requesting the plans and I know they've been doing that, working on educating those providers so that providers are being paid timely because that's a critical part and a requirement within their contract that claims are being paid timely.

The other piece is just as was mentioned, now that in order to get the pieces that we all negotiated last year in regards to skilled nursing facility payment reform on the directed payments tied to quality, they do have to have a contract with the managed care plan, which means they have to meet their credentialing, their quality expectations and those various pieces.

And so there have been a significant number of contracts already signed, just to be really clear, but there are probably still some remaining skilled nursing facilities negotiating with managed care plans. The Department typically does not get in the middle of negotiations between providers and plans, but we've been encouraging all plans and providers to bring those negotiations to close so that they can have those directed payments if they're contracted for those services.

With that, I will thank very much this panel, and we will move on to issue five. Our next issue covers some of the new CalAIM proposals included in the Governor's '23 Budget. We will begin with Jacey Cooper.

Great. So I will do an overview of the reproductive waiver and transitional rent during this particular item. So the Department is seeking to continue the state's progress in regards to ensuring adequate access to reproductive and sexual reproductive health services. We are proposing to move forward and invest 200 million total funds, which is 15 million General Fund in budget year plus 2024, for developing the reproductive health services through an 1115 waiver demonstration known as the California Reproductive Help Access Demonstration.

What I would note is that we are really trying to, within this proposal, reduce the General Fund impact to, for example, 185,000,000 of that 200 million will be federal funds and only the 15 million General Fund request. The waiver really would work to advance supporting access to family planning and related services, support the capacity and sustainability of California's reproductive health safety net, as well as really promote a system transformation for California's sexual and reproductive health safety net system.

We are proposing the waiver to be a three-year demonstration. We are also proposing that it dominate be grant-based. For example, these are grants directly to providers to increase access to reproductive health services across the entire State of California. And so really this is around how do we support providers to open up on evenings or weekends, really increase access to services, to help with workforce in regards to adding workforce, whether it's community health workers or workforce within their offices to expand capacity.

We also are technology or telehealth equipment, anything that allows women or individuals to have better access to sexual health and reproductive health services across the State of California. On March 16, the Department posted a concept paper for the reproductive waiver for a 30-day public hearing. Every 1115 has to have an official 30-day comment period that will end April 17. On March 20, we did our first tribal meeting and we are holding two public hearings, one on March 29 and the second one on April 3.

Really information about the waiver has also been publicly posted and we will be taking comments through this public hearing process. We'll close those and then submit to the Federal Government. Obviously, that would be pending budget approval of that $15 million to move forward with that official submission. In regards to transitional rent, the Department is really seeking to amend the CalAIM 1115 waiver to add transitional rent.

Our colleagues in Oregon and Arizona were able to forge through with CMS, which we love, to get six months of what's called transitional rent added to their 1115 waiver. I say transitional rent because that is a core component of what this is. This is really around someone transitioning out of an institutional level of care, skilled nursing facility, in-patient stay, a correctional setting, or transitioning out of child welfare.

We do see a number of individuals transitioning out of child welfare into homelessness and this is really meant to be a transitional investment in regards to six months of rent, for example, in that population. We are really excited about this proposal. We think it is just adding to the other components that we have, the housing transition services, the sustaining services, the recuperative short-term post-hospitalization housing, and then six months rent.

In regards to this, we still have a lot to figure out in regards to what it would look like in California.

We also are proposing it not only in the CalAIM amendment, but we are also proposing in the CALBHCBC our behavioral health waiver that's out and been engaging with people on so that our county partners also have these resources critical for everything we're tasking them to do both in care court as well as making sure some of our most vulnerable individuals experiencing homelessness with behavioral health needs have this opportunity as well.

So we're proposing in both of those waivers to maximize this ask. The Governor's Budget proposes 17.9 million in 25-26. So this is an out-year thing because we have to do an amendment process implement. It doesn't happen overnight, but increasing to 116.6 million in full implementation of this proposal. And happy to answer any questions when the time is right.

Department of Finance?

Andrew Duffy, Department of Finance. Nothing further to add, but here to answer questions.

LAO?

Yes, Will Owens, LAO. Regarding the Reproductive Access Demonstration, no concerns with this proposal. Regarding the transitional rent, until we see the demonstration we have no comments at this time.

Bring it up to the dais for Members questions or comments. I'll keep it here at the chair and just say how pleased I am to see us spending healthcare dollars on social drivers and determinants of health. It's been a long time coming and look forward to the ongoing work with the Administration to make this a reality. With that, we will thank very much this panel and move on to issue six. Issue six covers another of the 23 CalAIM proposal.

This is a proposed trailer Bill on the designated state health programs and delayed carbon of ICFDD and the subacute services in Medi-Cal managed care. Ms. Cooper, when you are ready.

Of course. The Department submitted a trailer Bill to effectuate its response to amend the CMS-approved CalAIM waiver to include the designated state health program, or what we call as DISHP in regards to this program. So I'll kind of walk through that. The DISHP Program was covering the non-federal share of the PATH Program.

So this includes an additional 646,000,000 additional federal funds to pay and continue to contribute to those critical investments that I was mentioning previously in regards to making sure we can increase access to enhanced care management and community supports. As a condition for that DISHP negotiations with CMS and this is a now national policy for all DISHP. It includes that you have to evaluate your rates, your Medicaid rates in your state, compared to 80% of Medicare, across primary care, across OB, and across behavioral health services.

And in that evaluation, if you have any rates that are below 80% of Medicare, then you have to agree to an increase of those rates. So we did a comprehensive analysis of our primary care, OB, and behavioral health rates and presented that to CMS, and I'll kind of walk through what that looks like. So essentially, we're proposing to increase rates in both primary care in the fee-for-service delivery system, as well as the OB rates in fee-for-service and managed care.

For example, in primary care in the fee-for-service delivery system, the weighted average percentage was approximately 68% of Medicare. So increasing there on the OB for both fee-for-service and managed care, the weighted averages were approximately 65% in fee-for-service and 68% in managed care. So below that 80% threshold, therefore indicating an increase. I would note though, when it came to our behavioral health rates within managed care, the rates were closer to 90% and so higher in that regard.

So no required increase from CMS in regards to our behavioral health rates on that front. So our proposal before the Legislature for consideration is January 1, 2024. Primary care will increase a 10% increase in primary care rates for fee-for-service. Of course, any managed care plan that is using fee-for-service rate that would then correspond on the managed care side as well. And then we are also proposing a 10% increase for OB on both fee for service and managed care moving forward.

So that is the proposal tied to DISHP and the rate increases tied to both primary care and OB services. Oh, I would also note that the OB rate increases is also for our Doula Benefit since we mirrored the fee schedule. In regards to the proposed changes for the ICFDD or the intermediate care facility, developmental disabled, and subacute care facility carbon in the Medi-Cal managed care plans, we are proposing to delay that implementation.

As I mentioned earlier, from July 1 of 23 to January 1 of 2024, we've worked very closely with the Department of Developmental Services and advocates and really just feel like the delay is needed to really give the time education to providers and happy to answer any questions that you may have.

Department of Finance.

Thank you. Would just note that there's $175,000,000 General Fund benefit which will go towards funding PATH. Thank you.

Thank you. LAO?

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

I'll bring it up to the dais for Members' questions. I will just state that it sounds reasonable to have this delay.

Since it was really stakeholder feedback that led to it. With that, I will thank this panel, and we will move on to Issue Seven. Issue Seven is an oversight issue on the Public Health Emergency Unwinding. We will begin with Director Cooper.

Thank you. All right. All my colleagues here. So on December 29th, 2022, President Biden signed into law the Consolidated Appropriations Act of 2023. Basically what this means is through that federal legislation, it separated the redetermination process tied to the public health emergency from the end of the public health emergency. And as many of us know, Medi-Cal redeterminations have been on hold since March of 2020. So we have not actually completed Medi-Cal determinations for over three years now.

And now we will be moving forward with reconvening the redetermination process effective April 1st of 2023. So we will begin our continuous coverage unwinding, as we call it, starting April 1st in California, elected for a 14 month unwinding period. So renewals will begin in April, and individuals with June of 2023 renewal dates. So they'll be getting notices in April for the June renewals. DHCS has prepared a very comprehensive unwinding plan that is posted on our website.

You can see schedules for the entire 14 month period, which really details all of those various pieces in that proposal. As you would imagine, though, by not redetermining or disenrolling anyone from our program, we are now at 15.5 million individuals, and probably actually over that, as I sit here, because that's effective as of December of 2022 members, which is a 24 percent increase prior to Covid. So a really significant increase in regards to total enrollment since March of 2022, largely obviously tied to the continuous coverage requirement.

The Department has made a number of pieces in place to simplify the complexity of the renewals. We've been working very closely with our federal partners to get various waivers approved. For example, people with zero income automatically going through, increasing our ability to have higher exparte rates in regards to compatibility thresholds.

We've really partnered with the federal government to maximize many of the waivers that they've put forward, including how we are processing returned mail and all of the various pieces to really make sure we're doing everything we can to make sure anyone who needs coverage remains on coverage. We know with this many lives not having been touched for over three years that we know some people are currently receiving services that don't need Medi-Cal coverage.

For example, they'll transition to Medicare, to Covered California, or they have employer-based coverage that they're covered to. Our goal is to make sure anyone who needs coverage remains on coverage. But we are anticipating that anywhere between 1.8 to 2.8 million people may no longer be on Medi-Cal. So just kind of flagging that. However, we're also trying to do what we can to not disrupt transitions, important transitions.

For example, we are deprioritizing the annual redeterminations for individuals aged out or will age out of the Young Adult Expansion in early 2024, really moving them to start those happening after January of 24 so that they do not lose coverage. Really, really critical. We also know that we are in California proposing to eliminate the asset piece come January 1st of 24.

So we currently have a pending request with the federal government for us to essentially be able to waive those assets between now and the end of this year, everybody who's on using assets on file to approve them to align with our Jan 1st, 24 asset elimination in California, and we're hoping to hear back from the federal government regarding that.

So these critical populations, we've really tried to see what we can do in partnership with our counties and our advocates to really reduce any disruptions of coverage where people will be needing it as we move forward. Additionally, in mid-February of this year, we did another big, large mailing.

The reason why that's important, we did it about a year ago to really understand how much of our contact information is not up-to-date. When people haven't necessarily had to file that for such a long period of time or haven't filed it, we knew there was a large return mail. We don't have outcomes of that yet, since we just did those mailings, but we should have outcomes by mid-April, and we're happy to provide you an update in regards to that.

But we do know our ex parte rates are increasing, which means we are having better information, which is good, and so we will continue to be looking at that. The Department has also done extensive provider trainings and renewal refreshers with our county partners over 2022. We conducted trainings for over 1,000 plus county eligibility workers to really make sure. Some of these county eligibility workers have never actually done a Medi-Cal redetermination. So we really worked with our partners to be ready.

We received from all counties a county readiness plan that assesses the county's operational readiness in preparation for the redeterminations continuing. We've been providing extensive technical assistance and we actually have a small workgroup with CWDA as well as some counties who really have an immediate group of people to have feedback on policy, what's going on the ground. So as these things launch, we'll be able to really triage and immediately come up with joint plans on how we're going to respond to those various pieces.

We've also created a robust communication strategy tied to this. So as was approved in the budget last year, a 25 million dollar statewide public campaign to really get the word out in regards to people understanding that they need to respond to those pieces coming in. So we are using yellow envelopes in California. So even trying to tag for people in our messaging to--if you get that yellow envelope in your mail, you should be looking at it. We need you to respond now.

It's going to be confusing for people that have not had to redetermine for so many years to know, 'oh, this year I need to.' So we have been doing broad-based communication tools. We have it in all threshold languages. We've been posting toolkits, making it as easy for our partners, whether it's counties, clinics, providers, hospitals, anyone, navigators out there really communicating with people. We launched this actually in May of 2022.

We call it our Coverage Ambassador Program, and really working with people on the ground to get the word out across the entire State of California. And so we look forward to getting those pieces. Also in that media campaign, it will include things like the traditional media, digital media, as well as various advertising pieces across the State of California. The last thing I would note is, obviously this is a huge lift for the State of California.

We will be publicly posting, we have both federal reporting, and we will be posting on our website county by county information to keep the public very aware of what's going on and where we are in regards to the redeterminations. And the last thing I would mention is we were very pleased to hear from CMS on Monday that California has met all of the expectations of the federal government in regards to keeping our enhanced match as well as the phase, which is really, really important.

We are one of very few states actually who have met all of the requirements of the federal government and had no mitigation plan needed for them. So we are very proud of that as well, given the time and effort that we've put in place for this. That concludes my comments.

Next we'll have Cathy Senderling-McDonald from Executive Director of the County Welfare Directors Association.

Thank you, Mr. Chair and Members. Cathy Senderling-McDonald, CWDA. Really appreciate the opportunity today. As you heard from Ms. Cooper, counties in the state have been working in partnership to plan for the unwinding since the coverage requirements went into effect in March 2020 since we didn't know at that time how long they would last.

At the point in time in December when the Consolidated Appropriations Act delinked the unwinding from the PHE lift, we had done much of the planning work together already and we're ready to swing into action with the county-based plans that Ms. Cooper mentioned and the other elements of the plan. One major item that we're still in process of discussing is related to the likely significant number of fair hearing requests that we anticipate people filing as they are discontinued.

As you heard, the estimate is between 1.8 and 2.8 million. Pretty much all of those folks are going to be entitled to request a hearing and both the ALJs who are housed at DSS, Social Services, as well as our county staff. We have specific staff who work with individuals who are appealing a decision to help figure out what happened.

Is there a way that we could administratively address the issue or do we need to proceed to a full hearing, in which case they actually prepare the statement that will be utilized by the administrative law judge and they need to make that available. There's timelines for these things, and typically individuals can receive aid while their case is pending.

So we have a request from the Administration and our meeting with the Administration representatives on this, a one-time increase of 44.5 million dollars General Fund to cover county staff time associated with doing those. Our concern is because we also cover with the same staff: CalWORKs, CalFresh, Child Welfare, IHSS, anything else that could be appealed. We are going to get a big backup if we have suddenly a huge number of these dropping in.

And so we appreciate that consideration so that we can timely handle those cases as well as the ones that we would normally expect to have. And like I said, that's a time limited issue. So it's a one-time request. I was also asked to talk a little bit about whether counties have the capacity to respond to the callers that we anticipate.

I'll say telephone wait times vary by county, by day, and even by the time of day and the time of the month, depending on what's going on, especially because our call centers cover not just Medi-Cal, but also typically CalFresh and CalWORKs. Ultimately, we handle calls on all of those, and it's important to remember that the counties aren't separately funded for the call centers. We peel funds out to staff those out of our regular allocations that we receive from the state.

And so it's essentially a balancing act. Our counties are able to see the metrics. They can see when times are busy and not and make decisions on who to have in the office, in the back office, just working on things, who to have on the phone lines, but they may over or undershoot and need to correct those. And so it's kind of a constant dance, as you might imagine, between those different places that they might be able to staff.

Our counties--I'll say, we know that there are at times long hold times. We're committed to excellent service, and as noted in pretty much every other panel you've heard, we are experiencing very similar staffing issues as to what every sector is. And I'll address that a little bit more, but I'll say counties are definitely doing what we can to ensure that all of the different aspects are covered as we head into what is obviously going to be a really stressful time for a lot of people.

Did I get a yellow envelope? What do I do? It's been forever or maybe never that I've had to do that. It could be--we'd expect if it's a little rough at the beginning that it will get better both as the message gets out and as our workers, many of whom, like you heard, have never done a renewal themselves for Medi-Cal, get used to that process and kind of get more of that experience under their belt.

I think that's one of the real key reasons that we work so hard with DHCS, the plans, and our other advocacy groups to try to nuance the message. As we think about call centers, we've not said, 'everybody call your county' because no, we don't need everybody to call the county. In fact, that would make the hold times longer. Have you moved? Did you tell us? If you did and you're getting mail from the county, then it's okay. We know.

And you don't necessarily need to make that phone call. If you've moved or your information has changed and you haven't let us know, you could call. We're also encouraging and through the messaging and the media plan as many people as possible to create an online account. If they go to benefitscal.com--we talked about that at the last hearing in depth--they're able to make their account and they can upload that information.

They can make changes to their address all online, and that automatically will populate in our system, and so the workers can see that. So we're encouraging people who are able to do that self-service. We know not everyone can, which is why we have the in-person offices as well as the phone lines, but just making sure that that's there. I'll just mention, too, I'd be happy to answer this as a question, knowing that I'm close to time.

There are a number of changes that BenefitsCal will be making, again, related to the conversation we had last week about prioritization of enhancements to the system. I'd be glad to talk a bit more about those. And finally, as discussed, we've got the hiring issues. We are recruiting like crazy, so if anyone does need a job, please get your friends to go apply.

We're also trying to work very closely with CalHR. They actually run the HR to ensure that our smaller and rural counties that don't have their own HR operations are able to meet merit systems requirements. And so we're working with them to try to streamline as much as possible right now to ensure that we do get those classes in to get their training so they can actually do the work both for initial and ongoing eligibility.

All in all, we also just finally have a proposal regarding the workforce that's part of the budget request that would help counties create pipelines for those who are interested in going into public service. And so in high school, community college, and if possible, partnering also with four-year colleges and universities to get a program going where they could come and start to work in the county and find out what that's truly like and then be ready to kind of hit the ground running upon graduating.

We're hopeful that it will also provide us with the opportunity through that trailer bill language that we're proposing to update some of those CalHR requirements. At the same time, the idea is to get that pipeline of individuals going who are interested and want to know more and also increase the diversity of our workforce.

Because starting in high school, community college, we think we'll be drawing from a base of individuals who aren't quite sure yet what they might want to do. Even if they end up in a different area of the county, it seems like it would be beneficial to have that sort of public service track created. So that's our big idea for the year on workforce, and looking forward to answering questions. Thanks.

Next we will hear from Laura Sheckler, Deputy Director of Policy and Research Affairs with California Health Plus Advocates.

Thank you. Laura Sheckler with the California Primary Care Association and California Health Plus Advocates. So this morning or this afternoon--nearly the end of the day now--I wanted to take a little bit of time to talk specifically about the role of community health navigators in this process of redeterminations. I think that most folks are really familiar with the important role of the counties in that Medi-Cal application process, but perhaps a little bit less familiar with the role of health navigators in community-based settings, CBOs.

But also specifically, I want to talk about in community health centers specifically because those are our patients. So for some background, the California Primary Care Association represents over 1,300 health centers, as my colleague Ally mentioned earlier, and that includes 4.8 Medi-Cal beneficiaries. So that's one in three Medi-Cal beneficiaries are served at our health centers. Of those, 36 percent have limited English proficiency. 663--actually, sorry about that--336 individuals are experiencing homelessness, and nearly one million are agricultural workers.

So when we're really thinking about who's most at risk of falling off of Medi-Cal during this redetermination process, a lot of those patients are really served in the community health setting. So when a patient makes an appointment at a health center or comes in for their visit, if they aren't connected to coverage already, then they are set up an appointment with an enrollment counselor.

That enrollment counselor can help them understand what benefits programs they might be eligible for, whether that's Medi-Cal, for a much smaller population, maybe Covered California, perhaps a local county coverage program for undocumented adults, which many of those patients will transition to Full-Scope Medi-Cal next year or programs like Family PACT or Every Woman Counts, et cetera. From there, they can actually help go through the application process and submit it on behalf of the patient while they're with them.

And if we're talking about Medi-Cal, they can also act as an authorized representative. So really be an intermediary between the patient and the county worker, so if any questions arise, more documents are needed, whatever is needed to make that a successful application, it doesn't have to go through the patient. They can actually work with that authorized representative at the health center.

And this is really key as we're thinking and hearing about some of the workforce challenges at the county, this is really an opportunity to streamline that process and make it as efficient as possible. And particularly, again, for those patients where this might be a more complicated process, if English isn't their first language, if they're experiencing homelessness, if they have nontraditional income streams or a mixed status family, then these health navigators can really help ensure that that is a successful application or renewal process for those patients.

So in terms of resources for this, last year, the Legislature did approve a 30 million General Fund which had federal matching, so 60 million for the Medi-Cal Health Enrollment Navigators Project, which is wonderful, and we appreciate that. And we also feel like it is insufficient for the challenges that we're facing this year and this really historic need. So during the application process last year, more than double that amount was applied for, upwards of 140 million for that 60 million in allocated funds.

And then from there, that program last year was created over four fiscal years. There wasn't enough funding for that, so it's been reduced down to three years, but even at that amount, this program has historically been funded at that amount for two years. So effectively it's a 30 percent reduction in health navigator funding when we're about to see the largest need we've ever had for health navigation.

So we are really looking to double that ask from last year to meet this need at this point, and then particularly for community health centers, while counties were really encouraged to partner with their community-based partners in their counties, only 33 health centers received funding through the Navigators Project currently, and that's out of almost 200 health center organizations with 1,300 sites. So this tiny fraction of health centers who actually see one-third of Medi-Cal enrollees actually are funded to help with this enrollment work.

So we just really wanted to highlight that key role of those community health navigators in this process, along with the important work that happens at the counties as well.

Thank you. Next we will hear from Linda Nguy with Western Center on Law and Poverty.

Good afternoon. Linda Nguy with Western Center on Law and Poverty. Firstly, we want to appreciate the Department's stakeholder engagement in the unwinding and renewal process. In particular, we want to commend the Department for its work to deprioritize young adults so that they don't age out, as well as to minimize coverage interruptions for seniors and persons with disabilities. Without this, many seniors and persons with disabilities would have had their Medi-Cal terminated for failure to verify their assets or for being above the current limit.

However, coverage termination concerns remain. Advocates from across the state--Alameda, Contra Costa, Santa Barbara, Los Angeles, and Sacramento, to name just a few--report county call wait times in excess of 30 minutes and often more than an hour, disconnects, and dropped calls and other barriers. This is prior to unwinding and before the expected surge in call volumes. We worry that individuals will be terminated not because they are no longer eligible, but because they cannot report their new address or other changes.

LA County call abandonment rate averaged 20 percent last year, meaning over 100,000 people a month got tired of waiting and hung up. Even worse, an additional 150,000 calls per month were simply disconnected by the county because call volumes were too high. It's unclear how many people gave up completely or tried again, but this demonstrates a discouraging process that is expected to become more challenging.

We appreciate all of the Department's efforts to help more people keep their Medi-Cal during renewals, including checking other sources like their Medi-Cal plan for contact information and requiring contact beyond mail, as well as the ability to make changes online through BenefitsCal. As Ms. Senderling noted, though, that's helpful for those who can use it. Not everyone can. These improvements cannot guarantee Californians will keep their coverage unless the state starts to address critical areas.

First, in light of the county staffing shortages, the computer system's automatic cutoff feature looms large. Basically, if a case is not marked as received, then the Medi-Cal will automatically end. When counties are understaffed and overworked, there's no guarantee that submitted renewal information will be marked as received in time. As a result, thousand risk erroneous Medi-Cal cutoff due to the auto-termination functionality. In past years, less than 20 percent of monthly Medi-Cal renewals resulted in discontinued eligibility.

Since the vast majority of renewals result in continued coverage, the state in the long term should implement system changes that does not default to termination. Second, and more importantly, there needs to be some sort of halt function when Medi-Cal cutoffs exceed expectations, as well as data measurements in place to know when to stop termination. This should include monitoring county call center metrics, requests for state fair hearings, the volume of procedural terminations, and county staffing readiness reports.

The bottom line is given the known challenges today, the Department should be planning for some sort of safety valve to protect Medi-Cal coverage. We'd also support funding for navigators as we know that the unwinding is a very significant process, as well as noting that starting 2024, to the credit of the Department, the Legislature, the Administration, Medi-Cal of 2024 will not be the same. All income-eligible adults, regardless of immigration status, regardless of age, regardless of asset limits, will be eligible, and that is something to be commended as well as work to get the word out. And so thank you.

Department of Finance.

Aditya Voleti, Department of Finance. Nothing further to add.

LAO.

Luke Koushmaro with the LAO. Nothing further to add. Thank you.

Bring it up to the dais for any Members' questions. I'll keep it here at the Chair if I can. I'd like to follow up. It seems that we heard from the county's concerns regarding workforce. We heard from consumer advocates about concerns regarding call wait times and abandonment. And in light of us having 1.8 to 2.8 million Californians who will be disenrolled from health care, how do we appropriately make sure we're working with our county partners so that we can redetermine the best of our ability?

Yeah, so I think many of the things that I mentioned in my opening pieces, we've done a comprehensive readiness piece where every single county has to walk us through how they're going to be ready to answer those calls, how they're making changes to make sure that people are available in their lobbies to make any necessary adjustments.

We will be publicly reporting outcomes of each of the various pieces every single month on our website, and that will be broken down by county, one: for broad public transparency in regards to how things are doing, but also so that we are able to very closely monitor how things are going across the State of California. We have worked very closely with CWDA and the counties to be ready. There was an augmentation in the budget last year.

We are in receipt of the additional 44 million dollar ask, specific to the state fair hearings, but I think we'll just have to continue to watch it very closely. We have a biweekly meeting set so that as we're hearing things on the ground, as we're seeing data, we can immediately triage. We also have various mitigation pieces in place from a systems point of view. We learned a lot when we had to turn this off--just to be clear--a few years ago.

And so we have a lot of contingency plans in regards to how we can move people into buckets if for something happens inappropriately, for example. And so we've been trying to kind of plan and prepare for all of those various pieces, but may defer to Cathy in regards to what the counties are doing to ensure readiness at the local level as well.

I would like to bring up Ms. Senderling-McDonald, if I can. And while you're doing that, Ms. Senderling-McDonald, can you comment on why the default to termination--can you explain what that means and why that's set up as choice architecture in that way or is there a different way that you may recommend?

Sure. So the automatic discontinuance that Ms. Nguy noted is, I believe it's been a feature in prior systems as well. Remember, we're in the process of going from originally four, then we were at three most recently. Now we're in two. And CalWIN, which is the other system that still exists, they are a couple counties at a time migrating in through the rest of the calendar year. And by 2024, we'll all be in CalSAWS, all 58 counties for the first time in one working system.

So the CalSAWS was also programmed in that way. These are conversations that likely had happened in the development sessions in which DHCS and CDSS also participate. And the idea is that, just as Ms. Nguy noted, if someone has--the idea is that if you've not responded as a beneficiary to the request for information at the time of your renewal, we are required under federal and state law to make additional attempts to reach out to say, 'hey, remember we sent you this? We need this. Are you there? Hello? Hello?'

It could be phone calls, by mail, and so we do start the process about 90 days prior to the person being actually due for that renewal. And so the first step is this ex parte, we look out, we see what we have in the databases, and then our system already at federal database, and if the answer is 'yes, we can tell that you're eligible,' all we do is we send them a letter that says, 'congratulations, you're still eligible.' That's called the happy path, right?

You get your letter. That is not in a yellow envelope, the idea being, if you get the yellow envelope, you need to do something in the case of the happy renewal, which is the percentage is going up as you're hearing, which is great news. That would be no further work on people's part. They get set out a year.

And so then if we cannot confirm that you're eligible, if we can't get to 'yes' in that process, we will send in that yellow envelope, a fill that packet that says to the person, 'we weren't able to find you eligible. Here's what we have, and here's what we still need or what we need you to verify.' So they're told, and this is different from the past, pre-ACA, everybody just got a huge blank packet and they had to remember, what did I tell them last time?

Like, I don't know. And none of that ex parte stuff happened. Just everybody got the packet. So now it's tailored. It's the percentage that doesn't get that initial renewal. And then that is the group that we're worried may be sort of used to being told if they get that packet, which has actually still been sent throughout the entire last three years, we've been continuing to do that process and send the packets and they've been told, 'just ignore those. You don't need to send them in.'

And so now we need to say, 'don't ignore those. You need to send it in.' So there is an important part of this messaging and a reason why you're hearing navigators are going to be helpful, ensuring that we're speaking to people in their language and sending them information in their language that they speak.

Those are critical pieces to this whole puzzle to make sure because if they don't send anything, they don't respond to the calls, or the county receives it and doesn't mark it as having been received, the system is set up to set a discontinuance for them. So we're starting in April with this process. If you count 90 days out, July would be the first point at which people would start to be actually discontinued and lose coverage. So in April, people aren't starting to lose coverage right then.

It's the process that's starting. And so the question is: of those individuals who send back information to us via the mail or drop it off at an office, will the counties get to it? Clearly, marking received will be a high priority for the counties and will be--and I'm sure you will be reminding them of that as well.

Even if they're not able to fully complete the process, if they're in a county that happens to have a higher vacancy rate or a larger kind of average number of people on Medi-Cal or what have you, ensuring that the system understands that they've sent that packet back is obviously a very big concern. Those who are able to go online and submit the redetermination online, it will mark as having been received, again, even if the county hasn't processed it. So that's an automatic thing.

So the online is a little more automatic. With the packets being mailed, someone has to mark it as having been received. We'll also be looking at using clerical staff to be able to do that. Again, that's something that you could perhaps do as data entry, not necessarily having to fully process and then kind of get those to the eligibility staff to actually key in changes and actually do and run kind of the process of the redeterminations.

So workflow is going to be really critical here and having the counties manage that. Pre-pandemic, we had 12 million people on the program, so it wasn't like we didn't do this on a regular basis. But this is an unprecedented amount of people and obviously huge, high stakes, given that we've got one in three Californians on this program at this point. So it's very important we get that.

I'm going to follow up a little bit, if I can. How and when will we know when discontinuances may be a problem in this process?

How will there be updates for us within the Legislature, and will there be an opportunity to pause or to slow down the process as we're going forward to ensure that we're appropriately doing the redeterminations? My fear is if we aren't receiving information, we're going to be terminating. How do we know our systems are developed?

Maybe I could say a couple, couple of things and then drop it over to Ms. Cooper to speak for the Administration, because importantly, we're going to do what they inform counties they need to do. So the guidance comes through DHCs. So it's very important that we be in strong partnership on all of these to be able to mitigate if we see situations. Ms. Cooper noted.

And I think it's a good point that when we got the requirement in, I don't think it came down till April 2020 for us to have halted all discontinuances starting in March 2020. Well, we'd already been discontinuing people. We had to quickly work together to go backwards, basically, and get people back on. And so it was really, I would say, the first time that I'm aware that our computer systems had to work so closely together to kind of revert people or going forward then avoid discontinuances.

There was, for example, a process that had been automated in one of the systems to automatically discontinue people based on an end date counted automatically when somebody was entered, it was people leaving CalWORKs. They get an extension of their coverage, and then it sort of was just added. And it said, well, if it was January 1, they get six months, and then, so July 1 we're going to kick them off. And it just boom, populated that. And we didn't realize that it was that automatic.

And then this big group of people dropped off and we all went, what just happened? And we had to kind of trackback. The systems have been fantastic and working in strong partnership to prioritize that, to help figure out this is what happened, this is how many people are affected, and then the MEDS System can kind of sideload them back into the system. There's downsides with that, but the upside is that the coverage is either never lost or restored very quickly.

So those are certainly, I would imagine, some things that we now have some practice at should we end up needing to use that. Of course, our hope is not, and I think one of the complicating factors in this is that we don't really have the right number to shoot for. We have 15 million people, and we've got estimates, but even the estimates are rather large.

And so with the data that we will be providing through the system to the state, I don't know that you'll be able to track it in real time, but it'll be pretty close. And so I think we'll be working in close partnership to be able to answer those questions. And if it looks like it's way more being discontinued, for example, than we would have thought, we'd want to say, hey, what's going on?

And kind of see if some of those practices might need to be put into place, and then we'd stand ready to help identify those cases, change our processes, dive into individual counties that might be having particular issues or what have you.

Sorry. That was longer than I expected to talk.

Yeah, no, I agree. I mean, I think we learned a lot of the systems when we turned things off because things broke and we figured immediately actions to restore people into coverage. So we do have a number of system flags that we've been testing for over eight months now, a massive testing across all systems to kind of have a better understanding if we do hit a threshold where for some reason numbers aren't making sense, people are being disenrolled at a different number so that we can quickly get in and mitigate

And our teams are very ready for that. And I agree with Cathy. Everyone came together during, when this first happened in April of 2020 to immediately address. So I think we have those systems and processes in place now, which is good, and the teams would be ready to kind of act if necessary.

I think that public reporting will be pretty timely. We've actually been working out all of the data flows from the counties, what that looks like. We've been training people for a long time now in preparation for this piece as well, which will be really important. There will be somewhat of a lag because there has to. We have to let the process happen before we post, but we'll be updating that.

I think the other thing, though, I would mention is that there are federal expectations in the omnibus that was passed last year in regards to how fast we move. We are required to complete all redeterminations within that 14-month time period, and there are expectations in regards to the timeliness of our actions or there are sanctions that can be put on the State of California.

And so we will obviously be watching those pieces very closely and we will communicate broadly with people where we are and how this is rolling. There have been states who opted into the early pieces as early as February. I think everyone's kind of watching to see what's going to happen with those states in April as we launch in April for redeterminations, June, and the first discontinuance is July, as Cathy mentioned.

So I think everyone's paying attention to states who went before us as well, see if we can learn from them. But I think everyone's very committed to doing everything we can to ensure coverage for anyone who needs it.

If I might just. Oh, I'm so sorry. One thing on the data that I do want to mention that I think it's important that people understand because of the speed with which the Federal Government and that act requires the reporting. There's one piece of the discontinuances that's going to be reported a lot faster than it usually is in the data that you see publicly today, like on the dashboard or the open data portal.

Typically we lag the discontinuance data for 90 days because when someone is discontinued today and after April, too, they'll be able to come back within 90 days and say it was because they didn't return the packet. They can come back and we essentially put them back on, no harm, no foul, as if the packet had been sent. And so they have that 90 day. It used to be 30 before the Affordable Care Act. It was lengthened to 90.

So if you think about it, in April we start 90 days early and then in July you have 90 days after. So the whole process could actually be six months before it fully gets played out for one person or one case, because the federal data requirements, they're making us report a lot faster. That 90 days will not have lapsed.

So we do know, I think historically pre-pandemic, we could look at the churn and tell you historically, X percent would drop off and then of them, this many people would come back over that time frame. So we could look to see, I think there's a lot of historic data that we could look at. It may or may not be quite as valid since the pandemic kind of changed a lot of things.

The numbers are so high right now, but at least we have something to look at. But just so you know, you're going to get the much quicker number. And that doesn't include people who would have just on the natural come back because we always have some turnover and churn during that extra 90 days. So hopefully that's helpful.

Yeah, we actually still post the churn report. It's a little different. But we do have all of the historical churn within the 90-day or within a 12-month period. We learned a lot during COVID It gave us a lot of time to analyze our eligibility data. We'll continue to update that monthly, too, just so you get both pictures of that catch-up period that Cathy's mentioning as well.

And I do appreciate that close communication with the Legislature. I think many of us share the concern that since we for over a year have been telling them not to fill out this form, that we appropriately are doing that outreach and education, and know we have a campaign to do it, but simply want us attuned to the daily redetermination process so we can understand whether there's workforce investments we need to be making to address what's happening in real-time.

And so with that, I will thank very much this panel and we will move on to issue eight. Issue eight is on the managed care organization tax.

We will begin with Director Baass.

Good afternoon. The Governor's Budget proposes a multi-year managed care tax starting January 1, 2024, through the end of 2026. It brings in about 2 billion in annual General Fund offset costs, and the framework is very similar to the model that expired at the end of 2022.

In the A pages, we signal that we are continuing to work on this model and really want to maximize our opportunity to draw down federal dollars and have been working closely with CMS on various kind of scenarios and models and framework to really maximize the opportunity for California. And we will be coming forward with a future proposal on this by the May revision.

Department of Finance.

Hi, Kendra Tully, Department of Finance I think we just wanted to echo the Department's comments. The Administration continues to work together to evaluate the proposal, MCO tax proposal, and any increase beyond what is proposed at Governor's Budget, and we're looking forward to providing the Legislature adequate time to review at May revision.

Thank you. LAO?

Jason Constantouros, LAO. We have two key messages for the Legislature. The first is that we think that the Administration's overarching goal of renewing the MCO Tax has merit and warrants legislative consideration. The MCO Tax has been a key source of support for the Medi-Cal Program and historically has provided a substantial benefit to the General Fund and a relatively low cost to the health insurance industry. We also think the Administration's interest in increasing the tax also has merit, given the state's existing budget problem.

Second, while we think the overarching proposal has merit, key details of the proposal still remain outstanding, most notably the opportunities that the Administration is considering to further increase the tax.

We recommend the Legislature continue to work with the Administration to get information on that and then regardless of what the proposal is, we recommend the Legislature get information from the Administration on the taxes overall fiscal impact to the General Fund and to the health insurance industry, and then also get updated analysis to ensure that any proposal is likely to meet federal requirements. Thank you.

Thank you. I will bring it up to the dais for any Members' questions. I will keep it here at the Chair if I can. First, I'm going to be very supportive of the MCO Tax. I would like to see it implemented as quickly as we can as it expired in December of this past year, and so hope the Administration is able to both find an MCO Tax that's larger than the one originally proposed as well as it gets implemented sooner.

And with that, I will thank very much this panel and we will move on to issue nine. Issue nine is on a trailer Bill related to the CCS Whole Child Model expansion and mandatory care enrollment of foster care children in single-plan counties first, we will begin with Director Cooper.

Thank you so much. The Department of Healthcare Services proposes to implement the California Children's Services whole child model in the 15 counties converting to the County-Organized Health System, or what we call COHS and single plan models, as a part of the county model change going live in 2024, as well as the mandatory enrolled foster children in single plan counties in order to align the policies in all managed care plans that have one plan for lack of better solution.

There are approximately 173,000 children in CCS, with a little under 31,000 or 18% in the Whole Child Model. This would bring the total count of Whole Child Model counties to 36 and around 47,000 children, or 27% of the CCS children in Whole Child Model. With the existing Whole Child Model managed care plan scheduled to expand to the new counties in 2024, this makes sense to further align the Whole Child Model implementation with that expansion that was vetted at the local level.

One thing to remind the Committee of is that each local entity did a full vetting at the local level and passed an ordinance in order to choose to change their model to either a COHS or to a single plan to kind of drive and align in that regard. Requiring the expanding Whole Child Model managed care plans to operate two separate delivery systems for CCS children would likely result in an increased opportunity of error and confusion at all plans.

So, for example, partnership health plan has a number of counties that are already carved in today providing those services, and so we don't want there to be confusion for providers on the ground, families, or counties in regards to which counties are carved in or out for one managed care plan who's currently overseeing. And that's why we're proposing to align where the counties have elected to add to those COHS or managed care plans to align the policy across those various counties.

We propose to take a phased approach for the implementation based on discussions with plans and directly with the county partners in regards to this. This gives the independent counties more time to transition functions to the managed care plan. Just for some background, the way the CCS program is administrated, we have independent counties and we have dependent independent counties where the counties perform all the various functions themselves.

For CCS, dependent is where the State of California actually provides the majority of the services, while some services are being provided just some care coordination services by the county themselves, but it is limited. For phase one, we would be implementing Whole Child Model in 10 OHS expansion counties for any of the dependent counties, less of an impact to the county partners and that was based on their requests and feedback to us in the stakeholder engagement that we did for this proposal.

I would also note that 11 of the 15 counties proposed to newly implement the Whole Child Model are dependent counties, so that smaller impact to our county partners that I notated earlier. In phase two, we would implement Whole Child Model expansion in two COHS expansion counties. So that is where the independent counties exist. By Jan. 1 of 2025, the Department is aiming to release the independent evaluation of the Whole Child Model by the end of this month due to delays with ADA and deidentification.

It is a very lengthy report and so we do apologize for the delay in getting that posted onto DHCS's website. Due to the delays of releasing the report, however, DHCS has separately briefed the legislative staff, the CCS Advisory Committee, the Whole Child Model plans, the local health plans of California, Association, as well as our CHIAC Members of the results of that evaluation.

The Department contracted with the University of California San Francisco Institute for Health Policy Studies to conduct an independent evaluation, which was required as of SB 586. The evaluation organized by research questions that addressed each of the evaluations, questions identified in statute. The Department's decision to proceed with proposing the implementation of the Whole Child Model in the additional calories was supported by the results and conclusions identified in the independent evaluation done by UCSF.

The evaluation report identified that the Whole Child Model had similar or the same results as classic CCS or an improved impact to the majority, not all, but the majority of the CCS client participants across the majority of evaluation measures as compared to classic CCS clients. The evaluation concluded that the CCS Whole Child Model maintained services and provided CCS-level quality of care for the majority of CCS clients in the Whole Child Model, showed increased access to CCS paneled providers, lower grievances, streamlined DME referrals, and timelines for CCS individuals.

Satisfaction was unchanged or improved for the majority of Members, quality maintained the same and HEDIS mostly improved or stayed the same as compared to classic. 69% were usually or always able to get as much help as needed or wanted. I would note that while there were some very positive outcomes of the Whole Child Model, there are two areas of improvement that this Department will be focused on in regards to the outcomes. The first one has to do with CCS enrollment.

On average, the absolute difference between the Whole Child Codel and the classic CCS counties for new referrals was around one to 2% of a difference. One of the pieces that we were held strong to in regards to our negotiations in SB 586 is how important it was to continue to have children who are CCS eligible to be screened in referrals and continue to have that.

Many of the protections that were negotiated in 586 were really meant to ensure that those protections are in place also in managed care. So the Department is very committed to continuing to work on those pieces of improvements, having conversations with our managed care plans in regards to how that we can make sure that children who are CCS eligible continue to be referred and enrolled when they are eligible.

Additionally, care coordination. This one I would note, though, the outcome showed that both need improvement, both the classic CCS as well as Whole Child Model, in regards to coordinating services for these children. So we'll be looking across both the CCS classic beneficiaries in our CalAIM work group who's focused on CCS improvements for that area as well as in Whole Child Model, to make sure that we're improving.

One thing I would note is come July 1 of this year, we'll be launching the enhanced care management proposal for children, which we are hoping will help, especially with those most complex kids. One of the things the evaluation showed is that for those most complex, they still need a higher touch of care coordination. We're really hoping that enhanced care management will be that option for those families, and we can see those.

We're also hoping that many of our CCS paneled providers will be of those enhanced care management entities to be able to provide that complex coordination for those children. Regarding CSS reimbursement, when a county transitions from fee-for-service to the Whole Child Model, existing law requires that managed care plans pay the physician and the surgeon provided that equal bump. So in CCS, we do have what's called the CCS Bump for those physicians.

That was codified into statute that that also applies in Whole Child Model and is required for that to be paid unless agreed upon to a different rate with the provider directly between the managed care plan and those providers, of course.

Under the Hospital Quality Assurance Fee supplemental payment programs, the methodology to determine the amount of supplemental payments to hospitals in the fee -or-service delivery system include factors that account for the higher acuity stays or services while under the managed care directed payments as currently designed are for the same per diem add-on for every piece. I think that's why you'll hear that there are some concerns from a hospital financing point of view, the transition from fee-for-service to managed care.

The Department of Healthcare Services has been working with CHA for quite some time in regards to, the California Hospital Association, sorry not to use acronyms, for quite some time in regards to how we're thinking about those Hospital Quality Assurance Fee payments and pieces that we can do to acknowledge that acuity that is impacting especially for our children's hospitals, which I know you will hear about in a moment.

So the Department is committed to working with our hospital partners to modify the structure of the managed care-directed payment programs to account for these differences in regards to how it's paid for on the fee-for-service versus the managed care side, and that would include both the inpatient and outpatient components of those payments.

However, I would note under the fee-for-service program, these payments are based on historical utilization, which mean the impacts of the trailer Bill on utilization will not be realized at least until calendar year 2026 for our hospital partners.

And in fact, in calendar year 24, the counties where Whole Child Model is expanded, hospitals would receive supplemental payments under the fee-for-service program based on calendar year 21 utilization when CCS remained in fee-for-service and would receive the supplemental payments under the managed care directed payment on those calendar year 24 utilization when Members receive care under Whole Child Model

Again, very focused on working with our hospital partners to mitigate those transitions, but given those various pieces, we do feel like there is a transition period as we continue to move forward in regards to those various pieces. And I think you'll hear from the California Children's Hospital Association their concerns with those finances. We've had conversations to discuss in regards to those proposals.

The two biggest factors that we've heard is this financing transition from fee-for-service to managed care, as well as the referrals to CCS, which is a driver, in regards to many of those components of how those acuity factors in their payment work. Having that CCS designation will help in regards to those acuity assessments and payment structures that we would be working to implement in the future. So, again, happy to answer any questions that you all may have when the time is right.

Next, we will hear from Anne Louise Coons, President and CEO of California Children's Hospital Association.

Thank you, Mr. Chairman. I want to start by just pointing out that California Children's Hospital Association, we represent the eight freestanding, not-for-profit children's hospitals in the State of California. We also operate 175 CCS special care centers, and 68% of all CCS in-patient claims are attributable to one of our members. We provide some of the highest acuity pediatric care in the state.

64% of all pediatric cancer care is provided by our hospitals, 73% of all pediatric organ transplants, and 75% of all pediatric cardiac surgeries in the state are provided by our hospitals. Pre-pandemic, we also staffed 57% of all pediatric intensive care beds in the state. It's probably more than that now, because, as you know, during the pandemic, a lot of community hospitals shut down their pediatric units. Two-thirds of our patients are covered by Medi-Cal, which is twice the average for a community hospital.

CCS is a major concern to us. It's something that we spend a lot of time on. We spend a lot of time with these families. A lot of the intensive case management that is now done for these families is actually done at our special care centers. So we're extremely committed to this program. We're very concerned about the future of it overall.

We actually have some legislation this year, SB 424, which is authored by Senator Durazo, to try to address some of our overarching concerns about the CCS Program. CCHA opposes the trailer bill language on procedural policy and fiscal grounds. From a procedural standpoint, this actually isn't a budget proposal. There is no budgetary impact. This is a policy proposal that we think should be run through the policy process. That was the case with SB 586, which was the legislation that created the Whole Child Model.

We believe that the same thing should be happening here. The Department has argued that this is somehow related to the selection that some counties made to move from either two-plan or multiple or different models to county-organized health system or single-plan counties, and has, I think, implied that there was some sort of a local process that addressed the CCS and that there was some kind of maybe buy-in on the part of these plans to move because of CCS. But actually, that's not true.

None of the materials the Department sent out to counties about switching models included any information about the CCS Program at all. Counties were required when they wanted to switch models to provide information to the Department telling them what they needed to do, and there was no mention of CCS made in those materials. So from a process perspective, this really took us by surprise.

We understood from the history about this program in SB 586, which sort of set up the Whole Child Model, that there would be an evaluation, that evaluation would be provided to the Legislature on December 31 of 2022. And then we assumed there would be another policy process with another bill to discuss kind of what the results of that were and maybe what the next steps would be. Now, we don't have hostility towards managed care plans.

We have a lot of contracts with managed care plans, obviously, but we have a lot of concerns about the Whole Child Model and what it could mean for the future of the CCS Program in general. We recognize that there's benefits to having everything consolidated under one plan. We also know that the Department itself has carved out services when it serves a different purpose. For example, the drug benefit was completely carved out of managed care a couple of years ago.

Mental health services are carved out of managed care plans. It's not like everything has to be capitated in order to work well with a managed care plan. So we think there are policy considerations that really need to be run through procedurally, and there's no rush to any of this. There is no need to do this in the next three to six months.

And certainly since the Department failed to release the evaluation timely, we don't think that should constitute an emergency on all the rest of our part to rush through some sort of decision. Again, there is no budgetary impact, and there is no need to do this right now. We can take the time to do it carefully, and we think that we should. We would say from a policy perspective, we've only seen a summary PowerPoint of the evaluation that is due to the Legislature.

I'm going to refrain from making any sort of critical comments about the evaluation because we haven't seen it yet. So, I mean, I think we know the Department believes that it showed that there was improvement. I think in some of the areas where the Department is focusing, where the improvement is, are very primary care focused. And it's not clear to me that, say the 7000 kids in CCS putting them in Whole Child Model affected, well, child visit rates or vaccination rates.

It probably had more to do with the fact that overall primary care performance on the part of managed care plans has been pretty poor over time. And I think the Department rightly has put a lot of emphasis on that and the need to do more improvement plans on the part of the managed care plans need to improve there. So if there's improvement, I'm not sure it's really singularly focused on CCS.

It probably has more to do with the overall population and the emphasis that the department is putting on prevention. But again, we kind of need to see the evaluation to know exactly, I mean, to see it for ourselves. It's a very complicated evaluation. It covers a lot of things, and we should spend the time to review it and do it right.

One thing that did come out in the summary of evaluation, which we have also independently confirmed, is that there is a statistically significant drop in CCS enrollment in Whole Child Model plans. To us, this is a really significant, substantial concern, because if kids are not, it's kind of like we worry about kids falling off of Medi-Cal at the end of the public health emergency. Kids who have CCS-eligible conditions are entitled to certain services. They're entitled to a special care center visit annually.

They're entitled to specific case management, they're entitled to the support services, particular transportation services, to help ameliorate their condition and make them well. We actually did an independent evaluation of this enrollment problem because we were so concerned about it when SB 586 passed. This was actually our primary concern, and we required that the Department adopt a separate capitation methodology for CCS instead of putting it into the one big capitation pot, because we thought that would provide a financial incentive to plans to identify these kids.

But it hasn't really completely solved the problem. We did a Public Records Act request with the Department in 2020 and got county-by-county CCS enrollment data. And we hired an independent consulting firm, Capital Matrix Consulting, which is Brad Williams, a former chief economist at the Leo, and Mike Janessa, former Director of Finance Department Director, to do that evaluation, did a statistical analysis, and what it showed was that it was statistically significant.

And four out of the five counties, four out of the five health plans, there was a 16% drop in enrollment in the first 12 months in health plan of San Mateo, a 13% drop in enrollment in the first 12 months after implementation in Cal Optima, and a 10% drop in enrollment in the first 12 months after implementation in the Central California Alliance for Health Plans.

So to us, this is a kind of fundamental thing that needs to be solved, and we're happy to work with the Department to try to solve it. But again, we think it needs to be solved first before we should be expanding the Whole Child Model. Finally, as Ms. Cooper alluded to, we have financial concerns about the implementation of the Whole Child Model. As she mentioned, the Hospital Quality Assurance Fee includes an acuity adjuster.

When outpatient visits are provided in fee-for-service, that acuity adjuster goes away. When the services are provided in managed care. There is a timeline lag, and for a certain period of time, there's actually a hospital will receive some payment for 2019, say at the same time in the fee for service side as they receive directed payments on the managed care side for a more recent year. So there is some overlap.

But when we've asked our hospitals to do an analysis of the impact of Whole Child Model, CHOC Children's, which has been in Whole Child Model since 2019, says that this is going to result in a $20 million cut to their hospital. UCSF Benioff Oakland now they are saying that this is going to happen this year. This is already happening to them. Now, the Department, we have a disagreement with the Department. We met with them earlier today. We need to kind of look further into that.

But I don't think they disagree with us that the impact of the Hospital Quality Assurance Fee is because when the Hospital Quality Assurance Fee was set up, CCS was presumed to remain in fee-for-service. So there was an acuity arrangement and acknowledgment there.

We recently asked UCSF Benioff Children's Hospital Oakland to do an analysis if Contra Costa and Alameda County became Whole Child Model Counties, and they estimate that the fiscal impact to them would be $29 million a year, which is an existential hit to the hospital. They operate more CCS special care centers than any other hospital, maybe save CHLA in the state. They provide a lot of very intensive services in the community.

These are services that we don't really want to jeopardize that hospital's ability to continue to provide services in this community, in the communities that they serve. So we feel really strongly that those two issues, both the enrollment issue and the financial issue, need to be resolved before there should be any consideration about the Whole Child Model. And again, I would just end with this isn't a budget proposal. It doesn't belong here. There's no need to do this right now.

The risk to CCS Members and to children's hospitals are significant, and we would ask the Committee to reject this proposal and direct the Department to pursue this through the policy process as they did with SB 586. Thank you.

Department of Finance?

Aditya Voleti, Department of Finance. No further comments.

LAO?

Jason Constantouros, LAO. I know there's a lot of information in this proposal. Just thought it would be handy to point out a few key pages in the agenda that might be helpful. The first on the bottom of page 43. That shows the 21 counties and five health plans that currently participate in Whole Child Model. And these are the counties that are generally operating county-organized health system managed care models.

The only one exception there is Ventura County, which was excluded from whole child model. And then turning actually to page 46, you can see all of the counties that are switching their managed care models. And just going from Alameda to Yuba, those are the ones that are specifically switching to either a single plan or a COHS model. And so those are the counties that are being affected by this proposal.

And then you can see the phased approach that the Department noted on page 47 and the top of page 48. Those are phases one and phase two. Most of the counties would be under phase one, but the biggest caseload impact would be on phase two, and that's because of the three largest counties, Alameda, Contra Costa, and Imperial would be in phase two. So just want to point out, raise a few issues for legislative consideration.

First, we understand the Department's goal in trying to align Whole Child Model with the recent managed care model changes. We think that that goal warrants some consideration. We also think the overarching objective of trying to standardize the way services are delivered across the state also warrants consideration. On the other hand, we've heard many of the concerns that were just raised in testimony from stakeholders, and we understand that the evaluation was intended to shed light on a lot of these concerns.

The Department noted that it did share some of the key conclusions of that evaluation with staff. Those conclusions are summarized on pages 44 through 46 of your agenda. And the Department walked through them at a high level, so I won't spend time going through them again. But we do recommend the Legislature withhold action until the full evaluation is released. And some things we think that Legislature want to keep an eye out in the full evaluation.

One of them, of course, is looking at where there are key differences between Whole Child Model and traditional CCS, but then also the magnitude of those differences. The magnitude wasn't entirely clear from the summary information we were provided, so we understand the evaluation will have more specific information there. And then also where the differences were greatest among the counties and what that suggests about the counties that are affected by this proposal. We are available to further assist the Committee once the full evaluation is out.

And we'd emphasize here the Legislature has many options. If the Legislature reviews the evaluation and finds that it addresses many of the concerns, it could adopt some or all of the proposal. Or to the extent that the Legislature needs more time to deliberate on some of these issues, could also defer some of this to a future legislative cycle. With that, happy to answer any questions.

Thank you. I will now bring it up to the dias for Members' questions. I'll keep it here at the Chair. I really want to get into this rate acuity adjustments and start to understand that a little bit, if I can.

I'm hearing high level that it's associated with the Hospital Quality Assurance Fee, but you also stated that the acuity goes away, and hoping you can elaborate on what that is caused by, so that we can then figure out how we can make sure to appropriately resource the acuity.

The way the Hospital Quality Assurance Fee was set up when it was established was there's three buckets and it's an enclosed pool. So it's not that the money goes away and there's state savings or something like that, it just gets distributed to different hospitals.

So children's hospitals, because we serve the highest acuity patients and we also have the highest percentage Medi-Cal by volume, tend to get more of Hospital Quality Assurance Fee, and we become very dependent upon it in order to continue operations because we haven't had a rate increase since 2012.

In fact, the Department, in keeping, I think, with their philosophy of wanting to support more primary care and basic care, they cut our rates by $62 million a year in 2017 in order to fund an increase in other hospital base rates. So we've been actually, I know that the Hospital Association has spent a lot of time at bringing the Legislature up to speed on some of those.

Just the fact that hospitals haven't had a rate increase in over 10 years, but we've actually experienced a rate cut. And so we've been using the Hospital Quality Assurance Fees in a way to try to balance that over time and some of the more increases in higher acuity, the cost of higher acuity care. But when the model was first set up, it was broken into three buckets.

There's a fee-for-service bucket, there's what's called a pass-through bucket, where services which are still carved out of managed care are passed through from a managed care plan down to a hospital. And then there's what's called the directed payment bucket. And the directed payment bucket is where services that are contracted through managed care plans receive their supplemental payments associated with that volume.

So the ways CCS and psychological psych, in-patient services, and out-patient services that are provided by hospitals are the two main buckets that are remaining in either the fee-for-service or in the pass-through bucket. So we're kind of most at risk because actually the Federal Government has said that we have to eliminate the pass-through bucket by 2027. So we've got a problem there, but that's not today's problem.

But the fee-for-service bucket, what basically happens is that if you provide a service, in this case an out-patient CCS service, in fee-for-service that's carved out of managed care, there's a multiplier that happens. So, for example, an emergency department visit happens for actually any Medi-Cal patient, and in a children's hospital, and you'd receive $600 for that visit.

The Medi-Cal Hospital Quality Assurance Fee would then also provide, on top of that, a supplemental payment of $600 times the multiplier, which in 2022 was 2.7 and in 2023 will actually be 3. So you would receive another $1800, say, in supplemental payment. When that visit becomes a managed care under contract with the managed care plan, there's no multiplier. You get a flat $238. So I'll just give you an example. An outpatient chemotherapy visit would pay about $22,000. The visit itself, Medi-Cal would pay 22,000.

The supplemental payment for that visit would then be another 2.7 times 22,000. So about $60,000 on top of that. If that same visit were provided in a Whole Child Model county, the hospital received $238. That's essentially why when the way the model was set up now, all that means is that that money just gets distributed to other hospitals. It doesn't go away or anything like that. It just goes to different people. The problem is that everybody, it's sort of a status quo situation.

People have become very dependent on what they're receiving, and it disproportionately kind of hits us more than anybody else because we still have CCS visits that are provided, carved out of managed care, and they have been historically.

I may have the Administration respond to that specific example, if possible.

Yeah, no, I mean, the way that she's describing the differences between it works in fee-for-service and managed care aligns, for lack of a better description. I think that's why we've been engaging with the California Hospital Association in regards to how do we change the way that we're doing the directed payment portions, which is the part that she's mentioning where there isn't a look at various acuity factors like a CCS kids or a very complex high acuity case.

Those are conversations that we'll have to continue to have. The Department has engaged far before this conversation in regards to how do we make those types of transition and changes, and we're very committed to continuing to find those types of options. As mentioned, though, because of the lag of the way it works in these pieces, we have time to do that because of the time that they'll be paid, the higher rate based on the utilization.

But we are very committed to continuing those conversations with our hospital partners. They're very important to our delivery system. They do provide a large number of Medi-Cal Services, so they are a key partner of ours, and we want to make sure that we find a pathway forward.

With that. It seems that there's more information that will be obtained by the Legislature through the evaluation, and I look forward to that information as it informs our decisions going forward. I'll thank very much this entire panel, and we will now move on to issue 10.

The Department is requesting 16 permanent positions, five year limited term resources equivalent to five positions, and the conversion of three long term resources, limited term - excuse me - resources to permanent positions, and expenditure to the authority of 3.8 million in the budget year. DHCS is mindful of the projected budget challenges but believes it's appropriate and important to resource our workload to facilitate being accountable to achieve important policy and program objectives.

The resources that I just mentioned are requested to address the following ongoing workload: Medi-Cal Health Enrollment Navigators Project, strengthening preventive services for children in Medi-Cal, short term residential therapeutic program, mental health program approval, oversight and monitoring and Administration - just the distributed workload related to the BCPs we have before you this year. The Department will be able to accomplish the following items with the additional resources.

So with regard to navigators, we will have sufficient resources to provide oversight of care and services provided to beneficiaries of the Navigators Project. Just last week, or a couple of weeks ago, we announced the award of the $60 million to 23 county agencies and 12 CBOs covering 44 counties as navigators. In terms of the strengthening preventive services for children in the Medi-Cal program.

We received limited term resources a few years ago related to maintaining provider directories and managed care compliance with those provider directories, and the request is to make those resources permanent so we can continue with those activities. And then in terms of the short term residential therapeutic programs. So the STRTPs, mental health program approval, oversight and monitoring, these are resources requested.

In the last two years, six counties have relinquished their mental health program approval oversight responsibilities, and so the state has had to take that on, including Los Angeles, which has 65 STRTPs, while Fresno County, one of the questions in the agenda, continues to retain their STRTP oversight and monitoring. So they gave us notice, but they have not continued to follow through on that. So the requested resources are meant to meet the new workload associated with counties relinquishing these responsibilities. Happy to answer any questions.

Department of Finance.

Kendra Tully, Department of Finance. No further comments.

LAO.

Luke Koushmaro, with the LAO. No concerns with this proposal.

Seeing that I'll bring it up to the dais. Keep it here at the Chair. I want to dig in a little bit on the STRTPs, a little bit. How many beds are there within each STRTP facility? Is that standard? So when you're saying there's 41 additional STRTPs in Fresno County, that they did not allow us to be the oversight agency. How many beds does that equate to?

I would have to get back to you on the number of beds for the Fresno County. I don't believe I have that.

Is there a capacity loss through the transfer of oversight from the county to the state? As we experience within Los Angeles County? Are we as a system overall losing capacity or what occurs when that oversight is transferred over?

So I think there are probably two kind of conversations coming together on this. There's the oversight of the mental health program certification program piece that we're talking about here, and then there's also the work that the Department of Healthcare Services and Department of Social Services did together with regard to assessing if STRTPs meet the IMD qualification.

And we, over the course of 18 months or so, went through and assessed all of the different STRTPs throughout the state, and many, most of them actually transitioned to meet the requirements necessary to continue in operations. There were three STRTPs with the total bed of 237 beds that were determined to be IMDs. They can continue to operate and the county would just be responsible, providing both the state and the federal share. So essentially covering the cost of those facilities since they are deemed IMDs.

What occurred in Fresno County? Can you speak to why they were looking to transfer oversight?

I don't know that.

Love to follow up offline when that's appropriate. With that, I will thank very much Panel 10 and we will move on to issue 11. Issue 11 covers the proposed Trailer Bill to conform statutory estimate requirements to recent program changes. We will begin with Director Cooper.

The Department proposes to update and conform statutory requirements related to the Medi-Cal Local Assistance Estimate. With recent program changes in Medi-Cal to reorganize the estimate and budget act information to conform with how the estimate is developed today. Our objective is to maintain transparency and accountability while enhancing usefulness and administrative efficiency. Specifically, this proposal would remove the requirement for fee for service rate increases be separately displayed. Fee for service rate increases are less central given the Medi-Cal program will be moving to 99.3% managed care.

So really just conforming to make sure we're providing those changes with aligning with our program, as well as consolidating all local assistance Administration costs, including county Administration for eligibility determinations. Currently, the largest component of the local assistant is administrative spending as well as the fiscal intermediary management. These are contracts that the state uses for our fee for service payments, for example, or other local assistance Administration, such as other non benefit spending have become larger and so breaking these out will be important.

For example, the path funds that we mentioned earlier is an initiative or a portion of the vaccine incentive programs. Just things to have more visibility into as well as a budget under a single budget line item referred to as the county or other local assistance Administration in the budget act, but would detail would remain in the Medi-Cal estimate.

Additional proposals are the proposal removes the requirement for the Department of Finance to produce a range of estimates of Medi-Cal spending to reflect current practice, as well as removes the requirement for county by county administrative cost projections to reflect current practice. Due to the changes in the estimate methodology related to the implementation of the ACA, the estimate has not featured a county by county projection for at least 10 years. So just kind of updating the statute to conform to current day. Happy to answer any questions.

Department of Finance.

Kendra Tully, Department of Finance. Nothing further to add.

LAO.

We have no raised concerns to this proposal.

Bring it up to the dais and thank very much. Panel 11, we will move on to issue 12. Issue 12 is on the proposed delay of the two week check right hold buyback. We will begin with Director Cooper.

So each June, the Department holds the last two weeks for fee for service payments or check rights, and pays them at the beginning of July. The practice has been in place for a number of years since the shift was implemented due to reduced state costs in a difficult budget year on a one time basis. In the 2022 budget act included funding to buy back the current two week delay by moving the two weeks back to the end of each June.

While we remain committed to this policy to pay providers timely due to the state's projected General Fund revenue decline, the Department is proposing to delay the buyback of the check right hold until fiscal year 24/25. The action reduced costs by 1.1 billion total funds $378,000,000 General Fund in current year and happy to answer any questions.

Department of Finance

Yes, nothing further to add. Thank you.

LAO.

With consideration for the state's budget condition, we do not have concerns with this proposal. Thank you.

We'll bring it back up to the dais. Well, thank very much. This panel move on to issue 13. Issue 13 is on the Medi-Cal Provider Interim Payment Loan Authority Trailer Bill. Director Cooper.

Yes, by way of background, there are situations where the Department could run out of budgetary authority, including in the budget isn't enacted on time or if there is an unexpected major change in operating conditions compared to budget act conditions, which would result in payments not being made to some Medi-Cal providers or managed care plans. State law provides for access to a temporary loan with approval from the Department of Finance to enable provider payments to continue until additional appropriation authority is obtained.

The limit on the loan is currently 2 billion from the General Fund and 2 billion in federal budget authority. However, this amount is insufficient based on the growth of the Medi-Cal costs in particularly managed care. The Department proposes to change the limit on the loan to a percentage an estimate Medi-Cal spending, allowing the limit to adjust the size of the program.

The Trailer proposes to set the interim payment loan amount to 10% of the amount appropriated to the General Fund, 6% of the amount appropriated from the Federal Trust Fund. Anchoring maximum interim loan payment amounts to a percentage will maximize the need to update the statutory limits in the future and happy to answer any questions.

Department of Finance.

Aditya Voleti, Department of Finance. Nothing further to add.

LAO.

We have not raised concerns for this proposal.

Bring it up to the dais would thank very much, panel 13. We will move on to issue 14. Issue 14 is on the Newborn Hospital Gateway Trailer Bill. Director Cooper.

Yes. The Department proposes to require all qualified Medi-Cal providers participating in presumptive eligibility programs to report the births of any Medi-Cal eligible infant born in their facilities, including hospitals and birthing centers or other birthing centers, within 24 hours after birth through the Newborn Hospital Gateway, resulting in more expeditious eligibility activation for Medi-Cal newborns. It also mitigates any issues at the provider level regarding eligibility of newborn when covered services are being accessed.

The Child Health and Disability Program will sunset June 30, 2024. The CHDP Gateway, including the Newborn Hospital Gateway process, will transition and be renamed The Children's Presumptive Eligibility. Online portal will be effective July 1 of 2024.

We were asked to provide an update on the CHDP transition plan as well. Last year's budget sunset the Children's Health and Disability Prevention Program by July 1 of 2024 and preserves presumptive eligibility enrollment activities currently offered through the gateway program as well as activities currently performed by the counties under the Child Lead Poisoning Prevention program. As a part of the transition, the Department has been convening a large number of work group members to really inform the transition plan as agreed to with the Legislature.

It has included public health nurses, managed care plans, county social service agencies, representatives from the healthcare program for Children in Foster Care Program, as well as consumer advocates to inform what that transition plan looks like, making sure that any of the protections or requirements of the program are appropriately embedded in all of the pieces moving forward. The Department kicked off this stakeholder engagement in last October. We have convened groups in October, January, February and as early as March 22.

There are two additional work group meetings scheduled in May and June, and we are very committed to continuing to work with stakeholders on that transition plan. It includes the presumptive eligibility, monitoring and oversight activities of our managed care plans, transition and reallocation of the various resources that were agreed to, as well as the Childhood Lead Poisoning Prevention Program activities and the establishing of the healthcare program for children in foster care as a standalone program. The Department is soliciting feedback. We look forward to working on that. We will present that transition plan to the Legislature in the future, and happy to answer any questions you may have.

Department of Finance

Nothing further to add.

LAO.

We have not raised concerns of this proposal.

Thank very much, panel 14. We will move on to issue 15. Our last presentation issue today is on the Acute Inpatient Intensive Rehabilitation Services Trailer Bill. We will begin with Director Cooper.

The Department proposes to eliminate the statutory provisions related to the initial evaluation, seven to 10 days and 14 days trial program for Acute Inpatient Intensive Rehabilitation Services . Acute Inpatient Intensive Rehabilitation Services are an intensive set of services to rehabilitate a physically or cognitively impaired patient to regain their maximum potential for mobility, self care and independent living. In 2010, CMS determined that trial periods such as these are no longer considered reasonable and necessary for purposes of Medicare coverage.

Each admission decision must be evaluated and based on thorough pre admission screening. Therefore, the Department proposes to update state law to conform with evidence based practices, federal Medicare policy, and current Department policy on medical necessity by removing the provision that describes the trial period of this benefit. Happy to answer any questions.

Department of Finance.

Nothing further to add. Thank you.

LAO.

We haven't raised concerns with this proposal.

Bring it up to the dais. Seeing no Members' questions, I will thank very much our last panel of the day. I would like to thank all of our panelists and we will now begin with public comment. Again, as a reminder, we welcome public comment on all 20 issues that are on today's agenda, but ask that you please keep your comments to only these issues. We will begin public comment with individuals who are here in the hearing room, and then we will go to the phone lines. Please begin.

Thank you, Mr. Chair and Members of the Committee, Jedd Hampton with California Association of Health Plans, CAHP. We represent 43 licensed health plans covering approximately 28 million Californians. Thank you for the opportunity to provide public comment.

I'd like to direct my public comment today specifically towards item number eight, the Managed Care Organization Tax. CAHP's members play a vital role in delivering high quality and coordinated care to Medi-Cal beneficiaries at an affordable cost to the state. CAHP has historically supported the MCO tax. Over the course of the last few years, federal regulations have changed and so has the tax. As such, we have worked closely with the Department of Healthcare Services over the past few months on the renewal of the MCO tax.

This task is complicated and the process is complicated, and we certainly appreciate the administration's willingness to consider and address many of our issues around the proposal. Our members believe it's critically important that if the tax is renewed, that the funding goes to supplement the Medi-Cal program and strengthen it, protects the affordability of coverage for individuals and employers and includes common sense protections for our member plans. We look forward to continuing our conversations with the Department moving forward. Thank you.

Thank you.

Hi. Thank you. Mr. Chair and Members. Cathy Senderling-McDonald, with CWDA. I want to speak to issue nine specifically related to the foster child proposal, enrolling foster children in the single plan model counties. We only recently became aware of the proposal. It was not discussed in the recently disbanded CalAIM Foster Care Model of Care Workgroup. So we're reviewing the proposal, and we do have some questions that we'll pose to the Department as we engage and report back as we take a position.

There are known issues with foster children accessing care through fee for service, but there are also good reasons that some foster parents or biological parents choose not to enroll their children into managed care when they go into foster care. So I think we have to unpack how access to physical, behavioral and dental care will be improved by this proposal, as well as we have a number of questions on the timeline that's being proposed. The trailer bill language would take effect immediately.

So as the single plan models came up, the children would have to, I guess, immediately be transferred. We're unclear on continuity of care provisions that might need to be put in place, as well as this happening at the same time, the plans are standing up. They're also creating these whole child models. And as you just heard in the next to last item, the CHDP program is being eliminated.

And so we don't even know the plan yet for what's going to happen to the public health nurses that we work with through CCS. We don't know the plan for how our children are going to get enrolled into foster care right now into Medi-Cal. We do work very closely in many counties with CHDP, so there's a lot of change at once. And so we may have recommendations here on the timeline should this be adopted. And we'll just, like I said, report back as we kind of figure more out about this and work in partnership with the state. Thank you.

Thank you.

Good afternoon. Jennifer Snyder on behalf of the California Association of Health Facilities, we want to comment on the CalAIM implementation item and also the CalAIM budget trailer Bill. First, we just wanted to express our appreciation to the Department and our support for the budget trailer Bill language that delays the implementation of CalAIM for the intermediate care facilities for the developmentally disabled.

We believe the delay provides the necessary time for CAHF's ICF/DD-H and -N Members health plans in the state to work through how best to integrate their patient population into CalAIM. So very pleased about that. We also support the implementation delay for the pediatric subacutes, which included, but we would ask the Department to reevaluate the delay for the adult subacute facilities. There's some concerns about the ability of those providers to qualify for any quality incentive payments through the Medi-Cal program.

It might be impacted because of that. So we'd like for them to relook at that. CAHF's nursing facility Members are experiencing a number of CalAIM implementation issues. We just wanted to note today there's three. First is because Medi-Cal managed care plans are slow to sign contracts with nursing facilities, many are being forced to provide services to Medi-Cal patients they already had in their facilities without a contract or new patients without a contract.

This and the second issue this is having an impact on their ability possibly to receive full recognition for quality incentive payments because a requirement to receive those quality incentive payments, they need to be network providers. So we're kind of caught in a catch 22 between not being able to accomplish to get to those contracts and then possibly not being qualified to receive Medi-Cal quality incentive payments based on that. And then third, many nursing facilities are informing us that since January 1 they haven't received a payment.

And so that's way beyond the 45 days where it's mandated for health plans to pay. We know there's two sides to the coin in that respect, but we are really concerned about the length and medical providers, nursing facilities are over at 70% Medi-Cal, so for them that's a big deal when they were used to receiving payments every two weeks from the Department. So we'd ask for a couple of things that the Department to consider.

First and foremost, greater DHCS enforcement of Medi-Cal managed care plans specific to making sure that they pay within the 45 days, and maybe some audits relative to what's their payment schedule and are they adhering to it and what's happening in the field. And then we'd ask the Legislature and the Administration to support possibly in any willing provider directive, at least for the time being. If there is a willing skilled nursing facility provider out there, then the plan should contract.

We have rates that are set already by the Medi-Cal program, so it's not as complicated to create a contract situation. And then during the transition, this transition year, we feel that the quality incentive payment shouldn't be hinged on the contract requirements, that maybe we could have a transition time where quality incentive payments could qualify even if they're not a network provider. And lastly, we would just hope that the DHS could hold plans accountable for establishing those contracts. So thank you very much.

Thank you.

Mr. Chair. Members of the Committee, Brandon Marchy with the California Medical Association - want to speak directly to issue eight, the MCO tax. CMA appreciates the Legislature and the Administration's ongoing efforts to increase coverage and get to universal coverage, improve patient affordability, and provide a robust benefit package for the Medi-Cal beneficiaries. We're also happy to see the conversation about the MCO tax continue and what strategic investments can be made to increase access to care in the Medi-Cal program.

However, the current plans to backfill General Fund obligations squander the opportunity the state has to build access to care for all, and funds generated from the healthcare system should stay in the healthcare delivery system to reduce patient appointment times, build a stronger, more robust healthcare workforce, and reduce outcome disparities and inequities.

For these reasons, CMA looks forward to working with the Legislature and the Administration to adjust the MCO tax to supplement current spending to improve access to care and reinvest those funds to benefit patients and provide them with the timely care they need. Thank you.

Thank you.

Good evening. Linda Nguy with the Western Center on Law and Poverty regarding the MCO tax. We appreciate that this draws down significant federal funds to offset General Fund. We agree with the Chair regarding timely passage and in light of recent expansions and future commitments, including health for all share cost reform and continuous Medi-Cal Eligibility, we recommend this offset should remain within the Medi-Cal program, particularly in coverage eligibility and service benefits.

Regarding we have some concerns with changing the Medi-Cal estimate TBL to no longer require fee for service rates be separately displayed. Considering certain services, namely prescription drugs, is fee for service and there's no other public place for this information. And finally, we support the Newborn Hospital Gateway, TBL as it ensures expeditious medical eligibility for newborns to more easily access medical services and recommend this be expanded to MCAP linked infants to be included. Thank you.

Thank you.

Hi Chair and Members. Mark Farouk with the California Hospital Association. Wanted to speak to the discussion on Medi-Cal and the MCO tax. California's hospitals provide a critical source of care for Medi-Cal's 15 million beneficiaries. Yet long standing systematic underfunding of Medi-Cal program persist. Hospitals have not seen an increase in their medical rates for over a decade. While reimbursements have remained stagnant, huge pandemic related losses and unprecedented inflationary pressures are placing many hospitals in peril.

Without help, cities and towns throughout the state are on track to lose vital community health care services and jobs. The crisis is not theoretical. It is happening now. In January 2023, we witnessed Madera Community Hospital forced to close its doors, forcing those that rely on the hospital for care to travel as far away as Fresno, some 30 miles away. Significant and immediate investments are needed to place California's hospitals on a financially sustainable path.

On March 15, 350 hospitals throughout California submitted a letter to the Governor and the Legislature outlining the aforementioned concerns that I mentioned, as well as asking for $1.5 billion lifeline to support the care for Medi-Cal patients. This represents just 1% of all Medi-Cal funding and is an essential cash infusion to keep hospital doors open and services available in the short term.

In addition to this onetime request, we need a long term fix to the systematic underfunding that I mentioned, and this can be achieved through the MCO tax. As it relates to the MCO discussion today, CHA strongly believes that the Managed Care Organization Tax, like all other healthcare related taxes in California, should be used to protect access to care for Medi-Cal beneficiaries.

Accordingly, we respectfully request that a significant portion of the MCO tax revenues be used to stabilize California's healthcare providers, including hospitals, and protect access to care. Thank you.

Thank you.

Mr. Chair and Members, Amy Blumberg, on behalf of the California Children's Hospital Association. Thank you for the discussion today on item number nine and allowing the California Children's Hospital Association to express our strong concerns with the proposal to expand CCS Whole Child Model. Also, I'd like to align myself with the California Hospital Association and express support for CHA's $1.5 billion budget request to support California's hospitals who care for Medi-Cal patients.

On average, 62% of patients at California children's hospitals are on Medi-Cal, and for some of our hospitals, it's 70% to 75%. Significant and immediate investments are needed to address systemic underfunding and place California's hospitals on a financially sustainable path. Also, we need a long term fix of systemic underfunding in the Medi-Cal program and the MCO tax can assist with this.

Like CHA, CCHA strongly believes the MCO tax should be used to protect access to care for Medi-Cal beneficiaries and we request that a significant portion of the NCO revenues be used to stabilize California's healthcare providers, including hospitals, to protect access to care. Thank you.

Thank you.

Good evening, Mr. Chair and Members. Connie Delgado, on behalf of the District Hospital Leadership Forum, appreciate the conversation about hospital reimbursement and would like to align my comments in support of the $1.5 billion request for our struggling hospitals. District hospitals, more than half of them are operating in the red and have seriously been impacted by the pandemic and we want to assure that all of those services remain open for California's patients. Thank you.

Thank you.

Good evening. Matt Lege on behalf of SEIU California, specifically on the MCO tax issue eight, we are supportive of the potential to raise significant funds to support the Medi-Cal program. We have real access to care needs, which is caused in part by our healthcare workforce crisis. As many of the panelists today talked about. Healthcare workers, particularly low wage healthcare workers, are leaving the industry and this proposal gives the state the opportunity to lift up the workforce across the Medi-Cal system.

We look forward to continuing to see the proposal come together and discussing the detail how the state can meet our access to care needs for our most vulnerable. Thank you.

Thank you.

Thank you Mr. Chair. Meagan Subers on behalf of the California Primary Care Association, California Health Plus Advocates, thank you for having two health center representatives on your panel this afternoon. On issue number eight in the MCO tax just wanted to express our support for that proposal and urge the Legislature to ensure that the additional generated revenues from the proposal go to support healthcare and the Medi-Cal system. Thank you.

Thank you.

Chair, Member, Beth Malinowski the SEIU California want to start by acknowledging the work of this Legislature and the public sector workforce and supporting the meaningful expansion happening around healthcare coverage. To the critical redetermination activities relaunching now look forward to continuing to work with all of you to make sure redetermination's process of success for consumers and for the workforce. With regards to issue number nine, CCS Whole Child Model Expansion, SEIU members are deeply concerned about a further expansion of this pilot. The timing of the proposal goes against the commitment to a complete public evaluation. Interplay of this proposal with other managed care.

Shifts are also of a concern to us and most importantly want to acknowledge the impact on the ground for vulnerable children in our state. The skills of our local county CCS workforce cannot be easily replicated and will be lost in a pilot expansion that takes work from local jurisdictions to managed care. Case managers, nurses, therapists who are dedicated to unique needs of the families they're serving today.

We also cannot separate this from the different transition that was committed to in the FY 22/23 budget or on the CHDP transition. Just acknowledging that this transition, plus the expansion of the CCS Whole Child Model does equal a significant depletion of our local public health workforce, potentially. Thank you.

Thank you.

Chair and Members. Marvin Pineda on behalf of Children's Hospital of Los Angeles. On item number nine, we oppose the Department of Healthcare Services proposal to expand the Whole Child Model for the reasons stated by the California Children's Hospital Association. Children's Hospital of Los Angeles serves some of the most needy throughout the state, a lot of times in many of your districts. We respectfully request for the Department to withdraw the Budget Trailer Bill. Thank you.

Thank you.

Mr. Chairman, Members. Nora Lynn on behalf of Children Now. Regarding issue three on the hearing aid coverage for children program, we appreciate the Subcommittee's oversight of this important program to get kids timely access to hearing aids. We look forward to working with DHCS to follow through on the actions they've committed to in their long awaited action plan.

But we think much more needs to be done in terms of more targeted outreach, especially to Spanish speaking families to get eligible kids into the program, improved provider relations to get kids timely access, and streamlining of administrative processes to keep eligible kids enrolled. Regarding issue eight on the MCO tax, we support the state seeking revenue through an MCO tax to ensure Medi-Cal can deliver access to care, and we're eager to see the proposal's details. Regarding issue nine on the Whole Child Model.

We oppose the proposed expansion of the CCS Whole Child Model because it is inconsistent with SB 586, authorizing the whole child model pilots in 2016 and given the experience, would result in the loss of important case management expertise and would be devastating to the pediatric specialty care delivery system.

And last, regarding issue 14 on the Newborn Hospital Gateway, we strongly support the establishment of the Newborn Hospital Gateway and since we would like to see it be used as expansively as possible, including babies born to mothers covered by the Medi-Cal Access Program. Also, we appreciate the Subcommittee's question about the Child Health and Disability Prevention Program stakeholder process and development of the transition plan.

Children Now has concerns about how CHDP functions, including how the local expertise and relationships made will transfer to managed care plans and how the plans will be monitored through contracts or other means to ensure children continue to receive seamless access to necessary services. We respectfully request that the Subcommittee convene an oversight hearing this year to allow for stakeholders engaged in the process and affected by CHDP sunset to share their perspective about the plan. Thank you.

Thank you. Seeing as there's no more public comment in the hearing room, operator, we're ready to begin public comment for our phone lines. As a reminder, the phone number and access code are on the first page of our agenda, as well as on the Subcommittee's website and should also be appearing on your screen if you are watching over the live stream. The phone number again is 877-692-8957 the public access code is 131-51-27. Operator let's begin.

If you'd like to make a public comment, you may press 1 and 0 at this time. First, we're going to go to line number 10. Please go ahead.

Good evening. Nicole Wardelman, on behalf of The Children's Partnership, speaking to issue 1, 9 and 14. On issue one, continuous coverage for children ages zero to five was passed by the Legislature last year. We encourage DHCS to move toward implementation of the policy quickly to prevent gaps in coverage for our youngest Californians. The children's partnership is opposed to the Trailer Bill language in issue nine to expand the Whole Child Model for California Children's Services.

The experience of Whole Child Model implementation over the past four years indicates that the model can deprive CCS children of access to both specialized medical care and expert case management services, and the transition will result in even deeper Medi-Cal cuts to CCS outpatient providers.

Finally, we support issue 14, the Governor's Newborn Hospital Gateway Trailer Bill, and recommend that the NHGT be used to enroll newborns born to mothers covered by the Medi-Cal Access Program, who also qualify for Medi-Cal at birth for at least the first year. We are also concerned that the sunset of the Child Health and Disability Prevention Program will leave a gap in pediatric care quality assurance and training functions. We appreciate your consideration.

Thank you. Next caller, please.

Next we go to line 28. Please go ahead.

Good evening. Chair Arambula my name is Katie Layton, and I'm testifying on behalf of the Children's Specialty Care Coalition on three items. First, we are opposed to agenda item nine, DHCS's proposed Trailer Bill to expand the Whole Child Model. The California Children's Services program treats California's most medically complex children and youth, ensuring that they get the right care at the right time from the right provider.

We do have several concerns with the way the Whole Child Model has performed thus far, including the statistically significant decrease in enrollment ... where it's gone into effect, meaning that fewer children are benefiting from the program. We also know that many families miss the deep expertise and relationship with their CCS nurse case managers, and we are also concerned about the negative financial impact to children's hospitals that the panel spoke to earlier, which threatens an already destabilized provider network that treats a high volume of Medi-Cal patients.

So until we have more details on the way Whole Child Model has performed, including the full evaluation and a better understanding of the root causes of these concerning issues, to consider expanding at this time is premature, and we feel strongly that this proposal belongs in a policy Committee and would urge this Committee to reject it.

I'd also like to voice our support for item eight, the renewal of the MCO tax, as well as highlight the importance of these funds directly supporting access to care in the Medi-Cal program. Lastly, thank you for your oversight of the hearing aid coverage for children program.

This program fills such an important gap in coverage for many deaf and hard of hearing children, but continued outreach efforts and sufficient funding are necessary to increase public and provider awareness, to overcome administrative burdens, and to ultimately ensure that children who qualify are actually able to fully benefit. Thank you.

Thank you. Next caller, please.

Next, we'll go to line 30. Please go ahead.

Hi Chair and Members Kathy Mossburg speaking on a couple of issues today. First. Sorry, I heard some feedback.

We are having a hard time recieving.

Representing the Developmental Services Network and Association of Intermediate Care Facility Homes serving individuals with developmental disabilities across the state. On issue six, DSN wishes to express their support for DHCS's Trailer Bill language to delay the transition of ICFTD homes and subacute services into Medi-Cal managed care until Jan 1, 2024. We very much appreciate this change in the Department hearing our concerns regarding the prior timeline.

Our homes and facilities will continue to engage with the Department through their stakeholder work group and work towards a smooth transition into Medi-Cal managed care. Also want to thank the Legislature and the Subcommittee for working with our homes to set up the stakeholder process. And on behalf of Totally Kids Sun Valley, when the time is appropriate, we hope this Committee will take up the issue to include the standalone pediatric subacute facilities. In the current hold harmless Medi-Cal rates language.

This request has been put forward by Assemblymember Friedman. There are only three facilities that meet this criteria who serve medically fragile children in Medi-Cal, so it's important these facilities are treated equally and don't see their rates fall below 22/23 levels. Thanks for your time this evening and apologize for the feedback.

Thank you. Next caller, please.

Next we'll go to line 42. Please go ahead.

Good afternoon, Chair and Members. Michelle Gibbons with the County Health Executives Association of California. On issue nine, CHEAC would respectfully oppose the Administration's proposed expansion of the Whole Child Model. The managed care plan model changes were initiated by counties for a number of broader reasons and was not intended to raise their hands for the Whole Child Model.

I would also note that while DHCS suggests that this is bringing counties transitioning into new models into alignment, the single model plans or the single plan model counties, those health plans don't have CCS Whole Child Model as a part of those plans today. So this is transitioning the CCS Whole Child Model and kids from the county over to those plans for the very first time. So that's not bringing them into consistency with the other plans. This is a new transition.

I'd also remind the Legislature that this means that as the Whole Child Model expands county staff that serve the CCS children are being put at risk, and we have a loss of, a potential loss of their expertise as well. This is one of the most vulnerable populations. So we'd urge the Legislature to please reject the proposal. Let's slow down. Let's improve the Whole Child Model where it's already implemented before we move forward.

And then lastly, on issue two, CHEAC has concerns with the calculation of the Administrative funding provided to counties for eligibility and case management. We think that the program is being underfunded and it's creating strain and challenges and carrying out our responsibilities. And so we want to just have a conversation and dialogue about revisiting the forecasting methodology to ensure that the program is adequately resourced. Thank you.

Thank you. Next caller, please.

Next we'll go to line 44.

Ten the conversion of three long-term to permanent positions. Regarding the one position to strengthen preventive services for medical-eligible students, I would ask how effective is the directory that's being maintained by that employee, regardless of whether it's a short-term, long-term, or permanent position. Am correct. And that I should reserve my remarks regarding issue 19 until a further hearing.

You can comment on issue 19 right now, ma'am, if you would like.

Very quickly, I would ask, how long has DHCS been out of compliance regarding the $7 million owed to LEAs due to excessive administrative withholds? And I would also ask, how frequently does this happen? And again, I want to encourage the Committee to consider Assemblymember Muratsuchi's AB 483 addressing DHCS, LEA audits, and the need to improve that procedure. Thank you.

Thank you. Next caller, please.

Next we'll go to line 51. Please go ahead.

Good evening. Kelly Brooks here, commenting on behalf of the California Association of Public Hospitals and Health System. Public health care systems are facing a growing structural deficit, mostly due to the fact that our 21 hospitals provide 40% of all hospital care to medical beneficiaries in the communities they serve and receive rates for those services that do not come close to covering the cost of that care. Funding is needed now more than ever to protect our patients most at risk, especially as we face economic uncertainties.

To help address this, we support the hospital industry's request for 1.5 billion in one time funding to hospitals that care the most in need. We were pleased to see the inclusion of the MCO Tax to support the Medi-Cal Program in the Governor's Budget. We urge the Administration to dedicate MCO Tax revenues to strengthen Medi-Cal payments to providers to help ensure our ability to maintain critical access to care for millions of Californians.

We also support the Governor's proposed Tallying Transitional Rent Waiver Amendment, which would create a new service to combat homelessness in our communities. We look forward to working with the Administration and Legislature to identify strategies to further support the healthcare safety net and ensure that millions of Californians who rely on medical can continue to be served by public healthcare systems. Thank you.

Thank you. Next caller, please.

Next we go to line 50. Please go ahead.

Good afternoon. Nassette Short and I've come on two issues on behalf of Loma Linda University Health, Rady Children's Hospital, Adventist Health Impeach, The Association representing California's community safety net hospitals. Broadly, regarding the Medi-Cal program. I'd like to urge the Subcommittee to support our hospital safety net providers who serve a large number of Medi-Cal patients. With hospital Medi-Cal rates being frozen for years and the cost of staff, medicines, supplies increasing and cost substantially, the state's safety net is at risk.

And we urge your support this year to fill that gap. And we look forward to working with you all on an ongoing basis for reforms to the system. And then finally, regarding issue nine, on behalf of Brady Children's Hospital and Loma Linda University Children's Hospital, we oppose the expansion of the whole child model and would like to echo the concerns raised by the California Children's Hospital Association. Thank you.

Thank you. Next caller, please.

So we go to line 45. Please. Go ahead.

Good evening, Mr. Chair and Members. Rebecca Sullivan, Local Health Plans of California, representing the 16 local Medi-Cal managed care plans in the state. Regarding issue number nine, LHPC supports the whole child model and its goals of improving coordination and integration for the CCS population across all health and social services, and to ensure continued access to the high-quality specialty care.

We believe the coast plans have delivered on the goals of whole child model by building expertise in working with the CCS population and their families, maintaining specialty care networks that provide critical care, and close partnership with the counties. We are supportive of the administration's proposal to build on the success by expanding whole child model through a phased approach that acknowledges the experience and readiness of existing COS Plans and the additional time needed for counties that are transitioning to a single plan.

We look forward to continued discussions with the Legislature and Administration about this proposal to ensure a smooth and successful transition to whole childhood model. Thank you.

Thank you. Next caller, please.

Next we go to line 46. Please go ahead.

Hi, Molly Robson with Planned Parenthood Affiliates of California. Regarding issue eight, PPAC is supportive of the MCO Tax but would like to emphasize that dollars generated by the MCO Tax should focus on increasing access to patient services. Over 80% of Planned Parenthood patients in California are Medicaid patients, and we would urge that dollars from the MCO Tax stay within the healthcare system to support patients across the state.

Additionally, on the portion of issue five related to the proposed 1115 waiver, we are grateful for the administration's proposal to invest 15 million in new state dollars for reproductive health, and we look forward to continued discussions with the Administration about considerations for how those funds may be used. Thank you.

Thank you. Next caller, please.

Next we'll go to line 61. Please go ahead.

Good evening, Chair Arambula and the whole Assembly Budget Subcommittee on Health and Human Services. My name is Katie Ettman and I'm the Food and Agriculture Policy Manager at SPUR, a nonprofit think tank in the Bay Area. And I'm speaking to issue three. Among people with Medi-Cal, 14% of individuals are living with diabetes and 33% suffer from high blood pressure. Black Californians are nearly twice as likely to be diagnosed with diabetes than White Californians.

This shows the vast racial health inequities CalAIM and specifically medically supportive food nutrition interventions can address. Medically supportive food nutrition refers to a spectrum of food-based interventions such as produce prescriptions, food pharmacies, and medically tailored meals. In action, medically supportive food nutrition can look like a pregnant person visiting their Doctor and being diagnosed with gestational diabetes. Instead of just being told to eat healthier, the Doctor can provide the patient with a fruit and vegetable voucher known as a produce prescription.

This allows the pregnant person to visit a grocery store or farmers market and redeem the prescription for free fruits and vegetables, a study completed in San Francisco shows this has the power to reduce the rates of preterm birth by 37%. Beyond improved health outcomes, foodbased interventions can produce cost savings. For example, researchers have estimated that subsidizing healthy food for Medicare and Medicaid patients could save $40 billion to $100 billion in healthcare costs nationally.

Medically supported food nutrition was the third most utilized community support in the second quarter of 2022, and we look forward to seeing this continue, but also want to see medically supportive food and nutrition expand to a full covered benefit in medical through AB 1644, authored by Assemblymember Bonta. Thank you for your time.

Thank you. Next caller, please.

We'll go to line 62. Please go ahead.

Thank you, Chair Arambula and Members of the Subcommittee, this is Felix Su with Manifest Medex, one of California's nonprofit Health Information Organizations, or HIOs for short. So we are grateful. Issue four for all the panelists, many of whom spoke to the need to build infrastructure, in particular for data sharing to enable the equity and the care coordination that CalAIM envisions.

Providers and health plans and CBOs, social services, and county agencies all need to be able to contribute to and access a comprehensive health record for Medi-Cal members and to receive alerts for important transitions like hospital admissions and discharges so that they can rapidly provide enhanced care management and community support. Many of the state's net teams that need to share and use this information are the ones that most urgently face the greatest barriers to receiving it today.

So think of this as being like the so-called last mile problem of any infrastructure challenge that this data has faced. So we and other California HIOs have both the capabilities and the long-standing commitment to our communities to deliver this critical infrastructure for the care teams working on CalAIM. So, as you continue your budget discussions, we urge you to pair CalAIM with the generous federal matching opportunities that are available to invest in HIOs as a digital health safety net for CalAIM success. Thank you.

Thank you. Next caller, please.

Next we go to line 18. Please go ahead.

Good evening, Chair Arambula and Members of the Committee. Craig Vincent-Jones from the LA County Department of Public Health Children's Medical Services, which is where CHCP is located in LA County. Thank you for this opportunity to speak to item 14 regarding the CHCP transition.

In LA County, the CHCP program, which is supported by both State and Federal matching funds, employs approximately 35 staff, more than half of whom are nurses and other clinical personnel, and is additionally responsible for administratively managing HCPCFC, the Foster Care Program, which in LA County employs close to 100 public health nurses and additional support personnel. All these personnel have extraordinary pediatric practice experience and expertise we do not wish to lose in our jurisdiction.

When the Legislature agreed to the 2024 sunset of CHCP in the last Legislative session, CHCS pledged they would preserve foster care administrative functionality currently in CHCP and that there would be no net loss of either CHCP funding or CHCP positions after the CHCP sunset. We ask the Legislature to remain fully engaged in oversight of the CHCP sunset transition process to ensure that these commitments are fulfilled, particularly in the four following ways.

One, there is full transparency in this decision making process with stakeholders and that foster care administrative costs and functionality are fully supported. Two, DHCS allows maximum flexibility in detailing positions and classifications that will be needed to continue in the foster care administrative function that may be different in both large and small counties.

Three funds formally dedicated CHCP are reinvested in services that closely approximate the work for which CHCP has been responsible in the past, such as in Foster Care Oversight of Pediatric Practice Quality, and for the loss of matching funds resulting from the CHCP sunset is compensated with State funds and is reinvested in similar health care efforts accordingly. Thank you.

Thank you. Next caller, please.

Next we'll go to line 37. Please go ahead.

Good evening. This is Kelly Macmillan, and I'm calling on behalf of the California Dental Association on a couple of issues. Issue one, the California Dental Association supports California's recommitment to oral health by using General Fund support Medi-cal supplemental provider payments. The continued use of General Fund Dollars is critical to maintaining Proposition 56 funding levels, which provides much-needed stability for the medical dental program.

Since Proposition 56 took effect, there has been a 25% increase in dental providers enrolled in medical, which in turn has increased utilization for enrollees. On issue eight, the California Dental Association supports the use of the MCO Tax to maximize funding for and the use of federal dollars in support of the medical program and encourages discussion about whether a future MCO Tax could also support improvements in access with the Medi-Cal Dental Program, in addition to the Medicare side.

Regarding on issue 14, regarding the Child Health and Disability Prevention Program Sunset under issue 14, the California Dental Association remains concerned about how the vital dental care coordination services from CHDP programs will be preserved. CDA respectfully requests an oversight panel held this budget cycle about the CHDP transition plan. And finally, on issue 17, while the current dental managed care plans continue to underperform, CDA is supportive of high-performing and high-quality DMC plans and hopes that this procurement process will facilitate this improved access.

The California Dental Association supports the department's goals of increasing access and quality of care in Medi-Cal, and we will continue to be a collaborative partner in achieving the goals across the Medi-Cal Dental Program, regardless of the delivery system. Thank you for this opportunity.

Thank you. Next caller, please.

Next we'll go to line 39. Please go ahead.

Good evening. I'm here to speak about issue three. My name is Johanna Wonderly and I'm a resident of Placer County. I'm a mother of four children. Three have been identified with a hearing difference, and my son, who was in the Committee room with me earlier today, is still being evaluated to determine his hearing status. I have been involved as a parent, mentor, and advocate across the state with a focus in the area of resources available in the greater Sacramento area.

I've received numerous feedback about the HACCP since its inception. It is difficult and clunky for families to navigate and the lack of available resources within driving distance and reasonable access to care timelines and the back and forth between receiving care at their medical home and the HAVPP provider makes families feel like they are better off without it. The three pediatric audiology providers in our region are Feder Pediatric, UC Davis, and Kaiser. All three of these providers do not presently accept the HACCP Program.

To get to the next closest provider, we have to drive 100 plus miles. HACCP requires that services be covered by the child's insurance be used, such as hearing tests without their hearing aids on. But as you are all aware, nine out of 10 insurance policies do not cover hearing aids or hearing aid services.

So if an HACCP provider is not covered by their insurance, they would be expected to have two separate audiological providers, the one covered by their insurance for hearing aids off appointments and appointments with an HHCP provider for maintenance, fitting new molds, and seeing how well they hear with their hearing aids on.

This means that if their audiogram shows a change in hearing and that determines that a child needs to have their hearing aid programs adjusted, they must now call their other provider and wait for an appointment to have their hearing aids programmed to the appropriate level. This leads to the issue with timely access to care, many providers in our area are booking three months out. So a family suspects a change in hearing.

They have to schedule an appointment, wait three months for their child to be seen and because they are receiving their hearing aid funding through the HACCP rather than private pay or insurance, they now have the additional wait times until the HACCP providing our biologists can see them and make the adjustment.

These families are also unable to combine appointments so if you need a hearing test unaided and new ear molds which can be anywhere between one to four times a year, parents have to make a separate trip for the ear mold fitting because that is a service provided under HACCP and not under their insuring provider. These appointments are time away from work, time our students are missing class.

The lag time between knowing there needs to be a change in programming and getting a change in programming is time where access to language, classroom instruction, and socio-emotional health are diminished. Department of Healthcare Services needs to increase accessibility to this program for it to have value to our second-area families and to do that, they need to keep their funding. Thank you.

Thank you. Next caller please.

Next we go to line 54. Please go ahead.

Thank you, Mr. Chair. Jonathan Muñoz, California Strategies and Advocacy. On behalf of Inland Empire Health Plan serving 1.6 million medical beneficiaries. We support the Cali Initiative, adopting all community support services and enhanced care management benefit. We look forward to hearing more on the six month transitional rent proposal. Permission five IHP serves a region of 27,000 square miles.

And larger than nine states and would ask the Department of Legislature to take into consideration rural areas of a region and provider shortage areas when developing legislative and regulatory guidance, particularly around ECM and MCO Tax proposals. IEHP stands ready to innovate and would support and appreciate local flexibility allowances to carry out the state's vision. Thank you, Mr. Chair.

Thank you. Next caller please.

Next we go to line 49. Please go ahead.

Hello, My name is Casey Kane and I'm commenting on issue number three. I am a resident in Placer County I'm a mother of two. My son's first pair of hearing aids put our family back almost $1,500. We were fortunate that our insurance covered a portion of the cost, but not all. Our family applied to the Hearing Aid Coverage for Children Program when it first became available. For months we went back and forth with paperwork.

We sent in all the documents asked of us, but they needed more information. A self addressed envelope from HACCP was sent with a document request only to be returned to me as undeliverable as addressed when we then started to receive calls informing us that our file would be closed due to them not receiving the requested documents. At this point, my son desperately needed a new hearing aid for his left ear and we couldn't wait.

One new hearing aid with partial coverage put our family back another $1100. It was easier to simply pay out of pocket, but it hurt our family. And I know this cost is hurting so many other families. This program needs improvement, and to do that, it needs to continue to be funded. We need time for this program to work. DHCS needs to correct the barriers that are preventing access to care. Thank you for your time.

Thank you. Next caller, please.

At this time, there's no other queue.

Thank you, Operator. I will take that as the conclusion of public comment for today. I will begin by thanking the Administration Director Baass, Director Cooper for staying all public comment, as well as appreciating the Department of Finance, the LAO, all of our panelists here today. I will appreciate the Sergeants Tech Members who stayed. But most importantly, I want to thank the public for participating and improveing our process and making this the people's house. We are adjourned for the night. Have a good night.