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

Good morning, everyone. Happy MCO conversation day. It's my favorite day. So we have just one item on the docket today will be the MCO conversation. We have broken it down into two panels. The first panel will be the coalition that was accounted for, included in what we have right now in the breakdowns.

We will hear from them regarding what this will mean to them, increasing the rates x, y and z. The second panel is what could be if we add additional stakeholders to the current breakdown and so forth. My only little footnote here is Department of Finance. I hope no question goes unanswered today. I hope you have a supervisor here to come save whatever Department of Finance employee is here to answer their questions.

I promise I will take recess if there is no, if there isn't a person that's going to answer the question. I'm just giving you a heads up right now. So please, if you don't have a supervisor here, get them here to be able to answer any question I'm going to ask, or we're going to be here all day or all night if I. We're going to be here just waiting for that question to be answered respectfully. Okay, so we're gonna kick it off.

I welcome the Department, the rest of the panel one panelists, Lao Department of Finance to join us here. We might not have enough, so we'll just start with Lao Department and Department of Finance. Thank you. And then we'll welcome the rest of the Director. Will you be answering the questions, kicking us off? Yes, please. Great. Go ahead.

Great. Good morning, chair and Members. Michelle Boss, Director of the Department of Health Care Services so Assembly Bill 119 authorized an MCO tax effective April 1, 2023 through December 31, 2026. Tax revenues from this tax are going to be used to support the Medi Cal program, including preserving coverage in the Medi Cal program and new targeted provider rate increases and other investments that advance access, quality and inequity for our Medi Cal Members and promote additional provider participation in Medi Cal.

We obtained federal approval of this MCO tax on December 152023 from the Federal Government. The 202425 Governor's Budget proposed to increase the MCO tax to generate an additional 1.5 billion in net state revenue for the tax period of January 12024 through December 312026 by raising the per enrollee tax on medi Cal lives to maximize revenue within the federally approved structure.

Thank you to your early action on this modified proposal with the passage of SB 136 and we submitted the modified MCO tax proposal to CMS March 27 of 2024, thereby providing the opportunity to secure the tax. Effective January 1, 2024. In total, the tax will generate 34.7 billion in total tax revenues, including 20.9 billion in net state revenue, of which 12.9 billion is proposed to support the Medi Cal program and maintain a balanced budget, and about 8 billion is proposed for targeted providers.

Rate increases and other investments in terms of the 2024 targeted rate increases, we developed what we called the phase one targeted rate increases that were effective January 1, 2024 and these were for primary care, obstetric care, including doulas and non specialty mental health services for Medi Cal Members. Again, this was effective January 12024. This applies to both the fee for service delivery system as well as Medi Cal managed care plans. Essentially, we increase these rates to 87.5% of the lowest Medicare rate in California.

This is inclusive of eliminating the AB 97 provider payment reductions and incorporating the applicable Proposition 56 supplemental payments into the base. We received approval of these targeted rate increases in a state plan amendment. Managed care plans will need to update provider contracts and systems to implement these rate increases. We've outlined the following timetable for our managed care plans to achieve full compliance, and we are in continued discussions with our plans and providers on this timetable.

But for fee for service provider arrangements, managed care plans must fully implement the 2024 rate increases on a go forward basis as of July 31 and complete retroactive claim adjustments by October 31, and then for capitated provider arrangements so managed care provider arrangements to meet this rate increase no later than December 31, 2024 for 2025 targeted rate increases.

This is the second phase of these rate increases and we submitted a detailed policy memo regarding these rate increases and in compliance with trailer Bill Language that was approved as part of last year's budget. I will turn it over to Lindy Harrington, our assistant state Medicaid Director, to go into the details of the 2025 rate increases.

For professional services effective January 12025. We are targeting annual investments of $2.4 billion, with 975 million coming from the provider Reserve Fund for primary and specialty care, obstetric care, including doulas and non specialty mental health services 250 million 100 million coming from the Reserve Fund for Emergency Department Physician Services.

We propose to increase rates to target specified percentages of Medicare for these services on a procedure code basis and to require our medi Cal managed care plans to pay no less than the increased rate to their network providers. Based on our experience with the increases from 2024, we are exploring options to streamline increases for managed care subcapitated arrangements while ensuring that funding reaches providers. We propose to eliminate AB 97 payment reductions for all professional services.

We are proposing to increase rates to 100% of Medicare for primary care and specialty office visits, preventative services and care management, maternal care service, non specialty mental health services, vaccine Administration vision services, 90% of Medicare for emergency Department physician visits, and 80% of Medicare for other procedure codes commonly utilized by primary care specialists and emergency Department providers. We intend to apply the increases broadly across procedure codes in these service categories, covering the vast majority of codes commonly utilized by physicians.

We are also proposing to include hearing aids and audiology services within this domain and to increase the benefit cap on hearing aids. The hearing aid coverage for children program uses these same rates as Medi Cal, so the HACCP providers would see the same increase and we are generally proposed to structure the medi Cal targeted rate increases for those professional services to 80% of Medicare. For most services.

Many audiology services do not have a Medicare rate, so for these services, we are intending to review rates from commercial payers and other governmental programs to establish an 80% of Medicare equivalent benchmark. We are also proposing to adopt a Medicare locality structure and to set Medi Cal rates to target percent of the Medi Cal rate applicable in the locality.

This will improve the alignment of Medi Cal rates to local cost differences and in future years we propose to maintain geographic rates in relation to the Medicare rate in effect for the locality. We are proposing to allocate $200 million $80 million of the Reserve Fund for adjustments designed to promote equity and provider participation in localities where Members may face challenges with access to equitable healthcare due to healthcare worker shortages and to address social drivers of health.

We are proposing to implement the equity adjustment for specified categories of procedure codes on a geographic basis in localities identified using an equity index. The equity adjustment would raise the rate for these codes above 100% of Medicare. For high need localities.

We, in consultation with stakeholders, will develop an equity index using a composite of existing data sources, which may include status as a healthcare worker, shortage area, status as a rural or frontier area, concentration of Medi Cal Members as a percent of regional population, and broader measures of social drivers of health, such as the healthy Places Index. We are still working closely with our stakeholders to develop those indices. Localities may be established based on metropolitan statistical areas, counties, or subcounty service areas.

The index based adjustment factors will be applied by grouping localities into percentiles or tiers based on score, and we're proposing to apply adjustment factors to procedure codes used for primary care and specialty office visits, including preventative services and care management, vision and vaccine Administration, maternity care services, and non specialty mental health services for outpatient and ed facility services, effective January 12025.

We are targeting annual investments of approximately 490 million for community and hospital outpatient services, including hospitals and ambulatory surgical centers 725 million for emergency Department facility services. We propose to transition hospital outpatient ambulatory surgical center reimbursement to an outpatient prospective payment system or OPPs methodology no sooner than January 12027 and we are proposing to explore and engage stakeholders on transitioning emergency Department facility reimbursement to an OPPS methodology no sooner than January 1 of 2027.

An OPPS reimburses outpatient facilities for services using a single bundled payment for each episode of care similar to inpatient diagnostic related group or DRG reimbursement. The amount of the bundled payment varies by acuity and complexity of the services. The OPPS is intended to improve incentives related to patient care delivery and encourage economic and efficient reimbursement of services over traditional fee for service systems, which have an incentive for volume billing.

We are proposing transitionary increases to baseline reimbursements in the fee for service and managed care delivery systems beginning in 2025. Until the implementation of the OPPS methodology. The transitionary baseline increases will apply uniformly determined percentage or dollar increases to current reimbursement levels in the fee for service and managed care delivery systems. We propose to calibrate the OPPs to be budget neutral relative to increased baseline reimbursements in the preceding two years and to provide ongoing adjustments based on changes to Medicare rates.

We are proposing to geographically vary reimbursement under the new OPPs methodology in alignment with the geographic localities under the Medicare OPPs. We are proposing to apply regional or hospital specific equity adjustments to outpatient services to mitigate reimbursement disparities and future risk of hospital closures under abortion services effective January 12025. We are targeting investments of 90 million of the Reserve Fund annually for abortion services, 75 million for base rate increases, and $15 million to continue the abortion supplemental payment program.

We were proposing to increase rates for surgical and medication abortions to $1,150, including folding in the existing Proposition 56 supplemental payments. We are proposing to vary the rate for abortion services based on the 32 Medicare geographic regions and the Medicare Geographic Price Index, and we are proposing to continue the abortion supplemental payment program with funding from the Reserve Fund for the duration of the current MCO tax.

We are not currently proposing investments specific to family planning in Medi Cal due to existing high levels of reimbursements for the most commonly used family planning services, especially after accounting for the Proposition. 56 supplemental payments for ground emergency medical transportation services effective January 1 we are targeting investments of $50 million of the Reserve Fund annually for ground emergency medical transportation services. We are proposing to adopt Medicare's pricing system to vary geMT base rates by complexity, locality and rural status.

We are proposing to eliminate the 10% AB 97 reduction and to increase base rates to between 50 and 60% of the Medicare base rate in 2025. We are currently consulting with stakeholders to determine the impact of certain adjustment factors and the design of these adjustment factors will influence the final percentage of Medicare base rate that can be achieved.

Is that for all private companies as well?

That's for all ground emergency medical transportation. So that's the base rate that would be paid to all. Okay, thank you and we are proposing in future years to maintain the Medi Cal Base rates in relation to Medicare rates for our designated public hospitals partners. We are proposing that effective January 12025 we are targeting investments of approximately $375 million 150 million of the Reserve Fund annually for designated public hospitals.

We're proposing to transition reimbursement for designated public hospital inpatient services from certified public expenditures to a DRG or diagnostic related group type methodology. Additional payments to reconcile dphs to 100% of costs would occur if either more than one half of dphs received below 100% of cost under the DRG methodology or more than one quarter of dphs receive below 75% of cost under the DRG methodology.

The non federal share of the additional cost reconciliation payments would continue to be funded using certified public expenditures as it is today. We have proposed to sunset the reconciliation of 100% of cost using a phased approach. This does not jeopardize the financial sustainability of DRG funding to dphs only after two consecutive years in which a cost reconciliation is not triggered.

We have, however, engaged with the California Association of Public Hospitals on this proposal and are committed to working together to mitigate their concerns related to the sunsetting of the cost reconciliation, and we are continuing to work with them to evaluate the extent to which the proposed DRG methodology would cover their medi Cal costs. Such analyses are highly dependent on enrollment and other projections which are uncertain due to coverage expansions and transitions that occur in 2024 and ongoing redeterminations process.

We expect additional clarity in the coming months.

Quick question. When you were talking about the community and hospital outpatient emergency Department section, we were moving to opps from DRG.

No, no, no. So today for those, they are paid on a code base, just a simple fee for service basis. It's not a bundled payment. We're looking to transition them to a payment methodology that is similar to DRG for outpatient services.

Okay. Okay, perfect. Thank you.

And so we are also moving to do the same for the, for the designated public hospitals.

Okay. When do you anticipate? We'll have more information on that at the end. You said we're still waiting, so we're.

Continuing to work with them and we hope to have something for May revision.

Okay. In May revision on the plan for.

The transition or on the cost reconciliation piece of it?

Yes. Okay. Thank you so much.

We've heard their concerns and are working to kind of address those concerns.

Thank you.

For our federally qualified health centers under the non 340 B supplemental payment program, effective January 12025 the Department is targeting investments of 50 million of the Reserve Fund annually for services and supports provided by federally qualified health centers and rural health Clinicians Clinics. We are engaged in ongoing efforts to transition the existing $105 million fee for service supplemental payment program for these community clinics into a managed care directed payment arrangement, effective January 1 of 2025.

The directed payment arrangement will provide one utilization based payments and two performance based quality payments. We will direct the managed care plans to reimburse network FQHCs and RHCs, an add on payment for qualifying services on a per visit basis similar to what we do under the existing fee for service program. In addition, DHCs will direct managed care plans to reimburse network FQHCs and RHCs a performance based quality or payment equivalent to the difference between the targeted annual pool amount and the actual utilization based payments.

So this will allow kind of a balancer to ensure that we stay within our appropriated amount. This shift will help streamline and reduce payment delays which have occurred in the current fee for service program due to challenges that require manual actions and processes to reconcile and under the managed care directed payment, managed care plans will pay a prospectively established payment rate alongside regular claims processing.

In the meantime, for the remaining program period through the end of calendar year 2024, the Department has added additional quality control and updated procedures to ensure payments are made timely to the clinics.

And.

Those are our investments on the behavioral health throughput. We do not, unfortunately, have additional details to share at this time on the proposed domain. The Governor's Budget proposed these investments to begin effective July 12025.

Director, do we anticipate more information in the may revise or when do we, when do you think we'll have this.

Plan by may revise.

Okay. Okay. There are a couple of things I think we're missing. The health care workforce labor management Committee.

So that proposal will be implemented through the Department, through HCI.

Do we have any information on what that's going to look like?

It's our understanding based on kind of initial conversations, based on initial conversations that it is kind of dollars to support labor management committees that work with our Medi Cal providers and kind of thinking through how you can support, whether it's through training and et cetera. I think SEIU might be able to speak to a little bit more of it as they're working with Hkaya on the proposal.

I'm not sure if you can answer this question or maybe when the panelists come up on the graduate medical education program, how will we know the investments for 75 million annually from Medi Cal provider, from the Fund to UC to expand graduate medical education?

Would that be so those dollars are, were appropriate or going to the University of California? And so is it a one time or annually that's an annual.

How will we know that we've met the goals of this investment? Is there a certain amount of number of expanded slots at all their schools? Are we tracking if they're not meeting those slots, does that money come back to us? Do they keep that money and roll over for more slots?

We can follow up with UC, but we don't administer the program. So I'm not sure how maybe.

Jason Constantouros LAO, just to emphasize that a lot of that implementation is really left to the University. There is an existing graduate medical education program at UC that's mostly funded by Proposition 56 and this provides additional funding to that. But that program is implemented by the University. They contract with another entity to administer the grants. And so that's not specified in the legislation, what the goals are or how the outcomes would be tracked.

Yeah, I guess. I mean, it's to achieve the goal of increasing. I'm hoping we're meeting the goal of increasing.

I was going to ask and maybe we can follow up at a later date with maybe something with education so we can get our arms around that. But do we know also just like regionally around the state where those. Right, because I know like Merced's trying to start a medical program too. Is it going towards just graduating people? Is it going towards expansion of the infrastructure for medical school residencies?

Residencies, that's right. So it's really for residency programs and they're mostly administered as like competitive grants to different residency programs, not just UC programs, but other programs across the state, and some of them support like existing slots and some of them are used to expand the number of slots so they have different purposes, but they're primarily.

For residency programs and that's equitable across the state as far as we know.

I don't have the data at hand on how that's distributed throughout the state, but there are specific areas. So it focuses on primary care and emergency care. So there are specific medical areas that it focuses.

I'm just hoping, you know, we're always, we're short a lot from bilingual and so forth, you know, culturally appropriate, those with lived experiences, so forth. So I just want to make sure that we're reaching that goal of increasing the kind of people we want, right. Or need. I mean, the kind of people we need right now. Senator.

Thank you, Madam Chair. You know, I used to chair sub one of this operation, and I remember, I remember this appropriation and also the Prop 56 discussion. Somebody must get a report somewhere. I'm curious as to where these slots are distributed and what residency programs they Fund. So I realize it's not necessarily within the jurisdiction of this Committee, but it happens to be in our agenda.

So maybe when you all have time, you could, through the chair, you could obtain from the big UC where the money goes and which residency programs it funds. And I don't remember ever receiving that in sub one. Maybe we did, but that would be appreciated. Thank you.

I have a special guest today, the BP. And then I wanted to go back to the equity index. What stakeholders are we putting together for coming up with this index?

Sure. So we have been meeting with, or the Department has been meeting with several, we've been meeting with providers, our managed care plans, CPenn.

Some local health jurisdictions who've also raised in the Central Valley some ideas as well.

200 million is a lot of money. When do you think we will have a detailed understanding of how we're going to address the goals of the equity portion of this tax?

So we're hoping to have more details at May revision on this kind of, based on some of the feedback we've received. But that is our goal is to have more details at May revision.

Okay. Any further questions, colleagues, on the department's portion? I think that concludes my questions as well. And Director, I guess one last thing is the TPL on all of this waiting to may revise as well? Has she now all the final details?

We're continuing to work across the Administration on getting this out, ideally having some language out before may revision, but continuing to work on that.

Okay. It's my birthday this weekend. Maybe it's a birthday gift. I get the TVL this weekend. Worth a try. Okay. Now I'm going to turn to Lao.

Jason, and I apologize there. You know, we did have an initial discussion with UC and there may be some additional points that might be helpful to the Committee, too. When we met with UC and talked about it, a lot of the MCO tax funds hadn't yet been distributed, and that's because the state was still waiting on federal approval, which came in late 2023.

And so there, there was still a lot of, there's some uncertainty with how the funds would be implemented, but there was some discussion around potentially using some of those funds for other types of medical specialties than primary care and emergency care like other specialty groups. That's something that's allowed under the Proposition 56 program, but it's something that was also sort of under consideration. So there was some uncertainty now that the funds are currently being distributed. There presumably would be more information now.

That'd be great. I love the program. I think we need to help people get into this workforce. We need a lot of them all across California. I just want to make sure we're reaching those people and it's not the same kind of individuals that we've always had coming through this pool, getting a diverse pool. Ryan, do you have anything to report on this section on? Do you have a presentation?

Yeah, we have additional comments I'd be happy to share.

Go ahead.

So before we dive into the Leo comments, there are two key points or just key aspects of the proposal. Just want to emphasize, I know there's a lot here, and actually on page seven is of your agenda is a very rough summary of the major areas of where the funds are going to. But generally there are two key aspects. The first is that there are many rate increases in here, but the Administration is also proposing to change the way medi Cal pays providers in many cases.

So, for example, tying rates to how medic to benchmarking rates to the Medicare rates or developing new payment systems for hospitals. So I just want to emphasize that we're not just talking about increases in some cases. We're talking about changes in the way rates are set. And then second thing to emphasize is that much of the proposal when we reviewed it in January is conceptual. Much of it still appears to be conceptual. Major parts are into development. For example, we just talked about the equity index.

That would be an example of one where the Administration is still working with stakeholders to determine how that would be used. So given those two aspects, we had a number of points that we raised in our analysis back in late January, and I just wanted to emphasize three key points from that, just for the sake of time.

The first is that it's reasonable for the Legislature, given the amount of money here involved, that it would not only use the funds to provide increases, but also consider changes in the ways rates are set. We'd recommend that the Legislature focus any of those changes on ways that really make the existing system more rational and effective. For example, with regard to many sorts of provider rates, typically, the state hasn't had a consistent approach to setting rates and adjusting them over time.

They've had periods where they've increased and then decreased, but it hasn't been sort of consistent. Some of the proposal would benchmark rates to a percent of Medicare and then adjust that moving forward over time. And so that seems like that potentially would be more rational because they would now have a more consistent way of setting rates over time, rather than it being subject to periods where there's more capacity in the budget or less capacity in the budget.

That said, many of the administration's proposals, the details matter. So, for example, how the new hospital payment systems would work, what the effects of those would be, how the supplemental payment would work for clinics. These details, these details matter a bit when we're trying to assess the ultimate merits of the particular proposals. Second, implementation and legislative oversight also will be key for this package.

Given the expansive nature of the proposed increases, there is risk that the state and managed care plans, who also would have to implement many of these rate increases, would face implementation hurdles. These hurdles could delay the timing of when providers receive rate increases. Given these uncertainties, we have a couple of recommendations for the Legislature to consider very broadly.

One is when the Administration is considering new approaches to rate increases, we think it would be reasonable for the Legislature to authorize the Administration further studying and analyzing the impacts of that. But we'd also recommend that the Legislature direct the Administration to come back with more detailed proposals when they're available, rather than authorizing parts that are still conceptual. And then secondly, we'd also recommend that the Legislature adopt reporting requirements.

These would better track sort of implementation, but also early indications of outcomes resulting from the rate increases. And then our third key point is that financial sustainability also will matter a bit this year. This is one of the few areas of the budget where there is some more funding available for augmentations.

There is a potential, though not certain, shortfall in that package, however, and that's because the Federal Government has signaled that it might change the rules around approving the MCO tax, and the Administration has said that those rule changes, they're unknown, but they could result in the next tax being much smaller than this one. Were that to occur, there would be a shortfall in the funding plan that would need to be addressed. Typically, the Legislature would turn to the General Fund for backfilling that.

However, as this Committee has discussed earlier, budget assumes that there are deficits in the out years. And if the Legislature didn't have capacity in the General Fund to make these backfills, it could face pressure to undo many of these augmentations. And that could be very disruptive, particularly for providers and the Department that had spent several months and even years adjusting to the new system. So we think considering that will be key for the Legislature. Typically the main approach, it's a bigger structural budget issue.

It involves adopting an overall General Fund package that has capacity and anticipates there a potential shortfall. But we think that'll be a major issue for the Legislature to consider with that available for questions.

Thank you. Ryan, you prompted a question I had totally forgot to bring up. Director, this is going on till 2627. Originally we had a plan to do one extra year, but we're going to, we're cutting it at 2627. What is our plan for 27 and on, on how we're going to be providing these reimbursement rates.

So we are using some of the kind of the out year Reserve Fund as a solution for kind of the immediate budget, state's budget situation. So to your point that those Reserve funds to provide the rate increases in 2028 or so, you know, we will be, the MCO will be up for renewal for 2027. So there is the opportunity to again go back to the Federal Government with an MCO proposal.

Notwithstanding potential changes at the federal level, we do think that there will still be some opportunity for MCO. And I think also, you know, in 28-29 we may be in a different state fiscal situation as well. So it's really using those dollars today so that we didn't have to sustain significant cuts.

Jason, you didn't correct me. I keep calling you Ryan. I'm sorry. That was doing so good with your names. Okay, let me see if anything for right now, I think we're good for Senator Eggman.

If I could just ask maybe to the Director, and I'm assuming so we're going to raise the rates, but that we're recalculating how we do that. And I imagine we're working with stakeholders on that just because that's one of the thorniest issues that we're trying to deal with with matical is rates and reimbursement and the process for getting reimbursed. So we're working closely with stakeholders.

We are. We've been having multiple meetings with all the stakeholder groups that are impacted by the, by the various proposals and having in depth conversations, and we'll continue to do that.

All right. And the plan will be in May?

Yes, we'll have that. We'll have that.

And Senator ergonomy, you brought up, you made me think of another point, why it's so important. This is going to fluctuate for years to come. And it's so important for us to not lock in to what we decide this year as law for the outcoming years because we don't know what the budget's going to look like moving on, moving forward. And we want to make sure we have some flexibility in moving around dollars moving forward.

What I mean is I would hope that whatever is decided at the end of the day for the MCO tax is not going to be cemented in for years to come. I hope that it allows us some flexibility because something can happen. The outgoing years where we really, really, really need to balance the General Fund. Right. And we need to move some stuff around. And if we lock everything in this year, that's not going to give us some flexibility. Things change around.

Something can happen in the Federal Government. CMS comes up to us and says everything's 100% Medicare. Right. You know, just, I don't foresee that happening, but I just, I think there should be some flexibility in whatever is decided at the end of the day with MCO tax and what happens moving forward. That's all I'm trying to say. Okay. Let's bring up our stakeholders for the rest of panel one.

All right, let's see if we have enough. Three. Yes, we have two over here. zero, I think we'll be okay. We have one extra, by the way. Yeah, yeah, move it over. Okay. So joining us today in this first panel is California Medical Association, the California Hospital Association, Planned Parenthood, affiliates of California, the California Primary Care Association, SEIU, local health Plans, Association of Health Plans, and the California Association of Public Hospitals and Health Systems. So we're going to start with CMA. Mister Thompson. There you go.

Thank you, Madam Chair Members, really, for the opportunity to present to the Committee today and also for the Legislature's support for the first time, using MCO Dollars for provider rate increases and other critical investment in the Medi Cal system. This is the first MCO tax that has actually made those investments based on your leadership last year.

So we just want to take a minute and thank you for that and just tell you how excited I think we are to really see the major investments that are much needed in the Medi Cal system. At the start, CMA has been asked to address three overall questions. Basically, the impact of the MCO tax on physicians and providers behaviors within the Medi Cal system. Many challenges we've seen in the 2024 allocation.

And finally, basically, whether or not the proposed funding in the governor's January 10 proposal is adequate to meet the needs of the medic health system. So just on the first question, CMA strongly supports the governor's January 10 proposal. This is a multi year agreement we reached with the Legislature and the Governor last year for the first time, really making critical investments in physician reimbursement services. Medi Cal rates have not been raised for physician services since the late 1990s.

They've actually been cut two times since then, and since then, the program has grown exponentially by the amount of people they coverage and also has expanded benefits. So we've also said that the provider rates is accessed. It's the third leg of the stool.

The state has done a great job making a good benefit package and covering all eligible individuals and really providing access is kind of the last leg of the stool that we think that the state needs to tackle on the governor's January 10 proposal takes a huge step to accomplishing that fact.

Just to highlight commercial since the adoption of the ACA, there's been a huge growth in the amount of people who are insured, but the actual commercial rate, people who are insured through the commercial plans has actually stayed flat. All the growth we have seen in the state has been the medi Cal System, and we have to make sure that we've got enough physicians, providers in that system to treat the amount of new enrollees that we have put into that system.

So from the physician perspective, the MCO proposal, what we really hope to do is change physician behavior. We want physicians to take more Medi Cal enrollees to the extent that they're taking them, take a larger percentage. Right now. Medi Cal, with the current rates often doesn't cover costs.

So what we'll see in physician groups is kind of artificially limit the amount of Medi Cal patients that they can see, not because they don't want to see more patients, but that's just the hard financial picture that they have to deal with. And so we would say that the investments contained in the proposal this year and ongoing, we hope will be transformational for access within the system. And we really hope to. Our overall goal is physicians get to treat the community as they present themselves.

And right now, not asking what insurance coverage they have, but just to say, hey, if 40% of the, the population in a given community is Medi Cal, we want that physician patient role to be seen, 40% medi Cal patients. And we think this is a critical step forward as far as implementation on the 2024 rates. We do want to thank the Department.

To their credit, they have been meeting with stakeholders very regularly and always had an open door to tackle some challenges which are inevitably going to come up when we're doing new policy changes of this magnitude. I would highlight on 2024, I think we were hopeful to see some of those rate increases be in effect, kind of on the provider level by January of this year.

Given the way that we've been rolling this out, it's probably the vast majority of that money is not going to get to the providers until December of this year. So often what we will say is when we reach budget deals here in California or here in the Budget Committee, excuse me, there's a lag time before providers see that change.

And so part of what we've always said is part of the multi year deal, which is so important, I think the Lao touched upon it a little bit, is having multi year certainty. And obviously, this is difficult with having to balance a budget. So we're not, we don't, we're not naive to the concerns that the Budget Committee is going to have to face. But if we're really trying to move provider behavior, having that multi year certainty, we would say is essential.

If it dips up and down and sometimes supplemental payments that we've done in 56, you might see those supplemental payments a year, a year and a half after the care is provided. And we think not having that direct connection to direct patient care sometimes doesn't move provider behavior in the way that we would want to. And then finally, just whether or not the allocation within the kind of overall MCO tax we think is whether or not that's appropriate, whether other investments could be made.

I think what we would say is, listen, there's a lot of investments that we can make in the Medi Cal system. The MCO tax, the, you know, the 8 billion of the 20 over these periods are going to be extremely helpful into increasing more access. Can we do more? Obviously, I don't think even on the physician services side, we're taking certain codes up to 87.5% of Medicare. We love all of Medi Cal, could be equal to Medicare, but there's a great need in this system.

And so I think when we've looked at this on the overall deal, about 40% of the money generated from the MCO tax is going into provider rates, medical investments, part of the spending plan, about 60% is going into kind of General Fund backfill. And that's the agreement we reached last year. And we do think that the proposal as presented by the Governor is very narrowly tailored to really maximize access within the system. That's not to say there's not other investments that aren't, that we couldn't make.

And I don't think anyone is going to have a perfect plan, but we do think that the proposal as written is a huge step forward to creating access in the system. So thank you for your time. Appreciate it.

Mister Thompson, can you share, I think you might have some information on the graduate program.

Sure, yeah. There's a program called Cal Medforce. There's a couple of programs that do highlight the GME funding. So we're happy it's online. We can happily send it to you. They definitely do it in cohort model. Each year they have specific funding and they'll look for grant applications for residency. The Prop 56, which is 40 million a year, that is limited to primary care and emergency Department residencies. There's 75 million within the MCO tax and that can be across specialties.

And I will highlight just GME for us, we think is one of the most important components within this because it creates new residency slots. So we don't want to make sure we're not just going, you know, supplanting existing residency slots, that we're actually adding new slots. Because what that means is that's actually a physician present in the community who's practicing for that three to seven years of their residency program.

There's a strong correlation to residency programs and where a physician practices at the end of the day. So we can follow up with all your offices with that information.

Thank you so much. Now turn it on to CHA.

Thank you, Madam Chair.

Oh, just kidding. Senator Roth.

Well, I just wanted to. So the 75. Correct me, stu. The 75 million. There was a foundation or something. Correct. Created to manage that residency Fund. Money to be utilized by UC is.

That it's an allocation of UC and UC contracts with a third party to allocate that money. All of the. Allocate all the. Where the money's gone is all up on a website so we can provide.

And it's both primary care and specialty residency programs.

56 is primary care emergency Department. The 75, it can be across the board.

And do you have, you have, is it on the website where the residency programs are and what they are in terms of the 75 million?

Well, that's the 40. The 75 hasn't been allocated quite because that was last year, so that hasn't been distributed. But it's going through the existing program. So we do have the information on the existing program.

So it was 40 that I saw in sub one. Right.

That's from Prop 56. MCO adds a new 75 onto it.

Thank you. Thank you, Madam Chair. Mark Farouk, on behalf of the California Hospital Association, as you and this Committee has heard before, we've talked about the low medi Cal reimbursement rates in combination with the financial stress emerging out of the COVID-19 pandemic, as well as the increase in the medi Cal caseload to 40% since 2019. That this has been an unsustainable combination that has led to over half of the state's hospitals operating in the red and dozens at risk of facing closure.

Thankfully, last year, the Legislature and the Governor came together to create the distress hospital loan program to create a short term solution, short term relief for hospitals at risk of closure, as well as addressing the longer term challenges. With significant funding from reauthorization of the MCO tax to sustain and promote access to care for California's most vulnerable people, patients. The MCL revenue thus far has provided significant state budget funding to offset potential reductions in the Medi Cal program.

This also includes using over 3 billion from the provider Reserve Fund as a budget solution, something we would note. The use of this Fund should not create additional risk to this underlying sustainability of these foundational investments. This year the Governor has reaffirmed his commitment to using the 2.7 billion annually in the MCO tax revenue to improve access to Medi Cal despite the state's budget deficit.

This funding will provide a lifeline of support to hospitals, particularly those that serve disproportionate numbers of Medi Cal patients, significantly increasing chances of remaining open to serve their communities. While this does not fully address the historical underfunding in the Medi Cal program, it will partially close the gap between cost of care and how much hospitals are paid for the care provided to Medi Cal patients and promote equitable care for those that are often the most vulnerable.

This funding is critical for all hospitals, including those that are financially distressed, but the final details of the rate increases will determine to the extent to which specific hospitals remain distressed and if additional state support will be necessary. CHA is currently focused on how these investments can be targeted in the Medi Cal program to protect critical healthcare services.

We appreciate the Department of Healthcare Services willingness to engage with the hospital field in developing emergency and outpatient service is payment methodologies that move the needle in the right direction for all parties, the state managed care plans, hospitals, and, most importantly, patients. DHCS has proposed to improve emergency Department outpatient reimbursement in two phases. First, transitional reimbursement increases for the first two years, followed by more fundamental reforms on how emergency departments and outpatient medi Cal services are paid.

In effect, in the long run, the goal is to convert the state to a bundled payment methodology similar to that used in Medicare, as you all heard earlier, because the transitional increases go live next year. While the deeper reforms would not occur until 2027 at the earliest, we have focused on the transitional increases starting in 2025. In our conversations with DHCs, we've sought to incorporate lessons from the development of last year's targeted rate increases.

The main lesson we have drawn is that those have proven complex and difficult to implement. We have offered suggestions on how this proposal could be streamlined and simplified. Because the transitional increases would only be in effect for two years before deeper rate reforms are potentially implemented, we have urged DHCs to leverage existing payment programs rather than creating wholly new temporary ones, which would simplify the process of federal approval as well as implementation for all parties.

Further details still need to be worked out, including how to ensure that the timeliness of payments, which we look forward to doing in concert with the Department. In addition, we do have to share a concern related to the Perot's six months delay in funding to behavioral health throughput and the lack of detail around how this funding will be used. Behavioral health throughput is a major challenge in our emergency departments and inpatient beds alike, and the delay will only exacerbate these care transition challenges.

Therefore, we urge the Legislature to restore the effective date of this important funding stream to January 1, 2025 and ensure the funding goes where it is needed. In closing, we thank the Administration for its commitment to investing in the Medi Cal program and sustaining essential hospital services for California's most vulnerable patients.

We look forward to continuing the conversation with the Legislature and Administration to achieve a final targeted rate increased package that can be implemented smoothly, set hospitals on a more sustainable path, and improve the capacity to serve medi Cal patients. Thank you.

Mister Farooq, do you, what about number four? Do you think there's any adjustments, room for any adjustment to the administration's proposal that you believe would better improve access to care quality?

I think so. I share the comments that my colleague from CMA made earlier. I think there's always opportunities to make improvements. I think an area that we are particularly monitoring very closely is the implementation of equity adjustments. I think there's a lot of room in that space to figure out how do we define what an equity adjustment means and how do we impact it in those communities, whether that's a measurement of socioeconomic status, Medi Cal population, or geography.

As you know, there are hospitals in rural communities that are really suffering. That could potentially be an opportunity, but always room to make positive changes.

Moving towards Planned Parenthood representatives. Yes, you can.

I don't know, Madam Chair, if you. I can wait if you want to go.

You know what happens when I presided today. Took all my energy on the floor, so now I'm off my game. So, Senator Grove and then Senator Roth.

Thank you, Madam Chair. I do appreciate the fact that you guys are continuing to work on the root cause of this situation, which is actually the Medicare rates or medi Cal rates. When I first started engaging with the Cha and the plans, I couldn't. And you were showing me all this stuff.

As a business owner in this state 30 years, there's no way that you can operate on the rate reimbursement that you get because it's just a pathway to bankruptcy, which I think all of us in our districts, especially our rural hospitals, are facing. And we keep putting band aids on it, which we appreciate because we wouldn't be here today and we wouldn't have Tulare, we wouldn't have ridgecrest in my district if we didn't do those things.

But we still haven't addressed the root cause with the Medi Cal reimbursement rates. So I do concur with what you said. I also want to bring Delight, and this is just a. I'm sure that the percentages might be a little bit different, but something else that hasn't been addressed and why it's so important. I realize that we can say as Legislature, oh there's access to Healthcare, Medi Cal for all. But if you can't get in to see a Doctor, who cares?

I mean, if you don't have. I mean, who cares? If you can't get in to see a Doctor, why does it matter that you have that card that says you have healthcare insurance, especially with reimbursement rates? I had a provider provide me some information, the data he has to report, the time he spends with the patient, the consult that he does. He gets $42 and he says roughly about $165. Situation that is a pathway to bankruptcy. There's no way to do it.

On top of that, you have lease increases or building cost. I know one hospital has like a $44,000 a month payment, which is probably small, but it's a rural area. You have a 5% increase every year in campus compounding on lease or rental property or purchasing a building. You have an 18% increase of overhead because of increase in minimum wage and policies that come out of the building. You got supplies increased by 10% staying open till midnight in this one specific urgent care.

They have several urgent cares throughout the state, but this, they stay open till midnight to alleviate the cost for plans for somebody going to a hospital emergency and clogging that up, they can go to these urgent cares where you pay half or less than half of what's there. So I think the medical community work comp increases gone up 10%. Medical insurance for the staff.

I know mine in my business, when I got my blue cross plan, just saying it was 28% more than I paid last year for my business. Just throwing that out there. I'm not the only one. So business, including hospitals and providers are, and their independent buildings where they operate out of for care and these urgent cares, their costs are going up and we're not addressing the fact that the reimbursement rate has been cut. And I appreciate you bringing that up.

We haven't had an increase and it's actually gone down. That is the root cause of this entire situation. That is the root cause that will solve the gentleman next to use problem with wage increases and benefits. That is the root cause when it comes to making sure that we don't have standby emergency rooms in hospitals. That is the root cause to make sure that we have maternity care.

And you don't tell a woman in a rural community she has to drive two and a half hours before she has her baby. That is the root cause. I want to applaud the Administration and Doctor galley every time I've called them in a panic. I got two days to cover my emergency room, or they're gonna close. They step up and they address stuff, but that's all peace, peace stuff. It's not going to. The root cause is to address these rates.

And so thank you for continuing that fight and continuing to bring it up, because I think if we can get the state and the Legislature and the Governor to agree that even if we just pick the top 25 codes that we use continuously and increase those to where they need to be, then I think that that would be a huge impact. But it has to start at rate increases, and that's the root cause cause analysis. And people don't know what a root cause analysis is.

You find out what the problem is, and you fix it from the root, which helps all these other things that flow easy, including benefits for employees, the way, you know, offer time, employee, you know, all this stuff that benefits, you have to have the money to do it. So I thank you for continuing that fight. And I just want to throw out to the plans that my rates went up, like, significantly.

And I think other businesses are taking, and I understand why you have to do it as well, because you have to operate within this system. And I think if we just fix this issue with the rates where we have the ability to do it. We. Can be successful in making sure we don't have any more hospital closures. And our employees are also taken care of. Thank you, ma'am.

You know, one of the good things is just even last year, we've. I'm looking at all the codes, over 700 codes that we. That we already increased for rates.

We don't have that many yet. Do we have that many yet? Last year's money? Do we have last year's money yet? Are we stopped operating on the money before overall? Okay. But I know we made the rate increases, but they don't have the money yet.

Yeah. And the. And I agree with you on the behavioral health output. Right. And I think also what Jason said, lao. I think it's really grandiose, all these big headlines and stuff, but the details are really what's really important. Right. Ensuring this actually gets out the door in the hands of providers and hospitals and so forth. So we can see actual change. Right. Because maybe the next MCO tax won't be as high. Right.

And we'll have to apply for that, I think in a year, a year and a half to get that going for certainty. I think someone else also hears to be able to operate and understanding that you're going to get this again.

And just on the chair's point, going back to their rate increases and going back to this, you know, it's all well and good to say you have a medical card that says you're covered, but you can't get access to care. And it's all well and good to say we've increased rates for 700 codes. But you don't have the money. The money hasn't been released to you yet. I mean, it's like, I don't want to say you're scared to answer a question. Do they have the money?

Do they have the money yet? Is it gone to them, somebody at that end of the table? Yes, ma'am.

So part of the rate started in January 2024 on paper. In January 2024 on paper. And a lot of what we're talking about right now is for us to agree for the next fiscal year.

Exactly. But what I'm saying is that I'm just trying to make the point that we've told them this is your rate, but they're not getting that rate now. It's, we agreed January 2024, that would be the new rate. But when is the first time a check's been delivered for that new rate to anybody, a provider or a hospital?

So Linnea Koopman's from the local health plans, and I'll get to this a little bit more in my testimony, but I think anytime there is a significant change in the way that we're, you know, financing the Medi Cal program, there are a number of steps towards implementation, and that is where we are. I mean, we have the code list. We're still awaiting final guidance.

And I'll kind of talk through at a very high level some of the steps that have to be taken to get the dollars out the door because that is what we want to. We want to get the dollars to providers.

Absolutely. And I'm not being accusatory. I'm just trying to make a point that we did authorize rate increases, but no one's getting them. They have not got them yet. And that was just the point. But yet new laws have taken place to increase cost. So they were operating at a deficit already we authorized new in rate increases. The increased costs have already gone to effect. Everybody's paying increased cost on wages, FICA, federal food, assoudi, edd, workers comp, liability insurance, rate increases on medical insurance for employees.

All of that has gone up January 1, 2024. And when they paid their Bill February 1, if they pay it on a monthly basis like I do, they paid the increase. But the, the rate increase to offset those costs. They don't have a dime in that. So I just want to make that point, say we have to get to that point faster. No offense needed anyway, but I want you to that point because I need them to get their money. Okay? So they can take care of that guy.

I think I just have a quick question. I think the question number three in the analysis related to the hospital Association seems to be the most salient. You know, we've spent a lot of time on determination distressed hospitals, and I'm having a difficult time, even though I've been around here a while trying to figure out exactly what's needed. So the question is this.

Have you all done any modeling based on the proposed reimbursement rate changes with respect to one or more of your most distressed hospitals to see what the question is, what the impact would be and whether it impacts the financial sustainability of these hospitals? Or is it too little, too late, not enough. Some hospitals that have a high peer mix of Medi Cal are simply never going to be sustainable.

Thank you, Senator, for the question. We are certainly trying to get an analysis of how these rate increases will impact this question related to distressed hospitals. I think their current stage we're in is in these discussions that we're having here today, discussions with DHCs, trying to determine where things do land on the reimbursement rates, to make a determination of what impact that will have on distressed hospitals.

I think, to your point, and it also depends on the various codes and which hospitals are doing, which procedures and emergency room volumes and those services.

But we know the ones that are in most distribution. Some of them are in the newspaper. Those of us are not quite as informed, can probably figure it out. And the distressed hospital Fund is, my understanding, is now depleted, and I've put some pressure on those that have an ability to do something about it, to refill that to some level, even in a disastrous budget year. But we ought to know pretty quickly, chop chop, whether this money is doing anything other than sticking a finger in the dike to keep the floodwaters from overtaking us.

And that is sort of something that you can do, that we can't do because some of them are your Members and you can work with the Administration and data that's out there, projected or otherwise, to figure out whether it works better to do it now than once the stuff's in concrete and then we can't change it. Am I making sense?

Yeah, absolutely. I agree with what you're saying. And that is an analysis, I would say at this point, still working on that, to make that determination. We do think there are some, if you look at the economics arriving out of the COVID-19 pandemic and the impact that has had on certain hospitals. Right. You have to, overall, MCO funding is going to obviously stabilize access and stabilize many hospitals.

But I would say at this moment we don't know the total sum of those that would be absolutely protected through these increase rates. And there is also, as was pointed out earlier, the lag time of when the plan comes out and it's passed and getting that money out the door. So I think there's also, even if you have hospitals that by next year would be feeling a much more fiscal sustainable ground, there's some lag time where they may struggle in the intervening time.

I know certainly there's hospitals in districts around the state where this potential delay. Right. They have six months to a year to get help. This process may take a little bit longer.

Well, it's particularly critical because we're also dealing with seismic, in another Committee and seismic extensions that seem to be coming at us like acorns out of the tree. And we're going to have to get a handle on it and build a structure so that we can sort of step hospitals down the road to making sure their hospitals are able to continue to function.

I saw a statistician, I think I remember it correctly, you know, when you take a look at the non structural and the structural, only 232232 of our hospitals, you would know, are going to be capable of providing services to patients after a major earthquake, which is not a very large percentage of our hospitals in the state. So we're going to have to do it.

And with respect to the distressed hospitals, my point here is we need to get a handle on what their financial condition really is with everything that the state can do to increase medi Cal reimbursements, to see what they're going to be able to afford, what they're not going to be able to afford.

And then in the seismic area, explore alternative funding mechanisms, if any of those exist, to try to get hospitals up to snuffy so they provide services to vulnerable people in critical areas of the state. That's all from me, but I look forward to whatever you're able to give us. Thank you, Madam Chair. Thank you.

I'm going to go back to Senator Grove.

I just have a question based on the answer that you gave me just a few minutes ago, you said that you're in the process, and it does take time to change this system so that those rates can go out. What's the. And I know you're going to speak about it based on the actual or the implementation date that you're going to make this happen. The rate should have been affect January 1, I guess. Right? Or not.

So the rate increases were authorized. Right. But effective January 1. So for all services that were provided on and after January 1, providers will get that increased rate for those services. But it will be retro right back to January 1.

That's right. Make sure it's retroactive. It is. Make sure they get their money. Okay. Thank you.

Okay, miss, he's going to come back to you. Two different. I'm going to go through the agenda the way it was put out on the agenda. So I'm going to go with public health. Public hospitals.

Good morning. My name is Erica Murray. I'm the President and CEO of the California Association of Public Hospitals and Health Systems. Thank you for the opportunity to speak to you today. We represent the 21 public healthcare systems across California. They're mostly county owned and operated. We also represent the five University of California health systems, three of which used to be their local county hospital. The names of some of the hospitals we represent, Riverside University Health System, San Joaquin General, La County General. You get the idea.

These are the hospitals that primarily serve those who are on Medi Cal and who are uninsured. Although they're just 6% of all hospitals, they provide a third of all hospital care for Medi Cal in the state. They offer a range of comprehensive services beyond hospital care, trauma, burn training. They train half of all doctors and hospitals in the state, and they provide important primary and preventive care because of very Low medi Cal rates.

The MCO tax represents important funding to help cover public health care systems costs to maintain access for the most marginalized, Low income residents in our state. We really appreciate the inclusion in the MCO tax of $150 million that's targeted to public health care systems. It's important for two reasons.

First, because most of the primary care that's offered by public health care systems occurs in FQHCs, federally qualified health systems, health centers, public FQHCs that, because of the way they are paid, are not eligible for the $291 million allocated for primary care starting in 2024 or the $975 million earmarked for physician and non physician professional specialty care.

Second, the $150 million for public health care systems represents an effort by the Administration, working with the Legislature and with us and other stakeholders to address a looming and huge structural deficit. To your question, Senator Roth, we are not distressed hospitals yet, but we are facing a three to $4 billion structural deficit that must get addressed. And the $150 million that's targeted to what are called designated public hospitals represents an important piece of that puzzle.

Because you're a public hospital, are you eligible to apply for the funding that was, should there be another round of that funding for distressed hospitals because your funding is a little different?

We are eligible to apply. We are looking, we are working closely with the Administration on other ways to try to address our structural deficit. Just a little bit of background on the 150 million, and the Department explained this a bit, but I want to make sure people understand. Since 2005, public health care systems have been providing the nonfederal share for inpatient fee for service dollars for those patients.

The 150 million would be converted to a DRG structure, which is a more value based payment, which we fully support. However, that 150 million doesn't come anywhere close to covering the costs of providing those services. The Department has proposed to phase out the cost based supplemental. That would need to be layered on, and we have real concerns about that because we do constantly need to be covering our costs.

And we, as was mentioned, we've been having very productive conversations with the Department, and we're looking forward to a resolution in the May revise.

So what would it look like once that's in this transition is you utilize $150 million first and then go back to the original system, correct?

Well, we would convert these payments to a DRG, and then we would use, we would, it's called certified public expenditures. We would put up the state share to cover the delta of those, to cover part of the delta to cover those costs.

And you start working on that. Is it easy to transition back and forth like that?

It's just that nothing about public health care system financing is easy or simple, but it's something that we understand in the Department. We've been doing this financing at this. I don't know why I use the word easy.

I don't think anything is easy in this space of healthcare. Right?

Yes. No, it's not easy, but it's known and doable. In addition, I think it's important to note, in addition to the 150 million, public health care systems should receive their equitable share of other buckets of funding. We've been in discussions with and others about the emergency Department bucket, the community outpatient, the GME reproductive health, because we provide such a comprehensive range of services.

What's important to know, and specific to your question, Senator, is the, for public health care systems, the MCO tax represents a really important and insufficient solution to our financing challenges. This is not going to solve what for hospitals in particular and healthcare systems that predominantly serve Medi Cal, when you have rates that are so Low and you're working to try to cover your cost through supplemental payments, these MCO tax dollars will be an important part of those supplemental payments.

But we're going to need others, and we've been in conversations with the Department and all of you to try to find, it's what we do. We are creative and, and try to find ways to cover those costs, and I'm hopeful that we will. But it's important for you to recognize how important yet insufficient these MCO tax dollars are.

But you'll be eligible for the ED.

Yes.

And every provider code that is getting increased, you will be eligible as well.

With the exception of those first two buckets of primary and specialty care, because FQHCs are not eligible for those. And most of our primary and specialty care are provided in FQHCs.

Okay. Senator Roth

I'm just curious. Does your obligation as a county hospital to take care of local jail inmates impact your financial, your financial situation?

Very much.

And in what way and how's that funded?

It varies by county. For some counties, they provide the cost of covering those services. Other counties pass the costs of medical services for inmates onto the public healthcare system. So it ranges, but it does, in many instances, contribute to financial distress for.

Public health care systems by passing the costs onto the public health system. What does that mean?

That means it goes on to our books.

So it's not unreimbursed care?

Yes, we just, we provide it and then try to absorb those costs and try to cover those costs other ways.

Just curious. Thank you.

Thank you. Thanks very much. I appreciate the time.

Perfect. Thank you so much. Now we will move on to Planned Parenthood.

Good morning. Chair Members of the Committee. I'm Lisa Matsubara. I use her pronouns for Planned Parenthood affiliates of California. We represent the seven Planned Parenthood affiliates who operate over 100 health centers throughout the state. Together, they provide 1.3 million patient visits annually in California, and they are a trusted community provider. Planned Parenthood is committed to providing equitable and affordable access to the full range of sexual and reproductive healthcare for their patients, 80% to 90% of whom rely on medi Cal and family pact for care.

While abortion, family planning, cancer screenings and STI care are core services for our affiliates, the affiliates actually provide an expanding range of other services that really better encompass their patient needs, including non specialty behavioral health care, gender affirming care and primary care. That's why Planned Parenthood is part of this coalition to advocate for a new MCO tax that provides a sustainable solution to ensure that patients that rely on Medi Cal can receive high quality, affordable, appropriate and timely health care.

We strongly support the administration's proposal to make these critical investments in Medi Cal through the targeted rate increases. These investments are a pathway for sustained, predictable and long term funding in a way that really transforms the quality of care patients receive and reflects our state's commitment to health equity. It will directly improve access to medi Cal services, improve health outcomes by increasing available resources for current Medi Cal providers, and by incentivizing new providers to enroll in Medi Cal.

With regards to the department's 2425 proposal for targeted rate increases, specifically as it relates to family planning and abortion, we support the proposed increases to base rates for abortion services. We know that improving Medi Cal reimbursement strengthens California's network of abortion providers, and studies have shown that state Medicaid programs play a critical role in improving and addressing inequities and accessing abortion and family planning services for their residents.

We also applaud the department's proposal to rely on base rate increases rather than supplemental payments to improve overall reimbursement rates and reduce administrative burdens. While supplemental payments have been crucial for abortion and family planning services over the past few years, the Planned Parenthood affiliates have faced considerable challenges in obtaining payment in a timely manner. We are actually still trying to recover payments from Prop. 56 going back to 2020 as a freedom of choice provider.

Planned Parenthood continues to mostly be dependent on Medi Cal fee for service rates, and this leads to a considerable administrative burden for both affiliates and the plans. We're really eager to be a part of the Medi Cal transformation, and the proposal before the Legislature today will help sexual and reproductive healthcare providers like Planned Parenthood to move towards a value driven reimbursement model that really integrates with the department's vision for Medi Cal's future.

There's also a critical opportunity for sexual reproductive healthcare providers in Medi Cal to help meet key quality metrics for maternal health, STI's cancer screenings, and other gaps in health equity. Accordingly, we urge that the Department also allocate funds towards family planning investments that maximize the impact of this funding through federal matching for family planning services.

We are grateful for the continued partnership with the Department of Healthcare services on how to operationalize the proposed investments for abortion and family planning in a way that best supports California's Medi Cal beneficiaries and furthers the inclusion of sectional reproductive health care providers in the Medi Cal transformation. I appreciate the invitation to speak today, and I welcome any questions that you might have.

So in terms of how number.

The. Third question, the adjustments to the proposal.

So that was, we have provided a counter proposal to the Department with regards to maximizing the family planning match at the federal level to allocate some of the 90 million towards family planning rates and not just abortion services, so we can really fully maximize the federal match.

And if I'm not mistaken, I think the Department touched on this part. Right. Hear me over. Turn these pages .

With regards to the Current Prop 56 rates.

Okay. No. Okay. Thank you so much. Yeah. Okay. Any questions on this? Okay. We're now gonna move towards, I believe, CPCA. Here we go.

Good morning, Madam Chair and Members Dennis Cuevas-Romero with the California Primary Care Association. CPCA represents over 1300 community health centers, FQHCs, rural health centers throughout the state. Really appreciate the invitation to be part of this very important discussion. As we all know, there has been a historic, long underinvestment in the Medi Cal program and primary care. So this conversation is incredibly critical and a historic investment into primary care.

So we really appreciate this conversation as it relates to how our health centers are going to, and our patients are going to see benefit through the MCO tax. There are a couple specific buckets we wanted to talk about. The supplemental payment pool for non hospital 340 B clinics. That is incredibly important for our Members. Currently, the General Fund provides $105 million for our clinics to address the issue that was created when the state transitioned to Medi Cal Rx.

Our health centers, unfortunately lost a chunk of funding that they were able to supplement their payments, particularly programs for our patients that address social determinants of health issues. So the supplemental payment is going to double that to 205 million, or up to $225 million per year. That's especially critical. But I do want to note that, you know, not all of our health centers participate in the 340 B program, so it is incredibly important, but it does not reach all of our Members.

So just wanted to flag that there are other programs, particularly the graduate medical education, that we find especially critical. You know, health centers, as my colleague from the public hospitals mentioned, we provide care, and it's oftentimes really difficult to recruit and retain workforce at our Fqhcs. And some of our health centers do have teaching health centers. So the ability to bring in and train those residents is incredibly critical because, as my colleague from CMA mentioned, where you train, I think it's about close to 70%.

If you train, you'll stay where you train. So that's critically important. I do also want to mention, similar to the comment from the public hospitals, our FQHCs are, cannot access the targeted rate increases. While those payments will be sent to our FQHCs, that money gets returned, at least under the current proposal, in its annual reconciliation process. So the concept of the investment in primary care for FQHCs is fantastic, and I think it's well thought out. But unfortunately, as currently proposed, our health centers will not be able to keep the targeted rate increases.

Can you explain that to me again? So you'll get the increase and then you have to give it back?

Yes. So there's an annual reconciliation process, and because health centers get paid, are reimbursed for their services or with their, what's called the prospective payment system, their PPS rate, any, any rev, any money on top of the PPS rate at the end of the year gets reconciled because.

We haven't submitted that waiver to be able to increase that, or that is.

The current structures for health center payment, and it works the other way. So if health centers don't get underpaid and don't get their PPS rate at the end of the year, there's what's called a wrap payment, and the managed care plans then have to make health centers whole. But because we have our set PPS rate, the way our payment is structured, we cannot receive any funding on top of our PPS rate.

And maybe this is question for you too, Director, or what are conversations looking like to address that issue?

Dennis, do you want me to take this? Hi, Linda Harrington, assistant state Medicaid Director. So I think what Dennis is talking about is federally qualified health centers are reimbursed under the PPS, so they receive at least pps when they are reimbursed for the services provided and the fee for service delivery system, they receive that PPS rate, which is higher than generally the fee for service rates that are paid for the services.

They get an encounter rate that covers the average cost of providing services across, so they get that higher rate when they're reimbursed from the managed care plans. They're reimbursed similar to providers that provide similar services. So they receive payment on that, like code based or on a capitation basis. They then get what we call the wrap payment.

If that does not total up to their PPS, the state makes a payment to the federally qualified health centers for each visit to bring them up to that PPS rate. So what Dennis is talking about is when these rate increases go in, the revenue from managed care plans will go up, but that wrap component will come down because they will be receiving a higher amount. Their payment will stay at the PPS rate and, excuse me, that's a federal level reimbursement level and payment structure.

Can we do something about that? It seems like it'd be great for the rates to go up, but they're not going to reap the benefits. Correct.

So the reimbursement structure is not proposed to change. It still continues to be.

We can change that, right.

We would have to do significant work with the Federal Government to make a change to the PPS rate, and we would have to do some, correct me.

If I'm wrong, everyone in this table will get rate increases. Yes. Except FQA. Except this stakeholder, is that correct? Am I reading this correctly? So. Right.

So we're taking that investment of dollars and putting it in the 340 B non hospital supplemental pavement pool to increase that, to invest in that program.

So you will at the end get increases.

There will be increases on, for the health centers that participate in the 340 B supplemental payment, but not all facilities.

Will be reached correctly. And all the other stakeholders, all their facilities will be reached except this stakeholder. All the hospitals are eligible. All the providers are eligible. Planned Parenthood office clinics are eligible. Regardless, this stakeholder, only a portion eligible. Just trying to figure that part, how we reached that conclusion.

So we worked with our partners at CPCA to come up with the proposal that you see before you. So this was kind of the agreed upon. What we moved forward with was working in conjunction with our partners at CPCA, the proposal that you see CPCA.

So CPCA We're okay with this.

With the increase for the 340 b. Absolutely. That we are, we are, we have been working with the Department to work on that, to transition to a directed payment. I will jump to question three. I think we would request, and we have been having conversations with the Department about being able to access the increase and hold on to the additional funding for the targeted rate increases.

Because if we truly want to invest in primary care, for us, it is challenging where health centers, FQHCs, provide care to a third of the Medi Cal patients to not be able to have that. And frankly, we think that the challenge of going through the reconciliation process at the end of the year is a burden I can imagine on the Department and certainly on our health centers.

And, you know, if we truly want to invest, we would urge the Legislature and the Administration to allow health centers to keep the rate increases and not have that be subject to reconciliation at.

The end of the year.

We're talking about equity. My district is close to 100% communities of color. Where do they go to these two stakeholders? My community Members go to public hospitals. My mom goes to a public hospital and clinics and including Planned Parenthood clinics. So we're talking about equity. We want to make sure we're covering every single. It just seems, at least in this table, it seems unfair that only one stakeholder doesn't get the full benefits of what we're proposing here.

Senator Roth, I just. Is this subject to a waiver procedure where we could go in for a waiver to. I mean, we're paying the money, right?

So we. So today, federally qualified health centers and RHC rural health clinics are the only clinics that receive the prospective payment system rate. So that PPS rate, it's significantly higher in reimbursement than other providers. So the average rate today across clinics is approximately dollar 225 per visit. And so we do have requirements from the Federal Government that. That you have to pay at least PPS. Yes.

So we're saying they get paid more.

Than others in General per visit. Yes.

But nobody gets paid enough.

And I think that's a common theme. Right. As I've called, colleagues have mentioned, I think this is absolutely a historic investment, but it's something that, you know, many of the stakeholders here say that, you know, this is probably a long time coming and we should be having continued conversations on how to further increase investments.

Nope. Thank you so much. We're going to move on to SEIU.

Thank you, Madam Chair Matt Lege with SEIU California. Appreciate the opportunity to come here and speak about this important issue. I think I'll echo a lot of the comments that were made by the fellow panelists.

I did want to say on the front end, from our view, we think that this proposal does strike a balance between supporting the General Fund and trying to avert some of the worst cuts that we're going to, unfortunately, potentially have to consider this year, and then also investing in the Medi Cal program to make sure that we're actually delivering on this promise of not just coverage, but access, which we think is critically important and so appreciate.

Also on the front end, the Legislature and the administration's pursuit for additional federal money. And we just urge and echo some of the comments by Planned Parenthood and others around maximizing federal funds. I mean, it's the smart thing to do budget wise.

And how do we get more money to support our healthcare systems in California, we also see these for the first time of really going back to invest in the program, in the Medi Cal program, where often the MCU tax was used to support the program, but also support the General Fund. So for that, we think delivering on this promise of care is critically important. I know it's something that every Member on this panel has talked about.

I did want to highlight from a worker perspective, one of the critical things is really just there is continues to be a workforce crisis, and this is not going to go away in one year. It's going to take sustained investment to try to meet the need because it didn't happen overnight either. The pandemic definitely made it worse, with one in five healthcare workers considering leaving the profession.

We haven't seen the full extent of that yet because people are still considering retirement, people are still considering changing careers, and sometimes that can take some time, but this shortage exists from primary care physicians to allied health professionals, really across the board.

I did want to highlight a couple of the proposals, one of them being, and it's been talked about, but graduate medical education, which is really just a clear, easy way to make sure that we are starting to do that down payment for our workforce pipeline to make sure we have enough providers to be able to see the patients that we need. One study recently highlighted, by 2030, California is going to be in a shortage of about 10,000 primary care physicians.

So really, to address this crisis of access, we have to make sure that we have enough providers in the system that will take Medi Cal to be able to do that. GME is one of the first and easiest way to do that. As my colleague from the clinics mentioned, California does hold the distinction of being the state that has the highest level of GME graduates retained in the state.

So it's a little bit more than 72% of all of our GME graduates will stay in California and practice in California. By the nature of when they're doing it, often they're putting roots down where the graduate medical education residency slots are. And so continuing to serve those communities and so appreciate the consideration of that proposal and do want to offer our support for that proposal as well. Did want to talk about the Medi Cal workforce pool as well.

I know that's one that's been a couple questions on, but just for that proposal, we are, as I talked about the physician shortage, we're also in a shortage of allied health professionals, particularly. Those are everyone. And I could go through the CPT codes or the job classifications. I'm not sure which one there's more of? I would say there's a lot of different classifications where we need in healthcare, from medical assistants to respiratory therapists, rns, lvns and others.

And we see this workforce pool as really funding and bringing together that partnership to try to address it as an industry and something where sometimes the seed funding where you get people together, starting up training programs, is really expensive and really difficult and administrative burden. So getting this funding to help create these programs then helps ensure that they're going to continue through the ups and downs of the state budget. And so see that as a critical need.

We additionally see this as a way to try to address some of the local needs. So if we were doing something just looking at statewide, we may say, hey, we need, you know, 10,000 more physicians. Doesn't really matter where they are.

You know, with the Medi Cal workforce rule, at least SEIU's vision of it is we could do some of the targeted funding in places like Los Angeles or others that maybe need to train additional medical assistants that speak Spanish as a native language or, you know, in the Central Valley, potentially, you know, grow the number of respiratory therapists we have.

You know, the, from our view, the funding is not overly prescriptive and really trying to get the workers and management together and the industry together to say, what do we need to try to meet the care needs of our patients? And that's the real goal of that program. We also see that MCO funding is a real opportunity to not just increase access, but also direct quality.

And we think that there's a real opportunity, as we're looking at how to put the program together before they get set in concrete to think, like, how are we going to make sure that we're not just saying, hey, based on purely utilization, let's give you more money, but how do we get that delivery system to push forward and say, how are we going to meet the needs of our most vulnerable? How are we going to do that? So we'll highlight that.

I think there's some conversation of the funding for the 340 B clinic. We think that's a real opportunity to try to dig in and say, how do we really serve the needs of our clinic patients better with standards and workforce and look forward to ongoing conversation on that. And then finally, I'll just quickly, you know, sort of wrap up.

Also wanted to share our support around the public hospital funding and appreciate the work that the department's done already to try to address some of the initial concerns that folks and stakeholders had with the proposal to make sure that we're investing overall in our public health care system. And we also share the concern around the long term sustainability of that program to make sure that these public hospitals are continuing to be able to serve the communities that they're doing so currently.

So finally, I'll just say thank you very much for the opportunity to speak. We see workforce and investments proposed by the Administration is a real positive thing to not just make sure that we have access, but we have then the workers and providers there to actually be able to deliver on that access. Thank you very much.

Matt, how do you think your Members would benefit from this?

So I think our Members work, you know, you talked about every provider. Our Members work in every provider that's up here. And so, you know, having more money in our providers means that you can hire additional staff, that you can, you know, pay workers more, retain workers more. And then from the workforce perspective, in particular, both the GME program and the Medi Cal workforce pool, we see the opportunity to elevate the workforce. So have more providers.

But then also on the Medi Cal workforce pool in particular, it gives us opportunity to cradle to career sort of programs to help someone. You know, maybe they're a medical assistant, they speak Spanish now. We want to train them up to be an LVN for both current and potentially future employees as well.

So let's talk about this MediCal workforce pool, if I heard correctly, seed funding to get people together to create these workforce programs. But weeks ago, we talked about workforce programs that we're looking to cut. So why are we investing in brand new programs that have no detail whatsoever and delaying other workforce programs in this Subcommitee? This is my question to everyone here. I'm not sure what's happening. You don't want to be overly prescripted.

I'm not going to vote on anything out of this MCO tax that doesn't have details because we spend out so much money on everything. We just did an audit on homelessness. There's no outcomes. There's no deliverables on all the money we're investing in this whole MCO attacks, there's $275 million of no, with no detail plan whatsoever. I understand your plan. Your plan. I understand your plan.

I don't understand this medical workforce pool, because if we're here, and I'll read verbatim what this is intended for, equity MCO tax is to balance two things, to balance the General Fund and to support Medi Cal investments to ensure access, quality and equity. I don't see how the medical workforce board does that. It's looking to get people together. We're at a point right now is I don't need to have a group of people to come together and tell us what we need to do.

I've said this comment so many times in this Subcommitee. We have data on top of data on top of data of what is needed to close the gap in our healthcare system. We don't need another group of stakeholders coming together to tell us the same thing that another reporter already told us. We need to now do action and invest in the things we know is going to work. What's going to work is we're going to be potentially delaying loans for clinical social workers, loans for RNS.

All that is being delayed for those investments in workforce plans already in place, system already in place in HCI. But we're going to delay that and we're going to invest $75 million in something that we have no details on creating a brand new program.

That part upsets me an MCO, because the next panel we're going to hear about things that are happening right now with vulnerable patients and how we can utilize some of the money to close the gap in equity of things that are happening right now. So, I mean, I'm jumping the guy. I was going to say, I was going to say my host spiel on this, but on this part, I get it. We need a target. We need to get more people in all of these systems.

But if stakeholders are coming to me to ask, hey, vote on something that is not up and running, but also vote on something, a delay that is up and running, how am I supposed to justify that vote? I understand that we need to invest in our current providers now. CNAs do so much work. LVNs do so. And we're bleeding in that. We're bleeding. I know they need support. Bless their hearts. They do so much work and they don't get enough things. I get it.

We need to talk to them. We need to make sure that we're elevating them in their career ladder. I don't think this was going to do it. And unless I am missing the mark completely, colleagues, unless you see something else, that's where I stand on that.

Madam Chair, just to comment. You know, I've been a big supporter of continuing to increase GME funding and of course, medical schools and one in the Central Valley and all that. Of course, the cost and the time that it takes to train physicians and take them through a full residency program and get them in practice. It's a pretty long period of time.

I do think over time we need to also focus maybe on physician assistant training programs and nurse practitioner master's degree programs for our existing cadre of nurses around the state, because, frankly, I think those allied health professionals are going to be key to delivering services in our most rural and most isolated parts of the state, where we're going to have difficult time attracting physicians in sufficient numbers to do the job.

And whether it's with practice agreements or independent practice, that's a debate that goes on all the time. I do think with CMA's help recently, we've made some significant progress and are continuing to make progress in that regard with respect to nurses, nurse practitioners and pas. But I think we're going to have to provide an equal amount of attention to our physician assistant and nurse practitioner training programs in our csus, for example.

And it's going to require a little bit of money because, of course, as with everything else, clinical placements there are difficult to come by. And we're going to have to design a program where perhaps we provide some reimbursement, particularly in the clinical settings, reimbursement to those who are providing the supervision and training for the pas who are finishing their training, and perhaps nurse practitioners as well. So I just wanted to make those comments because it ties into, sir, what you were saying in your remarks. So thank you, Madam Chair.

And I would love to see this detailed plan and saying, hey, with $75 million, we're going to pay for CNA certification, we're going to pay for LVN certification, we're going to pay for PA's loan repayment. That's. Our workforce is bleeding. And the way we address that is to pay the cost of becoming XYZ because that's how it's preventing a lot of people from. From becoming that. Yeah. I don't know if you have anything, Senator Eggman.

No, I would just say the thing and maybe another talk with HKI about how this will support the plans that are already in place because there's already a multitude of workforce plans and getting people out there plans. So maybe we need to do some look at the outcomes for those we're.

Going to be moving on to. I know you gave a lot of remarks ready, but we'll go back to you to put it all together. Sure.

Thank you. Chair and Committee Members Linnea Koopmans with the Local Health Plans of California. LHPC represents the 17 local community based Medi Cal managed care plans that collectively cover over 70% of Medi Cal managed care beneficiaries. Since last year, LHPC has been part of the coalition that's advocated for reinvesting the MCO revenue into the Medi Cal program, and we really commend the legislation and the Administration for your commitment to doing that.

We are supportive of the administration's proposal to continue what was committed in last year's budget for future rate increases in the Medi Cal program, and we believe that the MCO funding is critical both in the short term for investing in the Medi Cal providers and bringing more providers into the system, and in the long term to ensure the ongoing viability of the Medi calculation, the safety net, and also the future Medi Cal workforce.

So I'll briefly respond to the questions that were posed in the Committee agenda and happy to answer any others at the appropriate time. So first is how local plans will implement the rate increases for 2024, and then the second is lessons learned that we hope inform 2025. So since the budget was passed last year, local plans have been working closely with DHCs on how to best operationalize the rate increases in managed care.

As champions of investing these dollars in Medi Cal providers, the local plans want to get it right. However, given the complexity of the Medi Cal delivery system, including capitation and delegated arrangements, implementing any significant changes to Medi Cal financing, like what is proposed in DHCs policy paper, will be similarly complex.

Implementation in 2024 requires final DHCs guidance as a precursor to informing providers about the rate and changes, configuring systems to reflect the new rates, analyzing capitated arrangements to assess whether the rates are projected to meet the minimum fee schedule requirements, and updating or amending provider contracts as needed. While these are some of the fundamental steps that plans are taking to implement the rate increases, these also look different based on the plan's network payment arrangements and provider agreements.

We all have an interest in getting the dollars flowing to providers as quickly as possible, but we also know that implementation is not as simple as flipping a switch. To that end, local plans want to continue to work closely with DHCs in the coming months, given the scope and the magnitude of the changes proposed for 2025, and it will be critical that plans get final guidance as soon as possible.

We would hope that this would come earlier than 2024 guidance, as again, that guidance is the basis for all of the work that has to be done to get the dollars in the hands of the providers. The Committee asked a question regarding how the targeted rate increases are affecting rate negotiations with providers and overall, I would say it's just too early to say how MCO funding will impact those rate negotiations.

I'll note that because 2024 rate increases were more limited than what is proposed for 2025, it will mean that while many providers will see an increase in their rates this year, many others will not because they are already receiving at or above the rates that are required in the new minimum fee schedule for 2024. Of course, that will look different in 2025 given the magnitude of the investments in the future.

We believe the new minimum fee schedule will serve as an equalizer to some extent because it raises the reimbursement floor. But we also know that rates will always vary by and even within regions. And DHCs's approach to align with Medicare localities acknowledges that.

Lastly, with respect to recommended adjustments to the proposal to better improve access, quality and equity, I'd say with, as with any policy, the details are critical and as you've spoken to chair, so we encourage DHCs to explore, together with those of us at this table and other stakeholders, opportunities within the proposal to allow flexibility to be responsive to local needs and to address provider shortages and to best target the funding to get the dollars to the providers that need it mostly.

And I'll close by saying we appreciate the commitment by both the Administration and the Legislature to using the MCO tax as an opportunity to really make an impact on medi Cal beneficiaries. Thank you.

Does adding takeaway impact local health plans at all? Meaning, let me rephrase that meaning. Is adding more to the increases, removing increases, does that impact you in any way?

So all of the rate increases or the vast majority of the rate increases, because most medi Cal beneficiaries are managed care, those dollars will flow through us. So the biggest impact is working very diligently and closely with DHS and our providers to implement it and get the dollars out. Yeah.

Okay. So potentially adding more is just more work to get out.

Yeah. And I think the LaO actually made a very good point earlier when they said we're not only increasing funding, we're changing how we're financing the Medicare program in many ways, and that's just difficult work, but necessary and something we're very supportive of, of course.

And, I mean, we've done part of it now, the rest for next year. Are we, are we prepared?

Are the, I think we have, we have some foundation and some lessons learned from 2024 because at least with professional services, the department's proposing to kind of expand upon that and increase the magnitude of those rate increases. But I think coming back to one of my comments. I think the biggest need to ensure that dollars can get out the door more quickly than they will this year is getting guidance soon and quickly.

And I know that is also difficult and takes a lot of work for the Department as well. But I think that's the biggest need to make 2025 more expedited than 2024.

Okay, our final panelists from the Association of Health Plans.

There we go. Hello, Madam Chair and Members Nick Luizos with the California Association of Health Plans. We represent 43 licensed health plans in the State of California that deliver coordinated care, high quality coordinated care, to about 27 million Californians, and that includes Medi Cal managed care care beneficiaries to the tune of 14.1 million Californians in the Medi Cal program. Our CAHPS Members in the commercial market and public programs pay.

They Fund the MCO tax and will be responsible for delivering the targeted rate increases along with our mutual Members that we share with LHPC. I just wanted to emphasize the MCO tax is real. And I feel like I need to say that at every hearing because I've heard legislators and interest groups testify that this is a tax that nobody pays and that is just wrong. You know, the individuals and employers in your district do pay the tax.

It is real and they see it in their premiums, therefore supporting.

We're thankful for that. we really are.

Yeah, well, Well, you know, we feel we have to say that because it's never easy for Cap to come to agreement to support the MCO attack because of the impact on the commercial market and it increases the cost of coverage for our consumers.

Nevertheless, California's health plans have been able to come together and support the MCO tax in last year's budget because working with the Administration, specifically the Department of Healthcare Services, and with the Legislature, we were able to achieve an MCO tax package that satisfies our basic principles, that the tax is affordable to our customers, and that finally it is invested towards improving the Medi Cal delivery system.

And I will just say no organization has clamored longer, except perhaps LHPC, that we achieve an MCO tax that is invested in the medi Cal delivery system and to make improvements and not just supplant resources, but that supplement them. So it was extraordinary to see the coalition formed last year to help make this happen and of course, to work with the Legislature and the Administration on this.

Our spending priorities last year, as health plans were directed towards improving primary care and specialty care and graduate medical education and a couple of other items, we are pleased, like others to see that the Governor in his proposed budget is honoring to keep the commitments towards increasing funding for Medi Cal providers, which we do believe will significantly improve access to quality healthcare for Medi Cal Enrollees.

We are also supportive of the early action item, SB 136, to increase the Medi Cal component of the MCO tax to help with our budget crisis. At the same time, Cap does strongly believe that the MCO tax revenues should be used to Fund improvements to the Medi Cal program and not just backfill existing spending.

So we do note the administration's proposal does gradually shift some resources, $3.1 billion over the life of the tax, from the Medi Cal provider Payment Reserve Fund to the General Fund, and that could limit the ability to Fund additional investments in the Medi Cal program.

Cap does believe that the investments made possible by the MCO tax must remain consistent with the intent of last year's budget agreement, and we urge the Legislature to ensure that the funds be directed to the Medi Cal delivery system and not program areas unintended by last year's budget.

So I'll get to I know you will ask me this question, Senator, so I will just get to the are there any adjustments in the administration's proposal that you believe would better improve access to care, quality care, or equity for medi Cal beneficiaries?

And I would echo the sentiment that others have already raised and we would like to work with the Department to repurpose the health equity approach to more directly address the unique needs of local communities with the goal of increasing underrepresented providers and improve access, quality and advance equity. We agree that addressing this issue is very important, so our goals are aligned. I think we just like to work through an alternative approach that would have more impact.

So onto the tri, I'll probably echo a lot of things that Linnea said, but health plans we're very proud to support improving California's Medi Cal program, since many of our Members are obviously heavily invested in that program. Our Members are currently working with the Department of Healthcare Services on how to effectuate the TRi and making these improvements in primary care and specialty care.

We're very appreciative that the Department brings in health plan representatives together to meet and discuss the TRi implementation and the opportunities they have provided to our plans to share feedback on kind of the technical aspects of this implementation of these rate increases is complex, it's unprecedented, and regulatory guidance is needed from the Department, and this guidance continues to evolve and is not yet in its final form. Receiving that guidance as soon as possible, will be critical to the implementation of these rates in 2024.

And we hope to leverage lessons learned in this year for 2025 by building on, you know, and testing the methodologies that will be used in this year. On that note, it's, again, it's critical for guidance to come out for 2025 rate increases. And, you know, we believe that guidance should come out as early as this summer if we're going to hit the ground running next year.

So California's health plans, I'll just close with this, are very proud in providing medi Cal managed care to billions of beneficiaries in this state. And we definitely want to be a part of the discussions about how to effectuate these increases moving forward. Thank you.

Yeah, I would just say what everybody's said on that equity money that we really need to measure not just coming to a deal, but having impact on what we're trying to have impact on.

Thank you so much to each panelist that came and spoke and gave their perspective. And I'll cite some remarks before we move on to the next panelist. In the past two months, this Committee has had to hear proposals on delays and cuts on agreements that the Department came to with those certain advocates, and I heard that sentiment be mentioned in this panel. The IDD population made an agreement in 2019 for rate reform, and the Department is coming to proposing to delay that.

Foster advocates made an agreement with the Department on increased rates for silps and the departments coming back to negate that agreement. I think that justification for what was agreed on last year does not stand this year because there are various examples of what this Subcommitee has had to listen to already in proposals on agreements that those certain stakeholders made with the Department.

So if cuts to foster care is on the table, even though that was agreed on, if cuts to CalWORKS and so many things that were agreed on is on the table, then the MCO tax, what was agreed on last year for me, and I don't speak for my colleagues, is on the table for rearrangement because there's been no pattern of what the Department has come to us and say, hey, we're holding the line on everything that we've agreed upon and we're only proposing cuts or delays for things that are brand new.

If there was going to be a pattern, I wouldn't say this, but there hasn't been. So that's where I stand on that thing. I know the GME program. I think that's great. I hope I didn't come off as saying that that shouldn't be a program in the MCO tax. I think that's phenomenal. Anything that we are doing to invest in our workforce is going to be great. All I want is just some deliverables, outcomes, accountability and ensuring we're meeting the goals of what was intended.

In this group of stakeholders outside of the plans, there are only four stakeholders that are reaping the benefits. That's it. Four hospitals, CM doctors, providers, providers as a whole, Planned Parenthood and CPCA. Four. I do not think that is a robust stakeholder coalition. I do not think so. For a tax that will bring us close to $28 billion over the next couple of years, 7.1 of those billion to medi Cal reimbursement rates, I think more people should have been at the table.

When we're talking about equity, the people we're going to hear next is because they haven't had the equitable share, perhaps because they don't have the ability to be at the big dog table. But I have the ability to be at the big dog table and I can represent and bring the voices of those people to this table to ensure that you listen to what else we can add to this. Because we're dealing with the deficit.

We don't know when we're going to come back to the table. We shouldn't make new friends. We need to make new friends. We should let these new friends be part of this astronomical ly beautiful approach. And I thank the health plans for coming to the table on this. I do thank them for coming to the table on this. And we wouldn't have this without y'all.

And I thank CMA for being instrumental in coming to the table and saying, hey, we could do something else differently with the MCO tax. We could invest in our medi Cal reimbursement rates. There are things you're going to hear from in the next panel that in fact saves us a lot of money for hospitals.

You're going to hear from private duty nursing, who you have patients in your hospitals that are taking up a bed months and years on end because there's no room for them to live with their families because there's no private duty nursing. You're going to hear about people leaving these, these workplaces because we're not paying them enough. We're talking about workforce.

So many of the entities that you're going to hear from are struggling because people can't work in these, addressing the most vulnerable things because we're not paying them enough. We're going to be talking about individuals with disabilities, children with complex needs that need support so we can still address those needs. I need everyone to have an open mind because we need new friends here, because this is just a great opportunity for us to close the gap on so many things.

And the number you're going to hear, I added all the numbers up. Of what the request? There's three unknown, but it's going to be $107.8 million for the first year and 164.6 million ongoing. That is less than the 200 million that is being asked for equity with no plan. We're not asking for a lot of money out of the $28 billion we're going to invest in this. It's not a big ask.

It's such a small chunk, and it's not even diving into any of your allocated funds. I spoke about the 275 million, which includes the labor workforce. We potentially don't even need to touch that. It's just the 200 million equity part that we could rearrange elsewhere. So those are my remarks on that. Before we start with our next panel. Thank you.

If you're positioned to speak, we can swap out when it's your turn. If you need to speak. Okay. We're going to be hearing from eight different proposals. Ask requests to be included in the MCO tax. We're going to start off with the California Association of Health Services Services at home. I ask that you introduce yourself. I don't recognize every single one of you, so I don't know where to turn to introduce your name as well.

Hi, Senator Dean Chalios. I'm the President and CEO of the California Association for Health Services at Home, serving home health hospice and home care providers around the state. And I'm here today to talk to you about medically fragile children. Again, I was here last year and I'm happy to be invited back. These are medi Cal beneficiaries, and these kids are really sick and they need the kind of care to be treated at home that their families can't provide.

And so we have to rely on private duty nursing to take care of them. These are highly specialized and highly skilled both rns and lvns that take care of their feeding tubes and their ventilators and provide other specialty care for them. Unfortunately, because of the woefully inadequate, you're going to hear that a lot, probably Medi Cal reimbursement rates for this service. We're not able to attract the nurses and pay them what they deserve to take care of these kids.

So the end result is these kids end up staying in the hospital despite the fact that they've been authorized by Medi Cal to receive the private duty nursing services at home because we can't find the providers to take care of them. So they end up staying in the hospital at 5710 $1000 a day. When our estimate, our best estimate is that we can take care of them at home for about $1,500 a day, depending on their condition.

We're asking for a 40% increase for this specialty care. Senators. These families and their patients have suffered enough. It's time to get them out of the hospital. Imagine having a child in a hospital that, you know, should be home, can be home, and should be home, but they can't get out of the hospital. So thank you for taking the time to listen to this. Senator Menshevar, I appreciate your zeal and your commitment on this issue as well. And we're happy to work with you to see what we can do to get these kids back home with their families where they belong. Thank you.

I visited one of those homes in my district, and there was a private duty nurse at the home. And I was able to speak to the mom and the nurse didn't have a time, a moment to speak to us because she was so busy with a child.

When we talk about equity, imagine if you are a parent with no access to a car and you want to visit your kid every single day and you have to take multiple buses to get to the hospital to visit your kid. And perhaps because most of the time, maybe they are at a children's hospital or specialized hospital, it's not your local one. We want to talk about equity.

This would remove barriers from accessing visiting your child as a parent because then you would have your child at home with you.

Absolutely, Senator. And a lot of these people stop off at the hospital on their way to work. They go to work, they stop off at the hospital on the way back, they go take care of their families and maybe they'll get back to the hospital a third time to tuck their child in and kiss them good night.

And there was a recent analysis and showcase how much the state would save.

Yes. Yes. And we've shared that with the Committee. The estimate is about 175 million a year. It's a savings to the Medi Cal program. It's something that would be good for everybody.

Thank you so much. We're going to move on to our California Association of Adult Date Services. Who's Lydia?

Oh, I'm right here. Hi. Good morning. Senator Menjavar and Members, thank you for the invitation to be here today. I am Lydia Missaelides and I serve as the interim Executive Director for the California Association for Adult Day Services, representing providers of Medi Cal funded community based adult services known as CBAs. Thank you again for your invitation.

I'm no expert in healthcare financing nor the managed care tax, but I do consider myself an expert in adult day services policy and financing, including our CBAs and adult day programs, and have devoted my 30 year career to program development, policy and organizing to support this model of care. And I do know a little bit about the participants we serve. And I have a family Member on Medi Cal who suffers from severe mental illness. I'm here to ask for your understanding and help.

Our small but devoted provider community and the participants and families they serve have been buffeted by forces for more than a decade that are beyond their control and are in crisis today. First, the great Recession with attempts to eliminate this program, which ultimately failed due to legal challenges and ultimately cost the state more than it saved. During this time, rates were cut 10% while Yall restored the rates in 20194 managed care plans failed to do so.

Two are making progress to do the right thing, and two are still a work in progress. Most centers are being reimbursed at the minimum medi Cal rate of day for 2024 services with 00 $9. Just calculating inflation, that rate number alone should be $122 per day. No business can survive, let alone thrive, being paid with $2,009 in today's economic inflationary environment. And uniquely for our centers, there is no Medicare or private insurance payer to make up that difference.

Federal VA does pay, though it's hard to get a contract, and they pay twice the medi Cal rate. Senator Mello I've been around long enough to remember Senator Mello in person, who was a fierce champion of adult day health and older adults, and a real visionary. He projected way back in the 1980s that we needed 600 centers across the state. At our peak, we had 364. Today, there are only 294 centers. Many counties have not one program in five years, 18 centers have closed.

So Marin county now has no adult day health. San Joaquin county lost its only center. Others are hanging on by a fiscal thread. The pandemic with the stressors that it brought continues to resonate today. 5000 people could not return to our centers when they were told that they had to because they had decompensated, deconditioned or passed away, and they could not sustain a four hour program day. Then we had major cash flow problems because of medical calaim changes.

And even though we've proven our grit and resilience, we are at a breaking point. The latest assault was the health change healthcare cyber attack that stopped reimbursements for six weeks. And I do have to acknowledge Department of Health Care Services and La care that worked with me to provide some cash advances to centers that were going to close their doors without that help. Workforce challenges have been discussed. If I may share two quick stories.

Home Avenue and Downey is a center that's been around for more than 20 years. Their founder, Nell Pineda, is a nurse with 50 years of experience. She is still working. She climbed the roof of her center the other day to look for a leak. As a matter of fact, there's a Jack in the box on their corner with a huge banner saying $20 an hour. Come work for us. Her direct care staff see that banner every day on their way to work.

She cannot afford to pay those hardworking, dedicated staff dollar 20 an hour today, and she came to Sacramento. She was in this building yesterday. Before she left, she told her staff with tears in her eyes to please hang in there. I'm coming to Sacramento to fight for a wage increase for you. But Nell and her social worker daughter are exhausted, fighting every day to keep their doors open and to keep her staff from fleeing to a better paying job.

Even managed care companies are taking staff from our centers after they have been well trained and this family does this work for her community. But they're at a breaking point. Acenterin Ventura Oxnard ADHC told me her drivers have been approached five times in the last year to come work for FedEx or UPS because they make a lot more money. And we know that staff turnover is harmful to participants. It upends deep trusting relationships, interrupts routines, costs, the center time and resources.

And that's only if you can find a qualified person who is of the community, of the culture, and speaks the language of the participants. That is what our centers are known for and what they do best. And on top of that is willing to work for low wages. So try to do all this for $9.50 an hour, which is what our rate calculates to over a six hour day.

And then try to find qualified staff when you have to compete with the 25 hours minimum wage for healthcare workers that y'all passed. It doesn't apply to CBas, but everyone knows about it. I need to wrap up. I know. I also the last thing I just need to say is that is a complete myth that there's any type of negotiation going on between an insurance company and our cbas providers.

Just two days ago, a managed care plan told one of my Members to his face, we don't negotiate rates. So please understand this. Believing that there is a negotiation between a small business, a small family operated business, or a nonprofit and a huge insurance company is a myth and it is harmful to developing policy and rate structures that work.

And that's why we're sponsoring AB 2428 by Lisa Calderon to set a rate floor and why I'm trying to help our Members figure out how to talk to their plans about rates. We can't pretend that we can achieve equity, access and quality by paying rates that belong in another decade and are completely disclosed connected from cost. Thank you very much.

Thank you. Lydia. Lydia, can you talk to me why we believe or you believe that this would be a no fiscal have no fiscal impact?

We're still working with the Department of Healthcare Services on any kind of fiscal impact way deep in the actuarial lisette rate weeds. And I know that Scott is very familiar with this, as are many in this room, because most of the plans did restore the rates, but the four did not. And two of them did start restoring the rates retroactively. And there's a two year settle up, look back period. I can't tell you what the fiscal impact is.

I don't know if the state can, because there's all these intervening factors here that are, I think, going to make it very difficult. But let's just be clear. This is such a small amount of the insurance company business. It's what you guys call budget dust, and it will make a huge difference in keeping these centers alive in their communities to serve these very vulnerable people. Just like you're going to hear from my other colleagues around this table.

We cannot continue to operate with rates that do not even remotely reflect costs and do not reflect the complexity of the populations we serve who are getting more and more complex every day because people are getting discharged from hospitals faster.

Was there a specific percentage you're looking to increase?

Well, just inflation alone, not even taking into account minimum wage increases, is $122 a day. Right now we're at 76. I haven't done the math to calculate that, but what was thought, I can see, is working on that right now.

We have the number 122.

You said 122. Yes. And I have to say veterans Administration pays about twice that in their published rates and they pay for transportation separately if the center doesn't provide it themselves.

So it looks like that's where I'll be in about 50 years.

Well, we hope to be there for you.

Okay, thank you so much.

You're welcome.

We're going to now move on to.

Can you, and forgive my ignorance, is there a distinction between you and, or the way you Bill and the pace programs, which seem to be.

Yes, absolutely. Absolutely. Because pace is on an all inclusive capitated rate basis. Medicare and Medi Cal Dollars. This program was specifically designed by Leo Mccarthy and others back in the day to be a medi Cal only program because we are an alternative to nursing homes. So we are paid a daily rate for all the services that are regulatorily required to be provided. Nursing, social work, transportation, meals, ot pT, speech on and on for $76 a day. In some cases, 68.

And you don't deal with any population over 65, just under 60?

oh, no, no, no. We serve anyone 18 and over 18 to death.

So then you do have the Medi Medis?

We absolutely do. That's the bulk of the folks that we serve.

But you just don't do the capitated rate. You do.

Yeah. And there's no Medicare Dollars. It's medi Cal only. Yeah, thank you. So.

But why not go to a capitated like the paces?

We have approached our managed care, some managed care plans with that. I've had a crash course in managed care financing over the years and still no expertise. And we have approached a couple of plants, say, hey, would you like to try that as an experiment? And I've been rebuffed at every turn for coming to them with various ideas. So it's just me and a couple of staff. We don't have a lot of resources to invent something new.

And I asked because you mentioned San Joaquin county lost theirs. But we do have a new robust.

And some of the new paces are not open to the public. They're only serving people within the pace insurance product, if you will. So then that does exclude people who are just coming from the community. Senator Roth, I'd love to chat with you more about that sometime.

I'm just curious, this failure to negotiate is that across the state with the medi Cal managed care plans? I mean, I'm down in Riverside County, so we have LEHP.

No, every plan is different. I've gotten to know many, many of them, and we have had some success with some of the plans voluntarily raising rates. They tend to be county operated health systems, coast counties that are a little closer to the community, if you will. So, no, it is not universal, but no plan is paying anything close to what it actually costs to provide the service. Thank you for that question.

Thank you. Moving on to our third speaker from the congregate Living Health Facilities Association.

Hello, everyone. Thank you for giving us the opportunity to be here today. My name is Mariam Voskanyan. I'm a registered nurse and I own and operate a congregate living health facility. I'm the President of the Congregate Living Health Facility Association as well, and we started this Association actually just last year to get attention for our desperate fight and increase our daily reimbursement rate and to be recognized as a managed care long term care provider for medi Cal recipients.

For those who don't know, a congregate living health facility, also known as a cliff, is a six to 18 person residential home that provides 24 hours a day, seven days a week medical care to people who are in need of a lower level of medical care than acute care hospital, but require more care than a nursing home. Aside from medical care, our residents also receive 24 hours nursing supportive care in addition to pharmacy, dietary, social, recreational, PT, OT, St, everything, and so much more.

Our patients thrive because they live in a community and in residential settings. Despite the many severe disabilities that they can have, they participate in community events, outings, religious gatherings. Some even hold jobs while living in our facilities. Our patients have come to live in cliffs for many different reasons. Diagnoses such as car accidents, sports injuries, strokes, and ALS. The average age of our patient is about 44 years old.

They often do not have families or their medical care needs or so much that their family Members cannot manage them at home. Many are quadriplegic, which means they can't move any of their limbs. Some are on ventilators and therefore grapple with many deficits such as motor skills or communication. Most of our patients not only require 24 hours medical care, but also require maximum assistance with activities of daily living, such as feeding, toileting, bathing, anything that we take granted on a daily basis.

With all due respect to seniors, sending our patients to live in a nursing home is very inappropriate and callous. Our patients who choose to live in a cliff. Our patients who choose to live in a cliff. I'm sorry. Because they have the desire to live a fulfilling life and do not want to become institutionalized.

They often have personal desires and needs, such as decorating their rooms to their tastes, such as using Harry Potter posters and bringing in their personal furniture and other items to make them feel as close to home as possible. Many of our patients wanted to attend this hearing today to ask for your support for a rate increase. Unfortunately, due to their disabilities, our patients are not physically able to make the long trip via car or airplane.

Some of us are from Southern California, but I am here in front of my district. Yeah, from your district, but I am here in front of you today to respectfully share with you that our daily reimbursement rate of dollar 490 has not been increased, not even $1 since 1983. I mean, that's. That's hard to believe.

While other providers have received some sort of supplemental rate adjustments, increases for COLAs grants, or even relief funding during the pandemic, I want to say that we received nothing over the last 40 years. We are asking you today to increase our daily rate from 490 to 675, an increase of $185 for the 229 medi Cal waiver patients we serve. While in no way is our small rate increase proposal to commiserate with our current costs, we fully recognize the state's dire fiscal situation.

And so we are asking for a small amount of relief just to keep our doors open. We just cannot wait another year. Our patients cannot wait another year. We do not know the numbers, but we regularly hear of cliffs closing after desperately trying to keep their doors open. Our patients and our families. Our patients are families to us. We cannot possibly even fathomize the idea of closing and making them move. That's beyond our comprehension. But it is very real.

For every single one of our cliffs in California when we were founded, you could buy a gallon of milk for a dollar. The median price of a home in LA was $49,000. The median price today in LA is $1 million, with a 95% increase. Just alone, our CDPH licensing fee for cliffs have increased 700% since I started my cliff in 2012. You know, so again, the reimbursement rate adjustment for cliff since 1983 has been zero.

As you can imagine, all of our operational costs have skyrocketed since 1983. There's labor, insurance, food, medical supplies. We are desperate to pay our staffs, our lvns, our cnas, a fair wage and make improvements to our patients homes and invest in model modern medical technologies to better care for our patients and ease the work of our staff. Updating a home modification, something like just adding a wheelchair ramp, could wipe out the entire cliff's budget surplus.

You may ask how we keep our doors open with such a deplorable medi Cal reimbursement rate. Our patients who do not receive medi Cal may have some limited coverage through avenues such as workers comp or other health plans, such as private insurances, and other coverage through health plans. I'm sorry, I lost my space. Okay, so usually these other coverages will pay nursing homes about $1,000 a day.

The health plan offers contracts for us with temporary rates through letters of agreements, and that's how we are able to keep these private pay patients in their homes. Cliff should be playing a much larger role also in taking patients from hospitals so that these long term hospital patients don't stay in hospitals and eat up dollars. We can provide the same care, long term care for these patients that nursing homes and subacute facilities provide in our homes.

So we're asking to not only get a reimbursement rate increase, but also to be able to take these patients in our homes and become a managed care benefit, because we're not cliffs, are not even a managed care benefit at this point.

Final thought.

So, in closing, we want to truly acknowledge the state's fiscal situation, but we have no choice but to beg for a small amount of an increase to keep our doors open. Thank you.

Are you Court?

Yeah, I'm sorry. I'm Court Green. I own four congregate living health care facilities in Senator Roth's district, so I wanted to be here to answer questions.

And we have somebody from Miss Groves district. And then.

Hello, my name is Julie Julia Rayan. I am from Fresno, California, and we own three congregate living health facilities in Fresno. And here to answer any questions as well.

Thank you so much. Senators. Any questions on this topic? Okay, the past three speakers I've visited, I visited a home, I've worked out with some Members at Seabass. They're doing some exercising, and I've visited a cliff, you know, looking to whatever we talk about here, have some kind of understanding of these things and seen firsthand. And I spoke to a patient there, and you know how, and I did see his room, right, how decorated it was. It was really great.

Okay, so moving on to our next speaker from the children's partnership.

Hi. Hi. Not yet. There we go. There we go. Hi, I'm Kristen Golden, Testa with the Children's Partnership, and I wanted to thank you all for having us be able to share with you a proposal on multi year, continuous Medi Cal coverage for young children. In 2022, California was one of the first states in the nation to enact multi year continuous coverage for young children. Zero to five. And now we need funding so it can be implemented.

This continuous coverage policy protects young children from having gaps in their Medi Cal coverage. Once enrolled, the little ones can stay covered with no annual eligibility renewals until they turn age five. This is not a new investment. This is a protection on the state's existing obligations to the Medi Cal Children. Continuous coverage is a foundational to ensuring that Medi Cal investments and reforms already made are set up for success. Also, protecting children's medi Cal coverage is a necessary first step to ensuring access.

You heard from the panel before here that having a coverage card is necessary but not sufficient. You need to be able to get into a Doctor's office, but I want to emphasize that it's necessary. If you don't have the card, you're not able to take advantage of of getting that accessible healthcare service. So you need the card.

So improving Medi Cal participation and access is for not if children and their families lose the Medi Cal coverage to pay for their healthcare services, they can't get in the door. A primary purpose of the MCO tax revenue is to strengthen Medi Cal and increase access, particularly focusing on preventive and primary care and not prioritizing what is effectively already the state's responsibility of keeping eligible children covered undermines a massive investments that the state has made in different reforms.

Like Calaim, the provider rate increases, the children's youth and behavioral health initiative, all those are for naught if you don't have the child there with the coverage. If eligible young children are dropped from Medi Cal, they're not able to take advantage of all this good work. Many of the recent reforms are in part in response to decades of Medi Cal's dismal performance in healthcare access, particularly for children with preventive care needs and access to mental health services.

A 2018 state audit found that only about half of Medi Cal children are receiving preventive services, and the follow up in 2022 didn't have much improvement. Similarly, in audit this past year, Medi Calderon were found to not have adequate access to mental health services. How can a health plan effectively manage a child's care and how can the doctors and clinics and hospitals provide timely care if the child loses Medi Cal during some of their most critical developmental years?

The current Medi Cal unwinding results are demonstrating the impact. Even despite DHS's laudable efforts to make eligible renewal easier. In the last few months, over 300,000 children have lost their Medi Cal coverage. That's about 80,000 young children, and these children are still eligible. The disenrollment rate is due to procedural reasons. The vast majority of them long wait times. They didn't get renewal forms, they submitted them, but they didn't get received by the county. Not on their fault, but they're losing coverage.

Even short gaps in coverage are going to be devastating, particularly for children with special health care needs who are requiring life saving medications, interventions.

And for young children that need frequent well child visits in the first five years of life, when 90% of brain development is occurring, children require at least 14 well child visits for screenings at specified ages for early detection and developmental delays, a child can't go back in time to get to make up a missed age, a sensitive screen, or missed opportunity for an early intervention.

By one example that's just really heart wrenching was a family with an 18 month old was screened for possible developmental delays and really needed a more thorough assessment. But she lost her medical coverage and it took her mother several months to get coverage reinstated, delaying vital early intervention for this little one. This delay accounted for a significant portion of the little one's life and brain development.

And you can imagine the stress that that must be causing for the family to not know the answer because they didn't have the coverage to get that assessment. Most importantly, continuous coverage works. We've seen that in the national demonstration that we had during the pandemic that when you have continuous coverage, you don't have gaps in coverage and children can be able to get the services they need. It is also a cost effective and a powerful access strategy.

The federal window of opportunity is upon us right now. We ask that you move and approve that they move forward with a waiver now, because we don't know what a change in a federal Administration will mean next year if one should occur. So we really need to move forward with this proposal now. We thank you again for hearing this proposal, and we hope that you'll be able to Fund it for implementation. Thank you.

And I believe this would help address, I think we talked about it a couple weeks ago, how, you know, we fare very Low compared to other states. Yes. On the zero to three to zero to five in children access and visits, right? We're below the state, the national average, so all these investments will be good. But we also need to make sure the kids keep their coverage so that they can get into those visits, especially when they're young, when they have so many that they need.

Okay, moving on to the next topic from California pan ethnic health network.

Thank you, Selene Betancourt here on behalf of the California Pan Ethnic Health Network. CPEHN we are a statewide healthcare consumer advocacy organization focused on reducing and eliminating racial health disparities in healthcare and access and outcomes. We really appreciate your comments thus far regarding equity and how we connect this to health outcomes and measure our success in investments.

And we do appreciate the administration's efforts to incorporate equity considerations within the targeted rate increase proposal and our supportive equity adjustments to incentivize providers to participate in Medi Cal, specifically in regions where community Members experience barriers and access to care. I will be discussing our recommendations to strengthen and focus the administration's proposal, but I do want to start off with the workforce that has been excluded from any MCO tax funded increase thus far, and that's community health workers promote Torres representatives and health representatives.

These are providers that provide crucial services in underserved, low income communities of color. For decades. The majority of the CHWPR workforce are women and people of color, specifically Latina women. Their services include culturally appropriate health promotion, education, assistance in accessing medical social services, care coordination and patient advocacy, and much more. CHWPRs really are the glue between patients and providers. They fill the gaps in the current workforce. They reduce costs. They increase access and improve health outcomes. Specifically for communities of color.

Most CHWPRs are earning between 60 and $30 per hour, but their rate really only covers about 38% of their total costs. These wages for these workers are trapped in a cycle of poverty and are not sufficient to attract or build the healthcare workforce that California needs.

Individual CHWPRs should be allowed to Bill for the preventative services that they provide at a minimum of 87.5% of the Medicare rate, which is comparable to the other enhanced rates of the other providers to provide the same services and utilize the same services service codes.

Moving on, I also want to discuss recommendations for the department's proposal and how that could be strengthened by utilizing a methodology that specifically accounts for racial disparities, rather than focusing solely on geography, which has been shown to mask disparities, especially for smaller racially and ethnically diverse populations that are geographically dispersed and often not adequately represented in data sets. While the department's methodology identify service codes in particular localities, it is unclear how only targeting service codes will ensure an equitable distribution of funds across provider types.

To ensure that these adjustments meaningfully advance health equity for Medi Cal Members, they must be intentionally designed to close racial disparities and disparities experienced by other groups. So we recommend that the Department identify providers that provide underutilized and effective services for specific populations, for example, mental health screening and primary care for Latina and black patients.

Providers that serve a higher than average percentage of Medi Cal Members as national researchers found that providers that see more Medicaid patients actually end up taking more Medicaid patients, providers that serve a higher than average percentage of medi Cal patients with disabilities, LGBTQ patients, and disproportionate numbers of specific racial and ethnic groups, such as black and native Hawaiian or Pacific Islander populations, and then practices that utilize team based care.

As research has also found that practices that incorporate providers like nurse practitioners and nurse midwives are more likely to accept new Medicaid patients, we also recommend that providers receiving any equity adjustment be required to participate in the state's data exchange framework, which going forward would help address the incomplete data concerns that the Department has identified.

And furthermore, the design of the equity index used to identify the localities could be improved by using a more comprehensive set of data sources beyond workforce related indicators such as Medi Cal Member claims data, health disparities data, and other types of analyses that consider smaller populations that are often excluded in broad area based social indices like the healthy Places index, these analysis can include direct engagement with communities through regional surveys and listening sessions, as well as research methods like using multi year pooled data and oversampling.

This data should also be used to assess the effectiveness of the equity adjustments by establishing benchmarks for providers that demonstrate a reduction in racial disparities across the services they provide. As the inclusion of social risk factors alone in an equity index will not necessarily translate to improvements in social determinants of health that are non workforce related. In short, the Department, to the best of its ability, must develop methods to track if Members access to care and health outcomes improves because of these additional payments.

CPEHN strongly supports the establishment of an equity adjustment and recommends a state led public stakeholder engagement process for recommendations and feedback on the equity index and the rollout of the adjustments, and we urge the Legislature to consider these investments that center Medi Cal Members and really advance racial health equity. Thank you,

The Lao recommended. One of the recommendations is regarding potentially holding on off on some parts that aren't fully could, this being one of them. Do you stand on that same page that work on getting the full detail of this before rolling it out?

We see this as an investment right now in how we can support communities of color and advance racial health equity. And we would want to work with the Department and how we can really clarify and the methodology and work this through. We definitely believe this is a foundation and how we identify communities that had been historically underinvested.

I can see the equity index being used for other areas. We want to make sure that it's solid, that it doesn't exclude populations. We would encourage then the Legislature, you know, look at the other providers that have been excluded when thinking about what to do with an equity, with the equity money that's been proposed. And our priority then would be for the CHWPR is to receive that rate increase as they are most directly impacting equity at this very moment. Okay.

Okay. Next topic.

Hi Linda Nguy from the Western center on Law and Poverty. Good afternoon. Linda way with Western center on law and poverty. Firstly, I want to thank you for making room at the table, or actually creating the table for us to discuss the need to timely implement share of cost reform, which was included in the 2022 budget and now needs to be funded.

The share of cost program acts as a critical pathway to health care coverage for low income older adults and people with disabilities who have significant healthcare needs but are just above the free medi Cal income limit. A share of cost is the amount an individual must pay for healthcare before Medi Cal kicks in. A person's share of cost is their monthly income minus $600 and is based on the antiquated idea that an individual can live off of $600 a month.

This outdated income limit forces people to spend more than half of their income on health care every month. As a result, older adults and people with disabilities are pushed into extreme poverty, which may explain why California has the highest rate of senior poverty in the nation and an increasing number of people experiencing homelessness with a disability. Think about it. Could you live on $600 a month? That's what the program demands of older adults and people with disabilities who need care.

When people can't access health and at home care, they often end up hospitalized or institutionalized or have to rely on already stretched family Members to provide unpaid care. In some cases, families make the impossible choice of paying for their health care or making rent and having food on the table. This is an equity issue. It's not fair that older adults and people with disabilities are the only population forced to pay so much to obtain essential health care.

Most low income individuals receive their healthcare for free or at most do not have to pay more than eight and a half percent of their income on healthcare coverage. Yet low income older adults and people with disabilities who are only $1 above the limit for free Medi Cal and live on fixed incomes are expected to pay over 60% of their monthly income on healthcare expenses.

Expenses share of cost reform would raise the maintenance need income level that $600 to 138% of the federal poverty level, the free medi Cal limit, so that if you're $1 above the Medi Cal limit, your share of cost is a dollar instead of that $1,000 plus. We, along with 70 organizations, urged the Legislature and Administration to ditch the deductible and timely implement share of cost reform.

Thank you so much, Linda. Moving on to our next speaker from California Chiropractic Association.

Madam Chair and Members of the Subcommitee, Lloyd Friesen, representing the California Chiropractic Association. Certainly, thank you for inviting us to the big dog table to have a discussion about our issues. I wanted to quote you. I'm going to limit my remarks to just the two questions that the Committee has requested. The first one is Chalkiro's request to reinstate the chiropractic benefit to Medi Cal.

Historically, doctors of chiropractic and the benefits or the services they provide have been an optional benefit, and we've had to go to the Legislature and the Administration to budget funding for the services that we provide. And following the financial crisis in 2010, many of the optional benefits were restored, but not chiropractic services for Medi Cal recipients. So over the past three years, the Association has come with a budget request to reinstate that benefit, this Subcommitee, and we've had Senator Medjovar and Skinner support that request.

Unfortunately, when it goes to the Administration and the leadership of the Assembly and the Senate, they have not seen fit to agree with them, and the funding has not been given to inclusion of Doctor Zakhara Pratek to the point that's been made several times here, and certainly Senator Medjovar said it before we came up on this panel, is that there's got to be a cost savings associated with an increase in whatever budgetary dollars are going to be placed into the Medi Cal budget.

We would say that there are numerous studies that show that inclusion of chiropractic services in a benefit plan will actually reduce hospitalizations by 42%, surgical interventions by 32%, reduction in advanced diagnostic evaluations, and so on with the conservative management of chiropractic, manipulative therapy and other services that we provide, it seems unfair that people that have employer sponsored healthcare workers compensation, the VA, federally qualified health centers, rural health care centers, and other delivery systems have the opportunity to see chiropractic doctors. Medi Cal does not.

So we again request the proposal to restore the benefit. The second ask is an issue where the times when chiropractic benefits have been in place is that the clinical situation has been limited, two visits per month, irrespective of the clinical necessity of the patient. So what we're requesting is a 24 visit cap, if you will, or 24 visit per year opportunity to make sure that the clinical needs of the patient are addressed during a particular episode of care.

And once again, there are numerous studies that support our ask in terms of cost savings, as you've articulated, in addition or in comparison to the cost. And it's for these reasons and the discussion that's taken place here today that our ask is consistent with the discussion with respect to working as a team to deliver quality cost saving services to Medicare. Excuse me, Medi Cal beneficiaries. Thank you.

I appreciate that. And then our last speaker comes from the California Orthotic and Prosthetic Association.

Thank you, chair and Members. My name is Spencer Green, and I'm a certified orthotist and prosthetists, as well as the current President of the California Orthotic and Prosthetic Association, or COPAA. I enter into this field to design, fabricate, and fit devices that improve mobility and quality of life for individuals with physical challenges. Orthotics like this are braces that support dysfunctional limbs, and prosthetics are devices that replace an amputated limb.

Many devices that orthotists and prosthetists provide are custom molded to the patient and are the result of a careful evaluation, a mold of the limb and several outpatient follow up visits which ensure appropriate fit, function, and outcome. When patients do not receive consistent care, their Independence, mobility, and quality of life suffer. In direct correlation with these impacts, the cost to the healthcare system increases.

The California Orthotic and Prosthetic Association is here to advocate for the hundreds of thousands of device users and California who rely on our Members to provide them with care. Today, the average reimbursement for orthotic and prosthetic devices by the Medi Cal program is 49% of the current Medicare payment and is the lowest in the United States. Coppa is requesting MCO tax investment to increase reimbursement to no less than 80% of prevailing Medicare rates.

As a result of the stagnant Medi Cal fee schedule, the cost of the orthotic or prosthetic device is often more than the reimbursement. Therefore, providers are faced with the dilemma to provide the device at a loss or to deny care to Medi Cal beneficiaries. When care is denied, this vulnerable population of mobility challenged Californians are required to travel further to access necessary care.

As a result, many patients decide to forego treatment and resort to using a wheelchair or other assistive device, which decreases Independence, productivity, and ability to complete activities of daily living. Achieving reasonable reimbursement will encourage providers to reengage with the Medi Cal program, which will result in decreased use of pain medication, decreased reliance on transportation services, increased opportunity to gain employment, and increased quality of life. The good news is that the savings to the healthcare system outweighs the investment in orthotic and prosthetic care.

A net positive impact for California Coppa has contemplated the impact of a rate increase, which is somewhat difficult to quantify due to inconsistent reporting. However, we can extrapolate the impact by examining the largest provider of OMP devices in the state. Over the last 10 years, they have closed clinics in high medi Cal density areas secondary to business challenges, including reimbursement for devices. Examples include Gilroy, Burbank, Santa Cruz, Woodland, Fairfield, Grass Valley, Pinal, Lodi, Red Bluff, Chico, and Oroville, to name a few.

Upon MCO tax investment, we would expect to see improved access to care in brick and mortar facilities or mobile care units. There's a well documented link between access, quality of life, and decreased healthcare cost. When you are mobility challenged, your likelihood of accessing care increases the closer to your home you are. Several recent peer reviewed studies have quantified the impact of orthotic and prosthetic care.

Some relevant facts from these studies are that device users who are employed have 3.6 times greater odds of reaching increased mobility compared to those that are unemployed. This underscores the correlation between employment and mobility for lower limb prosthesis users. Another statistic is that receiving a prosthesis within three months of amputation results in $25,000 less healthcare spend in the first year compared to those that received no prosthesis at all.

Lastly, patients who received a lower extremity brace incurred more than $1,900 less healthcare spend in 18 months after receiving the device as compared to those that received no device. In conclusion, Medi Cal beneficiaries deserve equitable access to orthotic and prosthetic care. Quality care strengthens the medical program by decreasing spend elsewhere in the system and promotes independent, healthy and productive lives to vulnerable Californians. We are a state that prides itself on supporting our people in need.

Our current status of having the lowest relative reimbursement for orthotic and prosthetic devices in the country is not consistent with our words. We appreciate your consideration to support orthotic and prosthetic device users by investing MCO tax money in the category of other outpatient services. Thank you for the opportunity to speak today.

Thank you, Director. I don't know if on any of the topics we talked about, you're like, hey, we already figured this out. They don't. They're totally fine or anything similar to that. You're close to that. I just want to make sure there's nothing in the works or plan for any of the topics we've talked about.

I mean, I would just say thank you to the kind of the providers and the providers associations for your commitment to Medi Cal and to the panelists who advocate on behalf of our Members. I mean, I think to some of the earlier points before, you know, there are probably opportunities for many, many, many more investments in the medical space, you know, but notwithstanding the state's fiscal situation, I think, you know, we kind of. We have our proposal before you, and I know there will be further conversations.

Just wanted to clarify that. Okay, great. Thank you so much for coming to the table. And, I mean, I appreciate hearing all your requests and see how else we can. What else we can do. And I want to correct myself. I got my numbers mixed up. It's $20.8 billion that we're working with for the MCO tax, and 7.1 of them is for medi Cal reimbursements.

And while we don't have three actual numbers for requests from the stakeholders here, that amounts to close to just 1% of the total allocation. If we were to Fund every single one of these stakeholders amounts to 1%. That's it. If we went a different route and we didn't just allocate 1% and we looked at the equity or the labor workforce, then it would still leave money left over under the equity and labor workforce.

I'm imploring the Department, imploring the Department and the other stakeholders, once again, imploring that we find ways to include new friends in this proposal, because the things we talked about here are preventative in nature. Some will save us money in the long run, and we're not talking about General Fund money because this is, regardless of the current State of our budget situation, because this is money that is outside of that. These are entities that are helping our most vulnerable individuals.

This isn't something that is an option for people. I don't think it's an option. If you need a prosthetic, that's the only option you have. Or if you're trying to not be isolated as an older adult in dealing with depression or anxiety, it's helpful to go to adult day programs. If you're an individual with complex needs who perhaps, maybe has no family Member to take care of them and needs a higher level of care than a SNF cliff is your only option.

Or community health workers, who I know very, very well, because I led a team of community health workers in my district, and I know that sometimes they're the only trusted messengers. And we talk about equity. You can't talk about equity without community health workers because they're the ones that our communities trust. Our private duty nursing is to ensure that our parents are next to their kids every single day and not have to maybe pencil in when they can go visit them because they're so far away.

And all of this will help the workforce, every single one of investments or continuous medi Cal coverage for our kids. The whole point of this is for kids, right? To ensure that we're covering and ensuring we have access to Medi calm. We heard the story of someone having to wait till they get referred again or added back onto Medi Cal to get coverage. And we know seeking. I've gone to a chiropractor for back issues, and that's preventative from surgery or anything, right? That saves.

All of these are all preventative. So again, I'm imploring that we come back to the table and look at what else we can do to take advantage of the MCO tax for the first time ever in investments in Medi calm. I would just like to concur with the chair and also just raise the point, as you have already done, that, while we keep talking about we need more healthcare workers, we need to increase the amount.

We have healthcare workers in front of us right now that aren't being paid equitably. So if we want to really invest in equity, we need to look at what we already have. 198340 years. Were you born yet, Madam Chair? I was not born yet. All right. As before my time.

Madam Chair, I will say that, you know, I think to some extent, this is not the administration's fault. We tend to focus around here on the issue or the project or the program that's the newest and sexiest, that gets the most attention in the newspaper. And we often don't come back and take a look at the programs that have been around for a long time that need help and nothing like a good budget crisis to force us to do that.

And it really requires more than just the three, sometimes four people who sit on this Subcommitee to do that. We're going to have to take a look at the budget holistically and take a look at the programs that, as our chair, our superb chair, by the way, has said, take care of the most vulnerable in our critical communities where there are no other services or there are no other services that meet the need. And we're going to need to figure out how to properly Fund them.

And if that means we Jettison some high visibility, sexy projects that don't come anywhere close to what you do every single day for the people that we care the most about, then I guess we're going to open the door and throw them out without a parachute. Thank you, Madam Chair, you've often said.

Instead of innovation grants, we should do sustainability grants.

Sustainability. That reminds me of one thing, the innovation accelerator program that I've mentioned in this Committee. What's it for? We already know what we need to close the gap, and we're putting aside, what is it, $40 million for that 74. 74 to tell us what we need to do to close the gap on equity. Faster, faster. It's right here in front of us. You're right, Senator Roth. You're right.

I mean, I think my pleas should be directed to the stakeholders we heard in panel one to be like, don't fight us in our request to include more friends. I think that's where my plea should go, employing those stakeholders to knife it. Because you're right, Department. I mean, at the end of the day, you're like, we're just getting our orders and we're going with it. You're right. So it's the other stakeholders. I hope you heard what's at stake here.

And your Members are getting a huge piece of the pie. They're just asking for a crumb. That's all they're asking for. So with that, thank you so much. Panel two, we're going to move into public comment. If you'd like to comment on anything related to the MCO tax, please step forward. Depending on many people we see, I'll adjust the time. Give me a second. Kelly, I think we could do a minute each. Go ahead.

Thank you, chair. Kelly Larew, with resilient advocacy on behalf of PHI Health, an air ambulance provider here in California. The Medi Cal Air ambulance industry obtained a Medi Cal supplemental rate expenditure authority last year as part of the budget agreement, but was not an allocation, unfortunately. Air ambulance providers appreciate the discussion today on maintaining critical services for Californians.

We look forward to continuing the budget discussions from last year to Fund the Medi Cal rate for critical air ambulance transport services to hospitals across California and to maintain emergency surge capacity. Thank you both.

Thank you so much.

Madam Chair, good afternoon. It is afternoon now. Thank you for a thoughtful hearing. Awa Kidani, representing the California Children's Hospital Association. We want to echo and align our comments with our colleagues at the Hospital Association. We support the spending plan that was agreed to last year, keeping it very simple and succinct, and then having conversations going forward. But again, thank you for your thoughtful hearing. Very enlightening. Have a good day.

Thank you. Take care.

Good afternoon, Madam Chair. Honorable Members David Campos, on behalf of the County of Santa Clara and our valley healthcare system is actually the second largest public health system in the state. And I'm so grateful to hear the conversation, discussion around equity. The reality is that public hospitals are the ones that serve the most vulnerable in these communities. And we appreciate the work of the Administration of the Public Health Hospital System. But I do want to say that we have concerns about our public health system.

You're talking about 150 million being capped for public hospitals. And while we appreciate the amount, we are concerned about the ability to have enough resources to do everything that's expected of us because of that, we also believe that it's important that we have access to other categories within the MCO. And of course, as we move away from the cost based pavement, we need to make sure that we're taking into consideration the impact that it will have in a day to day bottom line at hospitals. Thank you.

Good afternoon. Linda Nguy with Western Center on Law and Poverty. In addition to our previous comments related to the share of cost reform, we support raising the reimbursement rate for community health workers, promotores as trusted community messengers that will help in advancing health equity, as well as support timely implementation of the multi-year continuous eligibility for children up to age five, as this is critical to keep coverage during this important development time. Thank you.

Good afternoon. My name is Andrea Mackey. Just want to say I'm born and raised in San Fernando Valley and I'm a mixed Filipina community health worker who serve patients with diabetes out in Panorama City. On behalf of the Steering Committee for the Community Health Worker, Promotora, and Representatives Policy Coalition, we support raising the reimbursement rates for community health workers and promotoras to help at least 87.5% of the Medicare rate.

The current rate only covers 38% of costs and it prevents us from doing the important, critically, culturally, and linguistically appropriate care for our community members that I was able to see reducing emergency department rates, reducing hospitalizations by 68%. So, we cannot continue this without raising the rate. Thank you.

Thank you so much. See you in Panama City.

Good afternoon. Christine Smith with Health Access California. Health Access supports multi-year continuous enrollment in Medi-Cal for children under five to improve and ensure access to this critical program. We also support eliminating share of costs and expansion of, and also support the expansion of eligibility for Medi-Cal for medically needy adult, older adults, and persons with disabilities.

We echo the comments of CPEN regarding the DHCS equity adjustments proposal and also support investments in the community health workers and promotoras. Thank you.

Thank you.

Chair and Members, Kathy Mossberg with the First Five Association just want to align ourselves with the comments made from the colleague from Children's Partnership. Zero to five on zero to five continuous eligibility. It's good policy. It's been tested. We know it's brought down the churn rate to under 1%. We know that these are important years for these young kids, and we encourage this Committee to move this policy forward. Thank you for your time.

Madam Chair and Members, Tim Madden, representing the California Chapter of the American College of Emergency Physicians, and we are in support of the Administration's proposal around the MCO tax. We're very appreciative of the inclusion of emergency physicians in the increase to our reimbursement rates.

This will go a long ways to help ensure that our emergency departments are properly staffed with emergency physicians, and we're just very thankful to the Department for their stakeholder process and allowing us to come in and talk to them about it. Thank you.

Thank you.

Good afternoon, Committee Chair and Members. My name is Jared Giarrusso-Khlok on behalf of the University of California Academic Health Centers at UC Davis, UCSF, UC Irvine, UCLA, UC Riverside, and UC San Diego. As you heard, our academic medical centers are designated public hospitals for their regions and their communities.

Our comments are aligned with the California Association of Public Hospitals and Health Centers, and we support the proposed targeted provider rate increases as well as the $150 million investment in public hospitals that we believe will help us expand access, quality, and equity within Medi-Cal. Thank you.

Thank you.

Thank you. Madam Chair and Member, Sarah Bridge, on behalf of Maxim Healthcare Services, one of the largest providers of private duty nursing services in California, just really want to thank you for your leadership. Thank the Committee for the thoughtful work on these panels today. Underscore the comments made by panel two. We are really requesting a rate increase to ensure that we can get providers to care for medically fragile pediatric patients, get them out of the hospital and into their homes with their families.

Know that's important to you and all the Members of the Committee. Really want to underscore one final point, that we know that a rate increase of just 40% creates a savings, a significant annual savings to the state of $175 million annually. And so, if we can get this rate increase done, we know that we can save money in the future. So really looking for your support, this proposal. Thank you.

Thank you

Good afternoon, Madam Chair and Members. Nora Lynn with Children Now. Children Now is in strong support of the multi-year continuous enrollment policy for young children, and we call on lawmakers to move forward with its implementation. Thank you.

Thank you for your comments.

Good afternoon. Katie Layton on behalf of the Children's Specialty Care Coalition, representing over 3,000 pediatric specialty physicians throughout the state. Pediatric specialists are critical safety net providers for children and youth with medical complexity.

But this network is ailing from chronic underfunding over the last 20 years, and for a number of pediatric subspecialties, we're now seeing 50% of fellowship slots going unfilled. The MCO tax is an opportunity to bring much-needed rate stabilization to this physician workforce, which relies very heavily on Medi-Cal funding to sustain the network. So, we're so pleased to see the focus on specialty care in the 2025 plan.

We want to thank DHCS for proposing to bring E/M codes for specialty care office visits at parity with Medicare. Their policy paper also outlines that procedure codes will be brought to 80% of Medicare. We really look forward to further details on this plan and ultimately would love to see all pediatric codes at parity with Medicare, as this is really what's needed to stabilize the network, improve the pipeline of providers, and ultimately move the needle on access.

So, thank you to both this Committee and the Administration for your continued work on this.

Thank you.

Good afternoon, Chair and Members. My name is Trent Murphy. I'm with the California Association of Alcohol and Drug Program Executives. We really do appreciate the Governor's Office and DHCS's significant investments in this proposal, especially around FQHCs and RHCs, and also the $300 million earmarked specifically for behavioral health throughput. I will be working with the Administration going forward on the implementation of that $300 million throughput. Thank you.

Good afternoon, Madam Chair. My name is Carl Cook. I'm a disabled Air Force veteran. In January 2023, my right leg was amputated below the knee because of a chronic infection that rendered me unable to walk. After my amputation, I was sent to a VA rehabilitation facility in Martinez so my wound could heal, and I could regain essential life functionality. My wound healed quickly. I was casted for a prosthetic leg, and my leg was delivered. In March of 2023, physical therapy began teaching me how to walk.

I was sent home two weeks later with a wheelchair, a walker, and a plan to be followed at the outpatient Mather VA Physical Therapy Clinic. The following two months involved a lot of follow-up visits and testing of prosthetic components to provide me with the best functionality. I was working with physical therapy to learn balance, strength, and how to use the walker and eventually walk with my cane. As of June 1st, 2023, I returned to my full-time job as a budget analyst with CalSTRS.

I have continued to participate in physical therapy programs such as the PGA Hope Golf Program and recreational therapy bowling sessions. I'm an active musician.

Wrap it up, sir. Sorry, just one minute.

Yes, ma'am. Today I want to urge you to allocate the MCO tax investment dollars into orthotic and prosthetic care.

Thank you. Thank you so much.

Thank you, sir. Thank you for your service.

Yes, ma'am.

Good afternoon. My name is Erica Toth from Los Angeles County. I'm a CLHF owner and humbly asking this panel to have some increase for Medi-Cal reimbursement for waiver patients. All the patients, five patients out of six, they're all Medi-Cal waiver patients, and they're all the age of 29 and 30, between 29 and 35. These patients are the ones. They fall through the crack. They don't know were to go.

CLHFs is the best viable option and we would love to keep them in our homes and humbly asking for your help. Thank you so much.

Thank you.

My name is Irene Tocar and I am the owner and founder of two congregate living health facilities. I'm here on behalf of CLHF Association in order to strongly support the rate increase for our type of business. If not for us directly working with the patients, I'm respiratory therapist myself. Miriam is a registered nurse, people behind me, all the health professionals. If not for our daily work with the patients, our facilities would be closed by now. So, this is vital, this is very important.

This is to keep our people in the community. This is to prolong life and prevent them from institutionalization, which is inevitable unless we have the rate increase. Thank you so much for your attention.

Thank you.

My name is Mary Williams and I'm actually the founder of CLHFs. In 1918, the first law of 3535 was passed in 1986. And I can vouch that we have been able to provide services for so many young disabled individuals to have a quality of life. We have saved their government millions of dollars because our clients have not gone back to hospitals. They are working, they've gone to school, they've been able to get, and it's a community service.

And I'm here in support of getting a raise because I know from firsthand that we haven't had a raise for 40 years. And I'm so thankful for your support and what I heard today. Thank you so much.

Thank you.

Hi, my name is Shawn Welch. I'm actually Mary Williams' daughter and I grew up when I was 15 years old with four ventilator quadriplegics as roommates in my home. We moved into a home and that's how she started this. And Medi-Cal just said, wow, you know, you're doing great. And it's quite the story, of course, but anyway, I just reopened two congregates 2020 and I just am opening grand opening, my third one in May. And it's an incredible service.

I don't know what we would do if we cannot go on. And we were, we are all strapped. Our own money is going into keeping this going, hoping and praying that we will be recognized as something that saves so much money. So much money. And thank you so much for listening to us.

Thank you for your comments.

Good afternoon. My name is Carolina Klevnikova. I'm a CLHF owner in Los Angeles. I'm here asking for support for rate increase for CLHF industry. Please help us keep our doors open for our clients, and I'm very grateful for your support and consideration. Thank you.

Thank you.

Good afternoon, everyone. I'm a CLHF owner from Glendale. My name is Ani Arsenian, and I'm here in strong support of the proposed CLHF investment. Thank you so much.

Thank you.

Good afternoon. My name is Sarkis Sarkisian. I'm also a CLHF owner in Glendale, and I do strongly support this well-deserved investment in the CLHF. Thank you.

Thank you.

Good afternoon. My name is Anna Sahakian, and I represent the most underrepresent area of California. It's Fresno County, Central Valley. We have really very big struggle with services. I represent the CLHF homes in Fresno, and I really want to support the investment that state is proposing and in support for CLHF homes. Thank you.

Hello again. My name is Julia Rajian, and I'm also from Fresno, California. And we'd just like to give our support for the proposal. And I'd just like to talk about one of our most recent patients. He was in the hospital due to a car accident, and then he was, you know, sent out to another hospital and another hospital, and they were all over the state, and the family was able to place him with us and now be near his family, which is great for the patient.

And it's also, I think, a great asset to the hospitals as well, because they're not spending as much money, and they're so impacted and overfilled. And just having a patient there just because he needed an IV service, I think, is too much for the hospital, you know, to take on those kinds of patients. So, with us, we're able to help the patients as well as help the hospitals and alleviate their impacts. So, thank you very much.

Thank you.

Good afternoon. I'm Val Saikum from Fresno, California, and here to strong support for CLHF proposed investment. Thank you.

Thank you.

Good afternoon, Chair and Members. Johan Cardenas with the California Pan Ethnic Health Network. We support the share of cost by Western Center and the continuous children coverage by the Children's Partnership. I'm also here on behalf of the Having Our Say Coalition who supports the request to increase community health workers rates.

We believe that raising their wages will really help advance health equity by making a real investment in the success of the new benefit through Medi-Cal beneficiaries, as well as to continue to support many of our most underserved communities of color. Thank you.

Thank you.

Good afternoon, Chair and Members. My name is Anae Zuran. I work at First Five LA. And we want to urge the commitment to fund the continuity of Medi-Cal coverage for children ages zero to five as part of this year's budget. Through 2022-2023 budget California was one of the first states in the country to adopt a multi-year continuous Medi-Cal enrollment protection for children. Providing continuous Medi-Cal coverage is an important first step towards achieving health equity for young children in California as three fourths of children covered by Medi-Cal are children of color.

Communities of color are disproportionately impacted and are more likely to lose their medical coverage during the annual renewals. The vast majority of children who lose their medical coverage are terminated unnecessarily because they remain eligible. Moving forward with multi-year continuous coverage protects young children's healthy development and ensures existing state investments in children's mental health are utilized. We look forward to the continued conversation and appreciate the Committee's consideration of the matter. Thank you.

Thank you so much.

Hello, I'm Francis Mejia from Orange County, California. I just wanted to show my support for the congregate living health facilities and thanks for your time and consideration in this matter.

Thank you.

Hi again, Kristen Golden, Testa thank you for letting us share on the multi-year continuous coverage, but I also wanted to share our support for the community health worker rate increase as they are an important workforce that needs sustaining and important equity strategy. Thank you.

Thank you.

Madam Chair, Senator Roth, Rand Martin here on behalf of Aveanna Healthcare. First, we just want to thank you for the really important words you shared today about new friends. And number two, relative to PD and private duty nursing, it's not often that we get to see changes that actually provide, respond to the need of the child, at the same time responding to the budget issues with the state with the cost savings that that PDN would provide. Thank you.

Thank you. See no other public comment, that concludes Budget Subcommittee Number Three on Health and Human Services.