Assembly Budget Subcommittee No. 1 on Health

Good afternoon. We will now begin this hearing for Assembly budget Subcommitee one. Today we will be reviewing some issues concerning the Department of Healthcare Services and the California Health Facilities Financing Authority. We will begin with our first panel, which will consist of Sarah Brooks from the Department of Healthcare Services, Aditya Voleti from the Department of Finance and Meg Sabbah from from the Department of Finance, and you may begin whenever you're ready.

Good afternoon, Madam Chair. Sarah Brooks, Chief Deputy Director for Health Care Programs with the Department of Health Care Services. I'll speak to the first issue today. The Governor's Budget assumes that the Medi Cal caseload will decline from a peak of approximately 15.6 million to approximately 13.6, excuse me, 13.8 million by the end of 2024-2025 due to the end of the pandemic, continuous enrollment policy and the resumption of eligibility redeterminations with respect and then I'll move into the Committee.

The Committee questions specifically with respect to expectations on the Medi Cal caseload. The longer-term enrollment trajectory is uncertain at this time. However, the Governor's Budget assumes declines in enrollment level off after the unwinding period at the beginning of 24-25. With respect to the redetermined simplifications and flexibilities and anticipations of the state continuing those next year, I have a few talking points with respect to that. California did receive approval for many federal flexibilities to retain enrollees through the unwinding period.

However, the Centers for Medicare and Medicaid Services, or CMS as I'll refer to them today, recently extended the flexibilities granted to states through December 31, 2024. These flexibilities may slow the enrollment decline as CMS determines the future of many of the flexibilities. Other state level processes and flexibilities aimed at retention will end after the unwinding and reduced case retention. As the state shifts towards normal business operations, some flexibilities may be counted as the state's discretion.

At the state's discretion, which strengthens streamline administrative processes and reduce procedural denials. We are awaiting additional federal guidance on the flexibilities to further inform next steps at this time with respect to the state exploring options to reduce procedural denials of redeterminations. DHCs is using available data to focus outreach activities to communities that have lower renewal rates due to inaccuracies and required information to make a final determination of Medi Cal eligibility.

DHCS is also conducting monthly surveys of disenrolled Members to better understand barriers and the lack of completed renewals which lead to procedural denial. So currently we are surveying our Members to gather additional information on these issues. DHCS is continually exploring state level strategies as well as those requiring federal approval to help address procedural terminations. Based on some of the early feedback from survey of our Members, the Department has taken several steps to keep people from losing coverage.

We've conducted a best practice session with mesoamerican indigenous organizations regarding assisting those with limited English proficiencies. We've issued guidance to county offices to include information about local navigator resources on their websites and phone systems, and Members experience experiencing long wait times and we've continued to strengthen partnerships with health enrollment navigators, trusted community based partners across the state to aid with renewals.

With respect to the state's performance on timeliness of redeterminations, the state is completing, on average, approximately 70% of the monthly renewals due during the renewal due each month. As of March 31, 2024 there are approximately 1.6 million redeterminations to be reprocessed or to be processed. Excuse me, to the extent the redetermination has not been processed, these individuals retain their healthcare coverage until the redetermination is complete, so they stay on until their redetermination is completed.

We do have statutory requirements pertaining to timeliness standards for annual redeterminations, so we do have metrics for our counties. However, due to the unwinding activities, counties have been held harmless for meeting those metrics as at this time, outside of Medicaid unwinding, what are some of the other significant enrollment trends we are seeing in our caseloads? You asked a question about that. Unwinding impacts are far and away the dominant factor driving enrollment trends at this time.

Another policy that likely has an impact, but is not possible to cleanly disentangle from broader unwinding impacts. Is the elimination of the asset limit effective that happened January 1, 2024. We're still learning new information about that as that just became effective earlier this year.

Thank you. And before we continue, we will go ahead and take roll.

[Roll Call]

Okay, thank you. And I will turn it over to Assembly Member Bonta to see if she has any questions about this first presentation.

You're currently doing surveys at this point, and how often do you do them, how long do you anticipate? And at the end of your survey period, will there be a full report that's provided?

Yes, we're currently doing the surveys monthly and let me just look quickly to my phone, a friend, if that's okay. How long will we do those Rene.

Oh, hello. Rene Mallow, Deputy Director with the Department of Healthcare Services. So the surveys are conducted on a monthly basis. They're being done by California Healthcare Foundation, and they'll go through the end of May, through the end of the unwinding period. We do publish the findings of those surveys, and then there'll be a compilation of all that information at the end of that process.

Perfect. Thank you. And my other question had to do with the fact that you state that you do have metrics, but you are not holding the counties to that at this point. Can you go into that a little bit more? Yes.

So there is state statute that requires that the counties be held to certain metrics with respect to redeterminations because of the public health emergency that was put on hold. We are starting to have some conversations around that, but have not put anything in place at this time with respect to that.

Okay. And then with the issue of the zero to five continuous coverage, were you going to talk about that now or the next panel?

Sorry about that. We can talk a little bit about that. I think I'll have my phone a friend come up here, if that's a little bit, and just talk a little bit about it, because she's our expert in that space, and I think I'll just have her come up here and talk a little bit about that, if that's okay. Thank you so much. I'm going to let you have a seat, Miss Rene.

So, hello again. Rene Mallow, Deputy Director with the Department of Health Care Services. So, in respect to the zero to five continuous coverage, we still have to await final determinations about legislative authority to finance the initiative. However, we have taken some initial steps in terms of engaging with stakeholders to receive feedback in terms of the structure of that program. But until we have the legislative authority and the financing for the proposal, the proposal has not yet been submitted to the Federal Government.

Thank you. So in 2022, in the budget that included the provision that would allow the Department of Finance to certify funding. You need more?

That funding has not yet been certified.

This is phone a friend day.

Andrew Hewitt, Department of Finance. Could you please repeat the question?

So my question was around the zero to five. The fact that in 2022, there was the budget included a provision that would have allowed the Department of Finance to certify the funding to implement it, but it has not been certified. So the question is around that.

Yeah. Per statutory requirements, the determination we made regarding whether the General Fund can support this program for the 2024-2025 fiscal year and subsequent fiscal years. State statute requires the determination to be made before the Administration can submit the waiver.

So this was done back in 2022 and we're in 2024 now. So what has happened to prevent this from being certified?

Ryan Miller, Legislative Analyst's office if I could maybe add in a little bit, I believe that the, the so called trigger, which is kind of a mechanism that the state has used commonly in the past to make future decisions contingent on the availability of revenues, while it was done in the 22 Budget Act, I believe that the language specifies that the determination be made in May 2024 based on conditions that will be like for this budget that we're working on currently.

And so essentially, without having the petition in front of me, the trigger language would, in effect be looking at whether the state has excess revenues to cover this. I think in addition to a few other augmentations in some other areas of the budget, and based on the budget condition, I think it's thought to be unlikely that those conditions would be met.

Thank you for that input. Okay, so now we will move on to the second issue, California advancing and innovation, Medi Cal, also known as CalAIM. On this panel is Sarah Brooks, again, Ty Ulrey, Meg Sabbah and Ryan Miller. And we have someone filling in for Ryan Miller. You may begin whenever you're ready.

All right, I do apologize upfront. I have quite a few talking points. All right. So I'm going to get through all of your questions. All right.

All right. So I'll start with an overview of CalAIM. Again, Sarah Brooks, Chief Deputy Director with Department of Healthcare Services. CalAIM does encompass a broad based delivery system program and payment reform across the Medi Cal program, with a five to seven year roadmap of transformation building on policy year over year.

I'll provide an overview today and implementation status of two key initiatives under CalAIM, enhanced care management and the movement of Medi Cal beneficiaries from fee for service Medi Cal to managed care, as requested by the chair. First, I'll speak about enhanced care management as it is a part of CalAIM's broader population health management program. As a reminder, the population health management program uses evidence based practices and data analytics to close gaps in care and drive delivery system activation to improve outcomes.

Population health management is about engaging Members as owners of their own care through preventative care, early interventions for risking rising risk, patient centered disease management, and implementing holistic care for high risk populations, including addressing social drivers of health. It also redesigns critical transitions in care to ensure the continuum is working as intended to provide an update on ECM. Specifically, enhanced care management is a new benefit that went live on January 1, 2022.

It is a high touch program designed to address the clinical and non clinical needs of a high risk population, especially Medi Cal Members who need to navigate multiple delivery systems and have social services needs. In designing ECM, equity and access to care, considerations were fundamental. The populations of focus were selected to address healthcare disparities and support high risk Members getting care when and where they need it.

We started ECM for individuals at risk for avoidable hospital or ED, formally known as high utilizers, for individuals experiencing homelessness, and for individuals with serious mental health or substance use disorder needs. Over 2023, several new populations of focus launched, including individuals in or at risk of being in long term care and the children of youth. Population of focus this past January, the final two ECM population of focus, which included justice involved and birth equity, went live.

I'll note that given the significant racial and ethnic disparities in maternal outcomes in California, effectively addressing the needs of the pregnant and postpartum individuals requiring care is a critical part of DHCS's health equity vision. DHCS added this population of focus when we launched the children and youth population of focus, recognizing the tie between investment in the perinatal care and outcomes for children and youth, especially those who are zero to three years of age.

Based on the most recent data available through quarter 22023 in the first 18 months, 140,000 Medi Cal MCP Members across the state received the ECM benefit. We expect to see more enrollment growth across ECM in the coming months and years, including as we fully implement the benefit for the new populations of focus and as the delivery system is being built.

So you were asked a little bit about path and some of the state's efforts with respect to path, so I'll talk a little bit about that. CalAIM's Incentive Payment Program IPP and Path are two key initiatives that are intended to develop the capacity and infrastructure of our delivery system to sustain ECM as well as community supports under CalAIM. So these are really incentives that are built to provide structure for CalAIM.

Overall, IPP is made available through the managed care plans, and path funding is available directly to providers and CBOs. Both programs launched in 2022, and we see tangible results from these state investments. First, I'll start with Path as a reminder, providing access and transforming health is what Path stands for. This is an initiative to build up the capacity and infrastructure of on the ground partners such as community based organizations, CBOs, hospitals, county agencies, tribal partners, and others under Path cited round 1 and 2.

DHCs awarded over 250 organizations approximately $347 million in investments to ECM and community support services in all 58 counties. We award organizations that have experience working with populations, including those experiencing homelessness, those transitioning from incarceration, birth equity populations, and children involved in child welfare. Awards were made based on key priorities and assessment of where there are access gaps, the ECM and community supports, and to equitably distribute funding across regions and organizational types.

These awards are made based on the awardees achieving key milestones so you don't just get the money, you have to achieve milestones to get the money. We know from progress reporting that organizations have successfully expanded expanded their capacity to serve Members and directly provide ECM and community support services by investing in workforce training, data exchange, and systems to support billing and other tangible infrastructure.

In accordance with their award agreement, over the next 12 months, the cited team will announce awards including federally qualified health centers and rural health centers to drive participation in Calais. Cited round three awards will be made in the fall of 2024. I'll talk a little bit about the technical assistance marketplace under PATH, which provides technical assistance to organizations so that they are prepared to participate in Calaim.

The marketplace is a website where organizations interested in receiving technical assistance can find and work with pre selected vendors to develop projects. It is a one stop shop or or a site of various off the shelf projects and curated vendors that can provide customized CTA. So it's basically a place where you can go and shop and find vendors that you can that can provide services under the CalAIM infrastructure. Finally, I'll provide a brief mention of the collaborative planning and implementation, or CPI, collaboratives.

These are local work groups that provide a forum for providers, managed care plans, and other stakeholders to identify and address implementation gaps at the local level. Next, I'll provide an update on the IPP initiative. The CalAIM initiative our IPP, as I mentioned, was launched in January of 2022 to support the Medi Cal Managed care delivery system in implementing ECM Community supports in Calais. The program runs through June of 2025.

IPP evaluates performance outcomes in six month increments over three program years in four priority areas, delivery system infrastructure, ECM provider capacity building, community supports, capacity building, and quality. The IPP program is currently in the third program year, with the most recent submissions from mcps reflecting measurement period of July 1 December 31, 2023. So I think the point being that this is infrastructure money that the plans utilize to build their and build up infrastructure within the CBOs that they contract with.

Wanted to provide also a little bit of an update on what's happening with some of the transitions. You asked for an update there, so wanted to provide first an update on our 2024 managed care plan transition that went live GN 12024. With that transition, approximately 2 million Members went to a new plan in 21 counties that was a result of the county led plan model changes, commercial plan changes, and Kaiser direct contract with DHCs that you're likely well aware of.

Due to the scale and complexity of this transition, DHCs deployed various methods to put Member projections in place and monitor the transition. A cornerstone to Member projections is continuity of care. So continuity of care is key and important to us at the Department and for our Members. DHCs put into place enhanced continuity of care projects protections to minimize Member disruption.

The robust continuity of care provisions put obligations on the receiving plan to retain at least 90% of the Members primary care providers, approve out of network requests and honor valid authorizations from the previous plan and proactively outreach to the Members providers on behalf of the Member and initiate the continuity of care agreements for the most vulnerable members called special populations. So that's a lot of words.

What I'm basically saying is that there were high level protections put in place for Members for continuity of care that plans had to put in place and they had to have 90% that basically said that 90% of their Members had to obtain continuity of care for special populations with respect to requests that were being made of them. DHCs also encouraged the receiving plan to have 100% overlap in provider networks for ECM and community supports, as well as required the plan to honor all authorizations.

Of the approximate 2 million Members that transitioned to a new plan, only 9400 continuity of care requests were received, which is a testament to the significant effort managed care plans put into a network building and proactive provider outreach prior to the transition. Throughout this transition, DHC has closely monitored data for any access to care concerns, which include grievances and appeals and ombudsman data. Grievances and appeals reporting showed below the baseline.

DHCs attributes strong continuity of care protections to have a positive impact on the number of grievances and appeals. As expected, calls to ombudsman did increase between December and January, but DHCs began seeing downward trends in February. About 2% of Members calls were 2024 transition related, so we did see a spike upward, but we also see a spike generally in that time of the year anyways, and then it started to come back down.

In addition, DHCs completed the carving of subacute care facilities and intermediate care facilities for the developmentally disabled in January. So that was another transition that occurred. So wanted to just provide you with a brief update on that as well. DHCs engaged significantly with stakeholders. We held regular calls, recognizing the sensitivity of the population and the providers at hand. We worked with providers to gather information from them, send out regular reports.

We talked with health plans, did things like met with a health plan and had them walk through what their actual experience was in terms of working with a provider specifically, so we could understand what their experience was and what the provider's experience was, and we could intervene if there were any issues, or we could actually also take away best practices and share those with health plans as well. So that was an example of something that we did during this transition.

I got off my talking points, see what happens. So then, with respect to kind of questions about what happens with how many Medi Cal Members do we expect to remain on fee for service and what populations will be left using that payment model? Following well where we are today, we essentially project that 99% of Medi Cal Members will be enrolled in the managed care plan until 2024. So the majority of our population, or almost all of it, will be in a managed care plan in 2024.

As of February, managed care plan enrollment is at 94%, so 14 million Members will while fee for service is at 5%, approximately 811,000 Members, a small subset of the Medi Cal population, will remain in fee for service, which include foster children and youth in non coscalable counties, newly eligible Members and non Cos MCPs who have a Medi Cal exemption request newly eligible American Indian and Alaska native members and non-Cos counties who have a non medical exemption request and share of cost Members.

So that's the small group of individuals that will stay in fee for service. Potentially, you asked about how will the state ensure that managed care plans offer the quality care that our vulnerable populations need? DHCS has developed more robust requirements around quality improvement and health equity efforts to include regionally assessing how plans perform and requiring more county focused interventions as the required quality efforts. Mcps must do lower performing measures also require requiring that they include an equity intervention.

All mcps are conducting a disparity focused CMS performance improvement project, which is called a pip for well infant visits. All MCPs must stratify by race ethnicity for 10 quality measures that are held to the nation's 50th percentile, and all MCPs are subject to enforcement actions to include monetary and non monetary sanctions for quality performance ratings that fall below the 90, the 50th percentile. So that's an example of a few of the things that we're holding our plans to for quality and health equity improvement.

Responsibilities with respect to accountability measures and what accountability measures should the Subcommitee consider measuring that the migration of these populations to managed care did not diminish or reduce services to these populations? We did establish a multi pronged monitoring approach to oversee the transition of Members. DHCs did require enhanced continuity of care protections, as I talked about. We also solicited and tracked feedback from stakeholders, including Members, to monitor any access to care concerns.

And we have existing monitoring processes to review grievances and appeals access to care and quality metrics. So I tried to get through my talking points pretty quickly because I think you're going to hear me talk quite a bit today. So happy to answer any questions.

Thank you so much to that. I will first ask my fellow Assembly Member if she has any questions.

Sure. I want to focus on the community supports. In particular, I know that they are intended to become permanent Medi Cal benefit, and the Department has indicated that providing these supports has been very cost effective, that it reduces emergency Department visits, hospitalizations and other high cost services. I know that housing supports and medically tailored meals have been some of the most popular communities supports programming. So on that related to the medically tailored meals. Full disclosure, I have legislation around this for the second time second year in a row.

Even though this is a better utilized program than many other supports, I'm worried it won't really reach its potential until it's made a permanent benefit. Some of the providers for medically tailored meals have been hesitant to really invest in expanding capacity because of the temporary nature associated with the piloting, and it may be more difficult to integrate this into clinical workflow until it is permanent. How is DHCs planning for this transition from community supports to a permanent benefit, and what's the timeline?

Certainly that's an excellent question. So, as you know, community supports are voluntary. As you stated, our 14 community supports that we currently have right now, and as you quite eloquently stated, we certainly have, housing transition and medically tailored meals are some of our community supports that are more highly utilized at this time, whereas nursing facility and community transition services environmentally adaptations are those that are kind of on the lower end that are being utilized just to kind of call that out for those that are in the room. How is DHCs looking to do this?

So we are looking to move, to utilize or move into utilizing these benefits as mandated benefits in our delivery system, ideally in the near future. We're looking, we've put forward the timeline of approximately 2027, but of course, would need to look to see what is allowable under our budgetary requirements. Also would need to look to see what is working within our health plans with respect to the community support specifically and which ones are reasonable and which ones are not.

As you mentioned, as you mentioned, medically tailored meals is one that's being utilized more frequently than others and so obviously one that we have our eye on more than others at this time.

And as it relates to the housing transition supports, obviously, we are very, looking very closely after the State Auditor's report around the ability to measure costs and outcomes associated with our homelessness programs. Do we know, can you provide any data so far about what the early indicators of success related to the housing transition supports program is Cost savings, yeah, start there.

In terms of the cost savings? I don't have any specific cost saving data with me today. I think that's certainly something that we would have to look, that we are tracking closely and are following as we move forward and as CalAIM is implemented. We're tracking that closely as we move through the implementation of CalAIM, as we move through the waiver itself.

Are there, are we only looking at utilization for the most part, reporting utilization, or are we focused in on, at all on the overall effectiveness of any of these benefits?

No, we're looking at overall effectiveness. We want to look at utilization, but utilization, I think we're looking at utilization in terms of utilization of the service, but then we're looking at utilization in terms of offsetting eD, inpatient utilization. Then we're looking at savings with respect to cost, but we're also looking at how overall life, improvement in life is occurring as well. Right. So we're looking at social determinants of health overall.

And because we're in a budget Subcommitee on this and not necessarily a policy Committee, it's a very, this is, yes, I went to law school and they always say, never ask the question that you don't know the answer to.

So apologies, given the kind of budget limitations that we have every single year, if you were to wave your magic wand and really think about the efficacy component in terms of the long term or midterm to long term savings and cost effectiveness of any one of these benefits that we might be offering, is that something that we, as a kind of a budget Subcommitee or throughout our budget should keep in mind as we're thinking about where to cut and what to keep.

So you're asking me, can you restate your question?

I'm sorry, what the weighting, essentially, kind of the weighting of the midterm to long term cost savings and efficiencies that we realize with any of these immediate benefits where they may cost something in time, one in one particular fiscal year, but save, you know, 10 x 20 x in following years, certainly.

How would you advise us to weight those? Yeah, I would look to my colleagues and, and LAO to perhaps comment on those things.

Ty Ulrey, Department of Finance as you stated, there's currently no funds built in for CalAIM programs beyond the end of the waiver, the demonstration waiver period, December 2026. We would have to wait and see more data on the outcomes and the evaluations of these programs before we can speculate on which specific programs we might be looking at as most cost effective at the moment.

Thank you. Assemblymember Bonta does bring up a very good point, though. We are oftentimes looking at how much something costs today and not factoring in how much you save down the line.

And so I think that it is extremely important, you know, when we're going back and we're looking at the things in the budget that we're going to continue to Fund or that we're not going to continue to Fund, look down the road to say, okay, if we continue to Fund this, is this going to create healthy people, healthy communities that do not require mass amount of medication, hospitalizations, chronic interventions for the rest of their lives and ultimately end up saving the state a significant amount of money, even if you do have to do a little bit more investing up front.

Unfortunately, I don't think we do a lot of that, and we need to do a lot more because what we have been doing, which is just looking at how much it costs today, is not working in terms of saving money, nor is it working in terms of saving lives. So thank you for bringing that point up. Quick question for you. You mentioned something at the beginning around the focus on the disparity between maternal morbidity and mortality outcomes. Can you elaborate on that a little bit more?

Sure. So I think going back into my talking points, the disparity between maternal. Yes. Can I go back to my talking points and pull them up real quick? Apologize. I have too many pieces of paper here. I'm not going to find them. So I'm just going to talk real quick. So I think what I was talking about was the fact that there's a disparity between, you said between. I said between maternal. Can you repeat what I said? I apologize.

Well, I probably said maternal morbidity and mortality, but essentially you were talking about the differences and maternal outcomes and understanding that there's a disparity in terms of not only for the infant but for the mother as well. I was wondering if you could talk.

No, I think so. When we've looked at data before, we have seen that there are different outcomes, definitely when we've looked by race ethnicity and when we've stratified our data. So, for example, I think when we look, for example, at African American black women, we certainly see that there's a disproportionate number of women that receive, that don't receive postpartum, for example, visits.

And you're likely well aware of this, that don't receive visits, that don't receive postpartum visits in comparison to other kind of race, ethnicities for example. So that's an example of what I was referencing there.

And so what exactly is the Department doing about some of these things?

So we have set bold goals by 2025, as one example of something that we're doing by 2025. We're in 2024 now. But that's an example of bold goals that we've set. So we have maternal and child health outcomes that we have set one of those. So the MCAs is one example. Our managed care accountability set is an example of a set of health outcomes, or metrics that we hold our health plans accountable to.

You likely have heard of these before, but they include a set of metrics, for example, the postpartum and prenatal visit metrics that we hold our health. Excuse me. We hold our managed care plans accountable to. They must hit the benchmark of the 50th percentile, national average percentile. And so if they don't, then we will hold them accountable and we'll sanction them if they do not hit that. If they don't hit that metric.

So when we look at the issue of the fact that, you know, black women die at a rate three times more than, you know, white women in childbirth, the metrics that you have established, do you believe that they are metrics that will help with a decrease in that particular number?

I'm going to tell you that I would like to bring my expert here to talk with you about that. I'm just gonna be upfront and honest with you. I'm not the expert in that area, and I don't want to pretend to be.

I could sit here and talk to you about it, and I do have data about it and facts that I could present to you about it, but I'd like to bring my expert, and I didn't bring my phone a friend today on that one, so I apologize about that.

Thank you. Well, yes, please have that person come and speak either to me or have another Committee hearing about it, because the issue of black mothers dying here in California is extremely significant, and it is regardless of someone's socioeconomic status. And I think ensuring that people have postpartum visits is very important. Discussing about the whole fourth trimester care and expanding that is also very important.

However, many women, specifically black women, do not get to that point where they have the ability to miss a postpartum visit or concerned about their fourth trimester care, and so have them reach out so we can have a conversation about that.

I definitely will do that. I appreciate you raising that very important issue and just will say that the department's committed to working on that issue. It is important to us.

Yeah, I believe I mentioned it to someone else. I'm not sure if the metrics that you guys are looking at are actually going to get at the heart of that particular problem. And so it's definitely something that needs to be revamped and revisited so that we are doing things that are, that evidence has shown can actually improve the outcomes. With that, we will move on to the third issue, child health and disability prevention program phase out. Sarah, you're still here.

I'm still here.

And we will bring up Michelle Gibbons, Andrew Hewitt, Paula Fonacier-Tang, and is Jason here? Jason is back, and you may begin whenever you are ready. All right.

Good afternoon. Sarah Brooks, Chief Deputy Director for healthcare programs with the Department of Healthcare Services, to talk to you today about the child health or the CHDP transition. All right, so the CHDP transition is on track to sunset by July 1 of 2024. I'll note that the CHDP program transition plan was recently posted on our website and is available. I can get that link to you if you would like it. All right, so our outreach to providers.

So with respect, you asked the number of questions, so I'm going to go through those questions again. All right, so with respect to the transition of the CHDP gateway, and I'll kind of break this up into different sections. The first is on the CPE or the children's presumptive eligibility. Our outreach to providers is being done through program letters, provider notices, Medi Cal bulletins, stakeholders meetings, and has been ongoing for over a year.

Existing CHDP providers will be grandfathered in, excuse me, as CPE providers, outreach and communication efforts were planned as part of the development of the CHDP transition plan, which was developed with extensive stakeholder engagement and began in 2022. To help familiarize the providers with the portal changes for the new process, they are being directed to complete online certification trainings. Through our outreach process, providers have been directed to complete these online trainings as soon as possible and before July 1.

To extent that they have not completed the trainings by July 1 date when they log back into the portal, they will be directed to the training. There are two modules for completion, and they are self paced. It is anticipated that completion of the modules will take relatively short period of time, but less than 2 hours maximum. But that's likely a long period of time. Really, it's just to get familiar with the portal. So it's really a short training.

Technically, it should not take you 2 hours to get through it. How many providers have gone through the training to date? To date, 25 providers have initiated and or completed the training, which was launched April 1 of 2024. We do anticipate that this number will continue to grow over the next several weeks as we near the implementation date.

DHCs will be hosting a CPE overview training in May and June of 24 for providers who wish to become qualified providers, and information about these trainings is included in our provider communications and through the Medi Cal learning portal. Detailed instructions about the registration process are available in the Medi Cal Learning portal user guide, and providers may contact the telephone service center or TSC if they need any assistance.

DHCs will be monitoring the number of qualified providers who complete the trainings over the next several weeks and will do additional outreach and our trainings if needed. With respect to health enrollment navigators, we have health enrollment Navigator project partners in 48 counties. They include county welfare departments, community based organizations, community health clinics. We also have 6000 DHC coverage ambassadors who are located statewide that can assist individuals in submitting medi Cal applications.

So we have a good network of individuals across the state who are ready and available to help individuals submit applications. With respect to EPSDT and case management care coordination can DHCs provide assurance that on the ground in counties where CHCP programs formed an important safety net that children will still be effectively linked to care?

So, moving on to EPSDT and case management care coordination, DHCs can provide assurances that mechanisms and processes are in place to effectively link children to care, whether they are enrolled in MCPs or in fee for service. MCPs are required to meet all EPSDT requirements under federal law and as such, cover all medically necessary preventative services for children and youth in accordance with AAP bright futures, period of city schedule, and anticipatory guidance.

MCPs must also provide care coordination to all Members, including children and youth under the age of 21, to ensure appropriate and timely access to all needed medical, mental health, substance use disorder, developmental, dental, social, and health education services, including coordinating transportation as needed. Fee for service providers are also responsible for providing all EPSDT screening and treatment services to their enrollees.

Referrals and care management or case management services for the fee for service population will continue to be processed or provided by any fee for service provider, so any fee for service provider can provide care coordination or case management for their patient.

FQHC CCS programs HCPCFC manage the maternal child access to health or receive services from county social workers, TCM HCBs waiver programs, or through the community health worker benefit or other health programs as identified with respect to DHCs, evaluating how many children currently served by CHTP would not be eligible for those other case management programs. Almost all children enrolled in or enrolling into Medi Cal will be enrolled in a managed care plan and their MCP will be responsible for providing their necessary level of case management.

For children that are accessing Medi Cal for fee for service and not eligible for a specific program, they will still be able to access care management or case management services through any fee for service provider. Some examples, as described before, include FQHCs and community health workers. To prevent children from losing access to care.

You asked about services they now have access to as DHC willing to clarify that all children in Medi Cal are eligible for care coordination and or case management as medically necessary under EPSDT with respect to children losing access to services. Just to reiterate, care coordination and or case management will continue to be provided by any fee for service provider. Those are codes that are available for fee for service providers to utilize today.

The Medi Cal evaluation and management provider manual provides a comprehensive overview of the care management and case management services and reimbursement codes. These may be used by fee for service providers to Bill for care management or case management services. So, moving on to SB 184, which is HCPCFC and DHCs certification activities. Just keep going through it. Okay, I will do that. The transition plan includes a crosswalk identifying positions currently funded under the CHCP budget and identifies other county programs.

Each position could could potentially be redirected to allow counties the opportunity to bolster existing county programs. DHCs worked extensively with the workgroup and outside the workgroup with the counties to identify and discuss options for retaining staff positions and bolstering existing county programs. DHCs also conducted an analysis of current county CHDP program budgets submitted over the past five years to determine which CHDP program staff classifications should be redirected to bolster existing county.

Additionally, the reallocation of a portion of the CHDP funding to support the implementation of New County responsibilities under the upcoming CCS monitoring and Oversight program will provide opportunities for counties to reallocate appropriate staff positions to the CCS program. With respect to the CHCP clip program. The Interagency Agreement, or IA between DHCs and the Department of Social Services for the HCPC FIC will continue, and we are actively working on necessary updates to the IA in advance and will execute the IA before the expiration date of June.

IA between DHCs and the Department of Public Health for CHDP clip was specific to will expire on June 30, 2024 in alignment with the sunset of the CHDP program. The expiration of the IA for the CHCB Clip program will not impact children, as MCPs are already contractually required to comply with the CLIP program requirements. Additionally, the CDPH Childhood Lead Poisoning Prevention Branch will continue existing lead screening-related activities in collaboration with DHCs following the CHDP program transition.

To develop the budget methodology used to determine the HCPC administrative allocation, DHCs conducted an analysis of the CHDP program administrative costs and considered how the HCPCFC could retain existing CHDP program staff and their expertise. DHCs only considered CHDP program staffing budgets associated with administrative employee classifications. Additionally, the Department considered any additional operating costs, such as employee benefits and indirect rates. The administrative classifications considered in the analysis included supervising phns, public health assistance, administrative support staff, and fiscal support staff.

DHCs also utilized 2022 HCFC caseload data, current county employee salaries, and estimated workload figures in developing the budget methodology. The new HCPCFC administrative allocation will cover the following supervising phns, public health assistance, fiscal and administrative classifications. Budget allocations will be up for review and reassessed on an annual basis. DHCs considered all items in the proposed HCPCFIC program manual, including the performance measures into account when determining the allotment set forth in the May revise.

Counties had the opportunity to provide feedback on the impacts of the revisions to the new standalone HCPC program manual as they were involved in a working group process to develop the manual, including the identification of necessary revisions. In addition of new requirements, DHCs continues to meet with and accept input from counties and stakeholders, which we will take into consideration for future adjustments to the budget methodology.

Upon release of the approved fiscal year 2425 budget, DHCs will apply the HCPCFC budget methodology to HCPCFC caseload PHM data to develop the county budget allocations. DHCs will then publish and send out to the counties an information notice you had some questions about vaccines. Has DHCs analyzed the potential impact of VFC participation from removing the CHDP requirement that providers participate in VFC? DHCs does not anticipate an impact. Medi Cal providers are required to provide necessary immunizations.

In addition, all Medi Cal providers that meet the VFC program criteria, as defined in federal law, not just CHTP providers, may participate in the VFC program. DHCs requires the Medi Cal managed care plans to inform its network providers about the VFC program and expects that they promote and support enrollment of their providers into the program to improve access to immunizations. I could speak more on that today, but I'm sure you have some questions for me.

Good afternoon. My name is Michelle Gibbons. I'm with the County Health Executives Association of. California. We represent local health departments who administer the CHDP program and the healthcare program for children in foster care. And I too am going to say HCPCFC and hope I don't mess that up along the way. I also am here representing my colleagues as part of a coalition that includes CWDA SEIU Children Now in Los Angeles County, representing the partnership that it takes to really administer HCPCFC.

So representing social services departments, our collective workforce, and our children advocates, we appreciate the dialogue between our coalition and DHCs, including participating in those stakeholder convenings. I just want to acknowledge that transitions are difficult, especially when they impact California's most vulnerable children. I'm going to focus the majority of my remarks on the actual budget changes that are happening right now, but I do just want to put a pin to say while the Department says that the transition is on track.

The documents were just released in late March, and so we are still digesting and trying to figure out what this looks like on the ground. We also have some concerns around just things like care coordination and ensuring accountability for managed care plans as they take on this population. And just keeping in mind that foster youth come with a different set of challenges. They don't have necessarily the medical homes that folks do, you oftentimes don't necessarily see all of their medical history.

And so it takes a bit more, the acuity is more challenging, so it takes a bit more to just really make sure you're monitoring and doing what's right by those children. And so I just want to just put that in there because as the Department talks about all the care coordination programs available for the fee for service population, those care coordinations, TCM, CCs, they all come with strict eligibility.

TCM is actually starting to be wound down in a lot of jurisdictions because the fee for service population and the requirements on the managed care side is changing. So I just want to put a pin there. But I'll focus really on the budgetary piece and just say that despite our engagement, we still remain concerned with the department's proposal or the administration's proposal to only provide 13 million to stand up the HCPCFC program program as a standalone program.

We instead, as a coalition, are seeking the full 34 million, which was once the CHDP allocation, to transition over to support HCPCFC. When the CHDP transition came before the Legislature in 2022, the Administration said that this wasn't cost savings. It wasn't budget cost neutral or budget neutral either. However, the distribution of funds in the Governor's Budget, which you can find in the Medi Cal like estimate policy changes, it suggests something slightly different.

It not only shows that there's a finite bucket, so they're working with the 34 million of the CHDP allocation not going a penny over that, and they are dedicating the difference between that 34 million and the 13 million to what's called the CCS Monitoring and Oversight Initiative, which is an unrelated initiative. And despite participation in the stakeholder convenings and many stakeholders, including myself, saying this is not the right approach, you should not be moving funds from CHDP to support that separate and distinct initiative.

That is the proposal at hand. I would also just mention that CHDP and HCPCFC are so intertwined. The elimination of CHDP means you're taking some of the public health nurse supervision support, some of the public health nurse support, and administrative support away from the healthcare program for children in foster care. And that means that. And that also includes medical consultation in some programs.

In the draft guidance for creating the standalone HCPCFC program, DHCs adds new reporting requirements and performance measures that is going to require additional resources. It's important to understand, again, the acuity of the children and the needs of children in foster care is greater as time goes on. Our coalition put forth a methodology based on those duties and the on the ground experience that leverages various staffing ratios and creates a statewide funding need for the program.

We identified that after other funding sources dedicated to support foster kids, and particularly around, like the public health nurse side, there's still a gap of $46 million. We recognize that in this budget climate, though, there's really a finite bucket of money to pull from. And so we're seeking three key things we ask. First, that the Legislature approve our budget methodology and redirect the entire CHDP budget of 34 million to ensure that the healthcare program for children in foster care is sufficiently resourced.

It is really important that we get this right. It's also important that we have adequate resourcing, not caseloads that are overwhelming, and to make sure that kids don't fall through the cracks. I'd also ask, or we would also ask, that local jurisdictions are allowed to use their resources flexibly to meet the staffing needs of their jurisdiction. As you heard from the Department, there are specific positions that they're allowing and that they are planning for.

But in some jurisdictions, they may be leveraging a Doctor because the caseload and the acuity of the kids, they may need medical consultation. And so the nurses consult with the Doctor under the department's methodology and their proposal today, that would not be allowed to continue. And so we think that even if they're not changing the bucket of money that once your jurisdiction gets an allocation, if you think that it's best to have medical expertise, you Fund that with your allocations. That's what we're asking for.

And then the last thing is that we're asking for the CCS oversight and monitoring initiative to be delayed indefinitely. I will just put a side note to say. The CCS program is very challenging, and it's fraught with a lot of financial issues right now.

The budgets are already underfunded, and then the Department or the Administration layered on this additional CCS oversight and monitoring initiative, and I don't have enough time to tell you all about it today, but what I will say is it's unrelated to CHDP and it's unrelated to HCPCFC .

And if, because they are using the zero-sum game of 34 million, and that's the bucket that has to Fund both of these things, we believe that you should take that off the table for now and let's Fund HCPCFC appropriately to make sure that foster kids get the care they deserve. Thank you.

Thank you. And before I turn it over to Assembly Member Bonta to see if she has any questions, can you go back to that third request? So you want to eliminate the oversight?

Yeah. So this would be a new CCS oversight and monitoring initiative? It's a new initiative. We're not opposed to. To greater oversight and monitoring. Basically what that initiative is doing, though, is it's monitoring a CCS program at the county level like you monitor a managed care plan. And we are not the same. Grievances and appeals processes. For example, when we first started talking about this, they wanted somebody to be there 24 hours a day, staffing around the clock. That's just very different.

They don't staff or Fund us to that level. So what we're saying is that while there may be good components of that, there's not. There's nothing that's requiring it. There's no federal statute. There's nothing that's like really pushing for this, other than the Department put this in the bucket of Calaim and said that they were going to move forward with it. And it feels like the only way to Fund and get this initiative off the ground, from the department's perspective, is to use this CHDP money.

And so we're saying let's find a better funding source. Let's make sure that the program at the core infrastructure is adequately funded so that we can meet all the requirements and then find the appropriate funding source to add on this initiative. And so we would ask for that to be, be delayed indefinitely.

Ms. Bonta

My question was really around this reallocation to the CCS monitoring and oversight initiative, some rationale around that just to be a little bit more explicit.

And then also just, I know that you touched on in your comments the accountability component related to having the managed care plans take over the safety net services, but I'm just really wondering about the, if we're in an overall climate where it's likely that our service provision level is going to be attenuated or compromised to some extent with the budget deficit that we're dealing with, I wonder about the rationale for our most vulnerable individuals who are in our foster care system, forcing a transition around county level services and the reallocation of that funding as opposed to the strategy of keeping the program whole as it is moving forward.

Yeah, no, that's an excellent question. And just to be clear, with respect to kind of the budget and everything with the managed care plans, the things that are occurring within managed care are happening today and are already requirements. This is a transition that is occurring and we are taking advantage of things that are already happening in managed care. So I just wanted to flag that for you. I'm sure that you're aware of that already. With respect to kind of Michelle's comments. Appreciate her comments.

I think there are a number of things that I would kind of call out with respect to kind of CCS monitoring and oversight. I think that's a separate issue to kind of address. And I know that she's called that out as separately, you know, we are looking to kind of standardize the CCS program across the state, and that's why we've brought in place kind of this monitoring and oversight mechanism that we have under CalAIM put in place.

It's been a partnership, as we've seen it, between the counties and the state to put in place what's called, well, a memorandum of understanding that kind of outlines the different requirements of the program for both the state and the counties in terms of what each entity is responsible for doing. And as Michelle kind of laid out grievances and appeals is a perfect example of that.

And I think she's right that when we first started kind of talking about things, grievances and appeals was an example of something where we thought more stringently we might have the counties put in place kind of a, you know, a 24/7 requirement of something. And then we thought, oh, let's take a step back and look at how can we do this a little bit more easily and take some of the requirements off the counties?

And so actually took a step back, and the state is actually doing more of the responsibilities and the requirements and the activities and actions with respect to the grievance and appeals with that requirement there. And so looking to look at, looking at where we can kind of take off some of the administrative burden from the county. So wanted to call that out specifically. Sorry, go ahead.

It is relevant in that we're redirecting $20.8 million towards the CCS monitoring oversight as opposed to fully funding HCPC.

Yeah. And so I think separately, I think there have been conversations that have been ongoing with respect to HCPCFC. I hate that acronym. Sorry.

I don't know who made it up. I guess it's because it's how the name of the program, but there have been ongoing conversations about HCPCFIC and the methodology for what it should look like in the May revise. And obviously, I can't talk about what's going to be in the May revise specifically, but I think we've been having ongoing conversations with chiak and their partners as to kind of what the methodology should look like.

We have been having long conversations where we've looked to collect information from the counties to kind of understand what the, what the positions should look like. And I do think that whatever ultimately, to answer Michelle's question, whatever ultimately we do come up with will provide for the flexibility that they're looking for in terms of the positions that they need.

I think that, you know, we need to set something in terms of a program that will allow for flexibility for counties so that there's enough standardization so that we have, we have standards across the state, but that there's flexibility within that standardization that allows for the spending to occur so that counties can hire the positions that they need based on their own structures.

The ability to ensure that what is being done is standard, so that if you are in, you know, San Diego, county, in a foster child or Los Angeles or Sacramento, there's not a difference based on the fact that you happen to live in one area versus the other. I think that is extremely important. But that is a significant amount of money that you are taking that you initially propose to reallocate from this particular program.

So it would be very interesting to see what you all have in the May revision, recognizing the things that the people on the ground have said and the things that you've heard in this budget hearing. My final question is around the vaccines. So how are you going to ensure that the vaccine uptake is the same and not decreased throughout this transition period?

Sure. So I think there's a couple of things that we have done. So let me just. So we have been working with CDPH. We have initiated an improved interdepartmental collaboration process with CDBH, which administers the VFC program in California. So over the last six months, DHCs and CDPH have met monthly to work together to examine potential barriers to provide participation in the VFC program and to brainstorm potential solutions.

So we're working together with our partners at CDPH to look at how we can ensure that there isn't a decrease. Because pharmacies are often conveniently located and have expanded hours of operations sought by working parents, expanding pharmacy participation in VFC would improve access to vaccination for children on medi Cal and decrease vaccination disparities by insurance status because children and insured through commercial plans are often able to get vaccinated at pharmacies. So looking at pharmacies as an option also.

So enrolling additional pharmacies in VFC may help us increase as well. Increase as well. In particular in rural areas is something that we're looking at as well. We have talked with our managed care plans, pharmacies and CDPH to gather information on barriers to participation of those pharmacies. We've learned that there's confusion around Medi Cal reimbursement for VFC. Vaccine Administration is one barrier we're looking at, kind of, how can we decrease that confusion, and we'll be working to develop a fact sheet in that space.

And how often will you all be actually looking at the data once this transition is complete to see, do you notice a drop in numbers?

I would say probably we'll look at it. We'll look at it within quarterly. We'll look at it quarterly on a regular basis, at least for the first, like three to five years, I would say, and then ongoing as needed.

Okay, thanks. And I would just urge that if you start to see a drop that you work on transitioning something instead of waiting until the three to five years is over to say, zero, you know, we've noticed this. If you see that there is a trend, become active at that point instead of waiting until the end of the investigation period. So thank you for that. With that, we will move to our fourth issue, which is children and youth behavioral Health initiative fee schedule. And it is, Sarah, again. It is again.

All right. Sarah Brooks, good afternoon. Sarah Brooks, Chief Deputy Director of for healthcare programs with the Department of Health Care Services, here to talk with you a little bit today about Cybhi. All right, so a couple of questions about how have stakeholders in education seen this proposal? We'll talk. I'll defer to you seen this proposal and had a chance to give input on how it would work for them.

So the Department began vetting the concept of the statewide third party administrator function with education and health plan stakeholders in January of 23, based on direct feedback received from DHCS's CYBHI fee schedule workgroup, which included county offices of education, local education agencies, California community colleges, CSU representatives, and other education stakeholders.

The Department received overwhelming support for the proposal to establish a single, centralized statewide TPA infrastructure from both education partners and health plans with respect to the proposed fee amounts the same or the fee amounts the same for the private vendor as it would be if the local or the LEA performed the billing. I'll just talk a little bit about that. So the 2023 budget act included $10 million to establish the statewide TPA for the CYBHI fee schedule program.

In the fall of 23, the Department issued a request for information and selected a vendor, Carillon Behavioral Health, as part of the CYBHI fee schedule implementation. DHCS is working closely with the first cohort of 47 participating local education agencies, health plans, and the TPA vendor in a learning collaborative model to test implementation strategies and refine operational procedures. The role of the TPA is to centralize health plan oversight functions such as credentialing, quality oversight provider dispute resolution grievances and claims adjudication.

Centralizing these functions serves to benefit both the health plans and the participating local education agencies, as well as colleges and universities. By streamlining oversight and significantly reducing administrative functions that would otherwise fall to each health plan to separately administer with all participating local education agencies.

Without the TPA infrastructure, the participating local education agencies, colleges and universities would be required to coordinate benefits for all students receiving CYBHI fee schedule services, figure out which plan is responsible for coverage, submit claims to all health plans, and be subject to different oversight processes from each health plan. So it'd be a big administrative burden if they had to coordinate all of those things on their own as opposed to just submitting things through the TPA directly.

A significant majority of the local education agencies in nearly all of the colleges and universities lack any prior experience with billing health plans for student health services, nor do they have the necessary billing infrastructure at this time and data systems to manage direct claiming processes. By centralizing these functions, the local education educational agencies, excuse me, only need to have one oversight entity for purposes of the CYBHI fee schedule program.

This centralized TPA will also have one set of claiming procedures, streamlined operational policies, a single provider roster form, and so on. The trailer Bill proposes to charge a reasonable fee to the health plans to provide ongoing funding support for the TPA infrastructure. This proposal would allow the Department Fund the TPA without further impacting the state General Fund. If the trailer Bill proposal is not approved, there will not be a way to Fund the TPA contract going forward without the TPA.

These administrative functions and associated administrative costs, which would shift to each individual health plan mandated to reimburse school linked providers under the CYBHI Fee schedule program. This includes the Medi Cal managed care plans, healthcare service plans regulated by DMHC, and disability insurers regulated by the California Department of Insurance.

Without the TPA infrastructure, implementation of the fee schedule and provider network will cause a significant administrative and fiscal burden, unnecessary complexities, a variety of redundancies, and inconsistent processes for both the health plans payers and school sites, including k through 12 local educational agencies, California community colleges and CSU and UC campuses and I'm gonna turn to my DOF colleague to answer one question.

Nate Williams, the Department of Finance and I believe there was a question on the status of the Bill, and the language is in the very final stages of the review process and is expected to be posted on the Department of Finance website within the week. It will include some minor changes to the language, really just to kind of clarify the intent, and they are technical in nature. But again, it will be well expected to be posted onto the website within the week.

Thank you. Assemblymember Bonta, you have any questions?

No, I think it's. I'm very thankful that we've been able to do this, being working with schools a lot, knowing that they are, at this point, kind of our most accessible places where our students can address social emotional health issues and behavioral health issues. I think it's pretty critical, and I'm mostly concerned about making sure that it gets online within a timely manner to be able to support school districts that are experiencing all of the children who are in desperate need of behavioral health. So I think it's a very good thing. Just want it to happen right away.

Thank you. Just want to. Since the trailer bell language is not online and not readily available for everyone to see yet, have those who are stakeholders in this area been able to see any early draft of what we will hopefully see by the end of this week to ensure that they're on board?

I'm not sure whether any stakeholders have actually seen. Well, no one's seen the finalized language, but even the draft language that we shared with LEG staff, I'm not sure if any stakeholders have gotten a chance to weigh in on that. However, I'm assuming during the process to kind of come up with it, there would have been stakeholder engagement.

Yeah, we haven't shared the draft, but we've had significant discussions, and really, the idea came out of the stakeholder discussions for the TPA. So full support, I believe. Is there a projected annual cost for the TPA? Do we have a projected annual list?

Well, the TPA, so currently the fee schedule is only adopted by cohort one, so there's definitely a ramp up period. I don't think we've included any specific numbers for the full cost as it relates to when it's finally adopted by everything. But I know that we allocated $10 million for the current year to kind of get it up and running, and, you know, so that kind of gives a little bit of a ballpark as we move forward.

But ultimately, the language is really designed to kind of make sure that we don't have to use General Fund to cover these costs, the services that are being provided to the MCPs and to the insurers and the plans that they're covering the cost of these services.

All right, well, thank you. You are done. I'm done with you.

Thank you very much.

Have a beautiful day, and I look forward to the person that you bring to me. I will. Thank you.

I will bring her to you.

All right, we are going to move to our last issue, which deals with California health Facilities financing authority, specifically an update. And we will bring on Carolyn Aboubechara, Tyler Ulrey and Ryan Miller.

Good afternoon. Carolina Aboubechara, Executive Director of the California Health Facilities Financing Authority, also known as CHAFA. So I'm going to give an overview of what the authority does and talk about our programs. So CHAFA is housed within the treasurer's office. It's comprised of a nine Member board, and we've existed since 1979. And our mission is to improve healthcare access by providing financial assistance to nonprofit and public health facilities.

There are 21 different types of health facilities in our act that we can finance, and the way that we provide financial assistance to these nonprofit and public health facilities is through a number of bonds, loans and grant programs. We have 11 active financing programs, and so I'll kind of talk a little bit about them. The first program is our bond financing program. It's a program where ChafA is a conduit issuer.

It works with health facilities, and it acts as a middleman with bankers and investors in order to get the financing they need for a health facility. And the financing can be utilized towards construction, purchase of acquisition, mainly anything regarding buildings, brick and mortar. And so we facilitate that. We've been operating that program since the seventies. As of December, we've issued 619 bonds, for a total of $47.7 billion to 275 health institutions over the course of our history.

And these are bonds that can go up to 40 years at Low competitive interest rates because of their tax exempt basis. The second program we have is called our Help two Loan program. It's a revolving loan program that was seeded back in the eighties, and this program evolved from a help one program to help two program where it helps small and rural health facilities get a loan of up to $2 million at either two or 3%.

Obviously, with the industry market now, it's a very competitive rate and it's been very utilized. And so this is to assist the small and rural health facilities get the financing they need for infrastructure as well, buildings, equipment, to increase access to care and increase services. This program, since the nineties, since it evolved into the Help two program, has provided 303 loans totaling $144.9 million. CHAFA also administers the children's hospital grant programs of 2004, 2008 and 2018.

These were three ballot measures that were passed by California voters back in 2004. Proposition 61 enabled the State of California to issue $750 million in General obligation bonds for grants to children's hospitals. In 2008, Proposition three was passed to allow the State of California to issue $980 million in bonds. And the most recent one back in 2018, Proposition four, which enabled the State of California to issue $1.5 billion in General obligation bonds to fund the children's hospitals.

There are 13 children's hospitals designated in the State of California. Five are UC eight, or nonprofit, that we administer grants to to assist in their infrastructure costs, again, like acquisition of real property, construction equipment. And the goal is that they have to show how the investment will improve patient outcomes or increase access to care. And they do serve the most vulnerable children of our state. After that, there are a few one time General funded programs that CHAFA has administered over the years that are still open.

We have two mental health grant programs, the investment and mental health wellness grant program. And the second portion of that was dedicated to children and youth. And these programs were designed for us to give grants to counties to develop facilities that provide mental health treatment. And facilities can range from emergency services called crisis stabilization units or crisis residential facilities that are where an individual with a mental health crisis can stay for up to 30 days, or mobile crisis support teams.

And so we've allocated all the funding for these programs, but there's a lot of programs that are still being under construction or hiring or all that. So, and then, so the goal for these two mental health programs is to increase access to services for those who are having a mental health crisis. The third general funded, one time grant program is our jail diversion program. It's called the Community Services Infrastructure Grant Program.

We receive one time funding also for counties to give grants to those counties to develop facilities where they can provide mental health treatment, substance abuse treatment, or trauma informed services for those who cycle in and out of jail that have a mental health, substance use, or trauma disorder. And so the goal for this program is to get less, to get people treated and not cycle in and out of jail and not serve their sentence if they get the, the right treatment.

And so all funding has been allocated for that. We're just continuing to monitor all the programs and projects. Half of the projects we've awarded are done, and we're continuing to work with the counties to get the rest up and running. Then we also have the non designated public hospital bridge loan program. This was seeded from the General Fund back in 2021. Through the Budget act, we received $40 million, and then in the Budget act of 2022, we received another $40 million.

And this program is designed for the district hospitals in California. It's basically a bridge loan program whereby a lot of the district hospitals were switching from one Medi Cal incentive payment program to another, from prime to quip, and it caused a two year delay in funding that the hospitals were going to get.

So this program was designed to help with their cash flow needs, to give them a two year loan so that they have the money, and then when the funding comes from dhCs, then they can pay us back. We awarded the first $40 million to 15 hospitals and the second 40 million to nine hospitals. And currently all the hospitals have been paying back, and so they're all current right now.

And so we're going to continue working with the hospitals to get the collections back, and then this funding will go back to the General Fund. And then we have the distressed hospital loan program, which you may all have been hearing a lot about. Back in May, the distressed hospital loan program was passed through urgency legislation. It was a partnership with us and the Department of Healthcare access and Information. We partnered and we worked closely on a daily basis to develop the application process.

Very quickly, we received 30 applications from hospitals that were in distress, basically, the hospitals who don't have the finance or the funding they need to continue operations. And so these were loans to prevent them from closure or to assist hospitals in reopening. And so there were awards made to 17 hospitals. This program was funded with $300 million in funds, and they were awarded to 17 hospitals. One hospital forfeited its loan award because it was no longer eligible. It got bought out by another hospital.

It left us with 16 remaining hospitals that we've been working with on getting loans out to assist them with all their cash flow needs. Out of the 16, we have already dispersed and given out money to 13 of those 16. So we've already dispersed 222 million of the 300 million we received in less than a year, and we got it all out. We're still continuing to work with the three hospitals. Two of them are going in and out of bankruptcy.

And so we're going to continue working with those struggling hospitals, and that doesn't complete our work with these hospitals. We will be continuing to work on an ongoing basis until the six years are up on this loan. These loans are for six years. And so we're going to continue working on collecting a lot of information from the hospitals, their financials, their audits, updates on their turnaround plans, on how well they're operating their hospitals with this loan.

And so we are going to continue working also with the Department of Healthcare and Access information and figuring out all that criteria. Lastly, the newest program is our specialty dental clinic grant program that was also seeded from the General Fund. Back in 2022, Chaffa was allocated $25 million, and then in the 2023 Budget act, we received another $25 million. So the program is funded with $50 million. Basically, this program is assisted. Its goal is to.

Its goal is to increase access to oral healthcare for the special healthcare needs populations. And the special healthcare needs population consists of children and adults who have a cognitive, behavioral, or physical condition or a disability. And so we worked very closely with a number of stakeholders. We developed the application that went live back in the summer of 2023. We opened a funding round accepting applications back in October.

And now, as of April 1, I wanted to report that we received 101 applications for $270 million in requests, and we only have $50 million in funds. And so we are going to strategize on how we are going to tackle this review process if the funding is available. I know the January budget proposed delaying the funding from 23-24 to 25-26 and so we've notified everyone who has applied the 101 applications we received that it's on hold pending the availability of funding.

And so currently we're just strategizing on how to tackle that so that we can be ready to move forward as soon as the funding is available, depending on the timing. And with that, that's kind of an overview of what we all do. And happy to answer any questions.

Thank you. To your last point before I turn it over to our simply Member, Bonta, you said you got 101 applications totaling how much?

$270 million.

277.

270 million. And the funding is 50 million for the program, so quite oversubscribed.

Highly needed program.

Highly needed.

Interesting. Okay. Assemblymember Bonta

And just on that means. So the delay, the proposed delay is for the full $50 million, right?

Yes. Less some administrative costs since we've already incurred. Yes.

And the direction that we have right now is that you were just holding.

We're holding applications because we can't proceed forward without the funds. And so we've notified everyone it's subject to availability. That will give them the opportunity to update their applications, but that way they put their place in for the funding. And then once the funding becomes available, we will finalize the reviews, score them, and then make grant allocations and awards.

You said the 25 and 25 were over two different budget years, correct?

Yes, two different budget years.

Can you just give us a sense of what the 101 applications were in terms of distribution across the across the state?

Yes, actually. Well, I don't have the summaries, but, yeah, it's distributed throughout the entire State of California. We have five different regions we've allocated. We can see a diverse applications, literally throughout the state, and I can see that a lot of them are just regular dentists offices. Not only do a regular dentist office can qualify, we have schools that can apply, dental schools, and nonprofit clinics.

And so, just scanning through the majority of the applications, we can see a wide spread throughout the State of California of requests, and it's all over the board, from as little as a $5,000 request all the way to a $5 million request per applicant. The requests we've seen, a lot of them are for equipment and renovation because the clinics already exist, but there are some who want to buy a clinic and expand.

And so, yeah, so we distributed the allocations between a superior region, Bay Area, Central Coast region, LA is on its own, the southern region, San Joaquin, and I think that's it. And so we've got coverage, literally, from every single region.

Just to go back to the. Sorry. The distressed hospital loan program. So, you said 222 million of the 300 million have been dispersed. So does that mean that the three hospitals that have not been funded have $78 million between them in terms of.

Oh, yes. So Madera Hospital is one of them. They received $57 million. There's Hazel Hawkins Memorial Hospital. There's $10 million left there for them. And Sonoma Valley, $3.1 million. So Madera has the majority. And as we all know, Madera's trying to get reopened. And I think they're gonna. They already got a proposal, and they're gonna get out of bankruptcy, I believe, in May. So, literally, we work with these hospitals on a daily or weekly basis to continue trying to get the loans out. Yeah.

There's a lot of documents, legal documents, we have to go through, especially with bankruptcy court. Once they're in bankruptcy, a lot of issues have to go through the judge. So, now that they're heading out of bankruptcy, we feel that we may be able to move fast. With Madeira in broad brushstrokes, what are.

The terms of repayment for those loans?

Yes. 0% for six years with 18 months of no payments at all.

Okay.

Yes. The first 18 months or 1st 18 months, no payments. And then after the 18 month, they will start making monthly payments to pay down with zero interest. So they'll just make equal payments for the rest of the four years.

Thank you.

If I may. Going back to the specialty dental clinic grant program. So, the Governor's Budget proposes to revert the remaining $47.5 million for this program. In light, in response to the significant budget shortfall that the state is experiencing this year, the Administration focused on finding budget solutions that would maintain current programming and benefits that are currently being distributed. Given that none of the local assistance dollars for this program had gone out, we felt like this was an appropriate budget solution.

I don't know about appropriate. Certainly feasible.

Just out of curiosity, before you included this in the proposal, were you aware of the significant high demand for these dollars? Meaning, were you aware of the number of applicants and the cost that would have. That we would have had to pay if all of them were like, is there communication between the two? Because this is the first that I've heard of it.

I was under the assumption that, you know, this was an underutilized program, and that's why, you know, none of the funds had gone out. I was not aware that there were over 100 applications for this grant.

Yeah, I mean, I couldn't speak too much of the specifics there, but, you know, we anticipated appropriate uptake of this program. We felt we knew and understand that the need was there and continues to be there. But again, in light of the significant budget shortfall, we felt like that was the right action.

So you were aware that there were over 100 applicants for this program?

Well, may I add, the deadline was April 1, so that's when they all came in. We were a little surprised at the amount, but, yeah, April 1 is when everything came in. So way after the budget delay decision.

Are the higher interest rates impacting the authority's ability to issue and refinance bonds?

Okay, so on the bond program, it's kind of interesting. So since 2017, we have seen the most bonds we've. For the past five, what, nine years now? Since 2017, we've seen the most bonds issued since. In just four months. So from January to April, we've done more bonds than we have done in every year since 2017. And I was trying to find out what's the uniqueness? It doesn't have to do with interest rates.

It just has to do with most of the bonds we're issuing right now are for infrastructure, for what we call new money, meaning not to refinance. Typically, in the past, we would do refinance. Like, if we have good interest rates, they would take their bonds that are a higher interest rate, refund them, refinance them, and get more. We used to have a lot of refinancings in the past. Lately, it's all been mostly new money, construction, buying out of hospitals equipment.

And so it's more like infrastructure costs that they're seeking funding from us. So it was an interesting observation we saw, and it could be there are other issuers in the state that can issue bonds, but we have seen quite a number and a high dollar amount of issuances just at CHAFA alone in the past four months than we have in the past five years. So.

Yeah, well, I guess that would go along with hospitals and hospital systems stating that they lost a lot of revenue during the pandemic and no longer have some of the basic revenue that they used to have to do things like, you know, keep up with their infrastructure, especially with some of the requirements that are coming down from the state. So that is interesting. Can you provide an update on the repayment of the non designated hospital bridge loan?

Yes. So, like I mentioned, we received $40 million in one year and another 40 million in another year. And all the hospitals, this is a, a 0% two year loan that no monthly payments are needed. It's just a balloon payment, meaning we give them a loan after two years, they pay it back in one lump sum. They don't make monthly payments. So for the first program, we awarded 15 hospitals, all of them are current. We've already received quite a few payoffs. There are only eight, wait.

12346 hospitals remaining with payments, and only $8 million we need to collect from the first 40 million. So we've already made collections of all the money except for 8 million of the first 40, and they're all on time and all the hospitals are repaying. However, there's still another $40 million. Those have not come due yet.

There's nine hospitals that got those loans, and I know there's a Bill trying to seek that program, AB 2098, to extend that out so the hospitals have more time and kind of make it match the distressed hospital loan program, basically to extend it from two years to a six year loan. Yes, but they're all current, and they've made all their payments in their own time.

Thank you. Any other questions? All right, well, I want to thank our final panel for your update. We will now open it up to any public comment, and each person will have 1 minute.

Thank you, Madam Chair, Committee Members, staff Toni Triguero. On behalf of the California Teachers Association, I first want to express our interest in the Joint Hearing with the Education Budget Subcommitee on the Children and Youth Behavioral Health initiative in its entirety, originally scheduled for April 15, but had to be postponed. We sincerely believe legislative oversight and review of those expenditures as they relate to student health issues and leas is warranted.

CTA has participated in a number of meetings with the initiative staff, not just on the fee schedule, but on SPA, hip, and the certified wellness coaches. With regard to the fee schedule. Item four we've shared a number of concerns with initiative staff, including unintended consequences impacting the current LEA billing option program and the school based Medi Cal administrative Activities program, resulting in reductions in their billing opportunities and reimbursements.

We've also expressed the need to authorize expedited data sharing amongst the program participants, including requiring the third party administrator to arrange to engage in MOUs with the insurance entities, both commercial and managed care, to provide all the necessary billing criteria and administrative services, thus minimizing the hurdles faced by leas currently and thereby guaranteeing that they're authorized maximum reimbursement to fees that they are entitled to receive, as. The Committee has previously Thank you.

Thank you.

Good afternoon. Michelle Gibbons with CHEAC related to CalAIM, there is a population health management strategy, and as part of that strategy, managed care plans are required to fulfill their population health needs assessment through engaging in the local health Department community health needs assessment and community health improvement plan. They're going to change timelines for the locals. We are moving from kind of a three or five year cycle to now a required, standardized three year cycle and require new partnerships.

Under BHSA, behavioral health departments are now a part of that. What we have proposed is our own proposal for PNA path, and what we're asking for is to repurpose our own unexpended dollars from a different program and allow us to use that as the infrastructure to build to allow those partnerships to be successful. Thank you.

Thank you.

Selena Liu Raphael, behavioral health policy advocate with the California Alliance of Child and Family Services. Our 160 Member agencies are nonprofits serving the behavioral health and child welfare needs of children, youth and families in all 58 counties. Our growing full circle health Network is helping 70 Members in 32 counties with the enhanced care management rollout and relationships with managed care plans. We agree wholeheartedly with the goals of Calaim to both expand access and improve the quality of care received.

However, many of our programs are on life support due to soaring costs, workforce challenges due to inefficient reimbursement rates, and complicated and varying systems by county and managed care plans. We must continue to advocate and collaborate with other Association partners to ensure the goals of network adequacy, simplification within payment and documentation, and sufficient rates so that our Members, who are deeply rooted within these communities can keep their doors open and continue building relationships and quality services among those most in need. As you both mentioned, if these programs close, the cost of the state will be much higher down the road. Thank you.

Thank you.

Good afternoon, Madam Chair and Members of the Subcommitee. My name is Jenny Nguyen with the County Welfare Directors Association. I'd like to echo the comments made by my colleague from CHIAC on the CHDP transition and what's needed to create HCPCFC as a successful standalone program. Thank you.

Thank you.

Good afternoon, Madam Chair and Assemblymember Bonta Jolie Onodera with the California State Association of Counties, here to comment on issue three regarding the proposed transition of the CHDP program. Also would like to align my comments with Chiak Executive Director, Miss Gibbons regarding her recommendations. Thank you.

Thank you.

Good afternoon. Linda Nguy with Western Center on Law and Poverty. We applaud the department's work on improving Medi Cal renewal rates, noting that most of the improvements have been achieved through implementation of federal flexibilities, although would still note that over three quarters, 76% of people are still being terminated for paperwork reasons and so more does need to be done and so recommend that these flexibilities be made permanent, but also looking at other flexibilities that the Department have not yet implemented.

In addition, we support timely implementation for the multi year continuous eligibility for children up to age five, noting this is the critical time in their development. And finally, related to assemblymember Bonta's question related to calaim housing support services. Appreciate the recognition of savings, long term savings, and note that we have some studies that show that there are significant cost savings from reduced emergency room utilization, better health outcomes, and so forth.

Thank you.

Good evening. Beth Malinowski, the SEIU California. Chair, Members want to align myself as well with the comments made earlier by our colleague Michelle Gibbons from Chiac on behalf of the CHTP transition. Really appreciate the questions and discussion today, as well as the analysis and item. Appreciate taking this transition so seriously. Thank you.

Thank you. Hi, good evening. I'm Breanna Pittman Spencer with the California Dental Association here on the CHAFA spending specialty dental grant program. Obviously very concerned with the delay there. This has been a decades-long issue of access for patients with special needs, which is everything from folks with autism or other developmental delays to those who are medically complex and medically fragile. Really excited about the opportunity that the 50 million provides. I think that Chafa has put together a really, really strong grant program with the various regional allocations.

I think that's what we've seen in the applications. There's actually six in your district. Assemblymember Bonta and there's eight in the San Diego region. Both areas really, really need more capacity there. The funds are eligible for things like the facilities. So widening hallways, making sure that rooms are sort of sensory appropriate. There can be things to facilitate sedation, which is often needed for this population.

But there's actually extra points if you're going to be able to reduce sedation, which is something that we're really interested in, just because it's costly and complicated. So really would encourage any kind of creative thinking to not delay that funding. Thank you.

Thank you.

Vanessa Cajina, on behalf of the California Pan Ethnic Health Network, first of all, on the Medi Cal unwinding piece, wanted to appreciate the work that the Department has done to utilize all of the federal flexibilities available to them, but did want to point out that we have several community based partners around the state who have clients who are coming in showing that they are getting re enrollment paperwork that is not in the language that they indicated is their primary language spoken.

So we want to encourage the Department to make sure that their partners are working to make sure that language access is at the top of mind in all of this, then on calaim. Also really appreciate the work that we've done on path to get community based organizations enrolled in the enhanced care management pieces of this. But it is an incredibly high bar to get to through the path applications, and a lot of these cbos are having a lot of technical difficulties accessing those.

So even with the technical assistance vendor marketplaces that DHCS has really done a lot of hard work to put out into the community. There is additional work needed. We're here ready to do it, and we appreciate what the Department has done, but there's a lot of room left to grow. Thank you.

Thank you.

Good afternoon. Andi Liebenbaum from the County of Los Angeles also wanting to align our comments with those of Chiak and Michelle Gibbons, recognizing that Los Angeles has such an outsized and unfortunate number of people, families and children in the child welfare system. The more money we can have to stand up our new society and make sure that we can prevent children from getting into the system, the better off we are in the long run, the less expensive the system. So thank you very much.

Thank you.

Chair Members. Kathy Mossberg with the First Five Association. Just want to make a comment on the first item, the continuous eligibility for children, zero to five. We're part of a larger coalition of children's advocates supporting this really hope that it happens. The Department will ask for that waiver. We know from June 2023 through January 2024, approximately 74,000 children fell off of our medi Cal rolls. We know that the majority of them are still eligible. Those are just procedural disenrollments. It would be incredibly helpful. It's cost saving, and these are medical visits that these kids can't make up. So thank you for teaming that up today.

Thank you.

Nicole Wordelman, on behalf of the Children's Partnership, also aligning with first five on zero to five continuous coverage. It's really important. The state is already obligated to cover these children, and not covering them undermines other investments in things such as the children and youth Behavioral Health Initiative. The Department of Finance has to greenlight the issue. We're hoping they choose to do so as part of the May revision.

Thank you.

Good afternoon. Nora Lynn with Children Now on issue one regarding Medi Cal Continuous Enrollment, we are in strong support of the multi year continuous enrollment policy for young children, and we call on lawmakers to move forward with implementation on issue three regarding CHDP phaseout. HCPCFC is a complex program, and there are still still many programmatic details to work out in this transition.

We must ensure county HCPCFC programs have sufficient resources to ensure the healthcare coordination and oversight for children and youth in foster care is not impacted. As these programmatic details are resolved. Children and youth in foster care often have complex health needs, and without a fully equipped HCPCFIc, vulnerable children and youth for whom the state has a legal duty of care will be left without critical clinical case management necessary to meet their complex health needs. Thank you.

Thank you.

Hello. Richardson Davis with the California Council of Community Behavioral Health Agencies. We support the continued funding to Calaim initiative and CHFFA and CYBHI. However, some of our providers continue to struggle with some of the implementation. So we look forward to, to working with DHCs and counties to improve the partnership in the future. Thank you.

Thank you. Well, I want to thank all of our panelists. I'd like to thank the Lao and the Department of Finance for also being here. And with that, this hearing is adjourned.