The 2020-21 Spending Plan

Human Services

In-Home Supportive Services (IHSS)

The spending plan provides a total of $15.2 billion (all funds) for IHSS in 2020‑21, which is about $1.6 billion (12 percent) above estimated expenditures in 2019‑20. The spending plan includes about $4.5 billion from the General Fund for support of IHSS in 2020‑21. This is a slight net increase of about $160 million (4 percent) above estimated General Fund costs in 2019‑20. This slight year-to-year increase in General Fund masks a number of cost increases and costs shifts. Specifically, the spending plan assumes continued year-to-year growth to the three primary IHSS cost drivers: caseload (4.1 percent), hours per case (1.5 percent), and IHSS provider hourly wages and benefits (6.5 percent). Additionally, the spending plan continues to provide General Fund support for the 7 percent restoration of IHSS service hours. However, total General Fund costs are partially offset by a temporary increase in the federal government’s share of IHSS costs for the duration of the national public health emergency. We describe in more detail key cost increases and cost shifts in this section.

Continues to Provide General Fund Support to Continue Restoration of IHSS Service Hours. The spending plan includes $410 million General Fund to continue the 7 percent restoration of IHSS service hours in 2020‑21. The state has funded the restoration of IHSS service hours with General Fund since 2016‑17. The 2018‑19 budget continued the use of General Fund to restore IHSS service hours, subject to potential suspension on December 31, 2021. In January, the administration proposed to continue the restoration of IHSS service hours and delayed the possible suspension by 18 months—until July 1, 2023. However, as a part of the May Revision, the administration proposed to reduce IHSS service hours by 7 percent effective January 1, 2021. (The May Revision proposed restoring IHSS service hours and the associated funding if sufficient federal funding was provided to address the state’s overall budget problem.) Ultimately, the spending plan rejected the administration’s May Revision proposal and continues to provide General Fund to restore IHSS service hours, subject to potential suspension on December 31, 2021.

Temporary Increase in Federal Medicaid Funding Offsets Portion of State General Fund Costs. Under the Families First and Coronavirus Response Act (FFCRA), the federal government provided enhanced federal funding for Medi-Cal services, including IHSS, for the duration of the national public health emergency caused by coronavirus disease 2019 (COVID-19). The spending plan assumes this enhanced federal funding is in place from January 1, 2020 through the end of 2020‑21 and will offset around $1.2 billion in total IHSS General Fund spending across 2019‑20 and 2020‑21.

Commitment to Consider Automated Process to Reduce Number of Recipients Falling Into State-Only IHSS Program. Currently, county IHSS social workers manually terminate IHSS recipients from the program if they become ineligible for Medi-Cal due to a failure to complete the annual Medi-Cal redetermination. If cases are manually terminated, the recipients would need to reinstate their Medi-Cal eligibility first to receive paid services through the IHSS program again. However, if the social worker does not manually terminate the case, the recipient, by default, is enrolled into the IHSS-Residual program. Under the IHSS-Residual program, the state is unable to draw down federal funds for the services provided to recipients until they are reenrolled in Medi-Cal. In the Governor’s May Revision, the administration proposed to automate the termination process for IHSS recipients who fail to complete the annual Medi-Cal redetermination. It is estimated that this would save $72.6 million General Fund annually. As a result, these individuals would not be enrolled into the IHSS-Residual program; instead individuals would be terminated from IHSS and reenrolled into the federally funded IHSS program after their Medi-Cal eligibility is reinstated. The spending plan defers action on this automation proposal, with an agreement between the Legislature and administration to work together to consider how the automation process would work, impact on IHSS recipients, and impact on the IHSS-Residual program. (While action was deferred, the spending plan still includes the $72.6 million General Fund savings. This is because the spending plan assumes that Medi-Cal annual redeterminations will be temporarily suspended through July 30, 2021, meaning that no IHSS recipient will be terminated from the IHSS program due to a failure to complete the Medi-Cal annual redetermination requirement. Since no IHSS recipient will be terminated, the budget assumes no individual will enter the IHSS-Residual program—resulting in savings to the state General Fund.)

Holds County and Public Authority Administration Funding at 2019‑20 Levels. The spending plan provides $300 million General Fund for IHSS county administration and $325 million General Fund for public authority administration, which are equal to 2019 budget act funding levels. In January, the administration proposed to increase IHSS county and public authority administration relative to 2019 budget act funding levels based on estimated caseload growth in 2020‑21. However, in May, the administration withdrew the proposed increase to 2020‑21 IHSS administration funding levels, resulting in IHSS administration funding levels remaining relatively flat year-to-year.

COVID-19-Related Actions. As shown in Figure 1, the spending plan provides about $100 million in one-time General Fund across 2019‑20 and 2020‑21 for COVID-19 response efforts in IHSS. The COVID-19 response efforts include the implementation of federally required emergency paid sick leave benefits for individuals unable to work due to COVID-19 and the establishment of an emergency back-up provider system. Additionally, the administration implemented a number of temporary program flexibilities for the duration of COVID-19, which we explain in detail in the nearby box.

Other IHSS-Related Actions. In this section, we summarize other budget and policy changes in IHSS that are included in the 2020‑21 budget.

• Requires Statewide Social Worker Refresher Training on Service Assessment and Authorization. The spending plan provides $1.9 million General Fund in 2020‑21 for the Department of Social Services, in consultation with counties, to develop a statewide training program primarily focused on assessment and authorization processes.

• Extends State Paid Sick Leave to Waiver of Personal Care Services (WPCS) Providers. Currently, IHSS providers are eligible to receive up to 16 hours of paid sick leave annually (increasing to 24 hours annually on July 1 2022, after the state minimum wage reaches $15 per hour). The spending plan provides $112,000 ongoing General Fund to extend state paid sick leave coverage to WPCS program providers. (Similar to IHSS, the WPCS program is a Medi-Cal service in which recipients receive personal care services in their homes.)

• Eliminates Prorating Protective Supervision Hours for IHSS Recipients Residing in Same Household. Under the IHSS program, recipients who are non-self-directing, have cognitive or mental impairments, and require 24-hour supervision to remain safely at home may be eligible to receive protective supervision services in which their provider is paid to monitor them. In the past, when multiple recipients required protective supervision and lived together, it was assumed that the protective supervision services could be provided to each recipient simultaneously. As a result, the amount of protective supervision service hours was prorated or divided equally among the recipients. The spending plan, however, eliminates the practice of prorating protective supervision hours, meaning protective supervision service hours will be provided to each individual recipient rather than being divided. This action results in $15.8 million General Fund costs in 2020‑21.

• Approves Funding to Implement Federally Required Electronic Visit Verification (EVV). As mentioned in the Secretary of the California Health and Human Services Agency, Office of Systems Integration spending plan post, federal law requires states to implement an EVV system for Medicaid-funded personal care services, including IHSS. While states are required implement the EVV system in Medicaid-funded personal care services by January 1, 2020, the federal government granted California a “good faith effort” time extension until January 1, 2021 for this implementation. The spending plan provides $20.7 million ($6.1 million General Fund) to support the implementation of EVV in IHSS. We understand that due to recent federal guidance, the state will likely not meet the federally required deadline. As a result, the state will likely incur federal penalties of at least $14.8 million in 2020‑21. (These penalties were not captured in the spending plan.)

• Adopts Notice and Scheduling Guidelines for IHSS Provider Orientation. The spending plan requires counties to provide advance notice to labor organizations of the planned date, time, and location of the provider orientation in order to allow the labor organization to present to prospective providers. If the labor organization cannot attend, the county must make reasonable efforts to reschedule the provider orientation (so long as the orientation is not delayed by more than ten business days after the proposed date). Additionally, the spending plan prohibits counties from discouraging prospective providers from attending, anticipating, or listening to the labor organization presentation. Prospective providers, however, may, by their own accord, choose not to participate in the labor organization’s presentation.