March 15, 2021
The California Advancing and Innovating Medi‑Cal (CalAIM) proposal is a far‑reaching set of reforms to expand, transform, and streamline Medi‑Cal service delivery and financing. This post—the fourth in a series assessing different aspects of the Governor’s proposal—analyzes CalAIM proposals targeted at seniors and persons with disabilities (SPDs), including new benefits and structure changes to how long‑term services and supports (LTSS) are administered. (LTSS include, among other supports and services, institutional care in nursing homes and home‑ and community‑based services [HCBS] such as home care and personal care services.) Previous posts in this series provided an overview of CalAIM, considered CalAIM financing issues, and examined equity considerations related to the CalAIM proposal.
Senior Population Expected to Grow Faster Than State’s Population as a Whole. The Department of Finance estimates that the state’s senior population (aged 65 and older) will increase from 6 million in 2019 to 11 million in 2060 (83 percent). The estimated growth rate of the senior population is higher than the estimated growth rate of the state’s total population (13 percent) over the same period.
Senior Population With Disabilities Expected to Grow at a Higher Rate Than Overall Senior Population. In our 2016 report, A Long‑Term Outlook: Disability Among California’s Seniors, we projected that the number of seniors in California with disabilities (as defined by limitations in routine activities of daily living, such as dressing or bathing) will increase by 135 percent, from 1.2 million in 2019 to 2.7 million in 2060, which is greater than the projected growth of the overall senior population (83 percent) over the same period. The faster growth of the senior population with disabilities is partially driven by long‑term increases in average life expectancy, as seniors over the age of 85 are more likely to have developed disabilities late in life. Another driver of growth in the senior population with disabilities is the increasing racial diversity of the senior population, as seniors of color make up a disproportionate share of seniors with disabilities. As the share of seniors of color increases, a higher proportion of the senior population will likely have disabilities.
Large Share of SPD Population Must Access Two Different Insurance Programs. Among the 2.1 million SPDs enrolled in Medi‑Cal, about 1.4 million are eligible for and enrolled in both Medicare and Medi‑Cal. For these dually eligible beneficiaries, Medicare is the primary payer for the services that it covers (such as hospitalization and doctor visits), while Medi‑Cal covers services that are not covered by Medicare, including most LTSS. Figure 1 summarizes the services dual eligibles receive from Medi‑Cal and Medicare.
Figure 1
Medi‑Cal and Medicare Services for the
Dual‑Eligible Population
Medi‑Cal |
Medicare |
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aMedi‑Cal provides “wrap‑around” payments for these services. |
Medi‑Cal LTSS Infrastructure Encompasses Multiple Programs With Overlapping Beneficiaries. California’s Medi‑Cal LTSS infrastructure is made up of several programs—with different access points, delivery systems, and eligibility assessment processes—that may serve the same or similar beneficiaries while operating independently. For example, a single Medi‑Cal SPD simultaneously may receive case management through the Multipurpose Senior Services Program (MSSP), personal and home care services through In‑Home Supportive Services (IHSS), and care in a congregate setting through Community‑Based Adult Services (CBAS). This individual likely would receive these services through three different providers, after establishing eligibility separately for each program. Many LTSS programs—such as MSSP, Programs of All‑Inclusive Care for the Elderly, Assisted Living Waiver, and CBAS—also have a limited number of slots or limited capacity, such that many individuals who are eligible for these programs may not be able to receive services from them due to supply constraints. Figure 2 shows the various aspects of this fragmentation that make Medi‑Cal LTSS challenging to navigate for SPDs. Additionally, dually eligible SPDs must navigate both the Medicare and Medi‑Cal delivery systems.
Figure 2
Various Aspects to Fragmentation of Medi‑Cal LTSS Infrastructure
Delivery System |
SPDs may access LTSS through a number of different delivery systems, including Medi‑Cal managed care and Medi‑Cal fee‑for‑service. |
Administrator |
Various state and local offices are responsible for administering LTSS programs, including the Department of Health Care Services, the Department of Social Services, the Department of Aging, and the Department of Developmental Services. Various LTSS programs provide different services and levels of care. In order to receive comprehensive care, many SPDs may need to utilize several LTSS programs simultaneously. |
Service Area |
Few LTSS services are accessible statewide. Some (such as the Program of All‑Inclusive Care for the Elderly) are available only in a handful of counties. |
Service Provider |
LTSS is provided through thousands of private and nonprofit providers. These providers are of varying quality, capacity, and cost. |
Program Capacity |
Several LTSS programs (such as the Assisted Living Waiver and Multipurpose Senior Services Program) have a limited enrollment capacity due to facility constraints or state enrollment caps. |
Eligibility Criteria and Assessment |
While many LTSS programs use similar eligibility criteria, some programs target individuals with higher levels of need. Applicants generally go through a separate eligibility assessment for each LTSS program despite the overlap in eligibility criteria. |
SPDs = seniors and persons with disabilities and LTSS = long‑term services and supports. |
Fragmentation Creates Service Coordination and Access Issues for SPD Beneficiaries. If individuals were able to access all Medi‑Cal LTSS programs, they could be able to receive a comprehensive suite of LTSS benefits. However, individual programs’ services vary, as do their availability geographically. As a result, ensuring that Medi‑Cal beneficiaries are receiving all the services they require, or that beneficiaries’ care is being effectively coordinated between the various programs they have accessed, without duplication or gaps in services is difficult. (Some beneficiaries may even receive case management services from multiple programs, with no guarantee their case managers are coordinating effectively with one another.) For dual eligibles, similar coordination problems can exist between their Medi‑Cal and Medicare plans.
LTSS fragmentation also can create access problems for many beneficiaries. Beneficiaries may have trouble navigating multiple access points and sets of eligibility requirements in order to receive care from multiple programs. They also may find that some LTSS programs they are attempting to access are not available in their regions, or have a limited number of slots available.
Fragmentation Erodes Financial Incentives to Provide More Cost‑Effective Care. In addition to contributing to a lack of service coordination for SPDs, the current system can create an incentive for each program to “cost shift.” Cost shifting occurs when one entity or program takes actions that have fiscal impacts on a separate entity or program. Because the impacts are not borne by the entity taking action, that entity has limited financial incentive to limit overall costs or maximize overall benefits for a particular total level of expenditure. For example, under the current fragmented structure, while Medi‑Cal pays for the majority of LTSS costs for dual eligibles, it pays for only a relatively small portion of the costs of hospitalizations, which are paid primarily by the federal government under Medicare. In such circumstances, the state has limited financial incentive to provide additional LTSS that potentially would reduce hospital utilization for dual eligibles, since the savings resulting from avoided hospitalizations largely would accrue to the federal government instead of the state.
In 2012, the state undertook a major demonstration project called CCI to improve care coordination for individuals with both Medi‑Cal and Medicare coverage. CCI, which is scheduled to be in effect until the end of 2022, includes the following major components:
CCI Demonstration Has Shown Some Promise… Several evaluations of CCI have been carried out. These evaluations show promise on the part of the demonstration project in the areas of improved care coordination between Medi‑Cal managed care plans and IHSS program administrators (in a small subset of counties), high satisfaction among Cal MediConnect participants, and potential reductions in hospital and nursing facility utilization.
…But Has Experienced a Number of Challenges. At the same time, the CCI demonstration experienced significant challenges. For example:
In June 2019, the Governor signed an executive order establishing a formal process for the creation of a Master Plan for Aging. The executive order required the creation of a stakeholder advisory committee, publication of a stakeholder report on LTSS, and publication of the administration’s Master Plan for Aging.
Stakeholder’s Master Plan for Aging Has Components Related to Integration of Health and LTSS Programs Relevant to SPDs. The stakeholder report on LTSS was released in May 2020 and made a number of recommendations related to Medi‑Cal and Medicare integration efforts, including recommendations to:
Administration’s Master Plan for Aging Has Components Related to CalAIM. The administration released its Master Plan for Aging in January 2021. The Master Plan for Aging identifies five goals and 23 strategies to help build what it describes as a “California for All Ages” by 2030. The plan includes the implementation of certain CalAIM components to support specific initiatives, which we discuss below.
CalAIM Includes Several Proposals With Significant Implications for SPDs. SPDs are a key target population for CalAIM. Elements of the CalAIM proposal that would directly affect care for Medi‑Cal SPDs through the provision of new benefits and programmatic strategies include the following:
CalAIM Also Would Make Several Structural Changes to SPD Care. In addition to creating new benefits for Medi‑Cal SPDs, CalAIM would make several changes to how SPD care—and in particular, LTSS—is administered. Those proposed changes are as follows:
Proposal Could Bring Benefits to SPDs. CalAIM has the potential to improve care for Medi‑Cal SPDs in the following ways:
Major Other Questions Remain. Figure 3 lists our major outstanding questions about CalAIM as the proposal pertains to SPDs. As the Legislature evaluates CalAIM’s impact on the SPD population, we suggest focusing on resolving these key questions.
Figure 3
SPD‑Related CalAIM Questions for Legislative Focus
Overall Strategy for LTSS |
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Changes to Medi‑Cal Managed Care |
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Discontinuing CMC in Favor of Statewide D‑SNP Model |
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Evaluating CalAIM’s Impacts |
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SPD = seniors and persons with disabilities; CalAIM = California Advancing and Innovating Medi‑Cal; LTSS = long‑term services and supports; MLTSS = managed long‑term services and supports; IHSS = In‑Home Supportive Services; MSSP = Multipurpose Senior Services Program; ILOS = in lieu of services; SNFs = skilled nursing facilities; ICFs = intermediate care facilities; ECM = Enhanced Care Management; CMC = Cal MediConnect; and D‑SNP = Dual Eligible Special Needs Plan. |
In its evaluation of CalAIM’s effect on SPDs, the Legislature may wish to consider the following issues.
Ensuring CalAIM Proposal Ultimately Achieves Legislature’s LTSS Objectives. The CalAIM proposal is closely aligned with the LTSS objectives the administration laid out in its Master Plan for Aging. The Legislature may wish to consider whether the administration’s Master Plan for Aging aligns with its own objectives. If the Legislature disagrees with some of the administration’s LTSS objectives, the Legislature could articulate its own set of objectives, and then monitor CalAIM to ensure that it aligns with those objectives. For example, the Legislature may choose to consider whether the state should prioritize expanding existing LTSS programs or consolidating the state’s various LTSS services into a new statewide, comprehensive program.
Considering Ways to Further Reduce LTSS Fragmentation. Although CalAIM has the potential to significantly improve LTSS coordination of care, there are additional steps the Legislature could consider toward creating an integrated Medi‑Cal LTSS system. For example, as previously mentioned, Medi‑Cal SPDs currently are subject to a different assessment and referral process for each LTSS program they might utilize. This means, for example, that an individual who requires both IHSS and MSSP services would need to go through an entirely separate enrollment process for each program. The Legislature could consider creating a standard assessment and referral process for Medi‑Cal LTSS programs to streamline the process of enrolling in multiple programs simultaneously.
Explore Opportunities to Further Strengthen Relationship Between Medi‑Cal Managed Care and IHSS Program. CalAIM allows for greater service coordination between Medi‑Cal managed care and IHSS by allowing managed care plans to provide eligible beneficiaries with personal care and home care services while they await IHSS approval and, if needed, provide services above and beyond authorized IHSS service levels. In deciding what services will be provided through MLTSS by 2027, the Legislature could consider the benefits and trade‑offs of pursuing a higher level of coordination or integration between Medi‑Cal managed care and IHSS. For example, the Legislature could replicate or scale up past coordination efforts, such as providing funding so that IHSS county social workers could participate in interdisciplinary care teams and collaborate with other care providers to address the social, medical, and behavioral needs of an IHSS recipient. Alternatively, the Legislature could consider testing a fuller integration of IHSS within managed care plans, such as allowing managed care to play some role in the administration of IHSS. Whatever the Legislature chooses, it should carefully consider funding needs and the benefits and trade‑offs to legislative oversight; local control; and current IHSS program features, such as consumers being responsible for choosing their provider.
Requiring an MLTSS Development Plan. The administration has not yet articulated a specific vision for how it would realize MLTSS. We suggest the Legislature require more information from the administration on how it plans to implement MLTSS, and what components would be included in the final MLTSS infrastructure. This information could include what type of LTSS benefits would be provided under MLTSS, what goals and milestones the state would use to assess MLTSS implementation progress, and how the state would assess whether beneficiaries have equal access to and receive the same quality of care under MLTSS.
Considering Putting a Process in Place for Legislative Oversight of CalAIM Implementation. CalAIM would make many major changes to Medi‑Cal, with significant impacts on beneficiaries, all over a relatively short period of time. If approved, legislative oversight of CalAIM will be critical to ensuring smooth and successful implementation. Accordingly, prior to January 2022, the Legislature could consider requiring regular check‑ins with, and reports from, the administration, managed care plans, and other partners to discuss readiness for implementation. After January 2022, the Legislature could expand the focus of the check‑ins to include monitoring of the successes and challenges of CalAIM implementation.
Requiring a Comprehensive and Independent Evaluation of Any Major Reforms Ultimately Adopted. In order to understand the impacts of CalAIM, we recommend that the Legislature establish a framework for an independent and robust evaluation of whichever major components of the CalAIM proposal ultimately are adopted. Because ascertaining the true impacts of a reform effort this large would be a significant challenge, we recommend that the Legislature consider providing direction over the evaluation’s design and reporting. Reports of the evaluation should be clear and accessible to policymakers and should focus on pre‑identified measures of success. Ideally, the evaluation should be available, at least in a preliminary form, prior to any deadlines for deciding on whether to reauthorize any major components of CalAIM.
Adopting a D‑SNP Model That Maximizes Integration Between Medi‑Cal and Medicare. As previously mentioned, D‑SNPs vary in the level of coordination and integration they provide between Medi‑Cal and Medicare. Although the CalAIM proposal makes clear that D‑SNP look‑alikes would not meet the threshold that would be required of managed care plans, it does not specify a minimum standard of integration and coordination for D‑SNPs themselves. The Legislature could consider setting this minimum standard. Determining the appropriate minimum standard would require further analysis, as there may be some trade‑offs between the level of integration a D‑SNP model offers and the feasibility of implementing that model statewide.