LAO 2005-06 Budget Analysis: Health and Social Services Issue-by-Issue TOC
Analysis of the 2005-06 Budget Bill
Health and Social Services
Issue-By-Issue Contents
Overview
Expenditure Proposal and Trends
Caseload Trends
Spending by Major Program
Major Budget Changes
Other Policy Changes
Crosscutting Issues
Accessing Federal Funds For Prenatal Services
Federal Options Open the Door for State Savings
Governor's Proposal
Assessing the Governor's Proposal
Child Care
Eligibility Depends Upon Family Income and CalWORKs
Participation
Governor's Child Care Reform Proposals
Eligibility Reforms
Shifting CalWORKs Families to AP Programs
Eliminating the Long-Term CalWORKs Child Care Guarantee
Two-Tiered Waiting Lists
Advantages to Governor's Proposal
Implementation Concerns
LAO Recommendation
Governor Proposes Further Reforms for 11- and 12-Year-Olds
Reimbursement Rate Reforms
Two Types of Service Models— Vouchers and Direct State
Contracts
Proposal Creates a Tiered Reimbursement Rate Structure for
AP Providers
Governor's Tiered Reimbursement Proposal
Proposal to Create Incentives for Quality Makes Sense
Reform Could Promote Child Development
Tiered System Would Reflect Real Cost of Service
Differences
A Star Rating System Would Make Quality Differences
Transparent
A Tiered Reimbursement Could Address Significant Problems
in the Current System
Transition Title 5 Provider Reimbursement to RMRs
Reimbursement Rates Should Reflect a Systematic Approach
to Improving Quality in Child Care
"Pick-Five" Regulations Would Enhance Rate
Equity
New RMR Survey Methodology Shows Promise
Departmental Issues
Health and Human Services Agency (0530)
Secretary for Health and Human Services
Office of System Integration
Background
Governor Proposes to Transfer Projects to HHSA
EDD's Project Should Remain With Data Center
Remaining Projects Should Be Placed at DSS
Other Project Issues
Child Welfare Services/Case Management System Go Forward
Plan
Medi-Cal (4260)
Overview of Medi-Cal Budget Proposal
Key Changes in Current-Year Spending
Governor's 2005-06 Budget Proposals
Budget Forecasts Increased Caseload and Costs
Quality Improvement Fees
Fee Revenues Not Recognized in Governor's Budget.
Redesign Sound in Principle, But Needs Further Development
A Multifaceted Medi-Cal Redesign Plan
Managed Care Expansion
Three Major Components
Assessing the Governor's Proposal
Analyst's Recommendations
Limitations on Adult Dental Benefits
Annual Spending Cap Proposed for Adults
Assessing the Governor's Proposal
Analyst's Recommendations
Establishment of Enrollee Premiums
Monthly Premiums Would Be Similar to Healthy Families
Assessing the Governor's Proposal
Analyst's Recommendation
County Administration Monitoring
Eligibility Determinations Have Been a Problem
Assessing the Governor's Proposal
Analyst's Recommendation
Streamlining Children's Eligibility Processing
Single Point of Entry System
Analyst's Recommendation
Alter Enrollment of Health Care Providers
Backlog in Medi-Cal Provider Enrollments
Analyst's Recommendation
Requested Support Resources Appear Excessive
Conclusion
Hospital Financing Plan Could Begin To Right Ailing System
Public Hospitals Continue to Face Significant Fiscal
Pressures
Key Federal Mechanisms Significantly Influence Hospital
Financing
Federal Medicaid Waivers Integral to Hospital Financing
Intergovernmental Transfer Funding for Public Hospitals
Federal Rules Establish Limits for Federal Funding
Market and Regulatory Factors Threaten Status Quo
Financing Plan Primarily Targets Public Hospitals
Background
Overview of Governor's Plan
Certified Public Expenditures Replace General Fund
Use of IGT Payments Could Decrease
Plan Could Expand Payments for Care for Indigents
Plan Could Obtain Funds for Undocumented Immigrant Costs
Private Hospitals Would Shift to General Fund
Federal Payment Limits Would Accommodate Managed Care
Plan Could Move California Forward, But Presents Concerns
In General, Some Positive Steps
How Much Funding Is Generated Overall?
How Would Funding Be Distributed Among Hospitals?
Would the Revenue Stream Be Reliable Over Time?
Does the Plan Provide Incentives for Cost-Effective Care?
Does the Plan Allow a Reasonable Period for Change?
Does the Plan Take Advantage of All Opportunities For
Additional Federal Funds?
Conclusion
Financial Assistance to LA County Ending
Background
Where Does the LA County Situation Stand Today?
Analyst's Recommendations
Part "D" Stands for "Deficit": How the
Medicare Drug Benefit Affects Medi-Cal
Introduction
Background
Medicare at a Glance
How Medicare and Medicaid Interact
Medi-Cal Drug Benefits
An Overview of the Medicare Prescription Drug Benefit
Governor's Budget Proposal
Net Financial Losses Likely for Years
Federal Clawback Formula Disadvantages California
MMA Creates New Eligibility Administration Costs
"Woodwork Effect" Another Risk to State
State's Leverage to Negotiate Rebates May Be Reduced
Drug Coverage for Some Dual Eligibles Might Be Disrupted
Medicare Part D Could Result in Some Offsetting State
Savings
Analyst's Recommendations
Disease Management Pilot Program: Further Actions Could
Help Ensure Success
Background
Progress to Date of Medi-Cal Disease Management Projects
Components for Successful Implementation
Legislature Needs Information About Interaction With
Medi-Cal Redesign
Analyst's Recommendations
Public Health
Budget Proposals
Proposition 99 Fund Shifts
Background
Governor's Proposal
Assessing the Governor's Proposal
Proposition 99 After 16 Years: Steadily Declining
Revenues, Too Many Programs
Analyst's Recommendations
Governor's Anti-Obesity Initiative
Background
Assessing the Governor's Proposal
Analyst's Recommendations
Other Public Health Program Issues
GHPP Accounting Adjustment Would Provide Savings and
Consistency
Information Pending on ADAP Federal Allocation and Drug
Rebates
Evaluating the Governor's California Rx Proposal
State Lacks a Unified Approach on Homeland Security
Health Services—State Operations
Information Technology Projects Violate State Rules
Managed Risk Medical Insurance Board (4280)
Healthy Families Program
Background
Access for Infants and Mothers
Background
Governor's Proposal
MRMIB—State Operations
Mixed Signals From Administration, Staff Requests Must Be
Clarified
Major Risk Medical Insurance Program
Background
Cost Uncertainties in MRMIP
Reserve Requirement Unnecessary
Developmental Services (4300)
The Regional Center System: Growth Trends Continue
Background
The Regional Center System
Regional Center Caseload Trends
Program Expenditure Trends
Governor's Budget Proposal
Towards A More Systematic Rate-Setting Model
Background
Who Sets the Rates for RC Services?
Some Vendor Rates Have Been Frozen
Department Currently Studying Rate Reform
A Flawed, Complex, and Inconsistent System for Setting
Rates
Great Variation in Rate-Setting
Quality and Access Concerns Not Integrated With
Rate-Setting
Rate Freezes Appear Effective in Short Term, But
Problematic in Long Term
DDS Rate Reform Initiative Generally on Target
Interim Rate-Setting Actions Possible to Hold Down Program
Costs
Creating a Systematic and Rational Rate-Setting Process
Developmental Centers Program
Agnews Developmental Center Closure Plan
Developmental Centers Overbudgeted
Department of Mental Health (4440)
Community Program Issues
Proposition 63 Language Requires Clarification
New Funding for Community Mental Health Services
Legislative Role in Proposition Limited
Limitations on Use of Proposition 63 Resources
Implementation Actions to Date
Some Key Aspects of Language Are Ambiguous
Analyst's Recommendations
Community Program Issues
State Hospital Issues
Population Growth and New Facility Costs Increasing
Expenditures of Hospital System
Governor's Proposal
LAO Assessment of the Governor's Budget Requests
Analyst's Recommendations
State Operations Issues
Technical Budget Adjustments Warranted
Department of Child Support Services (5175)
Administrative Expenditures Excessive
California Child Support Automation System Project
California Work Opportunity and Responsibility to Kids
(5180)
Maintenance-of-Effort and Transfers Outside of CalWORKs
Caseload and Grants
Overestimate of CalWORKs Caseload
Budget Deletes Statutory COLAs and Reduces Grant Payments
Other Budget Issues
Unspent TANF Funds Identified
Current-Year Costs Overstated
Proposal to Reduce Earned Income Disregard
Alternatives to the Governor's Proposal
County Performance Rewards and Sanctions
Governor's Proposal
Previous Incentive Program
Current County Performance Measure
Problems With Governor's Proposal
Alternative Approaches to Funding and Incenting County
Performance
In-Home Supportive Services
Reducing State Participation in Provider Wages
Supplemental Security Income/State Supplementary Program
Budget Proposes COLA Suspensions
Caseload Overestimated for Cash Assistance Program for
Immigrants
Child Welfare Services
Measuring Progress in Workload Standards
Background
Child Welfare Services Workload Study (SB 2030) Findings
Child Welfare Services Budget Components
Revised Social Worker Staffing Ratios
LAO Recommendation
Child Welfare Services Overbudgeted
Foster Care
Foster Care Administration Overfunded
Foster Care Caseloads Overstated
Caseload Components
Seriously Emotionally Disturbed Children's Caseload
Analyst's Recommendation
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