LAO 2004-05 Budget Analysis: Health and Social Services Issue-By-Issue TOC Analysis of the 2004-05 Budget Bill
Health and Social Services Issue-By-Issue Contents


Expenditure Proposal and Trends

Caseload Trends

Spending by Major Program

Major Budget Changes

Enrollment Caps and County Block Grant

Other Policy Changes

Crosscutting Issues

Child Care


CalWORKs Child Care System

Non-CalWORKs Child Care System

Current-Year Child Care Reforms

Governor's Budget Proposes Additional Reforms

Eligibility Restrictions

Income Eligibility

Age Eligibility

Stage 3 Eligibility Limits

Eligibility Limits for Nonworking Parents

Weighing the Costs and Benefits of Restricting Child Care Eligibility

Provider Reimbursement

Family Fees

Proposition 49: After School Education and Safety Program

When Will Proposition 49 Trigger?

Health and Social Services Enrollment Caps

Most Enrollment Cap Proposals Flawed

Governor's Proposal

Caseload Limits a Standard Practice

Capping Enrollments Raises Issues

Analyst's Recommendation

County Block Grant Proposal

Programs Proposed for Block Grant Would Be a Poor Fit for Counties

Key Features of the Governor's Proposal

Evaluating the Governor's Block Grant Proposal

Analyst's Recommendation

Quality Improvement Fees

Additional Federal Funds and State Savings Possible Through Provider Fee Mechanism


The Governor's Managed Care Fee Proposal

State Has Opportunity to Expand on Fee Strategy

Analyst's Recommendations

Senate Bill 2

Budget Lacks Funding to Implement Health Insurance Expansion Measure

Indigent Adult Program

Medically Indigent Adult Program And the Vehicle License Fee (VLF)

Departmental Issues

Department of Aging (4170)

Consolidating Local Assistance Into Single Block Grant

Department of Alcohol and Drug Programs (4200)

Federal Funding Requirement May Not Be Met

"Remodeling" the Drug Medi-Cal Program

California Medical Assistance Program (4260)

Medi-Cal Benefits and Eligibility

What Benefits Does Medi-Cal Provide?

How Medi-Cal Works

Who Is Eligible for Medi-Cal?

Most Medi-Cal Spending Is for the Elderly or Disabled

Medi-Cal Expenditures

Further Decrease in Current-Year Spending

Budget-Year Expenditure Reduction

Medi-Cal Cost and Caseload Trends

Budget Forecasts Caseload Increase and Dropping Costs

Overall Caseload Estimate Reasonable

Assessing the Governor's 2004-05 Budget Proposals

Litigation Places Savings From Some Rate Reductions in Doubt

Reject Staff to Process Authorization Requests, But Provide Necessary Flexibility on Workload

An Agenda for Long-Term Reform Of the Medi-Cal Program

Proposals to Reform Medi-Cal Should Be Pursued

Governor Proposes Sweeping Reforms

Restructuring Medi-Cal Eligibility and Benefits

Expansion of Managed Care

Managed Care Proposal Raises Some Concerns

Analyst's Recommendations

Additional Opportunities for Reform Worth Considering

Failure of County Organized Health Systems Would Increase State Costs


Why Are COHS Plans in Bad Fiscal Health?

What Would Happen if COHS Plans Ceased Operation?

Options for Addressing COHS Plans' Financial Problems

Analyst's Recommendation

Moving California Toward a Model Antifraud Approach


Toward a Model Fraud Control Strategy

Characteristics of a Model Fraud Control Strategy

A Report Card for the State's Fee-for-Service Antifraud Efforts

Combating Fraud in Managed Care

A Systematic, Coordinated Antifraud Approach

The Governor's 2004-05 Antifraud Proposal

Analyst's Recommendations

Other Budget and Policy Issues

Additional Oversight Needed for Data Systems Contract

Contract to Monitor Los Angeles County Health Care System Terminated

Public Health

Budget Proposals

Breast and Cervical Cancer Treatment Program

Transfer of Eligibility Work to Counties Would Be More Expensive

Child Health and Disability Prevention Program


Governor's Budget Proposal

Major Uncertainties in Gateway Budget Proposal

Genetic Disease Testing Program

Reports on Information System Project Not Submitted

Managed Risk Medical Insurance Board (4280)

Healthy Families Program


Enrollment Cap Proposal Raises Policy Concerns

Budget Reflects Capped Enrollment in the Healthy Families Program

Governor's Proposal Has Some Advantages

Several Issues Warrant Consideration

Analyst's Recommendation

Choice of Two-Tier Benefit System Worth Considering

Alternatives for Reducing Healthy Families Program Costs

Shifting AIM Mothers Into Healthy Families Could Save State Resources

Family Contributions Could Be Increased

Benefits Package Could Be Trimmed

Some Children Could Be Shifted to County Coverage

Block Grant May Not Be Feasible

County Health Initiative Matching Fund


Federal Approval of CHIM Still Pending

Access for Infants and Mothers


Governor's Proposal

AIM Mothers Could Also Be Shifted to Maximize Use of Federal Funds

Reserve Requirement Unnecessary

Department of Developmental Services (4300)

The Regional Center System: Spending Growth Rate Remains a Fiscal Concern


The Regional Center System

Regional Center Caseload Trends

Program Expenditure Trends

Major Initiatives to Control Costs Show Progress

Evaluating the Governor's 2004-05 Budget Proposals

Caseload Assumptions May Be Low

Title XX Funding Shift Appears Viable Now

Cost Containment Measures Lacking Key Details

Statewide Purchase of Services Standards

Implementation of Parental Copayments

Standardizing Rates

Expansion of the Independence Plus Waiver

Reductions in Regional Center Operations

Analyst's Recommendation

An Agenda for Further Reform

State's Auditing Capabilities Could Be Strengthened

Lanterman Act Could Be Clarified

Nursing Home Rate Restructure Could Increase Federal Funds

Contracted Regional Center Services Could Be Reduced


Developmental Centers Program

Developmental Centers May Be Underbudgeted

Department of Mental Health (4440)

State Hospital Issues

Activation of Coalinga Hospital Could Be Delayed


Evaluating the Governor's Budget Proposal

Analyst's Recommendations

Capping Enrollment and Shifting Some SVPs To Counties Could Make Better Use of Beds


Governor's Budget Reduction Proposals

Analyst's Recommendation

Additional Funding for SVP Evaluations Not Justified


Governor's Budget Proposal

Analyst's Recommendation

Budget Includes Beds Missing From CDC Budget

Community Program Issues

EPSDT Costs Still Soaring, but Some Progress in Sight


Governor's Proposed Budget for EPSDT

Governor's Proposals for Reducing EPSDT Costs

Additional EPSDT Cost-Reduction Efforts Warrant Consideration

Analyst's Recommendation

Additional Federal Funds and State Savings Possible Through Provider Fee Mechanism

Department of Child Support Services (5175)

Update on Required Budget and Allocation Methodology Improvements

Governor's Budget Proposes Keeping County Share of Child Support Collections

Withhold Recommendation on Child Support Collections

California's Child Support Automation System

Project Background

Potential for Improved Accountability

Areas of Potential Benefits and Savings

Transferred CCSAS Project Must Include Current Staff and Project Management

Administration Should Report on Project Transfer

Department of Social Services CalWORKs Program (5180)

Caseload and Grants

Caseload Decline Ends

Budget Suspends Statutory Cost-of-Living Adjustments and Reduces Grant Payments

Expanding TANF Transfers Results in General Fund Savings

State Spending Budgeted at TANF Maintenance-of-Effort (MOE) Floor

TANF Transfers

Budget Proposes Significant CalWORKs Reforms

Welfare Reform in California

Framework for Evaluating the Governor's Proposals

Work Participation Reforms

Proposal Requires Job Search While CalWORKs Application Is Pending

Proposal Requires Aided Adults to Complete A Welfare-to-Work Plan Within 60 Days of Aid

Proposal Requires 20 Hours of Core Work Activities

Grant Reductions for Sanctioned And Safety Net Cases

Proposal Would Reduce Grant for Sanctioned Cases

Proposal Would Reduce Grant for Safety Net Cases With a Nonworking Adult

Update: Federal Welfare Reauthorization

Status of Federal Welfare Reauthorization

Major Provisions of Federal Proposals

State Participation Rates

Work Participation Requirements

Work Activities

Universal Engagement


Child Care

Impact on the CalWORKs Program

Federal Proposals Likely to Result in Participation Rate "Gap"

Update on the State Fiscal Impact


CalWORKs Automation

Withhold Recommendation on Proposed Increased to Consortium System

Adoptions Program

Reforming the Adoptions Assistance Program


Growth of AAP

Examining AAP Eligibility and Payment Levels

Overarching Considerations

Analyst's Recommendation

In-Home Supportive Services

Governor Proposes to Restrict Eligibility And Reduce Provider Wages

Eligibility Restriction

Reducing State Participation in Provider Wages

Reducing Services for Recipients Living With Relatives

Future Proposal for Reducing Service Hours

Comments on the Governor's IHSS Proposal

Eliminating the Residual Program

Reducing Provider Wages

Reducing Services for Recipients Living with Relatives

Establishing a Quality Assurance Program

Analyst's Recommendation

Supplemental Security Income/State Supplementary Program

Budget Proposes COLA Suspensions

Enrollment Cap and County Block Grant For Program Serving Immigrants

Food Stamps Program

California Food Assistance Program (CFAP)

Revenue Loss Exceeds Administrative Savings From Governor's Food Stamp Proposals

Child Welfare Services

Budget for Improving Children's Programs Should Reflect Legislative Priorities

Governor's Budget Provides $39 Million for Improving Children's Programs

Redesign Funding Should Be Eliminated

Child Welfare Services/ Case Management System


CWS/CMS Does Not Meet SACWIS Requirements

Federal Government Reduces Funding

Administration Should Consider Two Alternatives

Administration Should Report on Alternatives and Revise Proposal's Costs

Foster Care

Proposed Foster Care Reforms Lack Necessary Details

Governor's Proposal

Evaluating the Reform Proposal

Options for Reforming Foster Care

Governor's Budget Understates Savings Associated With Recent Court Decision

Community Care Licensing

Increase Oversight by Establishing a Special Fund