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


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


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


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


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?


Financial Assistance to LA County Ending


Where Does the LA County Situation Stand Today?

Analyst's Recommendations

Part "D" Stands for "Deficit": How the Medicare Drug Benefit Affects Medi-Cal



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


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


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


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


Access for Infants and Mothers


Governor's Proposal

MRMIB—State Operations

Mixed Signals From Administration, Staff Requests Must Be Clarified

Major Risk Medical Insurance Program


Cost Uncertainties in MRMIP

Reserve Requirement Unnecessary

Developmental Services (4300)

The Regional Center System: Growth Trends Continue


The Regional Center System

Regional Center Caseload Trends

Program Expenditure Trends

Governor's Budget Proposal

Towards A More Systematic Rate-Setting Model


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


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