LAO 2006-07 Budget Analysis: Health and Social Services TOC
Analysis of the 2006-07 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
Improving Long-Term Care
Analysis of Long-Term Care Caseload and Costs
Background
Characteristics of Long-Term Care
Summary of Long-Term Care Expenditures and Caseload
Historical Trends in Long-Term Care
Governor’s 2006-07 Long-Term Care Proposals
Governor’s Budget Proposals
Managed Care Pilot Programs Test Integration
Technical Budget Adjustments Warranted for Some Proposals
While Proposals Generally Have Merit-Fragmentation Problem Left Largely Unaddressed
Long-Term Care Council Should Sunset
Licensing and Certification Reform Proposals
Key Features of the Governor’s Proposal
Evaluating the Governor’s Proposals
Licensing of Health Facilities: State Oversight Needs Improvement
Background
Governor’s Proposals to Improve Licensing of Health Facilities
Serious Weaknesses Exist in Nursing Facility Oversight
Reductions in Nurse Evaluators May Have Weakened Regulation
Governor’s Proposals a Step Forward, But Warrant Adjustments
Additional Health Facility Reforms Should Be Considered
Compliance with State Laws Should Be Ensured
Address Lack of Coordination With Attorney General
Residential and Child Care Facilities: Inspections Alone Do Not Ensure Safety
Licensing Inspection Visits
Governor’s Proposal
Governor’s Proposal Does Not Address Enforcement Gaps
Current Enforcement System
Problems With Enforcement System
Analyst’s Recommendations
Some Practical Steps to Increase Children’s Enrollment
A Multifaceted Approach to Enroll Children in Medi-Cal and HFP
Grant Funding for County-Based Outreach Efforts
Statewide Media Campaign
Expanding Application Assistance Incentives
Streamlining Healthy Families Enrollment
Simplifying Medi-Cal Reenrollment Forms
Staffing for Some Activities Should Be Rejected
Conclusion
Budgeting for County Administration
Background
Governor’s Proposal
Comments on the Governor’s Proposal
Proposal Would Remove Incentive for County Cost Shifts
Controlling County Costs
Will Counties Cover Inflation Costs With Their Own Funds?
Proposed Language Is Broad in Scope
Proposal Is Inconsistent With Budget for State Operations
Short-Term Budget Solution Vs. Long-Term Budget Policy
Analyst’s Recommendation
Reject Trailer Bill Proposal
Adopt a Consistent Approach to Budgeting County Administration
Getting Better Budget Information
Budget Data Could Be More Accessible and Useful
Departmental Issues
Department of Alcohol and Drug Programs (4200)
The Substance Abuse and Crime Prevention Act: Proposition 36 At a Crossroads
Program and Funding Overview
The Future of Proposition 36
Administration’s Budget Proposes Major Policy Changes
Setting an Appropriate Level of State Funding for Proposition 36
Enacting Additional Policy Changes
Analyst’s Recommendation
Dependency Drug Court Funding
Medi-Cal (4260)
Governor’s 2006-07 Medi-Cal Budget Proposal
Caseload Projection Reasonable
The Effect of the Medicare Drug Benefit on Medi-Cal
Background
The Effect of Part D on the Medi-Cal Budget
Attorney General to Sue Over Clawback
State Taking Action to Help Transition to Part D
Federal Implementation of Part D Has Been Problematic
Adjustments to Governor’s Budget Plan Warranted
Analyst’s Recommendations
A Targeted Strategy to Constrain Medi-Cal Costs And Improve Access to Community Care
Care Not Always Delivered in the Best Medical Setting
Copayments Commonplace in Health Care Systems
Recent Federal Policy Changes Provide Opportunities to Reshape System
The Federal Deficit Reduction Act of 2005
A Targeted Strategy to Reduce Medi-Cal Costs and Improve Community Care
Analyst’s Recommendation
Hospital Waiver Increasing State General Fund Costs
Background
Governor’s Budget Proposal
Waiver Projected to Increase Net General Fund Costs
Budget Assumes More Federal Funds, But Additional Funding Possible
Analyst’s Recommendations
Medi-Cal’s Bitter Pill: High Payments to Pharmacies
How the Medi-Cal Drug Benefit Works
The “Spread” Is Costly to Medi-Cal
Federal Measure Would Reduce Drug Costs
Three Types of Drug Prices and What They Mean
State Has Planned a New Measure-Average Wholesale Price
Analyst’s Recommendation
Other Program Adjustments
Coordinated Care Proposals Should Be Modified
Reduce Funding for Disease Management Contract
Requests for Added Staff Excessive
Evaluating the Governor’s Budget Requests
Department Already Has More Positions Than It Can Fill
Justification Lacking for Some Budget Requests
Analyst’s Recommendations
Public Health
Budget Proposals
Public Health Program Expenditures
Public Health Expenditure Information Unavailable
Women, Infants, and Children Program Could Face Major Penalties
Managed Risk Medical Insurance Board (4280)
Healthy Families Program
Background
Future Federal Funding Unlikely To Meet Program Requirements
SCHIP Reauthorization
State Has Expanded Use of Its SCHIP Funds
Potential Future Federal Funding Shortfall
Alternatives for Addressing the Funding Shortfall
Caseload Projection Too High
Protect Legislative Oversight of Expenditure Authority
MRMIB-State Operations
Request for Additional Staff Positions Unjustified
Department of Developmental Services (4300)
Better Oversight of RC Purchases Needed
Background
Who Decides Which Services RC Clients Will Receive?
How Do RCs Provide Services for Their Clients?
Tracking Purchase of Services Spending
Purchase of Some Services Varies Greatly Among RCs
Oversight of RC Purchase of Services Could Be Improved
Audit of Purchase of Service Data Warranted
Community Services Program
Caseload Overbudgeted for RCs
Background
Governor’s Budget Proposal
Rate Increase No Substitute for Rate Reform
Background
The Governor’s Budget Proposal
Rate-Setting Reform Still Warranted
Analyst’s Recommendation
Developmental Centers Program
Legislature Should Proceed Cautiously On Law Enforcement Expansion
Background
DC System Subject of Investigations
Governor Proposes Additional Resources for OPS
Per-Capita Costs Increasing as Population Drops
Analyst’s Recommendation
Department of Mental Health (4440)
Response to Federal Investigations Premature
Background
The Governor’s Budget Proposal
CRIPA Settlement Agreement Has Not Been Finalized
Analyst’s Recommendation
Hospital Caseload Funding Overbudgeted As Staffing Problems Mount
Background
Governor’s Budget Proposal
Hospital Caseload Lagging as Coalinga Activation Stalls
LPS and Children’s Population in Decline
Analyst’s Recommendation
California Work Opportunity and Responsibility to Kids (5180)
Grant Levels Follow Current Law
Governor Proposes to Increase TANF Expenditures On CWS
Proposed Midyear Reductions Contrary to Legislative Intent
Background
Comments on the Governor’s Proposal
Deficit Reduction Act of 2005 Creates Potential for Substantial Fiscal Penalties
Scope of Legislation
Current Federal Law
Key Changes in Work Participation Rate and MOE Calculations
Conclusion: California Faces a Significant Participation Gap
Strategies for Meeting Higher Work Participation Requirements
Current Work Participation Status
Increasing Participation for Existing Cases
Adding in Former Recipients Who Are Now Employed
Separate Programs for Recipients With Multiple Barriers to Employment
Fiscal Considerations
Conclusion
In-Home Supportive Services
Current-Year Costs Are Overbudgeted
Legislature Needs More Information About Fraud Prevention Activities
Supplemental Security Income/State Supplementary Program
Budget Proposes to Further Delay Federal 2007 COLA Until July 2008
Options for Providing Benefits for Sponsored Immigrants
Federal Restrictions
Legislative History
Caseload and Cost Trends
Estimated Fiscal Impact of Expiration of Deeming Period
Policy Options
Conclusion
Child Welfare Services
California Failing to Meet Performance Improvement Goals
Background
California’s Current Performance
Penalty Exposure
Current Improvement Efforts
Further Improvement Efforts
Funding for CWS Should Be Flexible
Outcomes and Accountability Framework
Governor’s Proposal
Comments on the Governor’s Proposal
Dependency Drug Court Funding
Foster Care
Foster Family Agency Caseload Overstated
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