Summary of LAO Findings and Recommendations on the 2011-12 Budget

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Program
Budget Issue		LAO Finding Or
Recommendation
Last Updated
See Detail  AB 3632 mental health services Realignment of funding and services Adopt Governor's May Revision proposal to repeal the AB 3632 mandate and shift funding and responsibility to schools in 2011-12. 5-24-11
See Detail  Department of Developmental Services Preliminary LAO review of the Department of Developmental Services savings proposals Recommend the Legislature adopt the administration's proposals to achieve savings in the Community Services Program. However, for some specific proposals, our analysis indicates that it is uncertain whether the full savings would be achieved. 5-23-11
See Detail  Department of Health Care Services Transfer Healthy Families Program to Department of Health Care Services Recommend that the administration’s proposal to transfer Healthy Families Program be referred to policy committees. Recommend that the Legislature reject the administration’s proposed BBL that would provide DOF with authority to transfer both staff and expenditure authority between appropriations for MRMIB and DHCS just ten days after giving the Legislature notification. 5-22-11
See Detail  Department of Health Care Services Savings due to the Quest Diagnostics legal settlement. Recommend the Legislature recognize $50.1 million in savings from a legal settlement with Quest Diagnostics. 5-22-11
See Detail  Department of Mental Health Safety and Security in State Hospitals Recommend that the Legislature approve the 78.0 positions but reduce funding by $1.1 million General Fund (25 percent salary savings rate) to more accurately reflect the rate at which the positions are likely to be filled in the budget year. Recommend the Legislature approve the $4.1 million for the new personal alarm system. 5-22-11
See Detail  Department of Mental Health Transfer administration of behavioral health programs to the Department of Health Care Services Recommend that the administration’s proposal to transfer administrative responsibility for EPSDT, MHMC and Drug Medi-Cal from DMH and DADP to DHCS in 2011-12 be referred to policy committees. Recommend that the Legislature reject the administration’s proposed BBL that would provide DOF with authority to transfer both staff and expenditure authority between appropriations for DADP, DMH, and DHCS just ten days after giving the Legislature notification. 5-22-11
See Detail  Department of Health Care Services Diagnosis Related Group Payment System Recommend approval of $860,000 total funds ($344,000 General Fund) and seven two-year limited-term positions in the Safety Net Financing Division. We recommend denial of five positions for Audits and Investigations (A & I) and the redirection of five existing A & I Adult Day Health Care audit staff for two-year limited terms. 5-02-11
See Detail  Department of Mental Health Coleman Bed Expansion Vacaville Psychiatric Program - 64 Beds. Recommend reduction of $1.8 million General Fund to reflect phased in activation of 80.3 requested positions. The Governor's budget does not adequately account for a phase-in of these positions based on the activation schedule provided by the department. 2-14-11
See Detail  Department of Alcohol and Drug Programs Realignment of Alcohol and Drug Programs Recommend the Legislature consider the Governor's realignment proposal for alcohol and drug programs. A realignment of these programs has merit and may be workable, but the Legislature will have to address some significant fiscal and policy issues in developing a realignment plan. 2-02-11
See Detail  Department of Developmental Services The 2011-12 Budget: Options to Achieve Savings In The Regional Center System We recommend approval of the Governor's budget proposals to (1) extend the 4.25 percent provider payment reduction and the commensurate reduction to regional center (RC) operations, and (2) obtain additional federal funds for services provided through the developmental centers and the RCs. We also recommend the Legislature either expand the existing Family Cost Participation Program or implement means testing to determine who is eligible to receive these state services. 2-02-11
See Detail  Department of Mental Health Realignment of Mental Health Programs Recommend the Legislature consider the Governor's realignment proposal for certain mental health programs. A realignment of these programs has merit and may be workable, but the Legislature will have to address some significant fiscal and policy issues in developing a realignment plan. 2-02-11
See Detail  Department of Health Care Services Implement utilization limits, impose copayments and benefit reductions to achieve Medi-Cal savings Recommend the Legislature adopt some proposals to implement utilization limits, reject the proposal to limit prescription drug utilization, and consider alternatives to some utilization limits. Recommend the Legislature consider alternatives to the administration's copayment proposals. Recommend the Legislature adopt the proposal to eliminate over-the-counter cold and cough medicine, and consider an alternative to the administration's proposal to limit enteral nutrition to tube feeding. 1-23-11
See Detail  Department of Health Care Services Reduce Medi-Cal Provider Payments by 10 Percent Recommend the Legislature: (1) approve rate reductions pursuant to a study, (2) require department to report at budget hearings on the likelihood of federal approval as well as the implications of recent lawsuits and court actions, and (3) require the department to establish a process for establishing fee for service rates. 1-23-11
See Detail  Managed Risk Medical Insurance Board Increase premiums and copyaments, and eliminate the vision benefit for the Healthy Families Program Recommend the Legislature: 1) require MRMIB to report in budget hearings on the likelihood of obtaining federal approval for its proposals; 2) require the administration to provide the statutory language necessary to implement its proposals; 3) consider the copayment proposals in the Healthy Families Program (HFP) in tandem with those in Medi-Cal; 4) consider imposing lower copayment and premium increases than those proposed by the administration; and 5) eliminate the HFP vision benefit. 1-20-11
See Detail  Department of Alcohol and Drug Programs Three options for reducing costs in the Drug Medi-Cal Program. We recommend the Legislature consider the following three options for reducing costs in the Drug Medi-Cal Program: 1) establish monthly co-pay for all program participants, 2) establish group counseling maximum in outpatient Drug Free Program, and 3) reduce maximum reimbursable counseling in the Narcotic Treatment Program. 12-06-10