California Budget Crisis:

Legislative Language Part of Governor’s 2012-2013 State Budget That Requires Legislative Approval In Coming Months – Would Expand Existing Effort To Implement 4 County Demonstration Project to 10 Counties

SACRAMENTO, CA (CDCAN) [Last updated 02/07/2012 06:30 AM] – The Brown Administration yesterday released proposed budget related legislative language – called “budget trailer bill language” – that would provide authorization to expand an existing effort to move hundreds of thousands of people with disabilities and seniors eligible for Medicare and Medi-Cal into “coordinated care” or managed care plans in California. Brown’s proposal builds on an existing plan passed last year as part of the 2011-2012 State Budget, that already authorizes the Department of Health Care Services to move forward with submitting a demonstration project proposal to the federal government this spring for approval, that would beginning in January 2013, shift thousands of people who are eligible for both Medicare and Medi-Cal – known as “dual eligible” – into managed or coordinated care plans in at least four counties.

The 24 page proposed budget related legislative language is attached to this CDCAN Report titled “201206 – 617 Coordinated Care Initiative (Managed Care Expansion).pdf”. It was saved as a document pdf file, and persons who are blind or sight impaired should be able to read it using a screen reading device. Also released with the proposed budget related legislative language was a 9 page fact sheet on the proposal, also attached to this CDCAN Report, titled “201206 – Fact Sheet 617 – Coordinated Care Initiative (Managed Care Expansion).pdf”

The Governor’s new proposal is asking the Legislature to give his Administration authority to expand that demonstration project proposal to 10 counties. The proposal also calls for a controversial plan to shift In-Home Supportive Services as a managed care benefit for those persons in the demonstration project.

The proposed budget related language that the Governor eventually wants passed by the Legislature with other budget related legislation he has and will submit – including his overall main budget proposal for 2012-2013, does not contain any specifics yet about the actual transition of IHSS beyond the first year as a managed care benefit in the proposed demonstration project.

Legislative Language Also Includes Repeal of Medication Machine Dispensing Pilot Program Impacting IHSS

The proposed language also repeals the legislation passed last year authorizing the State to implement, with federal government approval, a medication machine dispensing pilot program, that the Brown Administration and advocates had hoped would result in producing up to $140 million in savings in State general fund spending – with that savings applied to the IHSS budget. A trigger in that legislation last year would have called for automatic additional cuts to IHSS if it was determined that the savings could not be achieved. After several months, the Brown Administration – and advocates – determined that the proposed pilot program was not workable and would not produce the savings. However the Brown Administration decided to not pull the trigger related to the pilot program that would have authorized more cuts to IHSS, and instead proposed to repeal (or rescind) the legislation authorizing the pilot last year. The Legislature still has to approve the Governor’s proposal to repeal it. [Note: the trigger related to this pilot program is different from the budget revenue trigger that was pulled in December that authorized a 20% across the board IHSS cut. That reduction however has been – at least for now – blocked by a federal district court order. The State is appealing that order to the US 9th Circuit Court of Appeals.

Proposal Would Expand Demonstration Project Up To 10 Counties Beginning In 2013

The proposal in the budget related legislative language by the Brown Administration says it is being proposed “…to improve care coordination” and will be phased in over a three-year period starting January 1, 2013 as follows:

  • In the first year, in up to ten counties, demonstration sites will be responsible for paying and arranging for the “full-continuum of Medi-Cal and Medicare services”.
  • All other “dual eligible” persons who are not living in demonstration site counties but who reside in counties where Medi-Cal managed care plans exist will be mandatorily enrolled in Medi-Cal managed care plans. These plans will be financially at risk and have the responsibility to arrange for Medi-Cal benefits. There will be no change in the way Medicare benefits are provided in the first year for non-demonstration site “dual eligible” persons.
  • In the second year, demonstration sites will be added, as Medi-Cal managed care plans become ready to take on additional responsibility for Medicare benefits for persons who are “dual eligible”.
  • Finally, persons who are “dual eligible” in the proposed managed care expansion counties (proposed to begin in June 2013), will transition in calendar years 2014 through 2015 for both Medi-Cal and Medicare benefits.
  • The proposed legislative language says that “Delivering long-term services and supports through Medi-Cal managed care plans raises important issues including, but not limited to, (1) consumer protections for individuals newly receiving acute, long-term care, and home and community-based services within managed care plans; (2) the need to develop a uniform assessment tool for home and community-based services; and (3) consumer choice and protection when selecting providers, including IHSS and other plan network provid ers.”


  • Both the full Senate Budget and Fiscal Review Committee (on February 23rd) and a joint hearing of the Assembly Budget Subcommittee #1 on Health and Human Services and the Assembly Aging and Long Term Care Committee (on March 7th) have scheduled informational hearings on the Governor’s proposal that impacts long term care and Medi-Cal managed care – and the proposal to include IHSS. While public testimony will be taken at both hearings – no action will be taken by either committee, since it is strictly an informational hearing.
  • Budget Subcommittee Hearings – at some point between March and late May the budget subcommittees of both houses will schedule their budget subcommittee hearings covering all areas of the Governor’s proposed budget, including his specific proposal impacting people with disabilities and seniors eligible for Medicare and Medi-Cal, with a more detailed look at his plan, including public testimony and possibly some action on the proposal. No schedule has yet been released. It is possible a legislator may introduce a regular bill that focuses on the Governor’s proposal and run it through the regular policy committees to allow for more review.
  • The issue and proposal will likely not be resolved until sometime in late May or June when the Governor’s budget proposal moves to the budget conference committee and then to the floors of the Assembly and State Senate for final votes. The State Budget year begins July 1 and ends June 30th.

If you need any assistance, you are welcome to join our support group at: IHSS Advocacy Group

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