4260 Department of Health Care Services
Major Program Changes
  • Improved Care Coordination for Seniors and Disabled Beneficiaries - The Budget includes $679 million in General Fund savings from transitioning beneficiaries who are eligible for Medicare and Medi-Cal from current fee-for-service models to a coordinated health care delivery system. Savings will come from (1) the Medicare program sharing half of its savings with the state, and (2) lower utilization of costly Medi-Cal long-term care services (e.g., reductions in hospital and nursing home admissions) combined with higher utilization of comparatively economical physician visits and home and community based services. To achieve short-term savings until service delivery improvements are fully implemented, one payment would be deferred and managed care payment policies would be aligned.

  • Transition of Children from the Healthy Families Program to Medi-Cal - The Budget includes $155 million in new General Fund costs in Medi-Cal from transitioning Healthy Families children to Medi-Cal over a nine-month period beginning October 2012. After accounting for savings in the Healthy Families program, the statewide impact is a savings of $64.4 million General Fund.

  • Medi-Cal: Operational Flexibility - The Medi-Cal health care delivery system must have the capacity to respond to the rapidly changing field of health care and be able to change benefits, services, rate methodologies and payment policies faster than the current regulatory process allows. The Budget proposes a process that will incorporate stakeholder input and determine cost-effectiveness before implementation of changes. It will use sound evidence, be transparent, and monitor to ensure that it achieves the desired value. The Budget includes $75 million in General Fund savings from this proposal.

  • Consolidations and Transfers - The Budget eliminates the Department of Mental Health and the Department of Alcohol and Drug Programs and transitions funding for Medi-Cal and related support programs from these departments to the Department of Health Care Services to improve state support of these services. The Budget redirects three direct service programs (Every Woman Counts, Prostate Cancer Treatment, and Family Planning Access Care and Treatment) from the Department of Public Health (DPH) to the Department of Health Care Services to improve service delivery. The Office of Multicultural Health and the Office of Women's Health are proposed for redirection to DPH's newly created Office of Health Equity to enable the state to better identify and ameliorate health disparities for disadvantaged communities.