4260 Department of Health Care Services
Major Program Changes
  • Managed Care Organization Tax - Chapter 2, Statutes of 2016, Second Extraordinary Session (SBx2 2), authorized a tax on the enrollment of Medi-Cal managed care plans and commercial health plans. The Budget assumes reduced General Fund spending in the Medi-Cal program of approximately $1.1 billion in 2016-17 and $1.7 billion in 2017-18. The legislation also included reforms that reduced taxes paid by the health plan industry. The Budget includes significant investments associated with the managed care organization tax (Chapter 3, Statutes of 2016, Second Extraordinary Session [ABx2 1]).

  • Medi-Cal 2020 Waiver - The Budget includes $2.2 billion in federal funds for the new Medi-Cal 2020 Waiver. California and the federal government reached an agreement on the Section 1115 Waiver renewal that began on January 1, 2016. The waiver includes a number of initiatives to improve health care quality including Public Hospital Redesign and Incentives in Medi-Cal, the Global Payment Program, Whole Person Care Pilots, and the Dental Transformation Initiative.

  • Full-Scope Medi-Cal Coverage for Undocumented Children - The Budget includes $188.2 million General Fund to provide full-scope benefits to 185,000 children. Chapter 18, Statutes of 2015 (SB 75), expands full-scope Medi-Cal benefits to undocumented children under 19 years of age.

  • Minimum Wage - The Budget includes $7.1 million General Fund to reflect the impact on certain providers of the 50-cent increase in the state minimum hourly wage, effective January 1, 2017.

  • Medicaid Managed Care Regulations - The Budget includes $5 million General Fund and 38 positions to implement the federal regulations. In May 2016, the federal government published final regulations pertaining to Medicaid managed care programs, and published final regulations in November 2015 pertaining to Medicaid fee-for-service access standards and monitoring. The managed care regulations are related to beneficiary grievances, provider networks, program integrity, and financing.

  • Institutional Deeming - The Budget includes $1.1 million General Fund to provide transition assistance to approximately 433 children currently enrolled in the Home and Community-Based Services Waiver for Persons with Developmental Disabilities. Under federal law, these children will likely lose their Medi-Cal eligibility with the transition of Behavioral Health Treatment from a waiver benefit to a state plan benefit in March 2017. The assistors will facilitate enrollment into appropriate, comprehensive health care coverage.

  • Behavioral Health Treatment - The Budget includes $180.2 million General Fund to provide federally required Behavioral Health Treatment services. Medi-Cal costs include transitioning responsibility for the provision of these services from the state's Developmental Services system.

  • Medi-Cal Estate Recovery - The Budget includes $5.7 million General Fund in 2016-17, and $28.9 million General Fund ongoing to limit asset recovery from the estates of deceased Medi-Cal recipients only to recoveries that are federally required.

  • Medical Interpreters - The Budget includes $3 million General Fund for a pilot or study related to medical interpreter services in the Medi-Cal program. The augmentation is contingent on future legislation.

  • Restoration of Medi-Cal Acupuncture Benefit - The Budget includes $3.7 million in 2016-17 and $4.4 million annually thereafter to restore acupuncture services for adult beneficiaries in the Medi-Cal program, effective July 1, 2016.

  • Health Care Reform - Medi-Cal caseload will increase from 7.9 million in 2012-13 to a projected 14.1 million in 2016-17, covering over a third of the state's population. Most of the increase in caseload is associated with implementation of federal health care reform. Beginning in 2017, the state assumes a 5-percent share of cost for the optional expansion population. The Budget includes costs of $16.2 billion ($819.5 million General Fund) in 2016-17 for the optional Medi-Cal expansion population.

  • County Medi-Cal Administration - The Budget provides counties an additional $169.9 million ($57 million General Fund) in 2016-17 and 2017-18 to determine eligibility for the Medi-Cal program. The state will conduct time studies to inform a new Medi-Cal county administration budgeting methodology.

  • AB 85 Redirection of County Savings - Under the Affordable Care Act, county costs and responsibilities for indigent health care are decreasing as more individuals gain access to health care coverage. Chapter 24, Statutes of 2013 (AB 85), modified the 1991 Realignment Local Revenue Health Account distributions to capture and redirect savings counties are experiencing from the implementation of federal health care reform. County savings are estimated to be $749.9 million in 2015-16 and $585.9 million in 2016-17. The Budget also includes $177.4 million General Fund for county repayments based on the reconciliation of the 2013-14 fiscal year. The General Fund savings are reflected in the CalWORKs program within the Department of Social Services' budget.