Assembly Budget Subcommittee No. 1 on Health, Monday, April 6, 2026
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Assembly Budget Subcommittee No. 1 on Health California State Assembly
Follow its sittingsSpeaker 1
And throughout the hearings, I would say we've tried to bring voices, first person voices from across California to testify so that we're hearing both from, Department of Finance and the administration and the LAO, but also from regular everyday people and how policies here in California and budget maneuvers here in California affect people's real lives. So today, I wanna say thank you to all of the panelists that are coming. As I mentioned, we have over 40 witnesses and technical experts that are here. And due to the volume of testimony, we're gonna ask everybody to keep their testimony to a three minute max, which I know is hard to do. But I think you got a heads up about that, and so would very much appreciate if you could respect each other's time by keeping your testimony as short as possible.
In addition to accommodate space at the witness table, we're gonna ask LAO and DOF to sit at the edge of the dais if, the table becomes full so that we can have you up here, but also have room for anyone testifying. With that, I wanna see if there's any committee members that wanted to make opening remarks. And if not, we'll jump into the agenda. Okay. Not seeing, any comments here.
We are going to start, with our subcommittee hearing that is set up to cover six different issues as listed on the agenda.
Speaker 4
So here's a couple housekeeping notes. The agenda is available online on our committee's website,
Speaker 1
and physical copies are available in the hearing room. You can also find available online several supplemental publications provided by either the LAO or stakeholders. At the end of each panel presentation, we'll take questions from members followed by public comment. And as a reminder, public comments will be taken in person at the end of each issue. We ask that you keep your public comment to name, position on the issue, and organization.
So, again, we have six topics. We have 40 technical, and other witnesses that are gonna be presenting, and so we just ask that the public is also respectful of one another in terms of the time at the mic as we'd like to, allow people access to what is happening and be fully transparent in our budget process, but also move expediently so that no one feels they have to miss out because time is getting too long. If you're unable to attend in person, you may submit written comments via email to asmbudgetasm. Ca dot gov. And at the very end, we will open public comment for items not on the agenda.
So we're gonna begin now with oversight no. This yeah. With oversight of reproductive health, state investments. This issue and please come on up to the table as I'm talking if you're here for this, witness for this panel. This issue will examine the five reproductive health programs established by the California Department of Health Care Access and Information in response to the Dobbs decision and the ongoing uncertainty surrounding the federal title 10 family planning program as well as our state's response to HR one's targeted defunding of Planned Parenthood.
For this panel, we welcome to the witness table Director Landsberg from the California Department of Healthcare Access and Information, Kelly Mossberg on behalf of Essential Access Health, and Nicole Barnett, president and CEO of Planned Parenthood NORCAL. And then we also have the LAO. But we're gonna begin with the with HCAI director Landsberg who will provide a brief overview of the five HCAI reproductive health programs, their current status, and funding outlook. And as each of you goes on to testify, if you could please introduce yourself before beginning your testimony, and, please start when you're ready, director Landsberg.
Speaker 5
Thank you. Good afternoon, madam chair and members. Elizabeth Landsberg with HCAI, the Department of Health Care Access and Information. Pleased to be here to discuss the reproductive access programs that we have administered at HCHI. So the twenty twenty two, twenty three budget included five programs with a total of a 120,000,000 appropriated for HCHI to implement to ensure access to reproductive health care services, including abortion.
The first is the uncompensated care grant program, which allocated $40,000,000 for health care providers who deliver abortion and contraceptive care to individuals with income up to 400% of the federal poverty level who don't otherwise have coverage for these services. And HCAI partnered with Essential Access Health to administer the programs and distribute funds to providers. 39 grantees have been funded over the past three years, and they have served almost 200,000 eligible patients, in all 58 counties. The second program is the abortion practical support fund, which provided $20,000,000 for services that support access to abortion care, including transportation, lodging, meals, abortion care doulas, and childcare and elder care. The program also supports organizations in building and expanding capacity to live to deliver these services.
So again, with this program, we partnered with Essential Health Access, to distribute funds. More than $11,000,000 have been awarded of the original 20,000,000 to 45 grantees over the past three years. And there is a remaining balance of a little over 8,000,000 and a fourth cycle running starting this July. We do anticipate all funds will be expended during this cycle. The third program is the capital infrastructure program aiming to enhance the physical and digital security infrastructure for health care facilities and reproductive health practitioners who provide abortion related care.
And here, we awarded to 36 grantees. And again, this was both cybersecurity and physical security for these facilities. Fourth was the clinical infrastructure program, $20,000,000. And here we have the scholarship and loan repayment programs where we provided scholarship and loan repayment to professionals who commit to providing abortion related and reproductive health services in underserved areas of California. So we've awarded scholarships and loan repayment to 342 clinicians, including physicians, nurse practitioners, PAs, midwives, and nurses.
The other piece of this program was the reproductive health hotline. So we launched a free confidential clinician to clinician consultation hotline partnering with UCSF to provide support services, consultation calls on topics such as STIs, contraceptive contraception, abortion, and abnormal uterine bleeding. And then fifth was the reproductive health services core established to recruit, train, retain, and support a diverse workforce of health care professionals to commit who commit to providing reproductive health services, including abortion care. So here we partnered with two different entities, TEACH, the Training in Early Abortion for Comprehensive Health Care was one entity, and then Birth Control Pharmacist was the other entity. I know that there's a timeline, so I'm happy to go into additional detail about either those five programs or the additional funds that HCAI has administered through prop 35 or otherwise as interested.
Speaker 6
Chair and members, Kathy Mossberg, on behalf of Essential Access Health. For more than fifty years, Essential Access Health has served as California's title 10 federal family planning program grantee, and we have been supporting a statewide network of providers delivering high quality, affordable, reproductive care. I want to begin by thanking, expressing our appreciation and thanking this subcommittee and the legislature as a whole for all their efforts in the reproductive health space. And we every day see the positive impacts of this fund. We've been asked today to address a couple of issues.
One, the current need and situation with uncompensated grant program and to provide a Title X update. First, wanna start with uncompensated care grant program. Essential access, as noted here by the director of HCAI, was is currently the administrator of this program. We actually are the administrator of three programs created by this legislature to protect access to abortion and contraceptive post Roe. Together, the LA Safe Haven pilot program, practical supports, and the uncompensated care abortion access program have served more than two and thirty thousand people.
I want to highlight the uncompensated care program. As again noted here by the director of HCAI, we have 39 grantees receiving $40,000,000 deliver abortion and contraceptive services to approximately 200,000 patients, ninety percent whom are California residents across every county through both in person visits and telehealth. At this point, all the funds in this grant program have been awarded. So without renewal, this program will be eliminated. Our grantees stress that this funding is a lifeline for under underserved areas and its continuation is absolutely critical.
Speaker 15
They fear being forced to turn away those unable to pay And because we we can go into greater detail at another time, but we certainly have examples of the care provided to individuals and how they're able to, through this through these dollars, get get services they normally would not otherwise be able to get. Because of HR one and because of lack of federal funding in various places, we know at this time the need is rising, not diminishing. We can't afford to lose this critical safety net. So we have, along with our champion, Assembly Member Bontel, thank you, recognized the state's budget realities, but we have put forward a budget request of $10,000,000 to be spent each year over three years for a total of $30,000,000 We believe there's a potential to combine both general fund dollars as well as other resources included in the new abortion access fund that was created last year. Other states have established similar programs post Roe and have maintained them.
Speaker 6
California has always led, and this is certainly not a moment to back away. We respectfully urge you to sustain this program. And then moving on to title 10. As you know, last year, the Trump administration unlawfully withheld title 10 funding for several months. The consequences were immediate and severe.
Staff positions were cut. Case care workforce was diminished across the state. This legislature stepped in to provide $15,000,000 in backfill and though that investment stabilized the network, ensured continued access to essential time sensitive services like birth control, STD prevention, and treatment, cancer screenings included. Because of that action, the Title 10 network was sustained and we were able to see 500,000 patients in California last year. But federal uncertainty remains.
We have just received the notice of award this past Friday for California. It is at level funds. So it is at that 12.5 level. This is delayed though. And we're in a similar situation where we would have normally under different circumstances, we would have been ready to go.
We would have been working with providers. We normally get the information far earlier than what we're getting it now. But because we have these $15,000,000 funds, we've been able to use them and actually start to build up and provide dollars and backfill dollars to provide stability to all the Title 10 providers across the state. So we again really want to thank you and we will continue to keep this committee updated. We are expecting potentially some language to be tied to those federal funds that could make it difficult to use broad based in the community, but at this point, we do not have that detail.
We will keep this in in this committee and staff informed on that. With that said, wanna thank you for your time and happy to answer questions.
Speaker 8
afternoon, madam chair and members of the committee. My name is Doctor Nicole Barnett. I'm the president and CEO of Planned Parenthood Northern California, where I oversee operations of 17 health centers spanning from San Francisco all the way to the most northern rural counties of our state. I'm here on behalf of my own affiliate but also as well as the six other Planned Parenthood Planned Parenthood affiliates serving the state of California. Since 07/04/2025, Planned Parenthood has been blocked from receiving federal Medicaid funding under HR one.
The intent was clear to defund Planned Parenthood, force health center closures, and restrict access to essential care. Since its inception, this defund has had real consequences. Nationwide, 23 health centers have closed, including five right here in the state of California. This impact is especially significant here in our state. Collectively, our affiliates serve one third of all Planned Parenthood patients nationwide with over eighty percent of those patients relying on Medi Cal and Family PACT.
Planned Parenthood is the largest provider in both programs delivering critical services like birth control, STI testing, cancer screenings, not abortion services, which remain state funded. The defund threatened over 400,000,000 in care for low income Californians. We are incredibly grateful to this legislature and to the governor for doubling down as a reproductive freedom state and helping us to weather this devastating defund. California stepped up to use state funds to keep Planned Parenthood health centers open and to ensure minimal disruption for our patients. However, this stability is temporary.
Speaker 33
The defund expires on July 3, and if it ends, we may resume normal Medi Cal operations and the state will be able to pay family planning claims using federal matching funds. However, if the defund is extended, we will once again need to explore alternative funding mechanisms or else we face devastating cuts, which will impact access for patients enrolled in medical programs. Despite these challenges, we continue to serve. Programs like the uncompensated care fund have been absolutely critical. At Planned Parenthood Northern California alone, we served nearly 7,000 patients last year in five languages through this program.
Speaker 8
Of the hundreds of patient stories that I could share with you, there is always this common theme. Patients come to us because they know they will be treated with dignity, with respect, and without judgment. And we are honored to be that provider. And we strongly support the budget request for $30,000,000 to extend its operation for another three years so that no patient is turned away. Thank you again for the opportunity to speak today.
Planned Parenthood remains rooted on our mission to provide care no matter what. Thank you.
Speaker 1
Anything from the LAO to add? Thank you. Any member comments or questions? Yep. Please.
Assembly member Ponta.
Speaker 4
Thank you. I wanted to just address the uncompensated care, needs. Given the fact that it sounds like we will the the demand has not waned at all. Given the changes to Medi Cal, we also know that there will be more people who will be dealing with an affordability gap. With this in mind, has essential access seen over seen any year over year unmet needs in the program?
Speaker 6
Yes. We have. And we can get you the specific numbers on that, but we have definitely seen oversubscription of about 2 to $3,000,000 every year to the degree that we've been able to keep track of that. We assume there's probably larger than that, but that's that's what our numbers are showing. That while these funds are helpful, there's certainly still need out there.
Speaker 4
then I know that we've been able to have an opportunity to continue to fund and fill the gap for Planned Parenthood. Are you foreseeing what are you what is the future foreseeing for Planned Parenthood and being able to cover insure coverage? I always am struck by the fact that 22,000 people a week, is it, go through Planned Parenthood doors?
Speaker 8
Depending on the affiliate that you're speaking of, it's patients who continue to come to our doors for care. But because of the federal defund, we've lost access to the federal funding. So the funding and the assistance through the state has been essential for us to maintain access to care. Like I mentioned before, if the federal defund is extended, it means that we will continue to be prohibited from access to federal funding, and it means that we will have to seek alternative, resources in partnership with the state to continue to keep our doors open.
Speaker 4
And then my last question, sir. The, to HCAI, given that these five programs that were established were onetime funds, many of them have been fully expended. Have you been able to do an analysis around the efficacy of the five programs or where you believe that we are going to need additional investment across these five programs?
Speaker 5
We have been collecting data from our partners, I mean, essential access, and we shared some of those, and and they're included in the agenda. I would note that the reproductive health services core, those training programs, and the residency program, the pharmacist, those are ongoing programs through 2028. We as noted, we still have funds for the practical support, but the governor's budget does not include additional funds for the uncompensated care.
Speaker 11
Great. Thank you. Questions about the uncompensated care program. So my understanding is health plans in California, unless they're self insured, are required to cover abortion services. Is that correct?
Speaker 11
So this money is going to individuals who are mainly self insured or they receive their insurance through a self insured health plan? Or what what's the uncompensated paying for?
Speaker 5
So the uncompensated care program covers for folks who do not have coverage for abortion, including uninsured people who are uninsured.
Speaker 11
So those individuals oh, six to eight percent of California's population's uninsured. So so for that population?
Speaker 5
Again, the the parameters of the program are to provide services for people who do not otherwise have Mhmm. Coverage. I don't know if there's anything miss Mossberg wants to add.
Speaker 6
Yeah. I mean, I would just say we are seeing plenty of folks come in who don't have access to insurance and are under the 400% of FPL. I think it depends on certainly year over year what the demo what that demographic will look like. We're certainly starting to see more. You've got people being pushed off Medi Cal.
You've got people not having access to covered cal. And then you've got the federal ban in certain ways. And so we've mainly seen Californians in this program as I noted, so 90%.
Speaker 11
Yeah. I mean, it would obviously, if we're spending $40,000,000 a year, would just be interesting to know where that gap in coverage is.
Speaker 11
Dollars 13,300,000.0 a year on average. Just would be interesting to know where that gap is. I don't think I'd be the only one interested to know in that. And do we know why approximately forty nine percent of abortions in California are performed for individuals on Medi Cal. Is there a a pattern or a demographic or some kind of pattern about why that's the case?
Speaker 11
Okay. And that wasn't some statistic I just pulled up. I mean, was from the UCSF. That was a number from UCSF. Advancing New Standards in Reproductive Health.
So it wasn't some blog I got it from or something like that. Just seemed like a really high number that a percentage of the population of individuals getting abortions are on Medi Cal.
Speaker 9
Jason Contanturo Celio. So I I'm not familiar with that statistic and and haven't looked into it too deeply. But I would just emphasize that in Medi Cal, some populations are disproportionately in Medi Cal because of different income thresholds. And particularly children and pregnant persons are populations that have higher income thresholds. This is because we have CHIP as part of our Medi Cal program.
And so those populations tend to be at higher levels. So that could be one reason why you're seeing a disproportionate amount of abortion coverage in Medi Cal. There could be other reasons too, but just wanted to note that as one possible one possible reason.
Speaker 9
It's like 14,000,000 or so. It's a it's about a third of the state, but it's like half of kids. Yeah. And then for pregnant persons, I don't know what the participation rate would be. But it does vary quite a bit depending on the population.
Speaker 11
So a third of the state, but half the abortions roughly, if that statistic is correct.
Speaker 5
Yeah. And as Mr. Constantinos noted, there is a higher income threshold for for pregnant people on on Medi Cal. So you have more than a third of the pregnant population that would be on Medi Cal.
Speaker 11
Okay. Question for Planned Parenthood, and and thanks for your time. I honestly am not overly familiar with too many of your services outside of abortion, and so I was wondering if you could help me understand if you get funding for and and how much services you do to help women who are opting to keep their babies and need maternal care.
Speaker 8
Mhmm. Absolutely. So we do pregnancy counseling. If the individual decides that they do want to continue that pregnancy, we can refer them for prenatal counseling. We can refer them for prenatal care.
They can also return to us for women's health care post having their baby as well.
Speaker 11
But when they're pregnant, you don't provide in in house counseling or services or continued ultrasounds or or things like that?
Speaker 8
No. Not currently in my affiliate. We don't have those resources to provide those services, but we do refer.
Speaker 11
Okay. I mean, Medi Cal would cover those as well, I would assume. Right? So seems to me it might be a worthwhile venture to provide those services if Medi Cal is gonna pay that bill. I mean, it might be a way to keep your doors open, to continue to pay the providers that are working there, that you provide services and ultrasounds, are critical for the Medi Cal population as well, who are lacking maternal care, and it's hard to find that care in California.
And actually, we've heard that in these hearings alone. And we underfunded that in California, and we should maybe increase funding around that. And I think my colleagues would support that. But but it does seem like maybe a way you can keep those ultrasounds moving, you know, during this budget crunch Yes. If you will.
So
Speaker 8
So in the past, we did provide prenatal care, but due to the reimbursement rates, we weren't able to continue that. So it's helpful to hear you say that maybe if the reimbursements rate were more appropriate that we could take that on again. We certainly wanna stand to support.
Speaker 11
Yeah. Mean, would love to increase reimbursement rates for maternal care. We spend a lot of time funding and finding all sorts of money to fund abortion care. And I think maternal care, all of us have been beneficiaries of maternal care, hopefully, and, know, otherwise probably wouldn't be here. But yeah, I agree.
We should increase reimbursements for maternal care 100%. So thank you very much.
Speaker 1
Alright. I am I think all of my questions really have been asked by folks on the dias. So we are going to open up to public comment. So this is our item on reproductive care. There's anybody in the audience that wants to speak to oversight of reproductive health state investments.
You're welcome to come up to the mic and, name organization and position. We're just gonna check the hallway.
Speaker 10
Hi. I'm here to support the Uncompensated Care Fund. I'm from TEACH. My name is Bethany Golden. I'm a nurse midwife as well as the co director of the Reproductive Health Service Corps.
Thank you very much for your time. Thank you. Thank you.
Speaker 52
Good afternoon, chair and members. Karen Stout here on behalf of the California Nurse Midvibes Association. We just wanted to express where gratitude for you continuing the hearing. We're pre reproductive health care providers, including abortion care providers. We support continued investments and strongly encourage you to preserve the sanctity of the state's abortion care.
Speaker 5
Hi. Thank you all so much for your time. I'm Madeline Merwin. I'm a resident physician, and I'm here representing the Bixby Center for Global Reproductive Health. You've raised some amazing points today, so many of which we, rely on expanded Medicaid coverage for reproductive services for the patients that we do advocacy work and research for.
Speaker 14
There is a plethora of data that shows our state has proud reproductive health standards, and we have proud reproductive health outcomes because of the care that we can provide, including abortion and expensive reproductive care. So please consider continuing that and continuing that legacy so that providers can continue giving the care that our patients deserve. Thank you.
Speaker 1
Okay. Seeing no other, public comment, we're gonna move on to issue three on our agenda. Issue three on our on our agenda, long term care services and supports. And if you're a witness, please come up while I'm speaking. This issue examines three specific issues within California's community based long term care infrastructure.
The status of wait lists for the home and community based alternatives or HCBA and assisted living waiver programs, ALW, the transition of congregate living health facilities or or CHLF into managed care, and the status of the moratorium enacted on the program for all inclusive care for the elderly or PACE. Due to the limited space at the witness table, we may take each issue as a sub panel. So we'll start with HCBA and assisted living waivers. And we've got DHCS that will provide a brief overview of the current status of both waiver programs with a focus on slot availability and current wait lists. And then, we will move on.
And if you could please introduce yourself before you provide testimony, and feel free to begin when you're ready. Welcome.
Speaker 15
Good afternoon, chair members. Michelle Boss, director of the Department of Health Care Services. The home and community based alternative waiver and the assisted living waiver are both home and community based waiver programs developed to create alternatives for individuals who would otherwise receive care in a skilled nursing facility or hospital. These waivers allow services to be offered either in a home or a community based setting. The services offer an offered under the waiver must be cost neutral or cost no more than the alternative of institutional level of care.
Both of these programs operate under enrollment cap caps or slot limitations. In response to the committee's, questions in the agenda, I'll share some of the numbers, and these are, as of 04/01/2026. So with regard to the total authorized enrollment slots under the HCBA waiver, we have 14,374. For the assisted living waiver, 18,144. Total enrolled participants for HCBA, a little over 11,000.
And then for the a ALW waiver, 14,579. Both of these programs have waitlist. As as I mentioned at the beginning, these programs operate under enrollment caps. The total waitlist for the HCBA waiver is 6,145, and for the assisted living waiver, 16,130. The average wait times from waiver application to enrollment varies.
There are different referral pathways for each of these waivers, and so the the the wait times vary depending on the referral pathway. For the HCBA program, it's twenty five days. And then for the ALW program, currently, we do not track the average time from the ALW application to submission to enrollment. We are actively working to develop such a system. The HCVA waiver has a five year term and enter into a waiver year four on 01/01/2026.
1,800 slots were added to the waiver effective January, increasing maximum capacity to 14,374 enrolled participants. And an additional 1,800 slots will be added in January 2027, bringing the total under this this term of the waiver to 16,174. We are working with our waiver agencies to address increasing efficiencies in the enrollment processes, but key constraints in terms of increasing capacities for both of these waivers is workforce and staffing. And workforce constraints really bring being the primary driver for direct care workforce such as private duty nursing, nurse providers, personal care agencies, etcetera. Happy to answer any questions.
Speaker 1
Thank you. We're gonna so we're taking just to tell the committee what we're doing, we're taking each issue for this panel separately, seeing if there's committee questions, Then we will go on to the next issue, see if there's committee questions, go on to the third issue, see if there's committee questions. At the very end of all of that, we will take public comment on issue three, which is long term care services and supports overall. We also do have DOF and LAO here. Anything that you'd like to add from LAO or DOF?
Speaker 15
Good afternoon. Karina Hendren, legislative analyst office. Regarding the HCB, a and assisted living waiver wait lists. We wanted to first note that the Legislature does have the ability to direct the administration to increase the number of slots in the waiver. But that being said, whether increasing the number of slots would actually increase access to the services is uncertain.
This is in part because the slot increase would be subject to federal approval, and any increase in slots would be conditioned upon meeting federal cost neutrality rules. Additionally, as the agenda notes and as director Boss noted, there can be capacity issues among waiver agencies or providers, and this means that increasing the number of slots on its own would not necessarily increase access to waiver services. Due to this, there may be additional programmatic changes that might be needed to increase the number of people enrolled in these programs.
Speaker 1
Thank you. So for, this item on the HCBA and ALW, are there any questions from members on the dais?
Speaker 47
Assembly member Bonta. Thank you. As you know, I have several HBCA waiver providers, participants in my district who have, we've been working with over time. I just wanted to kind of note that it is a significant opportunity for cost savings and and an ability to make sure that we are providing care for extremely medically complex patients. Given Elio's comments about the capacity, I I actually wanna learn learn more about that because I my understanding is that there is capacity that is being underutilized by several providers and wanted to just get a sense of from director Boss, what the plan could be going forward to ensure that we're integrating more community based services through HCBS programs into managed care?
Speaker 15
So we're not necessarily tracking that there is capacity that's not being made available or is not available. So we're happy to engage if you have providers who say they have capacity. That's one of the topics that we have for the congregate health living facilities where it is a waiver program that we are proposing. It's the next item to turn that into a managed care benefit, so that can be more broad and not be limited to caps or slots. But with regards to the other HCBA or assisted living waiver, not tracking the excess capacity that isn't isn't being used today?
Speaker 4
don't know. That's a good question. She's gonna respond. Did you to the question.
Speaker 15
Yeah. Please. Yeah. Just to note, in response to assembly member Bonta, there is the wait list. The programs do have wait list.
And so in that sense, not everyone on the wait list is currently making served, and that's correct.
Speaker 4
So that that was your point that there's there are waitlists Yes. And there's not enough ability for us to be able to provide the care.
Speaker 15
But kind of the the point we were trying to make is that bringing those waitlist number down and getting people actually enrolled in the program. Part of the equation is just the slots themselves, but then the other part of the equation is making sure that there are providers who can actually serve those people once they're brought off the wait list. So there's the workforce kind of component of it as well.
Speaker 16
Just so just so I'm clear. Are we tracking whether or not there is capacity that is not being utilized or we're not tracking that? Or we know everybody's at capacity and there's no more space?
Speaker 15
That's why we have the the wait list because we have individuals who can't get into a certain Okay. Agency. And so if there are providers that are we on the congregate health living facility, which is the the next item, tracking that there's excess capacity potentially available, which is why we're proposing to transition that particular agency into a different benefit so that it is more available.
Speaker 15
Right. Which is why we have waitlist in terms of the existing waiver agencies that we have today or those that can be, you know, potentially brought online. There is processing of those applications, but we are tracking with we have a waitlist.
Speaker 16
So what is so explain the difference between the waitlist and the slots. What's a slot?
Speaker 15
The slot is just an informal term for the number of spots in the waiver. So the way I can't remember off the top of my head how many slots there are, but it's a number of people who can enroll in the waiver at a given time. And then the waitlist happen once all the people once all the slots in the waiver are full.
Speaker 15
could create more capacity, but this is where the workforce and the ability to actually create it's it's a matter of having more nurses, more kind of providers to be able to provide these services. And so, it's it's it's to Elio's point, just if we add slots doesn't necessarily mean that we will be Okay. Increasing
Speaker 4
Can I just ask a follow-up So on how I get the basic concept that we need more people in the workforce to be able to if we were to open up those slots? Can you just do a comparative just a rough comparison around the cost of care to somebody who is in a skilled nursing facility compared to somebody who is able to receive the care through HCBA waiver services? So just where it makes the most sense for us to be able to invest our dollar.
Speaker 15
So the the cost for these waiver programs have to be it has to be cost neutral or less. And so I don't have the exact number of, you know, the comparison of a of a waiver slot versus a skilled nursing facility stay, but it has to be that no no greater. Mhmm. So that's why we are we want to expand these and grow these because they are more cost effective and individuals are served in their home or in the community. This is our goal.
And that's why we've been adding slots 1,800 or so for the different programs over the last few years, growing the capacity, But, clearly, you know, individuals want this to grow even faster than than we have proposed.
Speaker 4
Is it possible that you have, that we have not paced our increase in the number of slots accordingly? So if you said 1,600 new slots?
Speaker 15
Eighteen hundred Eighteen hundred? Programs and yeah. I can find it. But yeah. 1,800 slots for HCBA over the last few years, and then I believe it's 1,600.
I can get that.
Speaker 4
But we have a wait list of six six thousand one hundred forty five on HCBA and 16,130.
Speaker 4
Right. So is it possible that we perhaps should consider increasing the number of slots perhaps at a bit higher of a level than we have in the past?
Speaker 15
These are the things that we've been working through and kind of again, it's to the point of we can increase the slots, but they may not be able to be staffed. And so trying to find the balance of where we think we are actually being able to increase capacity and provide true access versus a slot that is meaningless because there's no, you know, no pregyny of nursing or whatever it may be that needs to to stop.
Speaker 4
How how are you determining whether or not you can actually have the workforce? What are what's the quantifiable data that you are using to determine and project the workforce associated with that?
Speaker 15
Based on conversations with our waiver agencies and kind of just the field and what is available and what they think they can bring up. I don't think we have a quantitative quantified way to do that, but it is based on these conversations and the ability to process the applications and the time it takes to do that.
Speaker 4
Okay. I I think given the clearly, pretty extensive wait lists, it might be helpful if we get a little bit more granular and rely less on anecdotal information and more what the particular drivers are for either the workforce or whatever the other kind of friction points are in the increase given the fact that this is a cost neutral and, in fact, potentially cost savings opportunity for for the state of California. Just hope that we get a little bit more specific about it.
Speaker 11
Great. Thanks. In terms of the slots, so the slots require a federal waiver? Correct. And is the are the are those like routine things or we gotta grovel for them?
Like how does that how does that work? Sure.
Speaker 17
I would say it's somewhere in between. So these are less policy sensitive and they're more routine insofar as when states are able to meet sort of applicable federal authority requirements, you know, 1915c waiver requirements. Director Boss mentioned sort of budget neutrality being chief among them. We're able to demonstrate that any proposed increase in slots meets the federal requirements we ordinarily would expect federal approval. Typically, this happens sort of on a year by year basis.
So based on the waiver year, we propose increased slots on a on a year basis. It takes, you know, months to go through that process, but we don't have to grovel if it complies. Yeah.
Speaker 19
And I noticed in the original well, I think my memory serves the original congressional letter that I brought up last time that I think you've since responded to, They had mentioned IHSS, didn't really provide any information at the time, but generally speaking had mentioned, you know, Minnesota, IHSS is a area in which there's more prone to be fraud. That was a statement, I think, in that letter. Is there in terms of getting these waivers, does does that kind of thing come up in those discussions about how the state's checking for fraud? Or I'm just wondering in terms of the the federal checks and balances on that, how that plays in, if at all, to these particular slots?
Speaker 17
So in an ordinary environment, that wouldn't come up as a targeted question. I think at this point in time, we wouldn't be surprised to receive that type of question from CMS given the letter from Doctor. Oz that was sent to our department regarding IHSS and growth in IHSS in particular. We are starting to hear anecdotally that other types of waivers that are more sensitive such as eleven fifteen demonstration waivers, the federal government is starting to propose new terms or conditions in the waivers related to sort of general program integrity safeguards, not specific to any given state. We haven't seen that occur yet in these type of nineteen fifteen C waivers.
Speaker 11
Yeah. Okay. Great. Yeah. I mean, think, you know, I mean, everybody's consistently supported, you know, IHSS, you know, in this building.
And I think it's important, you know, component. Obviously, I just wanna make sure we do our part, not not that we're doing anything different, but to, like, mess that up, right? Because it is pretty important to a lot of people. Last question on long term care, just generally speaking. Because I had recently met with a constituent who unfortunately has been has to go into long term care, and she had mentioned something about awaiting some kind of federal approval or something that.
But is this a state is there a separate federal long term care program or is that administered by the state? Long term care just generally administered by the state?
Speaker 17
So it depends on their source of health care coverage. And if it's medical by long term care, if it's like a skilled nursing facility or subacute facility, we operate that in compliance with sort of federally approved authorities. Those facilities are also sort of regulated and certified according to federal requirements. If by long term care, maybe they're referring to, like, an assisted living facility that would be covered under this waiver, it would be subject to the types of caps that we're talking about on enrollment here.
Speaker 11
Alright. Well, last thing, just case we're switching topics. Just wanted to thank the department. I know we've been working on an issue totally unrelated to this for many years now. Haven't quite got there, but I do appreciate, you know, the back and forth.
And I think we're going to get there one way or another, and I know we're all committed to it. So thank you very much for working with me on that.
Speaker 4
Back on to the cost of the kind of the cost differential between, skilled nursing facilities and, the cost of, waiver services. So the and this is for DOF. Oh, thank you. So I I believe that the the cost of one year of skilled nursing facility care is $110,000 on average. DHCS is quoted in the past compared to $24,000 for waiver services for these really medically complex individuals.
Do you all believe that it makes more sense to try to ensure that we are maximizing our HCBA waivers to ensure that we are recognizing more cost savings.
Speaker 16
Natalie Griswold, Department of Finance. I think we would point to DHCS's comments earlier that the number of HCBA slots has expanded in the last several years, and that we're kind of looking at the number of slots that can be, you know, staffed up so that they can support those needs.
Speaker 4
However, the the people the number of slots has expanded. Presumably, those people would be in skilled nursing facilities that cost considerably more.
Speaker 4
Right. So so the number of people that we are trying to get into the lower cost service, I. E. The waivers for at $24,000 is seems to make a lot more financial sense than keeping people in skilled nursing facilities at a $110,000, per year. Just from a pure math perspective, that seems to make a lot of sense.
Would you agree with that math?
Speaker 16
Yeah. I think that we, you know, we understand that the HCBA waiver slots are like, doctor Boss said, they have to be budget neutral. We understand that this have this can reduce cost in other areas. I think we understand that.
Speaker 4
They have they have to be budget neutral or less. The point that I'm trying to make is that they are significantly less. Is that based on the numbers that we have in terms of the cost of those services? Is that accurate that they are significantly less?
Speaker 16
That the cost of HTBA waiver slots is less than the cost of long term care slots. Yes. I believe that's accurate.
Speaker 4
$24,000 versus a $110,000. Yeah. Okay. So given that fact pattern, what can we do to make sure that we are and I heard director Boss talk about the need to make sure that we are increasing the workforce. What can we do to make sure that we are providing the cost savings that comes with ensuring that we are increasing the number of waiver slots?
What are some direct steps that we can take to make sure that we are saving 75 to $85,000 per patient? And I guess that's a question for DHCS.
Speaker 15
I think addressing workforce challenges, which we have across the street across the state, you all the health care industry and sectors, private duty nursing, for example, very difficult to find those providers. And so figuring out how to address the workforce challenges is is one of the key areas. And I know there have been many discussions in that space for how do we attract more nurses, for example, how do we build out that workforce, but I think that is going to be the key issue in terms of being able to increase capacity.
Speaker 1
Thank you. Seeing no other questions from the committee, we are actually going to recess our, sub one regular hearing. We are going to move back to our subcommittee number one on health issue number three, long term care services and supports. We had three different sections on that. We finished the first section and we're moving on to congregate living facilities or cliffs.
And I understand that one of our witnesses has a flight to catch. So we have miss Voscon Young. Is she coming to the to the table to testify? President of the Congregate Living Health Facility Association. Yeah.
Welcome. Yeah. Yeah. Yeah. Please, please come on up.
I understand you have a flight to catch, so we wanted to make sure that you get we'll go to you first and then DHCS, if that's okay.
Speaker 1
Bus Canyon. Thank you. Thank you. And then we also have a patient witness
Speaker 1
Trevor? Okay. So, miss Foskin Young will go to you first, then Trevor will go to you, and then we'll turn it over to DHCS. And just as a quick reminder, you have about three to five minutes.
Speaker 7
Sounds good. I will try to stick to it. Thank you for this opportunity. My name is Mary Anne Voscanian. I'm a registered nurse and the owner of a congregate living health facility or commonly called as Cliffs.
Speaker 49
I'm also the president of the Cliff Association. This association was formed out of sheer desperation by a group of cliff owners who recognized the need to fight for our communities and to keep our homes open for those who need them the most. A cliff is a residential home with a capacity of no more than 18 beds that provides inpatient care, including the following basic services medical supervision, twenty four hour skilled nursing and supportive care, pharmacy, dietary, social and recreational services. This care is generally less intense than that provided in a general acute care hospital, but more intense than that provided in a skilled nursing facility. All of these services are provided in the community and in residential homes despite the many severe disabilities that our residents may have.
Speaker 7
I'm here today on behalf of patients who cannot be here themselves. Our patients are statistics. They are young men and women whose lives have changed in an instant. Car crashes, strokes, sports injuries, and ALS are some examples. The average age in our facilities is just 44 years old.
Many are quadriplegic. Many rely on ventilators to breathe. All require around the clock skilled nursing care. But despite everything they have lost, they have not lost their lot their will to live meaningful lives. They choose to live in cliffs because we provide something different.
We don't just provide medical care but a home. A place that they can decorate their rooms with Harry Potter posters, celebrate birthday birthdays with outings to a park, and when possible, go out into their communities to work and to go to school. With all respect to seniors, placing these individuals in nursing homes is just not inappropriate, but it is heartbreaking. Our patients deserve dignity, choice, and equality of life that reflects who they are. This is represented by our guest today, Trevor, that you see before you, who made it all the way out from Los Angeles on a plane ride with the help of his family and nurses.
Unfortunately, many others who wanted to be here couldn't because of the logistical challenges of traveling with all the equipment that is needed. Cliffs make this possible, and yet today, that care is at the risk of disappearing. Our daily reimbursement rate is $490 It has not increased by even $1 since nineteen eighties. No COLA, grants, or even relief funds over the pandemic. Absolutely nothing.
For over forty years, through inflation, rising wages, skyrocketing costs, we have received nothing. Yet the cost of everything has increased since 1983. In 1983, you could buy a gallon of milk for a dollar. The median price for a home in Los Angeles was $49,000. The median price in today today in LA is about $1,000,000, which is a 95% increase.
CDPH licensing fees for our license type have gone up by 700% in the last ten years. And not to mention the cost for staffing, insurance, food, medical supplies, compliance costs, and all the other things that go along with operating a cliff. We are doing everything we can to hold on but we are definitely reaching a breaking point. We want to pay our staff what they deserve. We want to maintain safe, comfortable homes for our residents.
We want to invest in the equipment needed to provide the level of care they require. But right now, even small improvements like installing a wheelchair ramp can wipe out what little financial cushion we have left. And I want to be clear, this is not about profit. This is about survival. Without support, these homes will close.
And when they close, our patients don't just lose a place to live. They lose their home, their stability, and their community. Many have nowhere else to go. I also want to remind you that a rate increase for Cliffs was approved in 2024. For a brief moment, we felt seen.
We felt hopeful. But that increase was tied to prop 35 MCO tax initiative. And when that passed, our increase was taken away. I want to remind you that cliffs are also carved out of SB five twenty five health care minimum wage law, but we still hire from the same workforce pool. So we have to pay competitive wages in order to retain staff.
Addition additionally, we cannot build these costs into our rates as many other health care providers can. So once again, we are left with nothing. Today, we are asking for a onetime two year emergency bridge funding less than $8,000,000 from the general fund to keep our doors open until the transition of 1915 I waiver is completed by DHCS. We understand the state is facing difficult financial decisions. We are not asking for a permanent solution today.
We are asking for time, time to survive, time to continue caring for the people who depend on us, time to ensure that these patients are not forced into institutions that cannot meet their needs. Cliffs can and should be part of the solution, providing appropriate cost effective care to help relieve pressure on hospitals. But we cannot do this without your help. In closing, I ask you to think about the people behind this request, individuals who despite unimaginable challenges, still want to live with dignity, purpose, and a sense of home. We are doing everything we can to give them that.
Please help us continue. Thank you so much.
Speaker 10
And what's the congregate name? And are you happy? Yes. Is it is it have you made a lot of progress to where you are today when you got on a plane for the first time today?
Speaker 10
Is there anything you wanna say, like, to us? No. Nothing more? Yeah. Right now.
Yeah. Sure.
Speaker 12
Hello. Thank you for being here at this late hour. I'm Trevor's mother. I came up from San Diego today with him on a plane for the first time, which I never thought would be possible After his injury catastrophic injury two years ago, he was in ICU for a month, and then the hospital basically said we need to send him to a skilled nursing home. And I thought he would recover there enough to, you know, resume his life, but that did not happen.
Speaker 24
And so I found out about a congregate care that was I was able to get him out of a nursing home. Sean was able to get him out of a nursing home because this is available. And I really had no idea that these type of homes are congregate care is at risk of closing because they can't afford to stay open. And so I totally support this emergency fund to keep them going. It doesn't sound like a ton of money compared to what is being asked and what will supposedly happen in a couple years.
Speaker 12
But I'm not quite sure what else to say other than my son would be laying in a nursing home still. He may have not made it this far because I had to hire someone because he lived in Los Angeles and I'm in San Diego to just basically make sure he was getting the care he needed in the nursing home until I was able to get him to a congregate care home. And the kind of care that he had there is nothing compared to what he's getting here. And he gets out of the house, He's in a wheelchair that they didn't allow him to have at the nursing home. He was basically just laying there.
It's like a warehouse type of situation. It's so sad. So anyway, thank you for hearing us and being here, and we appreciate your consideration for this spending. Thank you.
Speaker 1
And so you're welcome to stay if members have questions. We don't wanna you're not required to stay if you need to.
Speaker 1
I think we do have a couple questions, but please let us know when you need to go. We don't want you to miss your flight, but assembly member what? Yeah. Assembly member, Shaibou. Maybe a couple quick questions and then let them get to their flight.
Speaker 16
Thank you so much for being here. So I was happy to carry the budget request for the the cliff funding. And one of the things that I thought was so important when we've had conversations in the past is how much how much savings comes from actually having people in the cliffs. Part of that is you haven't gotten a raise since the 1980s, which is not the good part of it. But do do you remember kind of how much hospital care was versus SNF care versus cliff care?
Speaker 12
In terms of a daily rate? Yeah. I just know that the first year that he was in a SNF, was from April 2024, April 1, it was actually two years ago today, the end of that year, the hospital billed amount was $675,000 for all of the care, which included his intensive care stay. In terms of a daily
Speaker 12
Yes. Okay. For that nine months. Mhmm. That was the billed charges to his private insurance.
Okay. And then by then, he was at Newstart. So in terms of the SNF daily rate, I'm not quite sure, but I think it was more than the $490 a day for congregate care, I believe.
Speaker 16
And I don't know, Miriam, is if you know off the top of your head what I'm not sure if you have a flight, I wanna get a question into you too. But, yeah, how much if you want to come up to the desk and how much hospital care is versus or SNF care compared to Cliff's?
Speaker 7
Yeah. You know, we've we've we've tried to figure out this number out along with some of our board members. Yeah. I would like Ron to chime in. Okay.
Speaker 19
members of accreditation. And I did some studies. In the ER, if you go, it's about 5,000 a day. And in the ICUs, it's about 10,000 a day in hospital care. So it and I work at at our local trauma one levels.
I'm a nurse practitioner. It averages about 5,000 a day in hospital stay. Mhmm. For regular patients. So given the acuity of these types of patients, it ranges between 5,000 to 10,000 a day in hospital care.
Speaker 22
And these patients are Medi Cal beneficiaries, which means our Medi Cal budget goes to these types of patients.
Speaker 16
And and how much is a daily rate for CliffCare? $490. Okay. So 5,000 to 490 basically 500. Right?
Speaker 7
Yeah. And $490 includes everything that I mentioned, housing, skilled nursing, medications, DMEs, activities, food.
Speaker 16
Right. Right. I mean, I think, you know, if we're talk we're we're having so many conversations right now about the cuts to Medicaid and Medi Cal here in California, And we have to be looking for solutions like this that can save so much money and still provide folks quality care in the community where they can thrive. Yeah. And so, so this just it feels like a no brainer to me, and I'm glad that there's work to bring, happening to bring them into the fold.
But I think that this bridge funding to make sure that cliffs are, able to make it there is really, really critical. And if we get to the point where there's actually enough funding to cover care, that we can move more people into CliffCare that, you know, can get this this affordable and quality care in communities where, you know, we could save our Medi Cal budget a lot of money.
Speaker 1
Let me just see if this are there any other questions from the or comments from the committee members for these particular witnesses that need
Speaker 12
to go? Can I just say one more thing? In the SNF where Trevor was, he was at least fifty years younger than any other person in there, and it's not an appropriate place for them. The New Start, the average age is he's 28. There's I don't know what the oldest is, but maybe 35, 40.
So especially care for the younger population with with catastrophic injuries is so important for them to not be in nursing homes.
Speaker 4
Yeah. Absolutely. Thank you to Trevor's mom. I'm sorry I missed your first name. Karen.
I'm sorry. Karen. Karen. But I think Trevor's mom is a beautiful reference. Karen, can you just share a little bit who else is in Trevor's Particular.
Yeah. They're just not their names, obviously. Just Oh, right. Number of people.
Speaker 12
There are five other residents. It's in a private home in a nice area in Chatsworth, and four of them are quadriplegics. And I'm not sure what the diagnosis of the other two. Mhmm. One of them has
Speaker 34
of my patients, I have 18 beds, three facilities, And a lot of patients that come to us two or three years later, their story, I can write it and over and over again. And they come to us with stage four wounds, and they're in bed for the next year. And I can I don't know how much is spent on that over the last last three years before we got them, but they found us, and we had an open bed? And we saved millions and millions of dollars. If we could get that person at the beginning of the journey, the big picture, you're saving millions and millions of dollars.
Speaker 10
They they they are they have, like, a one on one care compared to anywhere else. And so as far as money goes, when we're looking at someone like Trevor, we're looking at thirty, forty years. Most of my clients I've had a client for thirty years, thirty five years, actually, and he is well. He's a ventilator quad. He flew up here last year with me.
So, you know, we're looking at a lifetime. And starting it off, the the first two years are the most critical years after a catastrophic injury. I've seen people get to us right away, and they're back in their full time job within two to three years, really. He came to me. You would not have known this kid sitting here right now.
Yeah. He he couldn't speak. He couldn't get up in a chair. He was not like, very, very different. And I I push everybody, and I said, let's go.
His mom said, how are we gonna do that? I said, easy. We're getting on the plane. We're coming here, and we're gonna talk, and I want you guys to see this. He's not the only one.
We can show you I can I can show you a 100 people from thirty years ago? My mom started this thirty years ago forty years ago, and it works, and we're about to shut our doors. We are we we have we're up to here in loans. We cannot do it anymore.
Speaker 1
And I I am gonna have to ask you to wrap it up. Not not because we don't wanna
Speaker 12
This was Trevor laying in the nursing home before he went to Newstart. Terrible.
Speaker 4
Thank you so much, Trevor, for making your way up to Sacramento on the plane. I really appreciate you being here.
Speaker 1
Any other questions from members? I wanna I wanna say thank you also to all three of you, and I appreciate you. You're welcome to stay. I don't know if you have a play. We do.
Speaker 12
But we're happy to answer questions. We've been traveling since 04:30AM, so
Speaker 1
we're happy to. I know. I know. We we apologize for for making you wait so long, but really appreciate all of your efforts. Appreciate your services.
Trevor, I appreciate your strength and and your journey that has been very difficult. I appreciate you coming here, and I know that our committee has dug into this issue quite a bit. Miss Schibow has been an absolute champion on this issue last year, this year. It's actually why it was on the agenda today. So we're gonna turn it over to DHCS to add a couple of minutes, then we will see if members have questions after that and then move to public comment.
Speaker 15
Thank you. Michelle Boss, director of the Department of Health Care Services. And I will say it largely in part because of this advocacy in the prior last year's discussions, we are proposing to move this to a managed care benefit. That was one of the the big points of conversation last year. And so we are proposing to transition congregate health congregate living health facilities from an HCBA authorized benefit, which was the previous panel under the 1915 I Home and Community Community based plan to carved in Medi Cal managed care plan.
So there will be no caps, enrollment slots, etcetera. This will be available statewide. And so we also believe that this will standardize the benefits statewide so individuals will have more access to this benefit, providers will have the ability to negotiate with Medi Cal managed care plans based on kind of the needs and the rates for these services, to really providing an avenue for, increased access, increased, ability for plans to use this instead of hospital services to support these individuals.
Speaker 4
I I think the testimony included this kind of need for bridge funding. So the the gap between when DHCS goes through the final process of recategorizing to the 1959 process and the current time now. Is there a sense of whether or not the alignment of the requested funding matches up with when you all think you will be complete? So we're proposing to,
Speaker 15
carve this into managed care 01/01/2028. We do not have a proposal for bridge funding or kind of, increases in rates in
Speaker 4
the meantime. I meant the their request, the the budget request that's in through assembly member, through DHS.
Speaker 15
Sure. So our our proposal is to change change transition it to a managed care benefit 01/01/2028.
Speaker 1
I'm just gonna, pause member questions because I forgot to ask you if an LAO if you had anything to add. Okay. Assembly member Bonda, anything else on your end? Miss Shai Assembly member Shaibo, anything?
Speaker 16
Just, again, very happy that this process is going forward. Thank you for that. I think that this is a really important change, and it'll help a lot of folks, and it will, you know, save a lot of money. I was just looking back through my notes from, I went to a cliff in my community. Chatsworth is where I live.
Speaker 16
I went to one, I think, in Northridge as well, which is also in my district. And and there was a wife of her husband who had been in an accident and was, I think, quadriplegic. He she said her hospital stay was his hospital stay was $35,000 a day. And then again, the cliffs are $500 a day. So I just think this is a very smart investment for us to make as a state and again, the care, you know, being quality too.
Speaker 1
Yeah. Thank you. Thank you. And I know, so many members, you've been a huge champion and appreciate DHCS, saying making changes based on the testimony that was here. I'm sure I know folks had to leave.
I wanted to tell them, even though they got up at 04:30 in the morning and really only talked to us for five minutes, how impactful that is. So I appreciate you reinforcing it. It's not always the length of the testimony, but the quality of what people have to say. And we really do listen and appreciate it. And so thank all of you that are here.
Since there's no other questions from the dais, we'll go to the next issue. And then at the very end of this, we are gonna take public comment on all three topics that we've been talking about for issue three, the HCBA and ALW congregate living facilities or cliffs, and then our next topic, which is PACE. So we're going to turn to the program for all inclusive care for the elderly. In addition to DHCS, we've got Maria Zamora, Chair the Cal PACE, Chair of Cal PACE and Chief Executive Officer Center for Elders Independence. You're here at the witness table and we'll start with DHCS and then, move over to miss Samora, if that's okay.
Speaker 15
PACE is an integrated health care model that provides comprehensive medical and social services to older adults who would otherwise require nursing home care. PACE uses an interdisciplinary team to coordinate and deliver a full service preventive primary acute and long term care services at a PACE center. Since the PACE Modernization Act of 2016, the program has expanded rapidly, limiting really the department's ability to manage operations and shape future growth. To help us work through this deliberative growth strategy, we issued pause on new PACE applications for a minimum of two years. We did that last fall in November.
The moratorium or the pause means that we have paused accepting new PACE applications and also service expansions for our existing PACE organizations. This pause allows us time to realign oversight capacity and conduct strategic planning focused on the needs of Californians' duly eligible and aging populations. During this period, DHCS will assess the current PACE landscape and evaluate potential improvements to the application and market entry process. As part of the strategic planning effort, we will be engaging stakeholders, including Cal PACE, PACE organizations, advocacy organizations, and others beginning this fall. We are working with philanthropy to get support for a consultant to help us navigate this and engage in this stakeholder process.
The pause will last at least two years and will end once DHCS establishes a statewide strategic growth framework for both PACE organizations and just really generally our dual dual eligible population. The pause does not impact existing PACE organizations or participants that they serve. They can continue to enroll individuals in the the programs that are operational today. There are currently 40 organize PACE organizations in California operating in 28 counties across the state, and an additional 18 new PACE organizations will be onboarded in 13 new counties in the coming months. Happy to answer any questions.
Speaker 23
My pleasure. Good evening, madam chair and members of the subcommittee. My name is Maria Samora. I'm the president and CEO of the Center for Elders Independence, a PACE organization who has been serving the East Bay for over forty years. I'm also the board chair of the California PACE Association, so thank you for allowing me the opportunity to speak today on behalf of Cal PACE.
I wanna speak briefly to both the PACE application pause as well as our budget request to help prospective enrollees access PACE. These are distinct issues relating to PACE operations, and it's important to and and it is important to understand them each separately. As noted by the director, on November 17, the department issued a policy letter to all organizations stating that it would pause applications for new PACE programs as well as expansions of existing programs. This does not mean people attempting to enroll in existing programs cannot do so. We understand department's decision to temporarily pause applications for PACE programs given the state's workload.
The need to assess the application process and plan for sustainable growth of PACE is very important. And I want to emphasize that this moment did not happen overnight. Staffing and capacity challenges at the state have been an ongoing issue, and Cal PACE and our members have long recognized the importance of ensuring DHCS has the resources needed for appropriate monitoring, oversight, and the expansion of PACE. PACE organizations have been very mindful of these workload pressures. We have consistently engaged with the state in good faith and have remained open to collaborative conversations to identify solutions that work for both PACE organizations and for DHCS, solutions that ensure strong oversight while also supporting access to care.
Speaker 21
Clear shared metrics for lifting the pause will be essential, and Cal PACE is committed to working with DHCS to establish them. Yet while the state plans for the future of PACE, we must also ensure access to care is working for those who need it today. We can plan for the future without delaying care today, especially given that DHCS has repeatedly recognized PACE as a highly effective model and has expressed its commitment to making it available to those who need it. Currently, DHCS is processing between fifteen and eighteen hundred level of care determinations each month, a required step for enrollment into PACE. Due to staffing constraints, this created delays this has created delays and led to earlier submission deadlines for PACE organizations.
Speaker 23
The result is a shortened enrollment window and slower access to care for frail older adults. For the population we serve, delays are not minor. They can mean going without needed services, increased reliance on emergency care, potential for hospitalization, or even premature placement in institutional settings, outcomes that run counter to the state's goals. Often, when family members or older adults themselves come to a PACE organization, they are already in crisis. This is not a question of effort by any means.
It is a question of capacity. That is why Cal PACE is requesting funding for four additional state nurse positions dedicated to review level of care determinations. This is a targeted short term solution that would help reduce delays, improve access to care, and support the department in managing its current workload. We remain committed to working in partnership with the HCS and the legislature on longer term improvements to ensure the process is sustainable as demand continues to grow. As the state takes time to plan for the future of PACE, we must ensure that eligible seniors are not left waiting for the care today.
Thank you for your time and your consideration.
Speaker 1
Thank you. Does DOF RLAO have anything on this? Are there any questions from members, assembly member Slachey?
Speaker 18
Thank you, madam chair, and thank you for putting this on the agenda as well. You know, in my district, PACE programs are critical. But more importantly, I think I've spoken to many that when we come to Sacramento, bring our lived experiences. My father, as I've mentioned last year, in fact, has been just a very generally organic member of a PACE program in Lynnwood, where I was mayor of. And I've mentioned so many times that when mom was around, she took care of dad, right?
She just had what she did. And it's a cultural thing. It's a marriage thing. But it's been it'll be six years this summer. And dad talks about how he gets his oatmeal, like mom would make it at the PACE program.
He sent me a photo of his haircut he got the other day at PACE. And him being working out, which it was a joke because he doesn't really work out, but he was using the machine and he had to know the the he had someone record him. But, again, he he has found a place called home. And he doesn't go every day because he's still not old enough. And he's he's 73, but he says he's not old enough to go every day to the PACE program.
Mhmm. But he goes on Thursdays. That's his home front Thursdays. And I share that story just because, you know, it it's a place where he's found a place to socialize and and and and have a place to call home on Thursdays. So I just wanted to share that example in that moment.
So I I wanna believe that many of my seniors in my community are part of these programs because they it's a need. Right? It's not a luxury. It's a fact that they find a find a home. So I'm very thankful of the work that you and and everyone does to be advocates.
Speaker 54
I personally believe, and we have some budget requests so that we could ensure that as a pause is happening, that we, you know, we are asking for an increase in certain in in in services to have more individuals help process these applications. So as but assuming that that doesn't happen or as, you know, the the conversations are happening to advocate for there being in the Southeast communities I represent, I think you mentioned the Bay Area. And I know that members here represent different districts, they have PACE programs in their districts. So I understand that the department's currently reviewing their oversight capacity. So I just have a quick question if if how the department is considering addressing delays with the level of care determinations while the broader assessment of PACE is underway.
Speaker 15
So as mentioned, PACE growth has just expanded rapidly over the last ten years or so, and the department's staffing did not expand to commiserate with that. And last year, we did request to BCP for additional resources to be supported with kind of fees on our PACE organizations to ensure that our workload is kind of commensurate with the the staffing needs of the department. It did not move forward, and so we are in a place where we do have a backlog of the level of care determinations, and it is a matter of needing individuals to process these types of activities. And so not disagree with the assessment. And that's
Speaker 18
And I appreciate you highlighting that, and that's why I think one of the requests that I've made is we fund some of these positions because it's really about processing these applications. And I want make sure that more seniors and more folks take it, not advantage, but take the opportunities to be part of these programs. So thank you for clarifying that. As a quick follow-up, how will stakeholders be engaged during the two year moratorium, and what opportunities will there be for input as a department to develop its own long term strategy for PACE?
Speaker 15
Yes. So we plan to initiate the the stakeholder process late summer, fall. We're working with philanthropy right now to be able to hire a consultant to to really do that stakeholder process, engage with Cal PACE, our PACE organizations, consumer advocates. And it is beyond PACE. It is how we serve our dual eligibles and kind of where there are gaps across the state and the needs for services.
So we wanna be strategic in that conversation, and so there will be opportunities for for that process. We'll we'll be starting it in a few months.
Speaker 18
And I appreciate your work in the department for the work you're doing in this space. I know my colleagues in this committee and throughout the legislature will benefit from more of our PACE programs throughout the state, you know, getting the the the appropriate staffing to process these applications for our seniors. So thank you so much on behalf of my dad and the many seniors out there benefiting from these programs.
Speaker 4
you. And I wanna say that PACE or sorry, the Center for Elders Independence, thank you for being here. My district organization is 44 years 44 years old. 44 years old, which I'm incredibly appreciative of. I'm actually curious about the exponential growth that director Boss is talking about, whether or not you each have a sense of why that is happening.
Is it just because PACE programs are so incredibly popular? Is it the silver tsunami? Just one question. I'll ask all my questions, then you can The second is, has there been any consideration, or how do the are there any expedited processes for existing organizations during this two year moratorium for new PACE programs that we need to be aware of? And finally, how are we going to make sure that we are kind of meeting the demand for the number of PACE programs that we actually need to be able to support folks.
Speaker 15
So maybe I'll start with your last question first. That's part of the strategic kind of thinking we wanna do. Some some areas are saturated with PACE organizations. And so how do we think about where is the growth and the analysis that is needed to determine where is a new PACE center ideally located? Do we need to have another one in X County or do we need to think about where else a PACE organization might be needed?
And that is part of the work that we want to do over the coming months. And then with regard to your first question, I think part of it is growing population. In 2016, also the the there was a kind of a prohibition on private firms entering in the PACE space, and that was lifted. And so there's been an increase in applications from private companies to get into the PACE space as well. It's a dual eligible population, so it receives Medicare funding as well as Medi Cal funding.
And so, you know, opportunities for other providers to enter this space.
Speaker 23
I I think also the I like to say that COVID was the opportunity that none of us wanted. So I think that during that time, it really highlighted the benefits of PACE organizations. We were able to pivot very rapidly during a very difficult time to keep the most vulnerable, most frail individuals safe during that public emergency. So I do think that on a national level and statewide PACE got a little bit more visibility during that time because we did have significantly improved outcomes in terms of infection rate and mortality rates and those kinds of things during that time. So all of those things came together, I think, and really have spurred on growth of PACE in California.
Speaker 10
And then my question about the expedited have there been any expedited process?
Speaker 15
So those who had submitted kind of a letter of intent in the first process, we're moving on those. But once the moratorium or pause went into place, we've paused other kind of if you didn't meet the kind of the timeframe by which we specified, then we are not accepting new applications.
Speaker 1
Any other questions? I'll just add, I don't actually have a PACE in my desk, so, really appreciate you thinking about statewide, particularly some of the more rural areas that could benefit. I did get the opportunity to visit last year, I think it was, or the year before, here in Sacramento, a PACE facility, and it was just phenomenal. And then have heard from assembly member Sache a few times about how much it's benefited his, his family and his dad in particular. And so really impressed with that.
Was surprised not to see something else come forward from you know, that it's coming from the assembly member, not coming from the department, but I'm glad to see that you're starting to try to try to make them some some movement on this. So so, anyway, with that, we will move to public comment. You're welcome to stay for public comment, but you don't have to. It's gonna be public comment on all three issues that have been covered, all three topics under issue number three.
Speaker 6
Missette Short, on behalf of Loma Linda University Health in support of PACE and wanna align our comments with the Cal PACE organization, representing and supporting the urging the support for San Diego PACE.
Speaker 4
Hi. My name is Michelle Marcinik. I have to catch a plane, so I'm just gonna say it real quick. Thank you for your support past the over the last eight years to get hearing aid coverage closer to the finish line for children. We're so grateful.
With the federal pathway no longer viable, California now trails 35 states. Since 2021, California has spent 30,000,000 on an HACCP largely on administration, yet only 300 kids have gotten hearing aids, and there are still 20,000 kids still waiting. There are cost neutral pathways California can pursue to ensure families are supported and children get access to hear and connect with their world. Thank you.
Speaker 13
Thank you. Vanessa Kahina on behalf of CALPACE, with immense gratitude for Assemblyman Solace for authoring this budget request, and then also on behalf of Cardea Health, an immense gratitude to assembly member Bonta for her work to clear the HCBA waiver slots. Thank you very much.
Speaker 17
Good evening. Yasmeen Pellet with Justice in Aging. As noted, there are thousands of high needs older adults and people with disabilities waiting on California's HCBS wait list with critical care and that need critical care that will keep them out of, nursing facilities and living safely in their homes and communities. The number of available slots is insufficient to meet the astronomical number of individuals on these wait lists. DHCS should be increasing slots to meet the number of people needing the services.
Speaker 25
We disagree that budget neutrality is a barrier. The Social Security Act merely requires that the average per capita expenditure be less in the waiver than in institutional care, allowing the state to increase slots to address the need of everyone who needs institutional care. We also want to note that both the HCBA and ALW waivers have total capacities of over 10,000 slots, and both waivers have very large waitlists, 6,000 for HCBA, 16,000 for the assisted living waiver. And despite these wait lists, there are open slots, 3,400 in HCBA and over 3,500 in ALW. The notion that staffing is the issue does not track why there are so many open slots that are not being filled.
For instance, the assisted living waiver has hundreds of providers awaiting approval by DHCS.
Speaker 1
Wrap up. Thank you so much. Thank you. I I forgot to say, but if you could keep to thirty seconds, even better would be name organization position.
Speaker 7
Good evening, chair members. Jessica Brown with Capital Advocacy on behalf of WellBe Health with 11 pace organizations across the state. Just want to say that we are in support of Cal Pace's budget proposal to fund for critical nursing staff positions who evaluate the applications for older Californians who are looking to enroll in PACE programs. Thank you so much for your time tonight.
Speaker 23
Good evening. Sherry McHugh on behalf of InnovAge in support of the budget request for the $700,000 for the four nursing positions. Thank you.
Speaker 51
Hi. Erin Levi on behalf of the California Congregate Living Health Facility Association. Thank you to miss Schiavo for bringing the CLIF issue back again. We very much appreciate this committee allowing the CLIF folks to testify. And thank you to the department for hearing us, our plea to, bring this into a managed care benefit.
Speaker 27
Also, behalf of On Lock PACE program, the first PACE program in the nation, very proud. Behind every one of those applications for level of care is a real senior needing care and a real family member who's trying to navigate the system, so support of that budget recommendation. Thank you.
Speaker 1
And, actually, I'm gonna I'm gonna tighten this up because it sounds like there are there a lot of people waiting on this issue? There may just two more. Okay.
Speaker 10
If you if you can do name position and name organization position, that's even better. Linda Way with Western Center on Law Law and Poverty, align our comments with justice in aging in support of increased slots for the home and community based alternative and a, assisted living waiver. Thank you.
Speaker 29
Thank you, madam chair and members. Kathy Sunderland McDonald with Capron Strategies. I'm here for Habitat Health. We're a PACE organization with, sites in Sacramento and Los Angeles Counties in support of the nurse evaluator request. Thank you.
Speaker 30
Kelly Brooks on behalf of East Bay Innovations, an HCBA provider in the East Bay here in support of trying to eliminate the waitlist as quickly as possible, and thank you to assembly member Bonta for your remarks today.
Speaker 25
Allison Ramey, on behalf of AltiMed, one of the largest PACE providers in LA County and Southern California here in support of the budget request for the nurse evaluator positions. Thank you.
Speaker 20
Thank you, chair Addison members. My name is Evan Fern with Disability Rights California. And then I'm so sorry. Did you say just keep it to name and position? Okay.
Well, we we would like to see the HBCA waiver, waiting list cleared. This is a wonderful opportunity for people with disabilities to live independently. Thank you.
Speaker 1
We're not laughing at you. We're we're laughing with you, not at not at you. Seeing no other public comment, we are gonna move then to issue four, DHCS program budget, the January proposals and trailer bills. This issue is going to examine the Department of Health Care Services proposed twenty six-twenty seven budget, the Medi Cal, local assistance, and family health estimates, cost growth trends in the Medi Cal program, multiple budget change proposals, as well as trailer bills included in the governor's January budget. So we are gonna welcome to the witness table representatives from DHCS, LAO, and Department of Finance.
And if you you're welcome to come there or stay where you're at, whatever you're most comfortable with. But let's start with, DHCS with a brief overview of the of DHCS and the Medi Cal budget, key the cost drivers, and the January budget proposals and trailer bills that are listed in the agenda, and then we'll see if LAO and DOF have any additional comments.
Speaker 15
Thank you, madam chair. Over the last several years, the department's Medi Cal budget has seen significant growth. This is driven both by intentional state and federal policy changes over the the last several years. These changes include historic expansions of coverage, major investments in behavioral health, and delivery system transformation efforts like CalAIM. The department reviews enrollment and caseload trends on a regular basis.
Those trends include understanding rate increases, noting rate increase rates are actuarially sound in compliance with CMS regulations, as well as trends in utilization that impact total cost. The major drivers of growth specific to managed care include rate change increases due to higher costs and utilization in base data, higher utilization trends, higher average population acuity due to changing enrollment mix, such as when we did the public health emergency unwinding, the enrollment policy changes shifted the the populations that were covered. We are seeing an increase in senior population with increased acuity level as this population tends to have more health needs. In addition to these, total fund rate changes, there has been a trend in decreasing FMAP due to changes in enrollment mix, as I just mentioned, that is the growth in relative share of seniors and persons with disabilities compared to the Affordable Care Act optional expansion group. Changes in utilization patterns such as unsatisfactory immigration status rate growth concentrated in nonemergency services and in the coming years HR1 requirements such as the elimination of the ACA FMAP for emergency services, changing the FMAP from 90% to 50%.
In addition, over the last several years, Medi Cal caseload has grown significantly. Pre pandemic, we were at about 13,000,000 individuals and grew to about 15,000,000 individuals during the public health emergency and essentially freezed redeterminations for three years. We are now approaching the 14,000,000 number as a result of some of the changes from the state budget act last year and HR one. Some of the key areas of changes that I think are contributing to our growth is really related to pharmacy costs. The cost of per claim, for example, has gone up significantly.
So for example, in 2022, the cost per claim was about a $124. Now in 2025, it's a $174. So this is really just reflecting the higher cost per claim of of pharmacy spend. And then in terms of just total, spend for pharmacy, this is pre rebates. But just to give you a sense, in 2022, it was about $14,000,000,000.
And in 2025, that's grown to about $24,000,000,000. So significant increase in pharmacy spend and really getting at that cost per claim. We continue to, We have several levers to manage our pharmacy costs, Most notably, last year as part of the 2025 budget act, we eliminated GLP one for weight loss. We added the rebate aggregator for to collect state rebates for our unsatisfactory immigration population. We also included various utilization management tools as part of the Budget Act such as STEP therapy and enhanced prior authorization policies.
In regard to some of the significant trailer bill language that we have proposed, the skilled nursing facility financing trailer bill, we are proposing a one year extension of the current statutory framework for Medi Cal long term care reimbursement. This maintains the annual growth in SNF rates that's capped at 5% of labor cost and 1% for non labor cost. Skilled nursing facilities are one of the only providers that is essentially guaranteed a rate increase year after year. The rate increase for 2026 is 3.7%, about $240,000,000. We are maintaining the skilled nursing facility workforce standards program, maintaining the accountability sanctions program, and then extending the quality assurance fee for one year.
We are not reversing the elimination of the Workforce and Quality Incentive Program, the WQIP, that was eliminated as part of the 2025 Budget Act. For the twenty twenty seven, twenty eight financing proposal, we are, working on really designing the new kind of SNF value strategy to be patient centered, acuity based rates, flexibility for our managed care plans and skilled nursing facilities to negotiate locally appropriate rates, value based purchasing and alternative payment models, workforce based incentives, and other considerations as suggested by stakeholders. We're undergoing a robust stakeholder process right now to redesign how we pay our skilled nursing facilities. With that, I'll pause and see if there are questions.
Speaker 3
Thank you. Thank you, madam chair, and members of the committee, Min Lee with LAO. Staff have asked us to walk through our recent analysis of the Medi Cal budget, which took a closer look at the underlying trends in spending growth. Our medical analysis is available on our website. General fund spending on medical has more than doubled over the past ten years.
And to understand the key drivers of this growth, we examined what we refer to as Medi Cal based spending. That is core spending on services provided to beneficiaries. So at a high level, the base spending is driven by two main factors. One is caseload, how many people are enrolled, which groups of people are enrolled. And the second is the per enrollee costs, how much the program spends on average per per person.
So this includes the managed care capitated rates, the fee for service spending, and the Medicare related costs for those who are duly eligible. In our analysis, we try to isolate the effect of the effect of each of these factors by holding other factors constant. So for example, to assess the fiscal effects of the caseload changes, we held the per enrollee cost constant. We would note that our estimates are subject to various data and and methodological limitations that we outline in in the report. That said, the broad takeaway is is fairly clear.
Most of the recent growth in the Medi Cal based spending has been driven by the growth in the per enrollee cost rather than rather than the caseload. We estimate that the increase in the managed care rates, the fee for service spending, and the Medicare costs per beneficiary have accounted for about half of the base spending growth. The growth in the caseload on the other hand explains about 20%. Now, of course, caseload still matters. It has grown by more than 1,000,000 over the past decade or so, most of it occurring during COVID when there was continuous coverage.
But in percentage terms, the caseload growth rate has been relatively modest, averaging about one percent each year. By contrast, when we look at the per enrollee costs, the growth rates tend to be higher across the board. So for example, in managed care, which accounted for the largest spending increase, we estimate that that the per enrollee costs have grown at about 5% each year. That is due to people using services more frequently or at higher intensity as well as the rising costs of providing those services. An area where we observed an even bigger growth rate was pharmacy spending.
We estimate that the pharmacy spending per beneficiary has grown at about 13% each year. So what does this all mean for thinking about the the budget? Well, first, we think that these long term trends are useful for assessing the 2627 governor's budget. Overall, the administration's estimates appear broadly consistent with the long term trends. In a few areas such as managed care based spending, the projected growth is higher than the historical average, but still within a reasonable range of uncertainty.
We we think that on a on a broader scale, though, these long term trends are also going to have implications beyond this year's budget. In the coming years, Medi Cal caseload is projected to decline due to the unwinding of the federal flexibilities, the eligibility changes in HR one, the UIS related state budget solutions. But lower caseload does not necessarily mean lower overall spending. In fact, we see in this year's governor's budget that the total spending is projected to grow even as caseload declines. So this suggests that the per enrollee cost growth is likely to remain an ongoing fiscal challenge.
Speaker 42
One of the main recommendations in our report is that the legislature direct the administration to provide richer and more timely data in some key areas. We think this is critical to better assess the specific drivers of the per enrollee cost growth and to identify potential policy responses. So for example, with more recent and disaggregated data, we could examine whether the growth in the managed care rates is concentrated among certain service categories, groups of beneficiaries, or geographic regions. To what extent has the growth been driven by underlying medical inflation versus specific policy changes? A lot of this information is reflected in the actuarial rate setting process that happens annually.
Speaker 3
Another key area is pharmacy spending. By comparing patterns of utilization and net drug prices across different therapeutic classes and brand name drugs, we could better identify areas of large growth in in the general fund spending. Thank you.
Speaker 1
Thank you. Anything from Aleo or anything else? You're no. Okay. Any questions from committee members?
Vice chair Tongipa? Budget vice chair Tongipa?
Speaker 18
Yes. And thank you, madam chair. And I know all of you have been here for a long time. It's been a long day. I've been listening in the entire time as well.
But I actually ran over here to make sure because this is an area that I think a lot of people are really paying attention to. And I I appreciate the LAO's analysis because, yeah, I think in some of the agenda and what I was really looking over, it was pretty astonishing. The one thing I know you had touched on that the Medi Cal budget has doubled over the last ten years, but I would say that and I would ask whether it's DHS or if it's the LEO, I mean, is it is it 100% accurate to say that in 2022, just a few years ago, the Medi Cal budget was a $108,000,000,000?
Speaker 9
I don't I I don't think we have those numbers in front of us, but that that sounds like that could be right.
Speaker 18
Okay. So a $108,000,000,000 in the twenty twenty two, twenty twenty three fiscal year. And today, it's $222,000,000,000 Is that accurate?
Speaker 9
Yeah, it's it's in that range. It's both over $200,000,000,000 estimated for the budget year.
Speaker 18
And and the main reason why I asked that, and especially just for simple terms and clarity, is that's not over ten years. That's barely over four years. We've seen a 110% just about increase in Medi Cal spending. And I think that's extremely shocking, you know, to see at how fast it has increased just over from 2022 to this this this fiscal year. With DHCS, other than just seeing some of the general increase in spending, do you have specifics where we've seen where are those largest increase in spending areas?
Speaker 15
Sure. I would say one one place to highlight, is in our pharmacy spend. Mhmm. Noted earlier in 2022, this is gross spend, so pre rebate. But just to give you a sense, in 2022, it was about 14,000,000,000 in pharmacy spend in the Medi Cal program, growing to about 24,000,000,000 in 2025.
So you can see a significant increase in pharmaceutical expenditures. For that reason, for example, last year, as part of the 2025 Budget Act, we eliminated GLP one coverage for Medi Cal program. We had seen close to 200% increase in kind of utilization and cost in that space, and so that was one of the, budget proposals that was approved as part of last year's budget. So trying to identify where are the areas where we do see significant increases and identifying ways to address those increases.
Speaker 18
So then would you say that some of because this is these are a few laws that we've seen here that really expanded Medi Cal and the coverage that it's supposed to provide. Would you say that that's one of the largest factors like GLP ones that pretty much were mandated by law to increase? And then, you know, we've seen in other areas, whether it's HIPAA air filters or different areas of coverage that were forced on from that, would you say, is the main reason why we've seen the largest increase in Medi Cal spending?
Speaker 15
So I will say for a GLP one, for example, that has been a covered benefit for weight loss, I think, starting in 02/1978. And so it was covered. But with the new drugs that have become available, that's where we saw the increase in utilization. So back in 02/1978, very low utilization because there weren't as many drugs that were available in this space. And then over as we all know, over the last few years, just the more availability of these these pharmaceuticals are leading to more utilization in the medical program.
So there are expansions of benefits, expansions of populations, increased rates. We've done some rate increases over the last few years. So I think those are the three main levers of how these these, the increase in expenditures in the medical program.
Speaker 18
Are there any other legislative, requirements that have been put on that you would say have really seen that massive upswing in costs that we've essentially put on?
Speaker 15
Well, I think I would I would highlight some of the things that we've done with with regard to CalAIM and some of the the community supports where we are actually seeing, you know, expenditures in new services to support an individual, but we know that that's offsetting reductions in terms of long term care, hospital services, etcetera. So there's some offsetting additions of things that we've done as as kind of the legislature and the administration together, but we are recognizing some of the offsets as well.
Speaker 18
Yeah. That's it's just you know, again, I I just think it's so shocking to see $108,000,000,000 just a few years ago to $222,000,000,000 in an increasing amount. I mean, in four years, that would mean we'd be on the path for over $400,000,000,000 in just Medi Cal if we stuck to this path.
Speaker 15
So I would also note, just generally speaking, health care across across the nation are going up. Medi Cal is not immune to that. So you can see just general rate increases for Medicare, for commercial coverage, for employer sponsored coverage. It's going up nationally, not just in the Medicaid space. So to the LA's point of there are just natural increases in a health care program, that is a lot of what you'll see as part of just the base increases in our spend.
Speaker 18
Do we know if there's any other states out there that have seen a 100% increase in the same time period?
Speaker 11
So I'm not sure about the I'm sorry for the awkward leaning here. I'm not familiar with other states too, but I did want to note that when we're talking about Medi Cal cost increases, it does get a little complicated because Medi Cal has a very complicated financing structure and there's a lot of moving pieces and it it it depends a little bit what years you're comparing to and also if you're comparing to you know, just general fund spending or total funds. It sounds like your estimate is on a total fund basis. And so there there are some things that that there were some increases that that affect that. You know, we if we're comparing to 2022, that would have been before the MCO tax increase, for example, where the state also sought to increase directed payments.
Speaker 9
That's like a $22,000,000,000 increase alone in in the budget year and that those are those are mostly, you know, non general fund. Those are those are on a total funds basis and those really reflect, you know, additional federal funds coming to the state and those are legislative choices. So that it it does depend a little bit what what you're you're comparing to. But I I I think that the even if you look at a on a general fund basis, you do see that it a lot of it is just the underlying growth in the program. And, again, there's no smoking gun there.
There's there's managed care rates. There's provider rate increases. There has been some you know, the aging population has meant there's more seniors in the in the program. So it's hard to it's hard to look at one smoking gun. We we did also have those some of the expansions.
Another expansion that that I'm I'm sure you're you're aware of is the sort of expansion to comprehensive coverage for undocumented populations that a lot of that had occurred already by 2022. So for comparing just those years, I I don't know if that would explain that much of the growth from them. But if you're looking over a longer time horizon, that that is a bigger part of the growth, of course. So there's just a lot of moving pieces. It's hard it's hard to it's hard to find the smoking gun in terms of the growth.
It's it's the combination of a lot of factors.
Speaker 18
And I appreciate that. And and that's my my general purpose isn't to find the smoking gun. It's more of where can we analyze, okay, this increased by $20,000,000,000 in this section, and maybe this one did $30,000,000,000 here, and maybe this one did here. And then it's like, okay. Now we need to if the LAO is telling us that we are in massive deficits of $35,000,000,000, $36,000,000,000, and $38,000,000,000 year over year, we go back just three or four years ago, we solve a lot of those budget deficits fairly quickly.
And again, this is total funding, which leans heavily on the federal funding that we receive, and I understand that. And it's where I just want to make sure that the information that I'm gathering, when our budget deficit isn't just $2,900,000,000, it's potentially under the d director of finance department of finance, $20,000,000,000 or $35,000,000,000. You know, the difference there is, you know, we're in a bad position either way. So it's more of just trying to identify, okay, legislatively, did we put on additional things that this is the largest cost? Okay.
Well, how can we make the program better? You know, what can we do, you know, to identify things that aren't working in our system? And this is so personal to me because last year, I my my sister was on Medi Cal, and she Was essentially kicked off of medical because it was too expensive and she was a long time addict and. She had been sober for over five years and. It just essentially felt like it was Medi Cal rationing, and her organs were shutting down, and everything she was going through.
And I understand. But it's something that I think about every day because I was in a position where I think I could have done something. And I know so many other families out there that when we're talking about this, you know, what can we do here to make sure that another family doesn't have to go through what we've been through? I understand how important this is to get it right. And when you see projections like that that happen so quickly, I I think questions there are very reasonable to say, okay.
Are we spending money in the right areas, and can we prioritize the people who need it most? And, you know, again, when it comes to the callbacks on GLP ones, I think that's a smart thing. We've gotta get back to the basics to make sure that if, you know, somebody should be here today as long as they just had coverage. And so and they put her in hospice care, and within a week, we lost her. So this is a big deal for me when it comes to just finding out what can we do to make sure that there are others that aren't in that same position.
And that brings me to some of the questioning that we've had. So obviously, recently, the issues with hospice care fraud has been top of mind for a lot of people. And I've worked with others because, again, it was so personal to me on that. So what my question is, how much is DHCS spent on Medi Cal hospice services annually, and what portion of those expenditures have been identified as fraud, improper, or currently under investigation? And also, how are those losses reflected in the department's budgeted assumptions?
The main reason why I asked that is because I went through a lot of that area. We have found survivability rates that exceed 97%. But a lot of these areas have been billing. I mean, the one that was just arrested over this last week, $50,000,000, that one individual. And in our agenda, we actually talk about savings of $50,000,000.
Well, with that individual that's been arrested, I mean, that could have been a potential saving of a $100,000,000 simply from one individual stealing money from the system. So that I mean, I'm just trying to figure out what safeguards do we have in place to make sure, again, the money is going to where it's needed.
Speaker 15
Sure. So I do not have the hospice spend in the Medi Cal program. Happy to follow-up with that. I just don't have that at our at our fingertips. So we can follow-up with that.
But, I mean, we take fraud, waste, and abuse very seriously at the department. And our our audits and investigation unit is works very closely with the Department of Justice and goes after providers that we can find credible allegations of fraud and goes after them. I think a lot of the media out there recently has been in the Medicare space as well, and so kind of working together with our federal partners to identify those providers and take action.
Speaker 18
Yeah. It's the thing that really terrifies me because you know? And I've seen the governor and attorney general Rob Vonta. They found 200 cases pretty much that they've stopped when it comes to hospice care fraud. And then we've seen the same thing with the DOJ stopping an an additional 200 plus.
You know, my fear is that if each one of those potentially committed $1,000,000 in just hospice care fraud, that's exceeding $400,000,000 in fraud. And one of those individuals committed 50,000,000 themselves. You know, and that's a terrifying thing as we've looked into this information that in one street alone. I I mean, we've had colleagues in this building visit these hospice care facilities. Are are there safeguards that we're putting around the budgeting system that really grants this out that you could share with me?
Speaker 15
Sure. I will say, over the course of last year when we passed the trailer bill language working with the legislature to allow plans and the state, to, allow prior authorization or kinda utilization management, there was a law prohibiting that, prior to the passage of the bill last year, and that goes into effect in July. So that is one safeguard. We've also implemented what we've called notice of election where we have to get a provider and individuals kind of basically saying, yes, I am opting into hospice care and not allowing payment until we have that form on record. And similar with our managed care plans, a similar process to really have some extra checks that go into a place to ensure that the providers who are billing us are actually providing the services to individuals who are wanting those services.
So we've added those those two mechanisms in the last year and are also thinking about other ways to kind of continue to increase our ability to domain oversight of our our hospice providers.
Speaker 18
From looking at some of that data, are there other areas under Medi Cal or on the billing side that you would recommend that we look into that you potentially think could be more fraud out there?
Speaker 17
So I think hospice care specifically has been a priority risk area both for the Medicaid program and the Medicare program. So over the past years, we have And I
Speaker 17
Yeah, yeah. So this is not new. This is not news to us. I think that's why the state imposed a moratorium on new licenses for hospices several years ago. Number of
Speaker 18
But they paused that. Do you know why they paused that on the moratorium?
Speaker 17
My understanding is that it's still in effect. I have to learn more about that, though.
Speaker 18
But, yes, if you can keep going on to some of the other areas that you think that could be potential.
Speaker 18
I'm sorry. They proposed different rules and regs, and they ended up pooling those rules and those regulations. Yep.
Speaker 15
Right. So the emergency regulations were pulled but the the pause or the moratorium is still Okay.
Speaker 18
I understand. No. I I'm just trying to figure out because I was like, why would we pull the regs when it's been identified? So
Speaker 18
Okay. Yeah. And that's where, again, I it's just if what we've found just from finding both, you know, the California Department of Justice under our attorney general, finding that. It's a great job. And also the federal government finding that, it's just it it's a terrifying thought that, you know, if one person can do $50,000,000 in fraud, you know, how much others?
How many others are out there? And so I think that's where we're we're trying to, like, really just fig if we can fix that part, in my opinion, I think that leaves us with a lot of the resources out there to make sure that we're going back and we're prioritizing the people who need it most. You know? And that's, again, like, my personal mission is to make sure that somebody doesn't go through a lot of what we've we've had to go through. So, you know, that's why I'm always asking the question.
You're the experts. I I hopefully, like, rely if there are areas where you're like, okay. We've seen this red flag in the audit, and there are a few other red flags out there that maybe we should take an an additional look. You know? And that way, we can make sure that those general benefits and, again, when I see pretty close to a 110% increase in the Medi Cal budget, it just, you know, puts a pause very quickly to say, like, well, if we're spending a 100% more, has the service gotten a 100% better?
I don't think anybody would say yes to that. So I'm trying to figure out what we could do to be better. So I really appreciate that, and I appreciate Delio's analysis as well. You know, I hope full hopefully that we all can work together to really analyze what we need to do to become responsible government. Thank you.
Speaker 4
Yeah. I wanna thank the LAO for the the start of what I believe is a will be a very comprehensive analysis of what is driving the cost of care to go up. I think it was very enlightening for you all to share with us that the average per enrollee cost has grown and is probably one of the major drivers of the cost of of our medical system. It also seems like we need more information. I think one of the points of the analysis that is the most salient to me is the fact that we have limited data around the overall fiscal effects of of the changes that we made around service that have been cost saving over time.
I think director Boss, you mentioned that essentially because we have invested in CalAIM and other kind of community enhancements and benefits, we we know how much that has cost us in terms of care, but we don't know how much it has saved us over time. And I think that that
Speaker 15
We do so last spring in May, we released a report to CMS as required by our special terms and conditions showing the cost effectiveness of our community supports benefit. So for example, this community's I don't have the numbers, you may have them. But this community support resulted in a savings in our skilled nursing facility stays, our acute hospital stays. And so we do have actual we had to prove it to the the federal government essentially, and we do have that information.
Speaker 4
That's great. How do we account for that in our budgeting on a year over year basis?
Speaker 15
Well, our rates, for example, for inpatient services would increase to a certain extent otherwise for these services. And so the rate increases are not as significant. Just base rate increases are not as significant as they may otherwise would have been without community supports. I I think it would be helpful for
Speaker 4
us to make sure that we are continuing on, on doing that because I think the one of the reasons why, the cost, the cost for Medi Cal have increased over time is because we are making these investments that we then see recouped savings around in the out years. And when we do a budget analysis with just one snapshot every single year, what we see is we've spent more money for Medi Cal, but we don't necessarily know that in ten years' time
Speaker 15
Yeah. I mean, to your point, we don't budget the cost avoidance. Right. Right. It would have been 11% other compared to the 8% it is because of the cost avoidance of not having to provide inpatient services,
Speaker 4
for example. Yeah. And I think that that's always the challenge. So it's easy. I I think the reality is that the cost, the the actual care that we are providing and the services that we are providing have increased significantly.
They've resulted in more preventative care, more opportunities for early intervention, primary care, holistic care, health care approach, which has led to the reality of of of more savings and more life saving over the course of time. And I think that's always just a a nuance that I think might be lost on some of us. So I think it would be helpful if we kind of have that analysis. I wanted to just ask the LAO if you all had any specific areas of additional data that might help to inform this kind of more robust analysis as we consider our expenditures.
Speaker 3
Sure. So just to sort of add to my previous comments on the managed care data, the the data that we could access went up to calendar year 2023, So we didn't have a clear view of the the growth trends in in the more recent years. But even for the years that we could observe, there were some limitations. The data is generally not disaggregated enough to show precisely where the growth is concentrated. There are some breakouts by service category, but but they tend to be fairly broad.
So for example, we cannot distinguish between rate growth for emergency room versus outpatient facilities. There's a category for professional services, but we cannot distinguish between, say, primary care versus specialty care. The data also doesn't show breakouts by immigration status. So it it's difficult to understand how spending has evolved for those with unsatisfactory immigration status as the full scope expansions have occurred. In the area of pharmacy spending, we do have some data on gross spending at the drug level, but it doesn't show the net spending after the the drug rebates.
It's also our understanding that the that the gross spending data include only claims that are connected to the federal drug rebates. So that would largely exclude, for example, claims that are state only funded for for UIS individuals.
Speaker 4
I do have one other question. Given the incredibly onerous additional requirements that we've been so blessed with from HR one, do we have any way to estimate the cost of care or the increase to cost of care because of the on the administrative side because of needing to be meet the eligibility requirements, redetermination requirements, work requirements, what that will cost our Medi Cal program.
Speaker 9
So a lot of that cost will fall on counties. I think you might be hearing that in an upcoming item. Generally, I think there we have been working with counties to better understand the fiscal estimate. We understand that the administration may be coming back in May with a proposal around that. The administration has a proposal around funding increases in the CalFresh area for eligibility admin but not for Medi Cal.
But we understand that the administration might be working on that a little more. But generally, that there there's been a lot of we've we've we've seen a lot of sort of requests from counties, and so we're still working through through that to better understand it. But but counties have been compiling sort of what they assess the the workload impacts are on them.
Speaker 1
And we do have that I think on the next item. We'll dig into that one. Assembly member, Shibel.
Speaker 45
Thank you. So, I mean, it looks like the biggest chunk other than other is is managed care. And so I'm curious if you think that the Office of Healthcare Affordability putting limits on managed care increases will help controlling in this space at all, or is there opportunity for that to kind of impact these rate increases? Everybody can answer.
Speaker 9
Yeah. I I that would I think that would entail a little bit of of thought into in terms of the interaction. The the rates are set, you know, kinda actuarially adjusted. And so a lot of it really depends on, you know, the sort of judgment on the actuaries on on what they sort of, you know, assess the impacts of VOCA would be if there are impacts. Over the long run, you know, eventually, what what happens is they they we look at the actuaries look at data in the past, and then they make assumptions about what cost should be in the future kind of in the present.
So, they'll they look at data. Maybe that's about two years old and then they say, okay, let's let what what it what are sort of the cost and utilization increases that have happened in the last two years. So what I'm saying is eventually as as OKA's regulations come into effect, you you would start seeing that in sort of the past data, but it it could take a few years for that to sort of be act you know, actualized. But it it's it's I would say it's it's it's uncertain, you know, the the exact effect that might have. But there there could be effects.
It's it's just hard to gauge.
Speaker 15
So the only thing to add is that under federal law, we have to make sure our rates are actuarially sound and have to be approved kind of through CMS' process. And so we can't be bound by any kind of rate cap that maybe OCA Mhmm. Applies because of these federal requirements.
Speaker 16
So okay. So it's not the so the managed care plans don't set it. It's it's through actuaries. Yeah. Yes.
With the guys.
Speaker 15
We collect data from our plans, their their utilization, their cost, etcetera, and that's we go through an actuary process of, you know, using that, applying the trend factors that, may be appropriate to kind of forecast the the utilization in the future, and that's through an actuary process.
Speaker 16
Do you think so if these if this process is looking back a couple years, that means for 2024, for example, it was looking back to 2022, '22 would have been looking back COVID. Do we think that some of the increase like was COVID? I assume COVID was taken into account, and there wasn't this huge increase because of
Speaker 15
I mean, there are adjustments that are made based on policy decisions that might have come into play. And so there are adjustments based on what they see in the utilization and kind of any kind of leverage that might need to be adjusted to reflect, you know, the future reality of something.
Speaker 16
Okay. And and what to the point of Elio discussing basically needing the data broken down more to have a better understanding of what is driving so many costs. Is that data that you have that can be broken down? Is it data that we don't collect in that way? Like, how easy is it to get information on what what were the things that you just raised?
The two you just said two examples, I think.
Speaker 3
Like, diff like, more disaggregated service categories. Mhmm. So it it's our understanding that that that data is is available, and and the administration does have have have the ability. You know, there there might be certain sort of concerns around confidentiality depending on sort of how how disaggregated you you make the data, but it's our understanding for that for for the kinds of analysis that would be helpful, it it is feasible to to obtain that that level of disaggregation for for different service categories and populations and regions.
Speaker 9
I just also wanted to add that that we are working with the department on on some of the getting we have some outstanding requests we've been working with them on. So they they they have been they've told us they they've indicated they've been working on some of that
Speaker 16
Do we have an estimate of when that may We do not. Will it be in in time for us to vote on a budget?
Speaker 15
like, all of these numbers are all changing. It's it's, and I think that's part of, I think, the concerns that they're raising about the timeliness of some of this information. Is just a matter of the timing of when it's available and when the kind of the different slices of it can be available, but we are working with Allio to kind of assess what kind of data we can get them. I will note on the the rebates I mean, excuse me, on the pharmaceutical spend, the the net versus the gross, we because of our kind of confidentiality with regards to our rebate negotiation, we do not provide net spend or net kind of information on the pharmacy.
Speaker 18
Yes. And thank you. I did just wanna ask one more question too. And I was looking at this letter in response to some of the congressional investigations that have been happening. So it says in the letter that CDPH convenes a multi agency hospice fraud task force with partners, including California HHS Agency, DHCS, the California Department of Social Services, the DOJ's Division of Medi Cal Fraud and Elderly Abuse.
So the question that I just wanted to ask too is, what was the role that the task force played in these recent arrests and investigations?
Speaker 15
We would have to get back to you on on the task force. It's led by the Department of Public Health again, and so don't don't wanna misspeak.
Speaker 15
So we're a participant in terms of how it relates to the Medi Cal program and the providers in medical space.
Speaker 18
Do you think it would be beneficial if we had more resources allocated towards the front task force portion that falls under DHCS?
Speaker 15
I think there's been a lot of resource requests in the DHCS space over the course of this hearing, recognizing the workload that the department is under and the kind of the continued new requirements under federal law. I will say it is a space where I think, you know, it's a it is worth an evaluation of resource needs.
Speaker 18
The the just the main reason why. It's I'm just looking at this hospice to fraud task force and when, you know, they list DHCS underneath it, but it doesn't sound like that is what what's happening either recently. I'm just trying to figure out what is the role currently. Like, what would what is there a subdivision of DHCS specifically allocated towards the hospice task force?
Speaker 15
So our audits and investigation, which is one of our primary leads on program integrity, they are part of the task force. And so they, our deputy director for audits investigation, participates in the task force. I believe they meet regularly. I don't know the the cadence of that task force, but we do have a strong presence in in that. And it serves as kind of the the place to convene and collaborate across the departments in this space.
Speaker 18
Is there a point person that I can reach out to or anybody? And if if I could always reach out to you after this if there is somebody that I can send
Speaker 15
them out. You can reach out to us but it's our deputy director fraud it's an investigation okay who is our lead
Speaker 18
perfect I appreciate that and I I'd love to ask chair to in the future if there's ever a time where we can have. Whether it's a subcommittee or something to really look at how some of the money is allocated, especially on the hospice side too, I think that's an area that is extremely important when we've seen, I mean, unfortunately, scale issues. And so that's just a simple asset that I'm making. I appreciate you. Thank you.
Speaker 1
I think to summarize, you're hearing bipartisan requests for more information, more data. Right? I think you're hearing that from Accra, and I share, I share on those requests and wanna appreciate the LAO for the level of data you've been able to provide. And I think we all wanna know what is happening, why it what's happening, why is it happening, and how can we can have the data to make better decisions for the people of California. I think it is what our constituents want.
So my hope would be that DHCS could commit to specific dates, specific deadlines, specific deliverables when it comes to information sharing and a deeper level of of detail about why costs are the way they are and what's driving that. And I would suggest, even though it's hard to wrap our arms around those cost offsets that you mentioned, be part of that. Right? So if we're, if money if we're if we're starting to spend more money in one place, it it is likely decreasing somewhere else because it's going into preventative care as assembly member Bonta alluded to. So I would love to have that kind of data for us to be able to make decisions on.
I have, just a couple questions around the SNF and the, the the WQIP. And this is a rare instance where employees and employers are jointly unhappy, with what's going on and jointly frustrated and jointly feeling like employees are gonna lose out and patients are gonna lose out. And so just kinda wondering the level of savings if you could talk about with the WQIP. You said that was a decision made last year, but the understanding, I think, was that that was a delay. There was a gonna be a delay that there was gonna be reconsideration on on some of these pieces, potentially coming back, and there's a lot of disappointment out there around the way this has all happened.
Speaker 15
So, as part of the 2025 budget act, the the budget includes a reduction of a 150,000,000 as part of the WQIP, that we took action on given the state's fiscal situation. And as part of this year's budget, we maintained that elimination but pushed out the renewal of the, skilled nursing quality assurance fee as we are on robust stakeholder process now. We want to change it from a cost based reimbursement system or where we pay our skilled nursing facilities to one about value and alternative ways to think about that. And that's what we are undergoing right now. We need more time in the stakeholder process, so we are pushing out the renewal one year.
I will note, that skilled nursing facilities are one of the only Medi Cal providers that get an annual rate increase. Every year they get a rate increase compared to other providers that are not guaranteed that rate increase. It's 3.7% this year to about equals about $240,000,000 of a rate increase compared to last year. And so recognizing though WQIP is not there, they are still getting a rate increase, to provide these services.
Speaker 1
And in pushing it out, is there a it's not around cost savings, you're saying? It's really just it's that you need more time.
Speaker 15
Right. Working I mean, I think the stakeholders appreciate the time that we're taking and the the stakeholder process that we're engaging in, but we we are not ready that launch this fall and really want to be thoughtful in this space and not just continue to do cost based reimbursement, which we've done for decades.
Speaker 1
And there's some concern, at least concern brought to me, that, some of the funds that are used to pay employees aren't really there and how, you know, how how that is gonna work out during this delay, basically.
Speaker 15
I mean, the WQIP goes to the skilled nursing facilities who meet certain criteria. And how they use those dollars, I mean, we don't necessarily govern. It's kind of incentives to the skilled nursing facilities if they meet certain metrics. And so I you know, but they will get a rate increase that they could use to potentially offset how they were thinking of using the DPUB.
Speaker 1
Okay. Okay. Well, thank you for that. Are there any other questions from members? If not, we're gonna move to public comment on this issue.
Number four, DHCS program budget, January proposals, and trailer bills. And if I could ask you to just state name, organization, and position, I think it would be helpful to the folks that are waiting for the next issues coming after you. Hello. Hello. Kelly Larue here on behalf of Eli Lilly.
We appreciate the discussion on pharmacy pricing and would appreciate the conversation being reopened around coverage of GLP ones. Thank you.
Speaker 46
Give me a second. Good afternoon, chairman. My name is Austin, Bradley. I'm the director of nursing at Mercer Behavioral Center and educational chair for Caff's Progress Valley Chapter representing Merced County, Tuolumne County, and Stanislaus County. I'm also a mental health advocate of over twenty years.
Speaker 33
I'm here to respectfully oppose the current budget trailer bill unless it's includes the restoration of the W Quipa which just we're discussing even before COVID, California was already facing a health care workforce shortage and now that we've reached the occupancy levels.
Speaker 1
Ask for name, organization, and position. I hear that you oppose the W Quip. Anything any other position?
Speaker 33
Just that we need the funding for also for behavioral health services for SNFs, which they are sorely lacking. Thank you.
Speaker 16
My name is Maxine Neal and I'm the administrator of Modesto Post Acute in Modesto and I'm definitely opposed to taking away our W Quit money. We need it to I can staff so much better and give a lot to the employees that I couldn't do without it. So please bring it back. Thank you.
Speaker 48
Good afternoon. Yvonne Chung with the California Association of Health Facilities. We are the, trade association representing, most of California's skilled nursing facilities. We are speaking in opposition to the, extension of the methodology unless the WQIP funding is restored. I would add that the general fund savings is a $150,000,000.
Speaker 34
And without that, we are also losing a matching 150 in federal drawdown as well. So we are concerned that if we continue to not fund that program, we're eventually gonna permanently lose that drawdown. Thank you.
Speaker 30
Good evening, madam chair. Connie Delgado on behalf of PointClickCare with an oppose unless amended position unless the WQIP is included. Thank you.
Speaker 29
Thank you to everyone on the subcommittee. My name is Jo Miller. I'm a registered dietitian and I represent the California California Academy of Nutrition and Dietetics. We represent over 3,000 dietitians in the state of California and there's 11,000 or greater than 11,000 dietitians in California. Many of us work in skilled nursing facilities and we provide very critical essential support to food and nutrition services.
We are opposed to the current bud budget trailer bill language unless amended to include the WQIP funding. Food and nutrition services is a very dynamic source of employment, and we are critical Thank you. If you
Speaker 41
I'm Rondi Crowley. I'm the wife of a my husband went to Asian Care Center with a severe stroke, and I saw firsthand what it was to have qualified staff that were paid well and were respected and I really oppose the Department of Health Care Services budget trailer bill related to the skills nursing financing reauthorization unless it includes the reinstatement of the workplace quality incentive program. The staff are invaluable. I saw it every day for two years and it's an important that you bring. Thank you.
Speaker 2
My name is my name is Martins Basharun. I work for Cypress Healthcare here in Sacramento, and I'm here to support WQ. I would like the restoration of WQ because it helps for quality of care. The employee, the employer, and for patient care as well. Thank you.
Speaker 9
Madam Chair and members Rand Martin here on behalf of Ariana Healthcare and California Association for Health Services at Home in support of miss Pelarans and miss Stephanie's request for a 40% Medi Cal rate increase for private duty nursing. Talk about cost avoidance. Thank you, madam chair.
Speaker 43
Madam chair, members, Norlin Asperick, on behalf of Prime Home Health Care, a provider of private duty nursing services, echo my comments to my colleague. I'm also here on behalf of PACS, which is one of the largest skilled nursing facility operators. As previous speakers have noted, we oppose the DHCS budget trailer bill related to the skilled nursing facility financing reauthorization unless it in includes a reinstatement of the w equip. Thank you.
Speaker 40
Good evening, madam chair and members. Jack Anderson with CHIAC representing our local health departments. For the California Children's Services Program, in the current year, county programs are underfunded by a $109,000,000, and we anticipate a, current or a similar funding shortfall in the in the budget year as well. So CHIAC respectfully requests that the legislature provide sufficient funding based on program caseload and DHCS staffing standards. Thank you.
Speaker 26
Good evening, madam chair and members. Jess Gimran with Capital Advocacy on behalf of the Occupational Therapy Association of California and the California Association for Nurse Practitioners have a support if amended position on the department's trailer building, which rely, around skilled nursing facility financing and request that we restore the WQIP. Thank you.
Speaker 1
And you can sort of, move on up so we can fit more people in and so name organization and your position.
Speaker 23
I work at the Pines of Placerville Health Care, and I I would like you to restore the W Quip. Thank you.
Speaker 35
Sure. My name is Carol Silva. I'm a CNA at Sherwood Healthcare. I want to read to reinstate W Quip.
Speaker 9
Hi. I'm Adam Bernstein. I'm a former caregiver in Nevada County asking you to restore the WQIPP program.
Speaker 16
Thank you. Hi. Jennifer Snyder with Capital Advocacy representing Flankstone Healthcare, which operates 90 skilled nursing facilities in the state of California. We are also opposed to the governor's or the department's, trailer bill, which would, extend the reauthorization of the skilled nursing facility rate for an additional year without the inclusion of WQIP because that program is essential to these Flagstone facilities and their ability to provide employee services and supports retention and recruitment programs. So thank you.
Speaker 53
Madam chair, Tiffany White with SEIU California. On behalf of SEIU California and our 21 responsible owners and operators of skilled nursing facilities, we represent over 500 nursing facilities in the state of California, and we all are opposed unless amended to, include the WQIP. Thank you so much.
Speaker 1
Thank you, madam chair. Andrew Mendoza on behalf of the Alzheimer's Association. Out of respect for your time,
Speaker 1
Best comment. Thank you. Best for last. We are gonna move on to issue five, HR one and financing impact on Medi Cal and providers. And I understand that we do have somebody who has a 09:00 flight from the California Primary Care Association.
If she is here, he is here. We're happy to have you come up first and testify. So this issue is gonna examine the impact of HR one on the three key financing mechanisms that support medical providers, the MCO tax, the hospital quality assurance fee, and state directed payments. We're gonna look at the downstream consequences for hospitals, clinics, and patients they serve. So we've got, LAO's office, the California Hospital Association, the California Association of Public Hospitals, the District Hospital Leadership Forum, and then, California Primary Care Association.
I think what we're gonna do, for members up here on the dais is we will have our witness from California Primary Care Association give her testimony. You're welcome to stay as long as you can. There may be member questions, but I know you've got a 09:00 flight, so we wanna get you out of here, and then we can move on to the rest of testimony and and member questions.
Speaker 41
So thank you, madam chair and members of the committee. I'm doctor Christine Park. I'm a pediatrician and the chief medical officer for Northeast Valley Health Corporation, a federally qualified health center serving communities across the San Fernando and Santa Clarita Valleys in Los Angeles County. The financing decisions before this committee are not abstract budget line items. They're decisions about whether clinics like mine can continue to exist and whether the patients who depend on us will have anywhere to go.
California's community health centers operate nearly 2,300 clinic sites and serve 6,200,000 Californians annually. This includes onethree of all medical beneficiaries while providing nearly onetwo of all medical primary care visits. In 2024 Community health centers were among the strongest champions of prop 35, which made California's MCO tax permanent and dedicated increased medical funding to providers and services. We backed it because California has chronically underinvested in primary care, a gap that the state's own office of health care affordability has formally recognized. FQHCs are one of the most cost effective parts of our health care system.
In 2023 alone, collectively, we saved Medicaid $38,600,000,000 nationally. So like hospitals and other medical providers, health centers will feel the direct impact of HR ones changes to California's MCO tax financing structure. And the coverage side impacts of HR one, including work requirements and more frequent redeterminations will accelerate medical disenrollment, shifting uncompensated care costs directly onto health centers who are legally required to serve all patients regardless of coverage. So FQHCs, as you know, are paid through the prospective payment system, PPS, and this sustains the comprehensive care model our patients depend on, primary care, dental, behavioral health, and enabling services that keep patients connected to care. At the visit level at Northeast Valley, eighty two percent of the reimbursement for a Medi Cal patient comes from PPS, and the managed care organization pays 18¢ on the dollar.
The 2025 budget act eliminated PPS for state only Medi Cal populations, including individuals for unsatisfactory immigration status beginning July 2026, Layered on top of HR one's MCO tax and coverage changes, California health centers are projected to lose at least $1,600,000,000 in the upcoming fiscal year alone with losses compounding in every year that follows. At Northeast Valley Health Corporation, fifteen to twenty five percent of our patients have UIS. We are projecting approximately $7,000,000 in losses this year, growing to $14,000,000 by 2027. To prepare for these losses, we have been forced to decrease clinic hours, including the evenings when patients' school and workdays are done. We have found some cost savings this year, but we may need to reduce surfaces or staffing in upcoming years.
I'd like to emphasize that health centers cannot segment care by immigration status. So cuts to UIS reimbursement reduces resources for every patient at the clinic, low income families, seniors, and children. And when patients lose access to primary care, they reappear in emergency departments sicker and at far greater cost. So on behalf of California Health Centers, our preferred ask is to fully reverse the elimination of PPS for state only Medi Cal populations, including UIS communities. But our minimum ask is to delay implementation for one full fiscal year to 07/01/2027 to allow the legislature, the administration, and stakeholders to develop a sustainable alternative that preserves reimbursement, protects patient data privacy, and maintains a pathway back to full scope Medi Cal.
This is not only a policy question, it's an operational question. With fewer than three months until the scheduled implementation date, DHCS has yet to inch issue any guidance to FQHCs on how to implement a billing compliance and data infrastructure change of this complexity. A delay is not a retreat from fiscal responsibility. Rather, it's the minimum threshold for implementing such a consequential policy without causing unnecessary harm. California's community health centers are the backbone of the primary care safety net.
The decisions of this body, that this body makes in the coming weeks will determine where whether that backbone holds, and I urge you to protect it. Thank you very much.
Speaker 1
Thank you. Really do you have time if there are member or you need to you need to go. Yeah. So thank you. Thank you.
Thank you for taking the time to be here. We really appreciate it. We really appreciate it. Okay. We are gonna move on next to LAO that will provide who will provide a brief overview of California's hospital types, key Medi Cal financing mechanisms, and a high level summary of how HR one changes those, mechanisms.
And we are gonna ask Elio if you can keep it to five minutes. I know it's very technical. But after you, we've got, four other groups at least that are gonna be presenting on this panel.
Speaker 9
Sure. So I we have a we have a a handout that should be distributed that we can speak from. The handout is dense and covers more than five minutes of material. So I think I'll try to stick to the cliff notes version of it. But it is available as a resource if you have any questions.
I really want to just focus on the handout on four key pages. The first is really page two, and page two provides that that first issue that would you that Chiaradis discussed about what are the kinds of hospitals. And, really, when it comes to Medi Cal financing, you can think of there as being three key kinds of hospitals, private hospitals, county and UC hospitals, and district hospitals. And these distinctions are important because these hospitals are are paid somewhat differently in Medi Cal. And then they also have somewhat different financing arrangements, which we which we describe in the in the handout.
Now there also you'll also hear throughout the hearing something called the safety net hospital. Safety net hospitals are hospitals that disproportionately serve Medi Cal and low income patients and and those who are uninsured. And because they serve a higher share of uninsured patients, they tend to have more care that goes uncompensated. There are both private and public safety net hospitals. So both kinds of hospitals are function as safety net and because they're safety net hospitals, they also qualify for some additional federal funding.
The next page I want to turn your attention to is page five. Now, page five has a really has a figure that talks about provider taxes. So, you know, there are two key financing issues before you in this issue. One is on provider taxes and the other is directed payments and I think this committee has talked about these issues quite a bit in the past, so I won't elaborate on them too much. The key provider taxes at issue here are the MCO tax and the fee on private hospitals, which which you'll hear more about when when hospitals come in and describe it.
And then directed payments are ways that the state can direct payments through the managed care system to providers. And they effectively function like supplemental payments. So the plans pay at sort of base rate. And then the directed payment act provides an additional amount on top of that. And so that's become a key funding mechanism for hospitals and Medi Cal.
But on page five, what page five shows is a figure that shows the federal rules around provider taxes. And these federal rules are are changing under HR one, and so they're they're they're part of the key discussion here. And a key concept in in particular that's important for today's discussion is proportionality. So the federal government cares about proportionality. They they care about whether the state charges a higher rate on Medicaid or non Medicaid services.
Because generally, the the higher the higher the charge on Medicaid services, that tends to result in a higher cost to the federal government. Higher charges on non Medicaid services tends to shift costs on on the private health care and ultimately the consumers. So the federal government cares about proportionality because it's trying to limit its its costs in the Medi Cal program. You can get a waiver to proportionality, and the state has gotten waivers to that over the years. And that's really kind of what's at heart here.
Speaker 9
your attention to is page eight. And page eight describes sort of the three key HR1 changes that you'll be hearing about on this issue. And as I said, there really are three key ones. The first one are changes to those proportionality rules. So the changes are somewhat complex, but in effect what they do is they limit the state's ability to get a waiver from the proportionality rules.
Moving forward, the state will have to charge the same rate on Medicaid and non Medicaid services, and getting a waiver from that will be much harder. The second change is on a revenue limit. So in addition to having rules around proportionality, the federal government also imposes a limit on how much revenue you can generate from provider taxes. And HR1 gradually reduces that limit over time to almost half of what it is now. And then the third change would be the limit on directed payments.
So previously, prior to HR1, in the managed care system, state could managed care plans could pay hospitals as much money up to the amount that's paid on average in the in the in among private health insurance. And HR1 reduces its limit to what is paid in the Medicare program. And Medicare tends to pay a lower rate than what's paid in private insurance. And that decrease also happens over time. So the final page, again, are pages eight and nine.
And these really talk about what the effects of these changes will be on the MCO tax, on the private hospital fee program, and on directed payments. But the bottom line is, generally speaking, it will result in reductions in all three areas. The reductions work a little bit differently. So for example, in the MCO tax, it's not so much that the HR one requires a reduction to the MCO tax. It's that we also have proposition 35.
Proposition 35 places a limit on how much you can charge private health plan enrollment. And so because of that, to make to equalize the rates, absent an amendment to prop 35, the state can only reduce the Medi Cal rate. It can't increase the the private health plan rate. And so that results in a reduction in the MCO tax. For the private hospital fee, it's it's a little bit more gradual.
There there we we it HR one basically prevents us from pursuing an increase to the private hospital fee in 2025 that the state had was pursuing. But it sort of requires us to have the same level that we had in 2024. So it's more of a missed opportunity. But then moving forward, eventually, there will be rules in time that that could trigger some reductions to the private hospital fee. And then similarly, the it's our understanding that the state their the managed care payments do exceed what Medicare pays in aggregate.
Although we don't data on how much it exceeds it is sort of unknown to us at this time. And so pinpointing that exact reduction is hard to do. So that's really the gist of the handout. I do want to kind of leave with a couple of key points. The first is that, you know, this is an area where our understanding is still evolving.
Federal guidance is still emerging and so the estimates that you'll be hearing throughout the hearing are are are subject to some change over time as we get more information and more guidance from from the federal government. The other thing I would really emphasize is when you're when you're hearing from providers about the fiscal impacts, yeah, it it's it can be helpful to keep in mind that in some cases, what we're talking about are missed opportunities. We're not getting that that increase that we had planned to get or the case of the MCO tax, that increase had only been around a few years. And the and the rate increases that were gonna go to hospitals really had only recently come into fruition. In other cases, reductions will be an actual reduction to hospital operations.
This is because hospitals are relying, for example, on the the private hospital fee to help cover costs. And so reductions to their current levels would would potentially require some operating reductions. So when we're thinking about fiscal effects, it could be helpful to to try to differentiate between what sort of an opportunity cost versus what is a cost to today's service level. Thank you.
Speaker 17
Thank you, madam chair. Tyler Sadwyth, Chief Deputy Director of the HCS. Happy to provide brief information about the hospital value strategy budget change proposal as requested as well as updates on the HQAF hospital quality assurance fee and the MCO tax. Department is requesting 23 permanent positions and one year limited term resources equivalent to three positions, an expenditure authority of $10,664,000 total funds, of which the non federal share are administrative fees or reimbursements in budget year to develop, implement, and sustain a comprehensive value strategy for payments in hospital settings in Medi Cal managed care delivery system. Just as context, the department received one year funding in twenty five-twenty six with the non federal share comprised of a combination of reimbursements and the California Health Data and Planning Fund.
This BCP provides ongoing funding for those positions and it shifts the state share entirely to reimbursements, which again are administrative fees derived on intergovernmental transfers. The department is taking a phased approach to the hospital value strategy with the initial phases focused on making existing state directed payments compliant with the new federal requirements. Work is well underway, including policy research, data analysis, stakeholder engagement, and payment and program design. We have released a request for information and plan to onboard a contractor this year to convene a diverse stakeholder group to really inform the development of the landscape analysis, policy options, and a multi year strategy and an implementation roadmap. This BCP has also contributed to the establishment of a new branch exclusively dedicated to hospital financing and the Medi Cal Managed Care Program.
So just as context setting, as Elio mentioned, in recent years and especially from '24 to '25, the department has significantly increased hospital reimbursements through state directed payments. So today, as context on a statewide basis on average, Medi Cal managed care reimburses significantly higher than Medicare for inpatient hospital services and close to Medicare for outpatient and emergency services. And this is the result of intentional steps we've taken in recent years to improve hospital reimbursement through expanded state directed payments. In addition to expanding the payment amounts, we're also expediting the timeliness so that we can sort of disperse those payments more quickly. HR1 constrains state options and flexibilities related to hospital financing.
So as I just noted, we recently increased hospital state directed payments to approximate and even exceed Medicare. This is critical especially to supporting hospitals experiencing financial distress. However, HR1 sets new limits on state directed payments so they do not exceed Medicare rates, which means we will have to be decreasing those state directed payments over time to comply with HR1. HR1 also prevents proposed growth of missed opportunity in the hospital quality assurance fee. There's new limits on the amount of funding and also stringent new requirements on the tax model related to proportionality, as Elio shared.
So given this landscape, the goal of the hospital value strategy is to support California to be better positioned to adapt to federal cuts and constraints and also really align payments for hospital care with the appropriate incentives, including quality and value. In terms of updates on the hospital quality assurance fee, this, as noted, is not compliant with new HR1 requirements regarding provider taxes being generally redistributive. The calendar year 2025 fee represented a significant that we had submitted represents a significant increase to the current levels. We were notified by CMS that that is not approvable given the new HR one framework. CMS gave us technical assistance to comport with the transition period that they have allotted for this fee.
So based on the technical assistance, last month we amended the HQAF nine tax waiver amount to match the level of the 2024 fee plus limited growth. So again, we submitted that several weeks ago. For the calendar year 2026 fee, we also submitted that HQAF tax model request to CMS in late March. Again, this is representing sort of the reduced level consistent back to the current HQAF tax amount levels based on technical assistance from CMS. In terms of timing, there is no prescribed timeline in sort of law or regulation for CMS to review and approve either the pending '25 fee or the recently submitted '26 fee.
Typically based on our experience, approval can take up to three quarters based on significant back and forth and engagement with CMS that we've done. We do believe the 25 fee will be approved sooner. We continue to seek to understand the federal perspective on fees. I think the CMS is still sort of evolving and landing on their policy analysis and interpretation of HR1. So based on our engagement with CMS, we will identify potential future modifications and will adjust payment timelines in consultation with affected hospitals.
In terms of looking beyond the transition period, HR1 requires that the department redesign the calendar year '28 fee to really reduce the tax burden on Medi Cal, either by reducing the total fee amount or shifting the tax burden more to commercial hospitals in line with proportionality. So at this time, it's premature to provide a specific revenue impact. This is still sort of early stages of analysis. There are potentially multiple scenarios or pathways to comply, including some potentially with minimal revenue impact. And we think that the approach to this will be again further informed buyer engagement with CMS on their review and their feedback and their approval for the 25 and the 26 fees that are pending with them.
Pivoting quickly to the MCO tax. Again, this is not broad based or uniform. It's not generally redistributive under new HR1 requirements. And we did receive a transition period from CMS, including through the new regulations that they've released. This transition period leaves the MCO tax intact through the end of this calendar year, which represents the full term of the approved tax waiver.
So all Proposition 35 supported investments will end at the end of this year, except for targeted rate increases for primary care, maternal care, and non specialty mental health services. Wanna highlight the challenges facing us as a state with redesigning the MCO tax in conjunction with Proposition 35 requirements given new HR1 parameters. Proposition 35 calls for a substantially similar MCO tax as of 01/01/2027, and it limits the annual non Medicaid tax to $36,000,000 So basically an HR1 compliant tax with a $36,000,000 cap on non Medicaid taxes would amount to a total tax of less than $100,000,000 per year. And this can be compared to the current authorized tax of $12,700,000,000 per year. Furthermore, the net benefit to the state of that new tax compliant with both HR1 and Proposition 35, the net benefit would be approximately $6,000,000 per year compared to the current net benefit of approximately $7,000,000,000 per year.
So the department is evaluating options, including timelines for a future MCO tax given this landscape. That's it.
Speaker 1
Thank you. We we have four more folks that are gonna come up to the table. So appreciate not trying to kick you off the table. You've been so kind to stay here all night with us and, share really important information. I know members are gonna have questions for you.
We're gonna move next to the California Hospital Association. We're also gonna have, after that, the California Association of Public Hospitals and then the District Hospital Leadership Forum. So we will, as you're getting seated, we'll turn to the, we'll go in that order. So California Hospital Association, and please go ahead and introduce yourself. Then California Association of Public Hospital, please introduce yourselves, and then the district hospital leadership forum, if you could introduce yourself.
Welcome. Thank you.
Speaker 31
Hi. I'm Adam Dorsey with the California Hospital Association. So just very quickly, you know, we've had nine hospitals that have closed since 2020, And that we've had an additional 16 that have only stayed open with the assistance of state state government assistance. We've had 3,500 layoffs in health care in 2025 alone And we now have 12 counties in California that do not have access to hospital maternity services. These are all kind of the situation that hospitals were in before the reductions associated with the BBB.
Speaker 43
And so we're in a tough situation that is getting much more challenging right now. And in recognition of all of the work that has been done and the structural budget deficit, what we're asking for is reseeding $300,000,000 in the existing distressed hospital loan program Because it's a one time investment, it does not significantly contribute to the structural budget deficit and will allow for hospitals to have a fighting chance at continuing to keep their doors open. This is not a permanent solution. This is kind of putting a finger in into the dam and giving us time to, to fix the the larger structural issues that we're facing.
Speaker 22
Good evening, chair Addis, members of the subcommittee. I'm Susan Ehrlich. I'm the chief executive officer of Zuckerberg San Francisco General Hospital. I'm also a primary care physician, and I still see patients there. Just to tell you a little bit about ZSFG, we're we've been an essential part of the health care landscape in San Francisco for more than a hundred and fifty years.
We are the city's only trauma center. We're the busiest emergency department in the city. We're the only psychiatric emergency service in the city, and we are the safety net for the least well served in our community. We serve more than a 100,000 people a year or about one in eight of San Franciscans. We're a major teaching site for the University of California San Francisco medical school, school of nursing, school of pharmacy, and we also educate many other allied health professionals.
Our revenues come almost entirely from Medi Cal and Medicare. So this issue of HR one is a big deal for us. The reductions to state directed payments are catastrophic for our systems. We're doing everything we can to preserve access to services, things like working very hard on the way we see patients in the emergency department to reduce leave without being seen, to increase block times in our ORs. We're doing everything possible, with the money we have to be able to see as many patients as we possibly can.
And we do this because we know that by doing this, we will be able to sustain our mission. Otherwise, we we can't do this. But HR one creates a structural problem for us that operational efficiencies cannot fully solve. As the mayor prepares to submit his budget to the board on June 1, we are already reducing more than a 100 positions in the health department as well as making more than $20,000,000 of cuts to community based organizations. And this is just in the even before the major effects of HR one take place.
Speaker 56
We expect about 25 to 50,000 people in the city and county of San Francisco will lose Medi Cal coverage, but they will not stop needing care. They will still come to our emergency department for everything from routine illness to life needing lifesaving care, and systems like ours will be forced to absorb the cost either through our Indigent Care Program, Healthy San Francisco, or by providing uncompensated care. And that pressure will not stay contained within our system because when our emergency department is full, every other emergency department in the county, including private and nonprofit hospitals, will also feel the strain with overcrowded EDs. Healthy San Francisco is a great coverage program that provides access to affordable and basic ongoing health care services for uninsured residents. But if 25,000 to 50,000 people lose their Medicaid coverage, that would increase the Healthy San Francisco enrollment from today about 5,000 to about 30 to 55,000.
Speaker 22
And that would force the city to make some really unpleasant choices. We would either have to reduce the coverage pool. We would have to change the benefits or cutting the number of people who qualify, thus rationing services in one way or another. And we we won't be able to do this alone. So for these reasons, we're asking the governor and the legislature to reinvest in public hospital systems with a $500,000,000 general fund appropriation to the 2627 budget.
This investment by the state this year is a fraction of what we need, but it's an important first step, a down payment to shore up public hospital systems as we navigate these federal cuts that threaten to completely unravel our systems. Thank you. I'll stop there. I welcome your questions, and Katie Rodriguez with the CAPH is also here to answer questions.
Speaker 4
Good evening. My name is Ryan Witts. I'm the executive director for the district hospital leadership forum or trade association that represents the 33 district hospitals. And in your background materials, LAO did a great job highlighting the difference between the private versus county and UC versus district. And, you know, the I think the notable differences between the privates versus the publics is is obviously the the fact that they can act as a governmental entity.
Speaker 45
But unlike, I guess, the county and UCs who are larger public hospital colleagues, the district hospitals tend to be smaller in scale and far more rural. You know, the 18 of our 33 district hospitals are critical access hospitals, meaning they have fewer than or 25 or fewer beds, and they serve remote and rural locations across the state. HR one is not a single policy change as you guys saw in your background materials. And for our hospitals, it's kind of a culmination of overlapping financial shocks that are all gonna come to roost here pretty soon. We are going to see pressure on state directed payments.
We also know that while we do not participate directly in the MCO tax, that the infrastructure and the financial benefit for the state budget is at risk and so that will lead to Medi Cal instability. We know that that will also lead to coverage losses and other federal funding reductions. So, specifically for districts, HR one could reduce overall Medi Cal supplemental payments by roughly 30% as compared to today levels that are funded today. So as Adam and CHA and my colleagues had mentioned, you know, many district hospitals participated in that distressed hospital loan program. Nine of the 16 recipients actually were district hospitals.
We only represent 8% of the hospitals in the state, but yet we received half of the funding in the DHLP program. So they are not in a position right now that's strong to absorb these types of hits. And unfortunately today, many still remain distressed. That was a program that was funded a few years back. Today, we have 12% of district hospitals as we refer to them as in survival mode.
They have less than two weeks of days cash on hand. And we have 40% of our others that are within sixty days cash on hand. So nowhere near investment grade or any financing support. These hospitals do have few good options. They are delaying hiring, deferring maintenance, and needed facility upgrades.
They're narrowing their service lines. In rural communities, it just means patients have to wait longer, travel further, or just defer care altogether. So we do not have a specific ask. We just recognize that there's a lot in front. California is going to need a broader strategy than, you know, any specific Medi Cal re you know, value based program structure or even the rural health transformation program fund that we're all hoping comes comes to us.
But they're they alone by themselves will not solve the existing financial crisis and or the rising costs of health care that you've heard here today. So thank you, and happy to respond to any questions you have.
Speaker 1
Thank you. Any questions Come on over. Okay. I think we're getting tired. I will just I I will also say it's not just that we're tired.
I will also say that we have been steeped in this for two years, and and lack of questions does not at all indicate lack of interest or lack of understanding how serious this is. We started talking about this. This budget subcommittee started talking about the impacts of HR one last year before, HR one was even signed and started talking about how, detrimental we thought this was gonna be. And so now it's here and just, I think we do understand the gravity of the situation and appreciate, all of you for staying and testifying and sharing the story again because I do think while the three of us, and I appreciate my two, lady colleagues who are staying to the bitter end here. But I think while we understand it, it's really important for the public to hear time and again what's happening with the hospitals and agree that we need a broader strategy on that.
So since there's no questions up here, if there's public comment, we'll open it up, name, organization, and position.
Speaker 6
Is that short representing PEACH, which which are the 88 private disproportionate share hospitals that provide more than one third of all medical hospital care, in California and look forward to working with you all. We believe that, if we create policies where the money follows where the patient is going to access that care, we can ensure that there is access to care as
Speaker 32
Good evening, madam chair and members. I'm Erin Evans on behalf of the County Of Santa Clara. We operate the second largest public hospital system in the state, and we strongly support the $500,000,000 funding request towards public hospitals for this important work. Thank you.
Speaker 30
Kelly Brooks, on behalf of the Riverside County, Ventura County, the Urban Counties of California, and the University of California here in support of the $500,000,000 funding request for public hospitals. Just a few facts about each of these clients. Riverside County operates a public teaching hospital and 14 community health centers. As a result of HR one, Riverside County estimates 100,000 patients will lose Medi Cal, which will result in 1,000,000 fewer visits and 300,000,000 in losses to the county hospital health system. Ventura County Medical System, consists of two public hospitals and 36 clinics.
They estimate $400,000,000 in losses. University of California estimates $165,000,000 in losses, and this is on top of $1,300,000,000 in losses associated with the Medi Cal program.
Speaker 44
Good evening, chair and members. Beth Malnowski of the SEIU California. I want to speak to a couple of items. One, wanna the work of the department on addressing the provider tax challenges. Additionally, on the hospital conversation today, stand strongly with our colleagues and county public hospitals and health systems, making sure we're funding those at $500,000,000 As noted, this is just, just starting really the conversation, what is really needed to stabilize these systems.
Speaker 46
Additionally, just wanna also comment on vision care funding, was noted on the day as a moment ago. We are gonna have individuals that are in need to still receive care, and we have to make sure, send those dollars aside for that. Last, in behalf of the Fight for Health Coalition, of whom some have had to go home this evening, just wanna acknowledge the best way we can continue care and coverage is to keep folks on Medi Cal. We can do that by finding new revenue and really holding accountable as corporations. They're taking advantage of the program today and how covering folks.
Speaker 40
Good evening. My name is Dolores Alvarado. I'm the CEO of Community Health Partnership in San Mateo, Santa Clara. We have seven federally qualified health centers, two other clinics. We serve 200,000,000 excuse me, 200,000 folks a year.
About 30% of those are u UIS. And if I may just say one last thing because my colleagues will give you more data, is please consider who we are hurting by removing the PPS revenue system, by removing Medi Cal. We are hurting the most vulnerable of all.
Speaker 18
Hi, Alicia. General Oviros. I'm the CEO of Gardner Health Services in San Jose, California, about 40,000 unique lives. I think the ask for us is to restate the PPS rate. Now give us just some data points.
Speaker 16
My name is Sarita Coley. I'm CEO of Asian Americans for Community Involvement, which is another federally qualified health center, and we have about a thirty three percent UIS population. So you know what the implications of that would be.
Speaker 20
Katie Rodriguez with the California Association of Public Hospitals. In support of the 500,000,000 general fund asked for public hospitals as well as, the reversal or delay of PPS cuts, we have over a 100 FQHCs of public hospitals.
Speaker 10
Dina Lan, San Francisco Community Clinic Consortium here to speak against, asking you to restore the UIS the PPS for UIS. We heard a lot about the potential costs of why Medicaid is so high. I didn't hear anyone saying that it was primary care, and yet this would take a billion dollars
Speaker 1
So it's name, organization that you're with, and position. Andy a budget ask or you oppose a budget ask.
Speaker 55
Thank you. Andy Liebenbaum on behalf of Los Angeles County. We're the largest pub largest public hospital and health care system in California providing care to over 600,000 people every year. We operate four hospitals, two level one trauma centers that serve as our first stop for emergencies and disasters.
Speaker 48
Support the $500,000,000 funding request, and we're estimating the cost of HR one to exceed ongoing revenues by $1,800,000,000
Speaker 1
by 2028. Thank you. So we do understand the impact. So we just need your name, your organization, and you support or oppose a specific budget ask.
Speaker 7
Christine Smith, Health Access California and the Fight for a Health Coalition urging long term revenue solutions for the, for the legislature to look into long term revenue solutions. Apologies. I'm tired.
Speaker 39
Good evening. Katie Layton on behalf of the Children's Specialty Care Coalition. Just wanting to comment on how changes to Medicaid financing will, impact pediatric specialists who treat children and youth with complex health care conditions. HR one will certainly harm this network, and so we just ask that the legislature protect current medical provider rates and encourage creative thinking about, future MCO tax.
Speaker 37
Good evening. Omar Altamimi with CPEN, the California Pan Ethnic Health Network. Related to the MCO tax, if the legislature one, considering the limitations on how that can be raised and spent, how many can be raised and spent. If the legislature was to look into a plan to open it up, CPEN would be supportive of a plan that supports the the three and a half million Californians who are about to lose funding or about to lose coverage and funding for their coverage. And so that's one.
Speaker 49
And then on the the second, just aligning comments with SEIU and health access on revenues and and the Pfeffer Health Coalition.
Speaker 14
Hello, all. Thank you so much for your time today. I'm Madeline Merwin. I am a resident physician, and I am standing here from San Francisco on behalf of all of my co residents who are working so hard to provide care for our Medicaid population, and I urge support on, behalf, of them for the expanded Medicaid coverage. Thank
Speaker 31
Good evening, chair and members. Allison Ramey on behalf of AltaMed Health Services here today to ask for the legislature's rejection of the PPS, for the UIS reimbursement and asking that you guys reinstate that. Thank you.
Speaker 1
Thank you so much, and thank you to our panelists. I know you had a short time in the spotlight, but a very important message, and we really do appreciate you. And we're gonna move on to issue number six, HR one impact on the counties. This issue is gonna examine cumulative impact of HR one on California's 58 counties.
Speaker 1
so much. Organization and, you support or you oppose a particular budget item?
Speaker 4
I'm on behalf of Fighting for Health and Disability Voices United, and we support the the bill. Thank you.
Speaker 1
Thank you. So moving on to item six, and we have talked a number of time about counties. I'll ask you to come on up. We've got county supervisor from Plumas, director from Sacramento County Department of Health Services, a county administrator officer and chair of the County Medical Services Program, a director of the Department of Social Services from San Luis Obispo County, and a social services benefit specialist from Santa Clara County. So there should be five of you snugging into the table up here.
And then if we have other questions for LAO or DOF, we may, ask you if you have any anything to add here. But I will start by saying we have talked quite a bit about the impact on the counties, how difficult this is, and, and I know we have some champions on this committee. So I am gonna ask you to tighten up your testimony. We still have another issue after you. So as as quick as as tight as you can be to get your point across would be very much appreciated.
And we will start, with supervisor Hall with an overview of county responsibilities in administering Medi Cal and CalFresh. And then let's just go down the line. You can need to introduce yourselves and, we can move through or down the line the other way.
Speaker 52
Well, good evening, and thank you for your stamina and for your public service. And we I'm NeNe Hall, Plymouth County supervisor, and, we really appreciate the opportunity to be here today. I began my public health career in California, serving California counties in 1999. And I have served as a county health leader in Sierra, Loomis, Yolo and Santa Cruz Counties. And across all of these roles, one truth has remained constant.
And that is that when people fall through the cracks, counties are the ones who catch them. So that's why we're all here today to speak about the very real and immediate impacts of HR one. HR one fundamentally shifts fiscal responsibility for safety net programs from the federal government to the state and counties. And at full implementation, California counties are projected to face costs of up to $9,500,000,000 annually. It's staggering.
So why are counties not positioned to absorb this shock? To understand why this is so concerning. I'm going to briefly walk you through the history of the complicated relationship between the state and counties to fulfill safety net responsibilities. In 1978 prop 13 fundamentally altered. The state and local fiscal relationship, and it sharply reduced, property tax revenues for counties.
Fast forward to 1982. In response, the state then shifted responsibility for the medically indigent adult program to counties and provided some funding for that. 1991, the state experienced the worst state budget crisis it had in decades, and that's when we had something called realignment. And what realignment did was it created a structural solution to shift the responsibility for health, which included public health and indigent medical care, social services and mental health programs to the counties. This greatly alleviated the state general fund from funding these programs in the past, And it also created this direct funding stream from a half cent sales tax and vehicle license fees revenues that came directly to counties.
2010. In 2010 we all know what happened, the passage of the Affordable Care Act. And it created a situation where millions of Californians gained health care coverage. And as a result, the county indigent care program scaled down significantly. 2013.
Well, with so many people gaining health care coverage, AB 85 was passed. And the state began redirecting a significant portion of health realignment revenues from counties to offset the state general fund costs for the CalWORKs grant increases. So what will happen? HR1 is going to drive major increases in the number of uninsured individuals at a time when counties over the years have found themselves in a situation where we have less resources, capacity, and infrastructure than in any other point in recent history to respond. So our ask, counties are longstanding partners with the state.
Speaker 39
Without additional state investment, we will not be able to absorb the impacts of HR one on county programs and the communities that we serve. Under the leadership of the California State Association of Counties, counties and their associations have collectively developed a multi year countywide HR one budget request. What we respectfully request is $1,900,000,000 in fiscal year twenty six twenty seven and $4,500,000,000 in fiscal year twenty seven twenty eight. And this request includes targeted funding that is essential for indigent care to $761,000,000 in budget year in the current budget year and 2.4 in the following year. For county hospitals 500,000,000 in the budget year and $850,000,000 in the following to stabilize their revenues.
Speaker 52
County eligibility operations $3.00 $3,373,000,000 in the budget year and $4.00 2,000,000 in the following year to maximize the number of individuals who can retain medical and cal fresh. And finally county behavioral health services $224,000,000 in the budget year and $828,000,000 in the following year to serve all the individuals anticipated to lose medical. We appreciate the opportunity to share our perspective and look forward to continued discussions with the Legislature and the administration.
Speaker 53
Thank you. Good evening and echoing supervisor Hall's comments. Thank you for your stamina and endurance in public service for being here today and going through all this. My name is Timothy Lutz, I'm the director of the Department of Health Services within Sacramento County. And today I'm gonna elaborate a little more depth in what Supervisor Hall mentioned around an opportunity to highlight, in this case how Sacramento County historically met its obligation and is preparing to again meet its obligation to serve the indigent adult population coming back to our counties.
First, Sacramento County is an Article 13 County. What that means is we do not operate a public hospital system and we are not part of County Medical Services Program or CMSP. So to provide some historical context for how our indigent program operated in Sacramento, prior to the implementation of ACA, Sacramento County determined eligibility for indigent care by setting the income threshold at 200% of the federal poverty line and imposing an asset test. At the height of the program, was 2,009, we served approximately 50,000 individuals annually. And the budget was approximately $50,000,000 At the time the county operated 11 county clinics with program and clinic staff of about 150.
And we also contracted with FQHCs within the community and had a specialty provider network built up of over 300 providers. Services included medically necessary primary care, secondary care, emergency and inpatient hospital care. This would be representative generally of a comprehensive county run county contracted system capable of managing large volumes of uninsured patients. Fast forward now to post Affordable Care Act implementation and the Medi Cal expansion, our enrollment declined to zero. And so the county's prior clinic infrastructure was substantially reduced or repurposed.
I'm leaving Sacramento County today without a large scale delivery system. We have one county clinic and one satellite location. Given that enrollment has been non existent and also with AB 85 diverting funding, the county is in a position where it does not have the resources today to serve this population returning to it. Which accentuating the point again, Supervisor Hall mentioned with federal HR1, it does fundamentally shift that responsibility back to the county by imposing work requirements. DHCS is estimating that around 1,400,000 are likely to lose coverage and become newly uninsured.
We believe that in Sacramento, that number approximately 50,000 residents that may lose Medi Cal due to work requirements. In January, the Sacramento County Board of Supervisors adjusted our program eligibility criteria, reducing our threshold to where it had been recently at 400% of the FPL down to 138% while keeping the same scope of services intact. And the fiscal impacts that we're estimating for Sacramento County are between 50 and $90,000,000 at full implementation of work requirements. So in summary, many counties are struggling with staffing systems, contracts, operational capacity, the ability to suddenly absorb a large return of uninsured individuals back to the county. AB eighty five did redirect funding from counties.
It also slowed the growth of 1991 health realignment, which left counties right now with limited or no resources to expand in the GIP programs. Our county organizations led by CSAC are advocating for a multi county funding request. In our case on counties like ours, dollars $761,000,000 is the amount in fiscal year twenty six, twenty seven that we were indicating we needed and $2,400,000,000 in subsequent years. Included in that request, direct medical services, to eligible indigent adults, but also $200,000,000 for rebuilding county infrastructure for the 23 non CMSP counties. That infrastructure includes clinical infrastructure, information technology subsystems, fiscal, legal, billing, administrative, workforce, and operational support that is necessary to then start to bring this type of a program back.
It also includes $50,000,000 for public health departments to address increased demand that we expect for vaccinations, STI services, and other communicable disease response. In closing, we appreciate the legislature's attention to this issue and look forward to continuing to work together towards solutions.
Speaker 42
Good evening. My name is Scott DeMoss. I'm the county administrative officer for the great little county of Glenn. I'm also the CMSP chair. CMSP was established in California law in the early 1980s as a pooled risk health benefit program for 39 eligible counties with populations 300,000 or less.
Currently, there are 35 participating counties with four additional counties eligible to participate. Currently, Placer, San Luis Obispo, Santa Cruz, and Merced do not participate but are eligible. The program was designed to support the participating counties in meeting their WIC section 17,000 obligations. In 1995, the CMSP governing board was established as a local public agency in charge with overall program and fiscal responsibility for CMSP. CMSP was funded primarily by 1991 state local program realignment statute.
In 2014, the following the Affordable Care Act, most revenue allocated to CMSP was redirected to the state through AB 85. And then in 2019, funding was fully redirected to the state through SB thirteen seventy one. This redirection of funding was to continue until CMSP reserves are equal to two times the CMSP budget. In December 2013, before the Affordable Care Act, CMSP served over 80,000 members at an annual cost of 400,000,000. Today, less than 3,000 members are served at an annual cost of 25,000,000.
Speaker 38
The impacts of HR one post Medi Cal work requirements are estimated to increase the mandated population to between 41,124 members with an annual cost of $311,000,000 on the low end to as high as $943,000,000. The current CMSP reserve is equal to one year of expenditure at the low end of these estimates. CMSP counties will be responsible for cost overruns if program expenditures exceed available funding. CMSP can build capacity and serve this population in fiscal year twenty six-twenty seven, but will need state resources to continue serving this population beyond the twenty six-twenty seven year. As we prepare for HR1 changes, the CMSP board has already taken the first steps regarding the future of benefits and eligibility.
Speaker 42
The board reinstated the upper income limit to pre ACA levels at 200% of the federal poverty level. We lowered the asset limit test to 10,000 for an individual, 20,000 per couple for all CMSP applicants. We discounted the selected benefits added post ACA. This included benefits such as chiropractic services, some individual and group counseling services, vision, hearing, and dental services. For all CMSP covered services, the board reinstated a share of cost for CMSP applicants above 100% of the federal poverty level.
Lastly, we've made the decision to discontinue full coverage for undocumented immigrants and shifted to emergency only services to cover this population. We look forward to working with the legislature and providing the best care that we can with the funding made available meeting our 17,000 requirement.
Speaker 54
Good evening chair Addison committee members. I'm Devin Drake, director of the Department of Social Services in the county of San Luis Obispo. I've worked in social services for over twenty seven years and served my current position for over nine years. Investing in our county eligibility workforce offers a proven and cost effective- path to mitigate the harms of HR one but we are quickly running out of time. In San Luis Obispo nearly a quarter of our county's entire population is on medical.
We estimate over a third of all adults currently receiving medical benefits will be impacted by HR ones work requirements and six month redeterminations. This population reflects several characteristics that highlight our unique community sixteen percent are experiencing homelessness with many facing complex health needs and limited documentation. Nearly one quarter of our residents are Latino or Hispanic and many face language and access barriers. We have a significant for a farm work population often with seasonal employment fluctuating income and limited access to transportation. In order to implement new HR one changes responsibly we estimate that our workload will at least double.
And I will need to increase our eligibility workforce by 65%. Although promising, know we cannot rely solely on automated data sources because those systems can't capture the full complexity of real life circumstances, and many individuals have limited data footprints. Examples of this in my county include individuals working in informal seasonal jobs, major sectors of our local economy like farm workers and migrant workers with inconsistent records but significant health needs. Individuals experiencing homelessness with serious health conditions but limited documentation. Older adults ages 50 to 64 managing health issues, unstable housing or caregiving responsibilities.
Speaker 27
Informal caregivers whose responsibilities are not reflected in any system. And individuals with limited English proficiency or digital access. In these cases, eligibility workers will be required to make more individualized assessments, gather alternative forms of verification, rely on person centered interviews rather than automated data. When a participant who is subject to the work requirement is completely is is completing only partial hours, the eligibility worker will need to provide individualized support to help them meet the full requirement. Without direct engagement and trust built by an ineligibility worker, individuals may not know whether to report certain exemption factors that could help them maintain coverage.
Speaker 54
My county is approaching implementation of HR one with urgency and rigor but without state investment my county will lack the capacity to implement HR one in a harm reduction manner. In closing. I need to increase my workforce by 65% it takes roughly nine months to recruit interview on board and train new eligibility staff. To prevent people from losing coverage we need this funding now. On behalf of the county of San Luis Obispo we urge the legislature to support.
As you raise medical budget request of 270,000,000 in fiscal year- twenty six twenty seven. To implement HR one in a client centered manner. And we do think assembly member Shiboh for championing this request. Thank you. And then The social workers here.
Speaker 55
Good evening. My name is Crystal Porasachoa, and I'm a proud member of SEIU Local five two one and a social services benefit specialist eligibility worker from Santa Clara County. I've been in this field since 2021. I'm one of 13,455 eligibility workers represented by SEIU across California. We help people apply for and keep benefits to help them keep their families, keep their dignity, their life opportunities, and in many cases, stay alive.
I wanted to become an eligibility worker because I was a recipient of CalFresh and Medicaid when I was younger. I remember going to benefit offices with my mom and the people there who would help us. It is often the first place of stabilization for many families. As I got older, I became educated in sociology and public health. Becoming a member of the social safety net was a way for me to bring my experience full circle to empower and educate my community on a personal level.
In my job, my team handles the intake of new clients for general assistance, a cash aid program, CalFresh, and Medicaid, as well as the renewal of benefits. The clients I primarily serve are indigent households who are experiencing homelessness. Many are dealing with substance abuse and behavioral health issues that they are working on as well as several people who are trying to reenter the workforce. I also work with new families, those who are experiencing pregnancy, or those who are going through the reunification process with their children. Oftentimes, households are not aware of CalWORKS, and we offer a referral process for them.
I work in a unit with eight other intake workers and a supervisor. Currently, I hold a 179 cases to my name. Depending on the household composition, that number includes more than 250 people assigned just to myself. Continuing workers would carry 322 cases per worker. Medicaid only workers carry 422 cases, which increases the amount of individuals households served.
Demographically speaking, the majority of my clients are single individuals, parts of families, adults with disabilities, and older adults. Many are members of our noncitizen population, including asylees, refugees, victims of trafficking, and victims of violent crime. As you can see, it's a large swath, the population we serve. Less than a month ago, our office implemented a new same day service. Every application that comes in gets assigned to a worker.
Every morning, we have a bulk listing assigned to us and several times throughout the day. Workers will then screen those cases for expedited services and immediate need CalWORKs, which means if they meet certain emergency criteria, like if their expenses exceed their income, their gross income and property is under 150 or $100 respectfully, they qualify for an on the spot interview or within three days from us getting their application. We also offer Medicaid to any application, and we review retroactive Medicaid when needed. I also do annual redeterminations to clients to make sure that they are still eligible for services for another twelve months, plus a semiannual report six months after certification. Continuing workers process roughly 40 to 60 combined semi and annual certifications a month.
It's extremely challenging to connect all of our clients to the services that they need, but I try each and every day based on keeping abreast of different community service organizations and different waivers that may apply to them. That's why I started tracking the development of what eventually became HR one as far back as the twenty twenty four election. The day the so called great big beautiful bill passed. I downloaded it to my phone, and I combed through it to see how it would impact my clients and my coworkers. We're still getting used to the same day model, and now the severe restrictions of HR one will set us back, creating backlogs as we have to screen clients further than ever before.
Speaker 18
For example, a typical redetermination interview takes about an hour. But now thanks to changing roles like the able-bodied adults without dependents and the work requirements, and for which non citizens which are still eligible for CalFresh, which all of the aforementioned categories I mentioned earlier are no longer eligible starting April 1 and at their next recertification. Interviews will take twice as long as we try to do everything we can to keep household aided and help them work through all of the new and extra verification that they will need and provide explanations to their determinations to help keep their trust in these systems. When I saw these new requirements, I was heartbroken because I knew instantly how it would impact my specific clients. The Asai Lee college students and her siblings who now lose snap.
Speaker 55
The parents who work part time and care for their parents and their Children who are now limited to three months of food assistance in a three year period because of the so called ABOD rule. The elderly veteran will lose snap because they don't have a formal disability, but HR one imposes work requirements on people 65 years of age. And how much time it will now take us to provide as many resources as we can for these families, including meals on wheels, senior nutrition programs, free food sites. But everyone knows that these services don't come anywhere near replacing the benefits they will lose from HR one. The population I serve is in so much need.
And the federal limits that are in place are already so strict that people are already going without food and without health care coverage. I'm terrified on how HR one will hurt my clients and neighbors, especially during this time of food inflation caused by the one on one. We know we can't just shift the cost of services to the counties. Every one of us, even the wealthiest Californians will pay a price if our systems fail. I love my job.
I love my clients, and it hurts to know how they will be negatively impacted by HR one. No matter what actions the budget committee takes today. You can make it hurt not so much. Working together to implement these new restrictions in a way that supports workers and does the least harm possible, keeping the most folks enrolled in coverage, We can make a difference and prevent human suffering. Not everyone gets to make a difference.
I get to every day. With your leadership, I can make a bigger difference with people whose well-being has been disregarded by federal lawmakers. Thank you for the opportunity to share with you. I look very forward to the difference we can make as Californians who need it now more than ever.
Speaker 1
Thank you, and thank each of you for your, for your service. Assembly member, do you have any questions? Or LAO or DOF, do you have anything to add?
Speaker 18
Will Owens with the LAO. I think your agenda does a good job laying out some of our analysis on specifically county and care, and previous committees have touched on some of the eligibility workload. So with that, we'll be available for questions.
Speaker 4
Please. Thank you. And at this late hour, I want to really thank this last panel for starting to paint a very dire picture that we've all been living with for a while. I think the challenge that we have is that we are kind of losing sight of the fact that we essentially did away with our indigent care program, especially for the counties because we were rightfully kind of focused on realignment. And I think the question before us right now is how do we make sure recognize the fact that we've you know, the earthquake has happened and and we need to make the changes that we need with HR one, and we need to start making the changes around what that realignment looks like, particularly for indigent care.
So just to kind of drive the point home for you all, for us all here, and for the public, just around the indigent care component itself. You've asked for $761,000,000 for this budget year and $2,400,000,000 for 2728. What would happen if the state did not provide that funding? What would your indigent care programs look like? How would the counties respond?
How would you fund that? Because at the end of the I just wanna say, like, just because someone doesn't have health insurance doesn't mean that they're not gonna need to have health.
Speaker 53
Well, I'll speak to what we're looking at in Sacramento County. Recognizing these impacts coming up pretty quickly, we first started briefing our board in December and then again in January as budget was developed and recognizing that if no new resources came in, what this means is some pretty significant cuts across the board for county departments. So the board directed departments and the CEO to direct departments and work with departments on reducing across the board budget. So holding the line on any COLAs, which is a certain amount and then an additional 2.5% cut. So it was about a 6.5 cut to county departments, including our public safety departments, including our parks department.
Public health services also had reductions. Basically everything was on the table and currently is on the table. So I think without those additional resources, you're gonna see counties that are already seeing stagnant revenue and increasing costs having to significantly revenues and cuts within their budget and no one's going to be exempt.
Speaker 52
I'd like to add to that. I think that Tim Lutz succinctly points out the ripple effects to other county services that are funded by general fund. I was a health director pre ACA. And I was a health director of February when the bottom fell out and our realignment revenues that we never thought would be in a place where we wouldn't have growth became decimated. And what counties do I was in a rural county at that time, Plumas County.
We were a CMSP county. And so CMSP had to make a lot of changes in policy adjustments for that. When I moved to become the health services agency in Santa Cruz County, we had our own program called Metacruz. What happens in times of limited resources means counties get to choose who they cover, who's eligible, and what they cover. And it will create a situation where you reduce the income limits to 100% of FPL instead of 200% or 300% or 400%.
You will only cover certain qualified services that are the most needed or the most dramatic. I mean, it's going to affect people's lives because counties don't have endless resources, so they will continue to meet their commitments to the best of their abilities. But without with what happened with the trajectory of realignment, you know, starting many, many years ago and where we are now, we are not poised to go back to those two thousand and eight days. Mhmm.
Speaker 1
don't have any questions, but, I do wanna thank you, Crystal, for your service and the way that you clearly care about your clients. And to everybody that is here, thank you for driving so far probably from San Luis Obispo and, to everyone who came to came tonight. And I I'll repeat what I said for the last panel. Lack of questions does not at all exemplify lack of understanding or empathy or caring for this issue. We've been, started to talk about it last year as well, the effects that might happen on the county and start thinking about the cost shift, basically, that's happening from the federal government to the counties, really bypassing the state in certain ways, although we are being asked to solve at the state level.
And I think there's a lot of desire to do that. And I know Assembly Member Banda has been a huge leader asking really important questions around, you know, what is the cost gonna be to counties and what is that gonna look like? So it's very helpful for us to hear from each of you, you know, what it's like boots on the ground to go through this and what kind of adjustments are gonna have to be made regardless of, you know, which levels of funding if we're able to get to the, I think you said $7.61 was for Sacramento County but I thought I heard 1. 9,000,000,000 and then 4. 5,000,000,000 later.
Is that 761?
Speaker 1
Okay. Okay. I heard somewhere in there at 1.9 and a 4,500,000,000.0 as well, but it sounds
Speaker 1
Yeah. Public hospital. Astronomical. Anyway, we anyway, we shake it. But, so I just wanna I wanna say thank you to all of you, and we are are you're welcome to stay for a public comment.
We'll open it up for, public comment if there's anyone in here. And, again, I would love to have your name, your organization, and if you support the budget ask or you are opposed to the budget ask.
Speaker 50
Good evening, madam chair. Jeff Neal representing Contra Costa County, which not only runs the public hospital and a single plan Medi Cal and, of course, all the other services in support of significant ask for indigent care and public hospital costs. There simply isn't possible for counties to raise enough revenue and make enough cuts to make it up on our own.
Speaker 3
it. Thank you, madam chair. Brennan McCarthy with CSEC in support of the collective budget request for implementing HR one of $1,900,000,000 in the budget year, which is inclusive of engine of care, public hospitals, county eligible workforce, and behavioral health. With those funds, counties can meet our obligations under section 17,000 and protect those other health care systems. Without them, these public safety net systems will be decimated, and it will also spill over into public safety and elections and roads and all those So
Speaker 56
Counties look forward to partnering with the legislature on some of issue.
Speaker 28
Good evening. Michelle Gibbons with the County Health Executives Association of California representing local health departments here to echo our support for the county multi year budget ask. I would also just note that in addition to indigent care, to to answer your question about what happens, I just wanna remind folks about public health and how decimated it's been. Without funding, public health will be decimated even more, and we will lack preparedness for our state.
Speaker 29
Madam chair and assemblywoman Vonta, Paul Yoder on behalf of several of our counties. I wanna pick up on what the assemblywoman said about the earthquake. Unfortunately, after earthquakes, sometimes there's tsunamis. And to go to what Tim Lutz said, the the the countywide impacts of not providing the $2,000,000,000 to the counties, it it it will decimate all of their services. Kern County is looking at losses of 20 to $30,000,000 annually and then growing their county hospital.
Speaker 58
County after all these years, keeping a county hospital open in the Southern Central Valley. Really urge that you can find that 2,000,000,000 somewhere. Thank you.
Speaker 32
Good evening. Erin Evans on behalf of the County Of Santa Clara with admiration for my colleague, miss Porras, who had to leave. We certainly request your support for funding for eligibility work, indigent care, and the other services that my county colleagues have requested. Thank you.
Speaker 36
Kelly Brooks, on behalf of the counties of Riverside, Ventura, Santa Cruz, Santa Barbara, the California Association of Public Hospitals and Health Systems, and the urban counties of California, we're here in support of the funding for, indigent care, for eligibility work, and for, behavioral health. HR one puts California's longstanding commitments to care for its most vulnerable residents at risk. Without state support now, counties cannot sustain the services in in that the that millions of Californians rely on. Thank you. Amy Costa on behalf of Alameda County.
Speaker 30
We support any efforts the legislature legislature puts forward to help with our administrative costs, related to HR one and indigent care. Thank you.
Speaker 48
Andy Liebenbaum, County of Los Angeles. We urgently request targeted allocations in the budget to shore up the foundation of the safety net for indigent care investments and eligibility investments.
Speaker 47
Sarah DeKette with the Rural County Representatives of California. Rural counties are struggling and can't assume all of the costs for h r one. We're requesting the state support reenacting some type of state county partnership with funding for antigen care as well as supporting our eligibility workers so we
Speaker 47
Nicole Wortelman on behalf of the Orange County Board of Supervisors in support of funding for indigent care, behavioral health, as well as eligibility workers.
Speaker 15
Thank you. Michelle Volgaba representing San Diego County. HR one squeezes urban counties at both sides. Tightening eligibility requirements will push more people into the county system while federal funding cuts decrease.
Speaker 18
Thank you. Good evening. Dylan Elliott on behalf of the counties of Fresno, Merced, and Placer aligning ourselves with the comments made by our previous, county colleagues. Thank you.
Speaker 54
Clifton Wilson on behalf of the counties of Humboldt, Nevada, Solano, Placer, Southern Napa. All CMSP counties in support of the county HR one will tell you your budget request. Thank you.
Speaker 1
Thank you. Alright. Seeing no other public comment, we're gonna move to our final issue, which is Medi Cal Dental issue seven. Medi Cal Dental and prop 56 supplemental payments. So we will ask those witnesses to come on up.
We've got Laura Marcus, Chief Executive Officer of Dientes Community Dental and Doctor. John Hollister, president of Tolosa Children's Dental Center.
Speaker 1
And just as a as a point of personal privilege, I've worked on this issue quite a bit and been talking to quite a few dentists. It's an issue of personal concern to me. We know that the medical dental provider payments are scheduled to be eliminated on July year. We know that there's gonna be grave harm. I think what a lot of the public doesn't know is how intricately connected dental is with health overall.
I think that's a missing piece that sometimes the public doesn't always know and sometimes our colleagues don't always know. But welcome. We'll start, I think, with Laura Marcus of Dientes. And if you're able to keep it to three minutes, we would be grateful to both of you.
Speaker 44
Yes. Of course. Thank you, chair Addis and members of My the name is Laura Marcus, and I serve as CEO of Dientes Community Dental Care in Santa Cruz County. And each year, our organization serves 18,000 patients, the majority of them Medi Cal. Before I go into why I'm here, and I apologize for my voice.
I've lost my voice today. I feel compelled to say a few things regarding the issues that have been discussed. First, I acknowledge that cuts need to be made, and there are so many important issues you're facing and so many necessary services that require state resources as evidenced by today's testimonies. But remember that seniors and trans youth need dental care too. Over and over, I've heard some of you commenting on the increased cost of the medical program, and I wanted to be clear here that so much of that increase is because of good news.
Speaker 16
The cost of medical has increased because so many more people are getting the care that they need. When I started at Dientes in 2004, we were serving just under 7,000 patients and they had an average of two visits a day, probably an exam and maybe a filling or a cleaning, but not much else. Today, after more than two decades of growth, most of that in the past decade occurring since the ACA rolled out and California's Medi Cal expansion occurred, we now serve 18,000 patients and people receive all of the care they need, comprehensive care that they need. This includes specialty care like root canals and crowns and dentures and deep cleanings, treatments that are required before giving birth or getting heart surgery or cancer treatment. Today, patients are receiving much more care than ever before.
Speaker 44
And I think most of you would say that that is the goal of California's health program. With that said, this is all going to change with the governor's proposed cuts to dental. And so I'm here to speak against the governor's plans to eliminate full scope adult dental benefits and Medi Cal for individuals with certain immigration statuses, the cuts proposed to proposition 56 Medi Cal enhanced reimbursement, and the movement of UIS patients to the fee for service payment system next year. It states that this will save the state $2,000,000,000 next year, which all sounds prudent in a tough budget year, but I want to be clear that these savings will end up costing the state more in the long run. I was leading Dientes when California eliminated adult dental benefits in 2009.
I saw firsthand what happened. People stopped seeking preventative care. Dental infections became medical emergencies. Patients showed up in hospital emergency departments with conditions that should have been treated in a dental chair months earlier. Can our hospitals, especially those in rural districts which are already facing economic hardships and some even failing, afford to manage dental infections in their emergency rooms?
I don't think so. Can our healthcare system deal with thousands of worsening cases of diabetes, heart disease, or Alzheimer's, which are all linked to dental needs? A 2025 policy analysis from the American Dental Association estimates that eliminating adult dental benefits for the UIS population alone would cost California roughly $400,000,000 over five years. This is due to increased emergency department visits, higher medical costs associated with untreated oral disease, and the loss of health care jobs and economic activity across the state. At the same time, eliminating proposition 56 funding would undermine the very progress California has spent a decade building, restoring a provider network willing to serve Medi Cal patients.
Even today, with enhanced reimbursement, access remains fragile. In my community, only one in three adults with Medi Cal are able to access a dentist. Today, Western Dental, one of the largest providers in Santa Cruz County and in the state for Medi Cal patients, is planning to close offices all over our state. Members of the Assembly, we've already lived through the consequences of eliminating adult dental benefits. We know how this story ends.
Please do not repeat the mistakes of 2009 and trade short term line item reductions for long term structural costs. I appreciate all of your time. Thank you so much, and I'm happy to answer questions after.
Speaker 59
Madam chair, member of the committee, and your dedicated staff, thank you all for being here, very long day. Thank you for giving me this opportunity. I'm Doctor. John Hollister. I currently serve as president of the board of the Tuloso Children's Dental Center.
We are the only nonprofit in San Luis Obispo County dedicated exclusively to providing dental care to underserved children. In the late 1990s, remember that date, a group of visionary community members identified the greatest unmet need in our county to be access to dental care, particularly for children covered by Medi Cal Dental. At the time, lack of access had already become a serious and growing health crisis. In response, Talosa Children's Dental Center opened its doors in 2003. Now, more than two decades later, our mission remains unchanged, improving children's oral health in San Luis Obispo County.
We've provided a dental home to thousands of children whose families would otherwise have nowhere to turn. Operating a full service, nonprofit pediatric dental practice funded largely through Medi Cal has always been financially challenging. That is why we strongly supported Proposition 56 in 2016. The long overdue reimbursement increases were essential, not only for our survival, but to allow us to expand care. And across California, more providers began accepting Medi Cal and more children gained access to critical oral health services.
Today, however, we face multiple new and very real challenges. Following the pandemic, the cost of supplies, equipment, operations has risen dramatically. Even more impactful has been the shortage of health care providers, which has driven staff costs to new heights. These pressures have made the enhanced Prop 56 reimbursements not just helpful, but essential to maintaining care. Despite these challenges, Talosa continues to serve children through our Paso Robles Clinic and is expanding access through our Dentistry at School program, bringing care directly to children who would otherwise go without.
But now proposed cuts to the Medi Cal dental program would undo this progress. Based on our twenty twenty five patient data, Talosa Children's Dental Center would experience an annual revenue loss of nearly $300,000 under the proposed fee schedule. There is no feasible combination of cost cutting or fundraising that can absorb a loss of that magnitude. Even more concerning, many private dental providers will be forced to stop accepting Medi Cal altogether. This will lead to thousands of children without access to care, leaving Telosa as one of the only remaining providers, but without the resources to handle the demand.
The result is predictable and deeply troubling. More children in pain, more untreated infections, more emergency room visits, more missed school days, and ultimately higher costs to the state. I understand the difficult budget decisions before you. I've been here most of the day. It's very serious.
Speaker 14
However, eliminating voter approved funding, reducing reimbursement rates to levels not seen since the 1990s, and placing California near the bottom nationally in Medicaid dental reimbursement is not just unsustainable, it's unacceptable. As someone who practiced dentistry in California for over forty years and who has worked over twenty years to bring dental care to our underserved children, I urge you to maintain Medi Cal dental funding at a sustainable level. The alternative is a future where vulnerable children suffer unnecessarily, where preventable dental disease becomes a barrier to health, confidence, and success. Please do the right thing for the smiles, health, and futures of California's children.
Speaker 1
Thank you. Thank you. And I was so excited to hear from two people from my district that I completely skipped the LAO, who is gonna give us an overview of prop fifty six and its history. And maybe if you can do it just in your briefest of summaries.
Speaker 15
I can. Karina Hendren, LAO. So as the chair noted, we are providing a brief overview of Proposition 56. Voters passed Prop 56 in 2016. It increases taxes on tobacco products and allocates most of that revenue to Medi Cal.
The measure states that the Medi Cal funding is intended to improve timely access to care, limit geographic shortages of care, and improve quality of care. And since the twenty eighteen-nineteen budget agreement, the state has dedicated most of these funds to various provider payment increases. Prop 56 raises a key fiscal consideration in terms of Medi Cal. The figure on page 41 of your agenda illustrates this issue. This is the figure on page 41.
This shows that the amount of prop 56 revenues that are allocated to Medi Cal has declined over time, and this is because, tobacco purchases have decreased over time. The reduction in tobacco consumption has been a public health objective of the state. At the same time, it means that tax revenues for Medi Cal provider payments have declined. To manage this challenge, the state has structured provider payments as supplemental or limited term. This strategy gives a state more flexibility to respond to changing revenues over time as well as changes in the state's fiscal condition.
Though it's not required by prop 56, the legislature has taken actions to continue supporting provider rate increases even as revenues have declined. For example, in 2223, the state made some of the, provider payments ongoing and permanently shifted them to the general fund. In twenty four-twenty five, the state made physician rate increases ongoing as part of its MCO tax spending plan. The state has also backfilled decreasing prop 56 funding for remaining supplemental payments in recent years. But on the other hand, the state has also ended support for certain supplemental payments established under prop 56.
So bringing us to the 2526 budget and dental payments specifically, The supplemental increase for dental services is one of the larger items under Prop 56 originally created in twenty seventeen-eighteen. The aim of this payment was to expand access to dental services for Medi Cal beneficiaries. The twenty five-twenty six enacted budget eliminated these supplemental payments beginning in twenty six-twenty seven as a budget solution. This solution basically reduces the general fund backfill for Prop 56 supported initiatives. This was part of a larger package of solutions, as many of you recall, and this saves about $300,000,000 in General Fund annually.
But we do note there is some uncertainty around this budget solution, namely that the reduction is subject to federal approval. And if the legislature is concerned about this federal approval, it could consider directing DHCS to report back in the fall after it has submitted the request to the federal government.
Speaker 1
Thank you so much. We'll move any questions, assembly member? If not, I have a couple. But you go ahead. Oh my gosh.
Speaker 4
Thank you, chair, for being a warrior queen. I just I wanted to kind of get at the the reality that was raised in our analysis and in the LAO report that 50% of responding Medi Cal dental providers would likely leave the program entirely if if the if the if the $300,000,000 kind of general fund obligation was for supplemental payments was cut. That strikes me as essentially a complete annihilation of the infrastructure in the short term and the long term for our dental care over time. Can you all speak to that as providers?
Speaker 59
But it it it will. It's it's in our own county, you know, there are very few providers. And, you know, I've spoken to a couple of them, and and, you know, they've said that they will cut back or drop completely. And so all those kids will have nowhere to go.
Speaker 44
And and that was the case prior to the supplemental payments being made, right, as there was a very, very limited access in our counties or communities. And I think not only is that going to hit the private providers, Prop 56, the other cuts are going to be hitting the public providers, and then you're going to have this complete decimation of the health safety net system for for dental at least, which is going to impact the hospitals. It's going to impact the rest of the health care system. There's just not going to be anybody there to serve adults or kids. Mhmm.
We're already talking about cutting two two clinics if the other cuts go into effect. So the UIS is going to affect us. Nine thousand adults in our community are losing adult dental in July. And then in addition to that, of course, you know, the additional cuts that will be coming PPS to fee for service. And then in January, the the reenrollment and other eliminations are just hitting us from every side, you know, death by a million cuts.
Yeah.
Speaker 4
And then just this other issue around raised very aptly in the analysis, whether the general fund savings are worth the total reduction in provider revenue. Can I don't know? We you didn't have DHCS on that. We didn't
Speaker 1
ask DHCS to testify, but you've generously waited. So if you don't mind, I think the assembly member has maybe a couple questions on this, and I may as well. Thank you.
Speaker 4
The the saying, I don't know, you know, spite your what is that saying? Cut off your nose to spite your face.
Speaker 4
your nose to spite your face. Pennywise pound foolish. I think all of those are kind of what we are we are getting at here. How how would we lose provider revenue if we were to be able to think about making this $300,000,000 cut? It's a federal match.
Is that what Yeah.
Speaker 15
Are you asking about the federal match. Yeah. So so it's about 331,000,000 general fund that is eliminated as part of the 2025 budget act, and then that is drawn we draw down FFP for that. So I think it's a close to almost a more than fifty fifty match, so closer to 800,000,000 total fund impact.
Speaker 15
Yeah. That's how all Medi Cal rates work exactly. How much would we I believe it's noted in your agenda. I think it's about 800,000,000 total funds that would be lost.
Speaker 15
To save 300,000,000 general fund. This as you may recall, this was a solution as part of the general fund significant shortfall facing the budget in 2025. And so this was enacted to save 300,000,000 general fund.
Speaker 4
Right. So to save $300,000,000, we would lose $800,000,000 and completely destroy our dental health care infrastructure in the process. That's not a question to be responded to. That's just my observation at my midnight observation. Sorry.
It's not that late, worth it.
Speaker 1
And I and I but I I think, yes, that solution was happened in 2526. I think there were a lot of folks who had an expectation that we would have been working this year to find a different way to address this. So I guess one question is, has DHCS, relooked at this at all? I know I certainly know, dentists out there who have thought, well, we put these delays in place hoping that, you know, come July year, some of these things wouldn't be happening. Has DHCS looked at looked at anything to prevent the loss of dental coverage for so many people.
Speaker 15
So this was part of the 2025 budget act in terms of, items to address the state general fund shortfall, and the administration maintains that there's still general fund shortfalls in the out years, and so there's no change to this proposal. Proposal.
Speaker 1
And then can you talk about the, and it's I'm gonna say it probably wrong because it looks complicated on paper, but the gist is what the LAO said is that federal approval is needed to be able to eliminate this funding and and where you're at with that federal approval and the expectation of being able to get that approval.
Speaker 15
So the department must complete a federally required rate reduction or a rate restructuring analysis, and we must submit this to CMS by the September, so the last day of the quarter in which the the change goes into effect. We're attempting to complete this sooner so that we have information to share, before September. And this analysis reviews public feedback, compares dental rates to those of other California payers, and then presents kind of this information to CMS. And we're happy to share it, obviously, before we submit it to CMS, but this is required under federal law.
Speaker 1
And do you believe I mean, it sounds like we could be in a pickle. I don't know another way to say this. If the federal government doesn't approve this, then what?
Speaker 1
Okay. And I guess my last question for DHCS on this is earlier on another issue we talked about the cost shift that happens when you cut preventative care and how expensive it becomes to the entire system. And so if DHCS has calculated out the cost shift of cutting so much dental care to the rest of, the population.
Speaker 15
We have not conducted that analysis. I would note emergency dental services would still be covered, but the preventive services would would potentially be impacted with a a rate reduction.
Speaker 44
But I encourage you to to look at the, American Dental Association, Health Policy Institute, policy brief they published last April, which actually highlights what had happened in California in 2009 and the cost impacts to California based on that cut to eliminate adult dental. And I have, I think, provided it to I think I've provided it to Patrick, but I'm happy to provide copies also. And it does identify that California could expect to lose $2,000,000,000 over five years in associated costs because of all of the, you know, effects of losing access to oral health care.
Speaker 1
Yeah. I mean, in my estimation, that's one of the the easier things that we could do to be on the preventative side.
Speaker 44
Even just cutting some treatment, you know? I mean, there's ways to save, and I think that that's something that the dental community would be happy to participate with DHDS to talk about, you know, cut some things but not everything because we still can maintain good oral health by by providing some things.
Speaker 1
Yeah. Yeah. Well, I've been to both your clinics. Know the kind of services that you provide and very much appreciate that. And we have certainly been working as a budget subcommittee to try to figure this piece out.
Would invite partnership, obviously from the administration and from DHCS on, how to not cut dental care any, any further and how to ratchet back some of the things that were done last year knowing, you know, one, primarily how important it is to kids and families, but two, understanding the cost shift that we talked about earlier that we're, you know, in many ways, to assembly member Bonta's point, you know, cut off your nose to sweat your face or petty wise, pound foolish. One way or another, these costs are gonna whether it's loss of federal dollars or cutting preventative care that creates more cost in the system that we're all trying to reduce cost, seems like going in the wrong direction for something that's gonna have a relatively small effect on the overall budget when we think about the magnitude of the overall budget. So I I really appreciate you coming and staying all day, taking the time to come up all the way from San Luis Obispo. I know what that is like. We have a couple people here that do that.
So, yeah, very much appreciate it. Thanks so much for the opportunity. Oh, one other question from the assembly member.
Speaker 4
Just a it's a a good thing to keep us focused for our providers. I think people treat your mouth like it's something separate from the rest of your body. Exactly. What happens when we don't actually have good oral care? Oh my gosh.
I had a dental carry that went untreated. Because
Speaker 59
our dental center takes care of children. I look at the cost of lost school time, lost self esteem, loss of future employment opportunities if they don't have a good smile.
Speaker 44
have a dental care that's untreated, it could kill you. It literally the infection. There's there was a case, and it was now a dozen years ago, I think it was in Vermont, where a young child didn't get served, he couldn't access any dental care and his infection in his tooth went to his brain and he died. And that's when Bernie Sanders picked up, you know, really the, I don't know, the support of oral health care as a necessary part of your overall health. But it also affects your it can cause it can exacerbate dementia.
I'm tired. I have to say
Speaker 44
even talk anymore. It can exacerbate dementia, heart disease, diabetes, so many, so many parts, inflammation in your body in general. So it's really, really an important part of your overall health.
Speaker 59
I think dentistry has done a wonderful job in the prevention mode. We've we've we've really tried to, you know, stop the disease and treat it when it's, you know, early and when it's cheaper to treat. And, you know, these cuts could potentially eliminate all of that so these little things will become big things. Mhmm. And big things and a little tooth is not a good thing.
Speaker 1
Mhmm. That's a lot. Yeah. Thank you. Thank you.
Well, you're welcome to stay for public comment. You don't have to. I know you're tired, but
Speaker 1
you so invite public comment. And, looks like we have a number of people, so I'll try to, clarify. And maybe the first person up could just set a good example. So we we we how horrible this is. But if you could say your name, your organization, and what you support or don't support, but we do understand the terrible impacts.
Speaker 30
Absolutely. Amy Costa here on behalf of Western Dental, the largest provider of dental services for Medi Cal patients. We strongly oppose the scheduled cut for these rates.
Speaker 53
Thank you, madam chair members. Eric Dowdy with the California Dental Association. Appreciate so much the comments made today. I really hoping that we could find another solution and urge you to reject the cuts to Prop 56. Thank you.
Speaker 26
Hello again, madam chair and members. Jessica Moran of Capital Advocacy on behalf of the Association of Dental Service Organizations and the California Association of Health Facilities, urge the legislature to reject the proposed elimination of Prop 56 dental payments. Thank you.
Speaker 16
Hello. Deborah Payne. I'm the founding member of the Sacramento County Medi Cal Dental Advisory Committee since 2008. I'm also oral health consultant, First Five Sacramento. Please keep Prop 56.
We've made so much progress. Please let's not go backwards.
Speaker 51
Good evening. Thank you guys so much for troopers. I'm Catherine Eager with Vitamin Group on behalf of our client, Dentiquest. We respectfully urge the committee to reverse the proposed proposition 56 cuts to dental providers. Dentiquest I'll be really fast.
Dentiquest is one of the largest the nation's largest dental benefits administrators in Medicaid and a key partner in delivering DentiCal services here in California. Given the revenue that the state has received above January projections, we strongly urge the committee to restore the funding. Thank you.
Speaker 6
Thank you, madam chair, committee members. I'm doctor Sam Seiden. I'm a pediatric anesthesiologist that practices mobile anesthesia in dental offices in the greater Sacramento area. And I wanna put a face to the names of the kids we're talking about. I know it's not a surprise.
Speaker 60
This is the magnitude of dental work that these kids need under general anesthesia that we do five times a day, five days a week with no end of the waiting list in sight. This is a kid like the one that we were addressing with the dentist that has a large abscess on his cheek that is in real risk of becoming a life threatening infection within a day if it was not treated the day it was treated. Please keep this funding for these children. It's we can do it. We must do it.
This is California's humanity. Please, I ask you. Thank you.
Speaker 21
I know you've all been here a long time, and I would appreciate my two minutes if possible. Sir,
Speaker 21
name special Goodis. I work in a Diamond Springs Dental Center in a clinic in El Dorado. Very, very impacted with, indigent people. We get referrals from And then tribal health, El Dorado
Speaker 1
Community Health. Your request. And then your and then your request is your you want us to reject the proposal. You support the proposal. What?
Your position on the issue, sir.
Speaker 21
I'm a dentist. I'm a dentist there. Okay? We have a bilingual dental clinic. He told us Scotland.
So schedule of opine clarify
Speaker 8
I am asking that proposition 56 funding not be rescinded. Right now, just for you an example, 38 dot $39 Thank filling that we get in 1990 pays a private practice. Charges 234
Speaker 54
Thank you very much, madam chair and members. Chris Scroggin with Capital Abstee on behalf of Big Smiles and Children's Choice Dental Care, urging the legislature to reject the proposed custom proposition 56 funding for dental care. Thank you.
Speaker 5
Allison Barnett with Platinum Advisors on behalf of Liberty Dental Medi Cal dental plan and encourage you to maintain this funding. Thank you. Thank you.
Speaker 46
Jennifer Tannehill with Aaron Reed and Associates on behalf of the California Dental Hygienists Association. Want to align our comments with those of the Dental Association and, just comment that, yeah, please re maintain the Prop 56 funding. It will severely impact the alternative practice hygienists that are out there trying to serve these patients every day. Thank you. Thank you.
Speaker 30
Kelly Brooks on behalf of UC Health urging you to maintain funding, for the prop 60 prop
Speaker 30
my god. It is the end of the day. Props 56 funding for dental. Thank you. Thank you.
Speaker 12
Jim Wood with California Strategies here on behalf of Blue Cloud Surgery Centers, in a coalition of 15 dental surgery centers who see over 40,000 patients a year who will end up in emergency rooms for pain medication and antibiotics and no definitive treatment. This is surgery, not preventive care. They will have nowhere else to go. I'm also representing, speaking in behalf of the California Society of Anesthesiologists and KOS Dental, which has a group of pediatric dental offices in Southern California, all asking to reverse the funding post funding cuts by the administration. Thank you.
Speaker 26
This is not the first time I had to speak after doctor Wood. Chad Mays Chad Mays representing the California Society of Pediatric Dentistry. You heard a lot tonight. There is so much more to be able to hear, but we just wanna urge you. I think you've got a big a good sense of all this, but dental care is not just dental care.
Speaker 62
It is health care. It matters especially for for kids. And so we ask that you reinstate the prop 56 funds going into this next fiscal year. Thank you.
Speaker 49
Good evening. Omar Altsami, California Panethnic Health Network, requesting the rejection of the governor's proposal and prioritizing any funding that comes through for the 1,000,000 Californians who are expected
Speaker 50
Thank you so much for all all the issues you heard today. You guys are wonderful. Like, you're thanking us, but thank you guys for everything that you do. I'm I'm Thomas Lovinger. I'm representing a coalition of nursing home dental providers.
Speaker 63
Our bedside services provide critical dental access to nursing home residents whose medical conditions often make visiting the dentist impossible. And when they're able to, dental offices are rarely equipped to handle their needs. So our bedside service is essential for this population, and we urge you to reinstate Prop fifty six Dental and make it permanent.
Speaker 15
Thank you for your long evening. This is I am Tara Good Young from PDI Surgery Center, treated 32,000 children who have required extensive care. I do urge you to oppose the reduction of prop 56 To answer a couple of your questions, each emergency visit, $2,400 for a child that has to go there. That gets shifted to the medical side. Forty percent of them are seen a second time because it's transient care.
If they lose teeth, we trap them impossibly into a cycle of poverty. Four Thank you. Times likely to be employed if you have damaged teeth.
Speaker 1
Thank you. Seeing no no other public comment, we are gonna, move to public comment from items not on the agenda. If there's anyone that has public comment for items not on the agenda. I don't know how that could be at this point, but but maybe. Seeing no I'm just gonna give him a sec to there's nobody out there.
Okay. Seeing no other public comment, we'll adjourn, and thank you so much for your time today.
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