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California State Budget - Final Budget Outcomes

August 28, 2011
Updated May 20, 2011
Updated June 23, 2011
Updated July 5, 2011
Updated July 18, 2011

Prepared by: Legislation & Public Information Unit,
Disability Rights California

What’s happened with the state budget[1]

Governor Jerry Brown released his budget for the 2011-12 fiscal year on January 10, 2011. In January 2011, the projected budget gap was over $25 billion dollars. This included a deficit for 2010-11 of $8.2 billion and a deficit for July 1, 2011-June 30, 2012 of $17.2 billion. To address the budget gap, the Governor proposed $12.8 billion in cuts, $12 billion in revenue extensions and changes, $1.9 billion in other "budget solutions" and a $1 billion reserve. His goal was to complete the budget process by March 2011.

In February 2011, the Governor cancelled the sale of some state buildings and the budget gap grew to $26.6 billion. In March 2011, the Legislature passed the budget and the Governor signed $13.4 billion in budget solutions - of which $11 billion were cuts, mostly to health and human services programs.

The May Revise projected a budget gap of $10.8 billion, of which $9.6 billion was deficit and $1.2 billion was a desired reserve. The May Revise also updated revenue expectations with $2.8 billion more received for 2010-11 and $3.5 billion more for 2011-2012 than was projected. Due to pending litigation about the use of California Children and Families First Act funds (also known as Proposition 10, funded by a tax on tobacco), approximately $1 billion could not be used to fund Medi-Cal, and therefore, was not included as part of the budget solutions.

On June 15, 2011, the Legislature passed an alternative budget that did not include the Governors tax extension plan, but instead included fees, deferrals and borrowing to balance the budget. Governor Brown vetoed it. The legislature produced another budget, without tax extensions and the Vehicle Licensing Fee (VLF) extension, which assumed the State's revenues will increase by $4 billion this fiscal year. The Governor signed a budget on June 30, 2011. If the increased revenue does not materialize, additional “trigger” cuts are planned to go into effect in January 2012. Trigger cuts are automatic reductions that don't require further approval from either the legislature or the governor. If, by January 2012, the Department of Finance determines the new revenues of $4 billion have not been reached, the trigger cuts will occur, including $200 million in health and human services. The health and human services trigger cuts include across-the-board reductions to Developmental Services and In Home Supportive Services, and a 15% rate cut to some Medi-Cal managed care health plans. While not an all inclusive list, below are some of the key proposals in the budget that impact people with disabilities. For additional information on the budget, please continue to check our website at: http://www.disabilityrightsca.org

Additionally, we suggest that you look at the following links:

Ballot initiative to maintain current tax rates

Governor Brown proposed a ballot initiative to maintain the state's current tax rates for an additional five years and to scale back some of the corporate tax breaks. The May Revise proposal pushed to extend current tax rates. The May Revise also outlined the cuts that would have to be made in a "cuts only" budget, including additional cuts to education, CalWORKS, Medi-Cal, IHSS, and other parts of the safety net. The tax extensions were not part of the adopted budget and expired on June 30, 2011. Instead trigger cuts were adopted that could result in $200 million in health and human services reductions. The trigger cuts are described above.

Governor intends to move forward by petition, gathering sufficient signatures to qualify ballot initiatives to raise taxes. Ballot initiatives would be part of the November 2012 statewide general election, as new revenues are needed to solve the ongoing budget shortfall.

Realignment[2]

The Governor's January budget proposed to shift or realign certain programs between the state and local counties. In March, the Budget Conference Committee adopted the Governor’s proposed realignment framework along with initial implementation language. The Governor's May Revise budget continued to call for a major realignment of public safety programs to the counties. These program costs would have been funded with proceeds from extending taxes for five years. In January, the Governor proposed to use realignment revenues to fund AB 3632 services, which have historically been provided by counties. However, in the May Revise, Brown proposed that schools be responsible for student mental health costs. The final budget contained funding for essentially all aspects of the Governor’s realignment plan – both the public safety and health and human services components. The budget will dedicate 1.06% of the state sales tax to a special fund to support the transfer of services to counties. Realigned programs include EPSDT, Medi-Cal Specialty Mental Health Managed Care, and Mental Health 1991 Realignment revenue.

The realignment of the mental health EPSDT and Managed Care Programs would occur in FY 12/13, with the new sales tax revenue permanently dedicated to these programs. As already noted, ballot initiatives would be part of the November 2012 statewide general election because new revenues are needed to solve the ongoing budget shortfall.

Department-Issue

January Proposal Description

Outcome as of March 2011

May Revise

Proposal Description

May Revise

Outcome

Final

Outcome

Department of Developmental Services (DDS)

The 2011-12 Budget proposed to reduce an additional $750 million in General Fund (GF) system-wide.

Legislature instead adopted a system-wide reduction of $527.2 million GF to Developmental Services through a series of reductions & adjustments to community-based services as well as State Developmental Centers.

 

 

 

 

DDS-Porterville Developmental Center

Pursue additional federal funds for treatment services provided to individuals residing in the secure facility at Porterville Developmental Center.

The Administration anticipated $10 million in General Fund savings from this action in 2011-12. The Legislature estimated that a $13 million (GF) savings is achievable (additional savings of $3 million because more individuals would be Medi-Cal eligible than originally estimated).

 

Legislature adopted trailer bill language to implement this proposal.

Approved in the final budget.

 

DDS-Reductions in Developmental Center (DC) expenditures

Various actions including population decreases, program consolidations, & other related items were proposed for a $36.8 million savings.

 

Proposed increase of $3.6 million for DCs due to delays in achieving the original $15 million reduction. Will be achieved over a 2-year period by including consolidations, reductions in operating expenses & a cap on the # of beds at the Porterville DC to 230 - currently 297 beds.

Legislature adopted the Governor’s proposal.

Approved May Revise Proposal in the final budget.

DDS-Reductions in Agnews Community Placement Staff

 

Since Agnews closed - an additional savings of $1.5 million in GF was accounted for in the budget proposal as of March 2011. Legislature adopted this proposal.

 

 

 

Approved in the final budget.

DDS- Regional Center (RC) & Service Provider Payment Reductions

The 2010 Budget Act had a 4.25% reduction to RC & service provider payments –this is scheduled to sunset on 6/30/11. Governor proposed to extend it for 1 year resulting in $91.5 million savings in 2011-12.

 

The Legislature adopted the Governor’s proposal to extend it for another year, resulting in state savings of $91.5 million in 2011-12.

 

 

 

 

 

 

Approved in the final budget.

DDS- Proposition 10 Funding (Regional Centers)

In 2010-11 the RC budget included $50 million in reimbursement funding from the California Children & Families First Act (Prop 10). Funds are used to provide services to consumers from birth to age 5. Proposal in Jan is to continue this funding in 2011-12, resulting in a savings of $50 million.

 

The Legislature adopted the Governor’s proposal to continue this funding in 2011-12, a state savings of $50 million.

 

 

 

Approved in the final budget.

DDS- Accountability & Transparency Measures (Regional Centers)

Sets parameters on state funds for administrative expenditures of RCs & service providers; increases auditing & disclosure requirements, implemented through a trailer bill package (TBP). Areas in TBP include: RC contracts for direct service, regional renter dispute resolution & third-party liability, RC audits, regional renter conflicts of interest, & RC accountability & transparency.

 

The Legislature adopted this proposal for a reduction of $109.7 million.

 

 

Approved in the final budget.

DDS- Increase Federal Funds (Regional Centers)

Proposal focused on federal funding increases by: (1) expanding pending federal 1915(i) State Plan Amendment to include additional consumers & related expenditures consistent with federal health care reform; & (2) maximizing use of federal "Money Follows the Person" funding for individuals placed out of institutions.

This proposal was adopted by the Legislature & saves $65 million in GF in 2011-12. The Legislature also made fund adjustments by funding large residential facilities with $3 million in additional federal funds instead of state funds.

 

 

Approved in the final budget.

DDS- Implement Statewide Purchase of Service (POS) “Best Practices” (Regional Centers)

Proposal reduces community budget by $174 million in GF. To achieve reductions in this area, DDS will get input from committees to help determine what those standards should be. 

When developing POS Best Practices, prior reductions in the service area, as well as impact on consumers, families & providers will be considered. Exceptions will be put in place to ensure the health & safety of consumers & avoid the risk of out of home placement or institutionalization. The Administration will report back to the Legislature for the details regarding implementation.

The Legislature adopted a reduction in $174 million in general fund to the community budget. The reduction will be achieved through the development of POS Best Practices.

-  Increasing federal funds for RC Purchased Consumer Services through the use of new federal funds.

-  Decreasing DDS Headquarters Contracts such as holding Clients’ Rights Advocacy Contract’s current year funding level of $5.295 million for a savings of $250,000 ($200,000 GF), reducing the Quality Assessment project to $3.235 million for a savings of $530,000 ($424,000 GF), & maintaining Office of Administrative Hearings’ funding of $3.15 million.

 

-  Reductions & Efficiency in RC Operations Funding by implementation of provider electronic billing; elimination of funding for one-time costs associated with office relocations or modifications; elimination of RC staff positions for self directed services staffing; unallocated reduction to the operations budget.

 

-  Reducing Community Placement Plan Funding by $10 million.

 

-  Rate Equity & Negotiated Rate Control - A 4.25% rate reduction to providers was adopted in 2009-10 that has been extended because of the state budget crisis. There is an exemption to this rate reduction when the service is “usual & customary.” For example, you cannot apply a rate reduction to a yellow taxi, which has standard rates. Some providers who provide specialized services to people with developmental services were billing under this exemption. Proposal clarifies exemption to the 4.25% payment reductions does not apply to providers specializing in services to persons with developmental disabilities. Trailer bill will clarify the exemption by listing services that are not exempted from this reduction.

 

-  Annual Family Program Fee : a program fee in the amount of $150 or $200, depending on family income.

 

-  Maintaining the Consumer’s Home of Choice - Mixed Payment Rates in Residential Facilities with Alternative Residential Model (ARM) Rates allow a lower payment rate for a consumer whose needs have changed but want to maintain their residency in the home.

-  Maximizing Utilization of Generic Resources Education services for consumers 18-22 who remain eligible for services through the public school system, by requiring consumers to use the generic education resources in lieu of purchasing day program, work/employment, independent living, & associated transportation services on their behalf.

 

-  Supported Living Services (SLS) proposes two concepts: Prorated payment for shared tasks & an independent needs assessment will be required for consumers who have SLS costs that exceed 125% of their annual statewide average cost of providing SLS.

 

-  Individual Choice Day Services proposal allows alternatives to traditional day programs that promote choice & flexibility in delivery.

 

-  Maximizing Resources for Behavioral Services allows regional centers to contract with qualified paraprofessionals acting under the supervision of a trained professional in behavioral intervention.

 

-  Transfer Reduced Scope Prevention Program to the Family Resource Centers. The Prevention Program was established in October 2009 after changes in eligibility to achieve savings in the Early Start Program. It provides intake, assessment, case management, & referral to generic agencies for consumers 0 to 2 years of age who are not eligible for Early Start services but who are at risk for developmental delay. Proposal would decrease the required functions of the Prevention Program to information, resource, outreach, & referral; transfer responsibility for these functions to Family Resource Centers; & reduce funding to $4.5 million for 2011-12 & to only $2 million in 2012-13.

 

-  Enhancing Community Integration & Participation to maximize consumer community integration & to address barriers to the most integrated transportation services, a Transportation Access Plan would be developed at the time of IPP for consumers the RC is purchasing specialized transportation services or vendored transportation services for. It would address services needed to assist in developing skills to access the most inclusive transportation option that can meet the consumer’s needs.

 

 

Legislature adopted trailer bill language to implement proposals in column 4.

Approved in the final budget.

DDS- Early Start & Prevention Program (Regional Centers)

Through the $334 million (GF) reductions enacted in 2009, several changes were done to the Early Start Program, including narrowing program eligibility - Toddlers aged 24 months need a delay of 50% or greater in 1 developmental area or 33% or greater in 2 areas to enter into Early Start.

 

The Legislature reduced this program by $8 million in March 2011.

 

 

 

Approved in the final budget.

Department of Health Care Services (DHCS)- Medi-Cal limits on use of service (adults)

Annual individual cost caps on durable medical equipment, incontinence supplies, urological supplies, & wound care; a limit on prescriptions (except life-saving drugs) to six per month; & a “hard cap” of 10 on doctor visits.

Many proposals were rejected. Approved are: A yearly dollar cap on hearing aids of $1,510, a “soft cap” of 7 doctor visits/year, unless additional are medically necessary; & elimination of coverage for otc cough & cold meds & nutritional supplements -except for tube feedings.

 

 

Approved in the final budget.

DHCS- Medi-Cal Share of Cost (adults)

Proposal for $5 co-pays on physician, clinic, dental, & pharmacy services ($3 on lower cost preferred drugs).

Includes: $50 co-pay on ER services, $100/day & $200 max. co-pay for hospital stays. All beneficiaries would be subject to the co-payments. Changes take effect on October 1, 2011 – except dental, which takes effect on May 1, 2011.

Legislature approved co-pays. All adult beneficiaries would be subject to the co-payments. These changes would take effect on October 1, 2011.

These proposals require federal approval & beneficiary & provider notification.

 

 

Approved in the final budget.

DHCS- Medi-Cal Managed Care

 

 

Proposal to limit ability to change plans within Medi-Cal managed care to once per year.

Rejected by the Legislature.

Not in the final budget.

DHCS- Adult Day Health Care (ADHC)

Elimination of ADHC.

Legislature voted to eliminate ADHC & provide $85 million in 2011-12 to transition consumers to alternative Medi-Cal services. Alternatives are not specified & there is no timeline. A new program will be created through a federal Medicaid waiver for people meeting high medical acuity standards & are at risk for institution. The program is designed to immediately transition people meeting standards from ADHC to Keeping Adults Free from Institutions (KAFI)[3]

 

 

Provides $25 million in 2011-12 to assist beneficiaries currently receiving ADHC services to transition to other Medi-Cal services. The January budget proposal originally provided $85 million for transition. The May Revision does not direct the state to apply for a waiver & provides no funding for the KAFI program.

AB 96 (ADHC trailer bill) authorizes the state to submit an application to the Centers for Medicare & Medicaid Services (CMS) for a redesigned ADHC Program. AB 96 was approved & held in the Legislature (not sent to Governor).

The budget bill that had $85 million for this purpose & to pay for transition services was vetoed. There is currently no funding.

The final budget approved the Governor’s elimination of Adult Day Health Care Services and provided $85 million (General Fund) to temporarily transition existing ADHC enrollees to other Medi-Cal appropriate services. The Governor vetoed budget bill language stating the Legislature’s intent to craft legislation to use a federal Waiver program. The immediate transition of the program was subsequently delayed by the Department of Healthcare Services until Dec 1, 2011. The Department plans to shift around 90% of ADHC clients to managed care.

 

DHCS- Reduced Medi-Cal Provider Payments by 10 Percent

Reduce provider payments by 10% for physicians, pharmacy, clinics, med-transportation, home health, certain hospitals, LTC & nursing facilities.

The Legislature approved this proposal. This proposal will require federal approval.

 

 

 

Approved in the final budget.

DHCS- Use Proposition 10 Reserves to Fund Health Services (Medi-Cal)

Use Proposition 10 reserves to fund health services.

Legislature approved using $1 billion in Prop 10 funds (est. at $2 billion in 2009) to fund Medi-Cal services for children through age five. Requires voter approval.

An increase of $1 billion in 2011-12 to reflect legal challenges brought against the state’s use of Proposition 10 funds for the Medi-Cal program.

Legislature approved the May Revise.

May Revise proposal was in the final budget.

Managed Risk Medical Insurance Board (MRMIB)- Healthy Families Program Shift

 

 

Effective January 1, 2012, all children in the Healthy Families Program will be transitioned to the Medi-Cal Program; a savings of $31.2 million GF in 2011-12, subject to federal approval. Federal law allows for full-scope Medicaid (Medi-Cal) coverage for this population (100% of poverty to 250% of poverty). Benefits are eligible for enhanced federal funding of 65%. If possible, transitioned children will be enrolled into Medi-Cal Managed Care. Medi-Cal Fee-for-Service will be provided in areas where managed care is not available.

Not adopted by the Legislature

Not in the final budget

 

MRMIB- Healthy Families Program Vision Benefit

Eliminate benefit. This service provides testing eye refractions to determine need for corrective lenses & injury care.

The Legislature rejected proposal to eliminate vision benefit.

 

 

Adopted cost containment measures for vision services to achieve $3.3 million in General Fund savings in 2011-12.

MRMIB- Healthy Families Program Premium Increases

Increase premiums. Income levels -150 to 200[4] percent of poverty: increase by $14 per child (current $16 increases to $30). Max. premium limit for family with 3+children will increase by $42 (current $48 increases to $90).

- 200 to 250[5] percent of poverty: increase by $18 per child (current $24 increases to $42). Max. premium limit for family with 3+ children will increase by $54 (current $72 increases to $126).

The Legislature adopted increased monthly premiums for Health Families, affecting approximately 565,000 children, to take effect on June 1, 2011.

Families with incomes under 150 percent of poverty will not have any increases.

 

 

Approved in the final budget.

MRMIB- Healthy Families Program Increase in Co-Payments

Increase in co-payments. Healthy Families had co-payments that covered doctors' visits ($10), prescriptions ($15 for brand name, & $10 for generic), & emergency room visits ($15).

Beneficiaries were not denied service for inability to pay. An annual co-payment maximum of $250 per family also existed.

The Legislature approved:
- An increase in co-payments for emergency room visits from $15 to $50.
- A new in-hospital stay co-pay of $100/day, with a max of $200. Previously, there was no co-pay for hospital stays.

Changes take effect October 1, 2011 after appropriate provider & beneficiary notification.

 

 

Approved in the final budget.

Department of Aging

Elimination of MSSP[6].

The Legislature rejected to eliminate; instead they approved to cut funds by $2.5 million (or 13%).

 

 

Adopted the March outcome in the final budget.

Department of Social Services (DSS)-CalWORKS

The proposed changes to CalWORKs were estimated to reduce the 2011-12 caseload projection to 458,000 families, a 21.3-percent decrease from the 2010-11 estimates.

Approved & signed by the Governor in March: $102.6 million in time-on-aid reductions for adults cut from 60 months to 48 months of eligibility. $314.3 million from an 8% across-the-board grant cut.

No new proposals that directly impact clients such as grant cuts, time limits or other program changes in CalWORKs. However, the May Revise continues to rely on savings from the unprecedented cuts to public benefit programs signed into law earlier this year.

 

 

Adopted the March outcome in the final budget.

DSS- Establish Time Limit of 48 Months (CalWORKS)

Limit families to a 48-month time limit for CalWorks, down from the current 60 month limit.

The Legislature approved this proposal. After 48 months on aid (applied retroactively) all families would lose assistance unless:

--They meet a federal time limit exemption such as the parent being on SSI, the parent is caring for a family member with a disability, or is a teen parent who is not head of household; or--They are meeting work participation requirements. Approximately 115,000 families, including 230,000 children, would lose eligibility for CalWORKs due to this change.

 

 

Adopted the March outcome in the final budget.

DSS- Reduce CalWORKS grants

To change the maximum monthly grant for a family of three from $694 to $638 (an 8% reduction), effective June 1, 2011.

 

The Legislature approved this proposal.

 

 

Adopted the March outcome in the final budget.

DSS- CalWORKs Child Care & Development Program[7]

 

 

Estimates net decrease of $123.5 million for CalWORKs Stages 2 & 3 child care due to a “significant decline” in the Stage 3 caseload (occurred after former Gov. Schwarzenegger vetoed Stage 3 funding effective November 1, 2010). Stage 3 enrollment declined despite the state subsequently restoring program funds (child care for working families successfully transitioned off CalWORKs).

Legislature adopted the proposal.

Adopted in final budget.

DSS- Eliminate services for 11 & 12-year olds (CalWORKS)

 

Reduces by $34 million CalWORKs Stage 1 (administered by DSS, savings reflected in that section) related to the elimination of this program.

Legislature approved proposal to eliminate Calworks Child Care for 11 & 12 yr olds, except children with disabilities & whose parents work non-traditional hours.

 

 

 

Rescinds the March Agreement.

DSS- Restore Stage 3 Childcare

Restore Stage 3 child care in April but with new cost sharing provisions for families who are in higher cost child care programs. The proposal did not address what families will do until April.

The Legislature approved the Governor’s proposal to restore Stage 3 child care but with new cost sharing provisions for families who are in higher cost child care programs.

 

 

 

Approved the March outcome in the final budget.

DSS-SSI/SSP[8]

Reduce maximum monthly SSI/SSP grant for individuals from $845 to $830 – minimum allowed by federal law – effective June 1, 2011 for savings of $14.7 million in 2010-11 & $177.3 million in 2011-12.

The Legislature approved the Governor’s proposal. The grant for couples is already at the minimum level permitted by federal law & therefore the state cannot cut it further.

 

 

Adopted the March outcome in the final budget.

California Department of Education (CDE)- Special Education[9]

Reduce Proposition 98 funding for special education.

Legislature approved a reduction in ongoing Prop 98 funding for special education by $13.1 million, but backfills it with equal amount through other Prop 98 savings.

An increase of $399,000 for special education caseload growth.

Provides increase of $221.8 million Prop 98 GF to shift the responsibility for providing mental health services, including out-of-home residential services, from county mental health agencies & county welfare agencies to school districts.

Permanently repeals the AB 3632 mandate & removes mental health services from the realignment proposal for counties.

Since county mental health agencies will receive $98.6 million in MHSA[10] funds for the provision of non residential mental health services for students in FY 11-12, school districts are encouraged to contract with county mental health agencies to provide services using MHSA funds. Schools would be responsible for any cost exceeding this amount.

 

Legislature approved the case load adjustment.

 

Legislature approved elimination of AB 3632 mandate.

 

The Legislature also approved $800 million federal funds for CDE implementation. Because the funding was in the main budget bill, it was vetoed when the governor vetoed the main budget bill.

 

Approved by the Legislature

 

Adopted the May Revise proposal in the final budget.

Adopted the May

Revise outcome in the final budget.

 

 

 

Approved.

 

 

 

 

Adopted the May Revise Proposal in the final budget.

 

Department of Social Services (DSS)- In-Home Supportive Services (IHSS)

The Governor proposed five IHSS cuts totaling $486 million of General Fund. The Legislature achieved the $486 million savings goal, but without making any cuts to IHSS services or hours.

The Legislature rejected an across the board cut of 8.4% hours, & the elimination of payment for domestic & related services to adult consumers in shared households, & to children living with an available parent.

January proposals assumed higher IHSS caseloads than likely. The Legislature accepted reduced caseload estimates based on recent actual data for the rest of 2010-11 & 2011-12 years.

The May Revise proposes no new cuts to the In Home Supportive Service (IHSS) program, but does show savings from reduced caseloads.

 

 

Final budget adopted the March outcome, but includes 20% across the board trigger cut for 2012-13.

DSS- IHSS Advisory Boards

Eliminates funding for consumer advisory boards of the Public Authorities & makes them optional. They were crucial in facilitating IHSS consumer voices in support of IHSS. The estimated state savings is $1.6 million dollars.

The Legislature approved reductions in state funding for the consumer advisory boards of the Public Authorities from $54,000 to $3,000 & made them optional for counties.

 

 

Final budget adopted the March outcome.

DSS- IHSS Public Authorities[11]

 

 

The May Revise cuts another $7.517 million from the IHSS Public Authorities, on top of the January reduction of $2.476 million. This cuts Public Authority funding by 37% since FY 10/11 & by a total of 68% since FY 09/10, which threatens the continued existence & operations of Public Authorities.

The Legislature restored $2.2 million to the Public Authorities.

Final budget adopted 2.2 million restoration to the Public Authorities.

DSS- Medical Certification (IHSS)

Physician has to certify that new & current consumers require IHSS assistance to prevent institutionalization (does not mean consumer must meet particular institutional level of care).

The Legislature approved this proposal. The budget projects that approximately 43,000 consumers will lose services because they won't get the certification.

 

 

The final budget approved the March outcome.

DSS- Community First Choice Option (CFCO)

 

The Legislature directed the state to pursue federal funds available under CFCO if it is cost-effective. CFCO offers incentive for creating/expanding personal assistance services. If IHSS qualifies, CA receives an additional 6% in matching federal funds.

 

 

The final budget approved the March outcome.

DSS/Department of Health Care Services (DHCS)- Medication Dispensing Pilot Project/Trigger Reduction

 

Legislature directed DHCS to identify people using fee-for-service Medi-Cal who are at risk of not taking medications.

DHCS will procure automated medication dispensers installed in homes of people willing to be part of a pilot project.[12] The Medi-Cal savings will be credited to IHSS.

 

 

The final budget approved the March outcome.

Department of Mental Health (DMH)

 

 

DMH will be replaced by a Department of State Hospitals (DSH) in 2012. The Department of Alcohol & Drug Programs is also slated for elimination. Medi-Cal functions of both departments would be transferred to DHCS. Other functions such as federal block grant administration, facility licensing, & MHSA coordination & oversight are up in the air.

There is a $50 million increase for state hospitals to make up for budget shortfalls. $9.5 million would go to state hospitals for safety & security improvements.

 

Creation of DSH, remaining DMH functions after shift of Medi-Cal functions to DHCS, & the shift of EPSDT & community mental health to counties will be addressed in the 2012-13 budget. DMH will have a stakeholder process to work on the reorganization issues.

 

The Legislature approved the allocation to state hospitals for safety & security improvements.

Approved May Revise outcome in the final budget.

DMH-AB 3632

$98.6 million General Fund to cover mental health services for students, mandated under federal law for prior year costs incurred by counties per a state mandate created by AB 3632.

The Legislature approved appropriation of $80 million in General Fund to cover mental health services for special education students for 2010-11 prior year costs incurred by counties per a state mandate created by AB 3632.[13]

AB 3632 would be realigned to schools instead of county mental health. In 2011-2012, $68 million for residential out of home care for AB 3632 would be deleted from the CDSS budget & $66.6 million added to Prop 98. $98 million one-time funds would go to county MH departments for nonresidential AB 3632 services - a $52 million reduction.

A total of $221.8 million General Fund would go to schools for mental health services, & the AB 3632 mandate would be eliminated.

 

See above under education.

See above under education.

DMH-MSHA

Shifts MHSA funds to the Department of Mental Health, to replace the General Fund for AB 3632 services, the EPSDT Program & MHMC[14] for General Fund savings of $861.2 million in 2011-12.

The Legislature approved shift. Assumes that the one-time diversion of MHSA funds could be approved by a two-thirds vote of the Legislature & would not require a vote of the people. The Governor approved this proposal in March by signing AB 100.

 

 

Approved the March outcome in the final budget

DMH-Realignment

 

Realigns to counties AB 3632, EPSDT, & MHMC & replaces them with MHSA funding.

The Legislature approved this realignment.

Realigns mental health services for students (AB 3632) to schools.

Legislature approved this proposal.

The final budget contains funding for essentially all aspects of the Governor’s realignment plan – both the public safety and health and human services components.

The budget will dedicate 1.06% of the state sales tax rate into a special fund to support the transfer of services to counties.

Among the realigned programs are EPSDT, Medi-Cal Specialty Mental Health Managed Care, and Mental Health 1991 Realignment revenue.

The proposed realignment of the mental health EPSDT and Managed Care Programs would occur in FY 12/13, with the new sales tax revenue permanently dedicated for these purposes. The new funding amounts specified for the mental health realigned programs in FY 12/13 are:

EPSDT: $629 Million

Medi-Cal Mental Health Managed Care: $183.7 Million

The existing community mental health 1991 realignment revenue swap will occur in FY 11/12, and the amount specified for FY 11/12 is $1,083.6 million, growing to $1,119.4 million in FY 12/13.

CA Department of Public Health (CDPH)-Nursing Home Funding

 

 

The skilled nursing homes which are covered in AB 1629 (2004) are receiving a 10% cut in FY 2011-12. However, they also received an increase of 2.4%, making their real cut 7.6%. Part of their funding comes from a Quality Assurance Fee (QAF), which nursing homes pay & is matched by federal funds. The industry has agreed to extend the QAF until the end of FY 12-13, & in exchange will receive a rebate of the 10% FY 11-12 cut, so the 2.4% rate increase will be intact. Other changes are proposed for the funding formula, including extending the QAF to pediatric sub-acute facilities & a delay in the start of a “Pay for Performance” program.

Approved by the Legislature

The final budget approved the May Revise proposal.



FOOTNOTES

[1]           This summary includes information taken directly from the Governor’s 2011-12 budget documents, the California Senate Budget and Fiscal Review Committee’s Quick Summary of the Governor’s May Revision and information provided by the California Budget Project.

[2]           "Realignment" refers to a shift of responsibility for programs between state and local governments. The idea is that the entity that is responsible for administering a program should have discretion in how to administer the program together with a dedicated revenue stream for funding the program.

[3]           In the budget process, the Legislature eliminated ADHC as a Medi-Cal State Plan Optional benefit, and states the Legislature’s intent to create a redesigned form of ADHC described as KAFI (Keeping Adults Free from Institutions), that would continue to qualify for federal matching funds under the rules of a federal Medicaid waiver. For Fiscal Year 2011-12, the ADHC budget was reduced by 50% for a total state General Fund appropriation of $85 million compared to the Governor’s reduction of $177 million in state funds. This appropriation will be matched dollar for dollar with federal funds as long as there is a seamless conversion of ADHC from a program operating as an optional benefit to one operating as a waiver program. This federal match would create a $170 million total appropriation to implement the conversion of the program and transition patients to alternative services, as appropriate. The Centers for Medicare and Medicaid Services must approve elimination of ADHC as a benefit and must also approve the state’s application to convert the program to a waiver. See: http://www.caads.org/

[4]           http://www.disabilityrightsca.org/Legislature/Budget/2011/2011-01-12-budgetsummary.html - _ftnref1(1) 150 percent of poverty is an annual income of $21,855 for a family of two and 200 percent of poverty is an annual income of $29,140 for a family of two.

[5]           http://www.disabilityrightsca.org/Legislature/Budget/2011/2011-01-12-budgetsummary.html - _ftnref2(2) 200 percent of poverty is an annual income of $29,140 for a family of two. 250 percent of poverty is an annual income of $36,425 for a family of two.

[6]          Multipurpose Senior Services Program

[7]           The CalWORKs Child Care Program is administered in three stages. Stage One begins with a family's entry into the CalWORKs program. Clients leave Stage One after six months or when their situation is stable, and when there is a slot available in Stage Two or Three. Stage Two begins after six months or after a recipient's work or work activity has stabilized, or when the family is transitioning off of aid. Clients may continue to receive child care in Stage Two up to two years after they are no longer eligible for aid. Stage Three begins when a funded space is available and when the client has acquired the 24 months of child care, after transitioning off of CalWorks assistance.

[8]           SSI/SSP provides cash assistance to help low-income seniors and people with disabilities meet basic living expenses.

[9]           Special education services are designed to address the individualized educational and related service needs of children with disabilities. Special education services include Early Intervention Services for infants and toddlers, pre-school for students starting at age three, services for school age children in grades K-12, and transition services for eligible students up to age 22

[10]          Mental Health Services Act (MSHA)

[11]         Each Public Authority for In- Home Supportive Services (IHSS) is a public agency whose purpose is to make the IHSS program work better for IHSS consumers and home care providers. Core functions are: 1) creating a provider registry – a database of qualified and screened IHSS providers, and a referral system to connect providers with consumers, 2) providing training for consumers and providers, and 3) providing an employer of record for collective bargaining. Many Public Authorities provide more programs, including emergency back-up services.

[12]          The pilot project is expected to save the state $140 million a year, which in 2011-2012 will be credited to IHSS. However, if the pilot does not produce those savings, and alternative savings do not develop, there will be an across the board reduction to IHSS as of October 1, 2012, with certain exceptions.

[13]         AB 3632 was designed to maximize the unique expertise offered by county departments of mental health and to better coordinate public resources to support students with disabilities receiving special education services. Under AB 3632, county departments of mental health became responsible for providing services such as case management, counseling, medication management, and residential placement either in California or out-of-state.

[14]          Mental Health Managed Care