On June 28th, the state senate and assembly passed a series of bills that make up the fiscal year 2011-2012 state budget, which balances the state’s finances through a combination of service cuts, fee hikes, and an assumed increase in revenues. The budget also puts into place two “trigger cuts” to education and health and human services programs that will only be implemented if increased revenues are not realized.
Throughout the budget process, many proposals were made that would have impacted IHSS consumers and providers along with other members of the senior and disability communities. Some of the proposals were passed through a series of budget trailer bills that were signed into law by the governor in March. Other proposals were addressed in the main budget bill and related trailer bills that were sent to the governor for signature on June 28th. Below is a summary of the cuts and changes that will be implemented to the IHSS and Medi-Cal programs as a result of the final budget.
IHSS Trigger Cut – Will Reduce IHSS Service Hours by 20%
Reduction of IHSS Service Hours by 8.4% (trigger cut)
Establishment of New IHSS Eligibility Certification Requirement
Elimination of Funding for IHSS Advisory Committees
IHSS Community Choice First Option
Reductions in Funding for IHSS Public Authorities
Reductions and Changes to Medi-Cal
Medi-Cal Trigger Cut – Medi-Cal Managed Care Plans
Reduction of SSI/SSP Payments for Individuals
Reduction of Funding for the MSSP Program
IHSS Trigger Cut Related to State Revenues
Effective date: Currently delayed due to a pending lawsuit (David Oster et al vs. Will Lightbourne and Toby Douglas).
The state budget assumes that there will be a $4 billion increase in state revenues throughout the year and directs the Department of Finance to analyze the revenues after December. If the Department determines that the increase in revenues will be less than $3 billion, all IHSS consumers will see their hours reduced by 20% beginning January 2012. For consumers receiving the maximum amount of IHSS hours, this could mean a reduction of as many as 56.6 hours per month. Consumers will be able to direct the manner in which the cuts are applied to their services. Any consumer who has a documented unmet need will have the reduction taken from those hours first. Consumers will also have the option of applying for IHSS Supplemental Care hours if they believe the reduction will place them at risk of institutionalization for care.
In addition to the reduction in hours, the IHSS trigger cut would reduce funding for IHSS anti-fraud grants by $10 million. It is not known what impact this would have in L.A. County.
IHSS Trigger Cut Related to a Medi-Cal Pilot Program
Effective date: Will only be implemented in October 2012 if savings related to a medication dispensation pilot program are not realized.
The governor originally proposed to reduce hours for all IHSS consumers by 8.4% beginning July 1, 2011. However, the senate and assembly voted to only approve this cut if a new pilot program related to medication dispensation machines does not result in the anticipated savings of $140 million. If the Department of Finance determines in April 2012 that the pilot is not likely to reach its goal, a reduction in IHSS service hours (up to 8.4%) can be implemented in October 2012 with no further legislative action. This reduction would be in addition to the 20% trigger reduction mentioned above. If both triggers are enacted, consumers could see their hours reduced by nearly 30%.
Establishment of a New IHSS Eligibility Certification Requirement
Effective date: August 1, 2011
Upon implementation, all new IHSS consumers will be required to obtain a healthcare professional’s written certification that he or she needs assistance with some activities of daily living to remain safely at home. Services may be approved prior to the receipt of the certification in cases where the consumer applicant is being discharged from a hospital or nursing home, or if the county determines that there is a chance the applicant would need to be placed in an institution without quick approval for IHSS.
Current consumers will have to obtain the same written certification within 45 days of their next annual reassessment. Any applicant or current consumer who is not able to obtain the certification will be deemed ineligible for IHSS services. It is estimated that approximately 43,000 consumers will lose program eligibility with the implementation of this proposal.
Elimination of Funding for IHSS Advisory Committees
Effective date: July 1, 2011
In 1999, a law was passed that required all counties to establish IHSS advisory committees to submit recommendations to the counties regarding the IHSS Program. The governor proposed to eliminate the mandatory requirement for counties to establish these committees and to eliminate all state funding for them.
The assembly and senate both adopted proposals that would eliminate the mandate for IHSS Advisory Committees, but would only reduce funding for committees to $3,000 per county. The governor has signed the amended proposal.
IHSS Community First Choice Option (CFCO)
Effective date: July 1, 2011
The assembly and senate have both adopted an assumed savings of $121 million from the expected approval of additional federal IHSS funds from CFCO, which is a new Medicaid option available beginning in October 2011. The Department of Social Services will need to work with the federal government to implement this proposal. It is not known at this time if there will be any direct impact on IHSS consumers and providers.
Reductions in Funding for IHSS Public Authorities
Effective date: July 1, 2011
Over the last few years, funding for public authorities has been reduced from a high of approximately $57 million in fiscal year 2008-2009 to $27 million in fiscal year 2010-2011. Public authority funding was lowered to $24.7 million by legislation passed and signed into law in March.
Reductions and Changes to Medi-Cal
Effective date: July 1, 2011 except for the elimination of funding for ADHCs, which has been delayed until December 1, 2011.
Included in the budget were several changes and reductions to the Medi-Cal Program that could impact IHSS consumers. Specifically, the changes will:
- Limit doctor visits to 7 per year. All visits above 7 would be subject to physician certification that they are medically required.
- Establish a $5 co-pay for doctor and dental visits.
- Establish a $3 co-pay for generic prescriptions and a $5 co-pay for name-brand prescriptions.
- Establish a $50 co-pay for emergency room visits.
- Establish a $100 per day co-pay for hospital stays, with a $200 maximum per admission.
- Eliminate Medi-Cal funding for Adult Day Health Care programs (Approximately 14,000 IHSS consumers in L.A. County receive services from ADHCs.)
- Reduce reimbursement payments to doctors, pharmacies, hospitals and clinics
Medi-Cal Trigger Cut – Medi-Cal Managed Care Plans
Effective date: Will only be implemented in January 2012 if increased revenues are not realized
Similar to the trigger cut to IHSS, if the Department of Finance projects that the increase in state revenues will be less than $3 billion, cuts will automatically be implemented to the Medi-Cal program. Specifically, state funding for Medi-Cal managed care plans will be reduced by $15 million.
Reduction of SSI/SSP Payments for Individuals to the Minimum Level Allowed Under Federal Law ($830 per month)
Effective date: July 1, 2011
This proposal will lower the maximum amount for SSI/SSP payments for nearly 1 million individuals to $830 per month. Payments to couples would not be lowered, because they are already at the federal minimum level of $1,407 per month.
Reduction in Funding for the MSSP Program
Effective date: July 1, 2011
The Multipurpose Senior Services Program provides case management services to nearly 12,000 seniors per month who are eligible for nursing home placement, but wish to remain living at home. The governor originally proposed to eliminate this program. However, the assembly and senate both adopted proposals that would instead reduce funding for the MSSP Program by $2.5 million. The governor has signed the amended proposal.