Enhancing Federal Financial Participation for Consumers Served by the Department of Developmental Services

Enhancing Federal Financial Participation for Consumers Served by the Department of Developmental Services Summary The Supplemental Report of the 2020-21 Budget Act requires our office to evaluate Medi-Cal enrollment processes among consumers of the Department of Developmental Services (DDS) and provide options to increase enrollment with the goal of increasing federal funding for regional center (RC)-coordinated services. Potential Additional Medi-Cal Enrollment of DDS Consumers Is Fairly Limited. DDS can draw down federal funding for many of the services it provides to DDS consumers if the consumer is enrolled in Medi-Cal, has legal immigration status, lives in a community-based setting, and receives at least one RC-coordinated service. Currently, eight in ten out of about 320,000 total DDS consumers already are enrolled in Medi-Cal. Among adults, we find little potential for additional Medi-Cal enrollments or additional federal funding for DDS services. We find that the potential to draw down additional federal funding in DDS rests largely with children who would qualify for Medi-Cal through an eligibility pathway referred to as “institutional deeming.” This eligibility pathway—available to certain higher-needs children—considers only the child’s (not the family’s) income in determining Medi-Cal income eligibility. We estimate there is the potential to enroll up to 7,000 additional children in Medi-Cal through this eligibility pathway. On Net, Increasing Medi-Cal Enrollment Among DDS Consumers Would Actually Increase State Costs Overall. The state would save about $24 million General Fund in the DDS budget if DDS were able to enroll all 7,000 additional children in Medi-Cal. However, it would incur Medi-Cal costs in other departments (for services such as medical and dental care or In-Home Supportive Services) of about $70 million, for a net state cost of about $46 million General Fund, or $6,600 per child. Recommendations. If the Legislature’s main goal were to save money, increasing Medi-Cal enrollment among DDS consumers would not achieve that goal. However, if it has a policy basis for wanting to increase Medi-Cal enrollment among DDS consumers, we recommend it consider one or both of the following options to do so in a relatively cost-effective way: • Providing more hands-on Medi-Cal enrollment assistance through dedicated liaisons and enrollment workers at counties and/or dedicated staff at RCs. The administrative cost of this option would range from about $2 million to $15 million and some of these costs would be eligible for federal Medicaid funding. • Providing more education and improved materials about Medi-Cal and the related Medicaid waiver program administered by DDS, such as by changing confusing terminology, translating forms currently provided only in English, hosting educational events, or improving training of RC staff. The total administrative cost of such options likely would not exceed $2 million. We recommend against requiring Medi-Cal enrollment among eligible consumers, as proposed by the Governor’s administration in May 2020. (A consumer who chose not to enroll would have had to pay the RC the equivalent of what Medicaid would have paid for RC-coordinated services.) Not only would this approach cost the state money on net, but it potentially would discourage some families from seeking needed RC-coordinated services. GABRIEL PETEK LEGISLATIVE ANALYST NOVEMBER 2021 analysis full gutter AN LAO REPORT INTRODUCTION The Department of Developmental Services participation as well as an estimate of potential (DDS) currently serves a relatively small share of costs resulting from additional administrative consumers who are eligible for, but not enrolled activities and increased utilization of Medi-Cal in, Medi-Cal, the state’s Medicaid program, benefits outside the DDS system. and Medicaid home- and community-based This report builds on initial findings reported services (HCBS) programs (which fund an array in an April 2021 interim update and contains of services and supports that allow people to four main sections: (1) background about how live in community-based settings, rather than in Medicaid works in the DDS system and the institutional settings). Consequently, the state Medi-Cal eligibility and enrollment processes, cannot draw down federal Medicaid funds to (2) findings about the potential for Medi-Cal and help pay for DDS services provided to these waiver uptake among DDS consumers and about consumers—the state (through the General various enrollment challenges, (3) assessment Fund) currently pays 100 percent of the cost. The of the fiscal implications of enrolling more Supplemental Report of the 2020-21 Budget Act consumers in Medi-Cal and of four options for requires our office to evaluate Medi-Cal enrollment increasing enrollment in these programs, and processes and identify the barriers to enrollment (4) recommendations for the Legislature. among these DDS consumers. The Supplemental As RC-coordinated services provided to Report requires our office to provide options to infants and toddlers under age three in DDS’s address these barriers with the ultimate goal of Early Start program are not eligible for Medicaid increasing federal financial participation for regional reimbursement through DDS, we focus our analysis center (RC)-coordinated services. Our evaluation on DDS consumers—typically age three and may consider opportunities for streamlining the older—who are eligible for RC-coordinated services enrollment process and educating consumers under the Lanterman Developmental Disabilities and their families/representatives about Medi-Cal Services Act (Lanterman consumers). These are programs. Finally, the Supplemental Report requires the services that can draw down federal Medicaid us to include an estimate of potential General Fund funds in the DDS system. savings resulting from increased federal financial BACKGROUND How Medicaid Works in the DDS Targeted Case Management funding. Among the types of services that are not eligible to receive System federal HCBS matching funds are funeral services, Nearly All of DDS’ Service Categories tutor services, day care provided by a family Are Eligible for Federal Medicaid HCBS member, and temporary motel rooms used in Reimbursement. Nearly all of the types of emergency situations. home- and community-based services coordinated Medi-Cal Enrollment of DDS Consumers by RCs for DDS consumers are eligible to receive Allows DDS to Access Federal Funding for federal Medicaid HCBS matching funds. Such HCBS Services Coordinated by RCs. DDS can services include residential services, independent draw down federal Medicaid funding to support and supported living services, day programs, HCBS services coordinated by RCs and provided transportation, supported employment, and respite to certain consumers who are enrolled in Medi-Cal. services. In addition, some of the time spent on This federal HCBS funding has supported at least case management by RC staff for consumers 30 percent of DDS costs since 2011-12 as shown enrolled in Medi-Cal is eligible for Medicaid in Figure 1. 2 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT For services funded by Medi-Cal for HCBS services in the DDS system—(1) a Medicaid Medi-Cal-eligible consumers in the DDS system, 1915(c) HCBS waiver (which we refer to as the service costs are shared evenly between the state “waiver”), which has been in place for DDS since and federal governments. (The state also operates 1982, and (2) a Medicaid state plan amendment a 100 percent state-funded Medi-Cal program (which we refer to as the “1915(i) SPA”), which has for certain individuals who are not eligible for the been in place since 2009. The difference between federally matched program due to immigration the two is based on the level of care required by status.) If a consumer is not eligible for federally the consumer, with the waiver helping fund HCBS matched Medi-Cal, the state funds the total cost of services for those with more intensive needs. RC-coordinated services. California also has other Medicaid waivers (which RC-Coordinated Services Draw Down Federal are available to DDS consumers) that are managed HCBS Funding in Two Main Ways. There are in other departments, such as the Home- and two primary authorities for federal funding for Community-Based Alternatives waiver, managed by the Department of Health Care Services (DHCS). Figure 1 Medicaid HCBS Funding Provides at Least 30 Percent of Funding in the Department of Developmental Services Budget (In Billions) $12 10 8 Other fundsa 6 4 General Fund 2 Medicaid HCBS fundingb 2011-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 20-21 21-22 a Includes Medicaid administrative funding and other federal and state funds. b Includes Medicaid funding for services (waiver, state plan amendment, and targeted case management). HCBS = home- and community-based services. www.lao.ca.gov 3 analysis full gutter AN LAO REPORT An individual only can be enrolled in one waiver at a to HCBS services coordinated by RCs, DDS time. (Among DDS consumers enrolled in a waiver, consumers who are enrolled in Medi-Cal also most are in the waiver administered by DDS.) may receive other Medi-Cal services, such as This report is focused on the waiver and 1915(i) medical and dental care, and potentially may be SPA managed by DDS, the eligibility for which are eligible to receive in-home supportive services described below. (IHSS). (Medi-Cal also funds non-HCBS services provided in more institutional settings, like ICFs • Waiver Eligibility: Consumers must be a legal or skilled nursing facilities [SNFs]). While RC staff resident, enrolled in full-scope Medi-Cal, live may help consumers access these other Medi-Cal in a community-based setting, and receive services, the costs of these Medi-Cal services are at least one RC-coordinated service. (Some not reflected in the DDS budget. Rather, these individuals—particularly children—receive costs are reflected in other state departmental only case management from RCs and either budgets, such as the DHCS budget for health do not need RC-coordinated services or care services (including ICFs and SNFs) and the receive the needed services outside of the Department of Social Services budget for IHSS. In RC system, such as through schools.) They addition, schools also may work with DHCS to seek also must need a level of care equivalent to Medi-Cal reimbursement for therapies provided to that provided at an intermediate care facility children with developmental disabilities or delays. (ICF) for the developmentally disabled, a licensed health facility that is considered a Medi-Cal Eligibility and Enrollment for more institutional setting. An ICF level of care DDS Consumers is defined as having two moderate or severe support needs in one or more of the following Medi-Cal Eligibility Pathways. Before enrolling areas: self-help, such as dressing or toileting; in the waiver or becoming eligible for 1915(i) social-emotional to address such issues as SPA reimbursement, DDS consumers must first aggression, self-injurious behavior, or running enroll in Medi-Cal. Individuals with developmental away; or health, such as tracheostomy care, disabilities tend to qualify for Medi-Cal through one apnea monitoring, or oxygen therapy. To of the following eligibility pathways, also shown in enroll, the consumer, parent, guardian, or legal Figure 2: representative must complete a DDS form • Automatic Eligibility Based on called the “Medicaid Waiver Consumer Choice Supplemental Security Income/State of Services/Living Arrangement” (which we Supplementary Payment (SSI/SSP) refer to as the “DDS choice form”) indicating Qualification. Individuals who receive that they have chosen a community-based SSI/SSP cash assistance are automatically residence for the consumer, rather than an eligible for Medi-Cal. SSI/SSP is available to ICF. individuals who are age 65 or older, blind, or • 1915(i) SPA Eligibility: Consumers must be disabled and whose income and resources a legal resident, enrolled in Medi-Cal, and live fall below specified thresholds. Of the in a community-based residence. They do DDS consumers enrolled in Medi-Cal, the not need the same level of care as someone majority—about 61 percent—became eligible enrolled in the waiver. No forms or enrollment because they receive SSI/SSP. are required for the 1915(i) SPA; DDS can • Income-Eligibility. Medi-Cal is a seek reimbursement from Medicaid once the means-tested program. In the DDS context, consumer uses an RC-coordinated HCBS slightly more than 20 percent of consumers service. enrolled in Medi-Cal arrive through the Medi-Cal Pays for a Variety of Services, income-eligibility pathway, including children but the DDS Budget Reflects Only Case whose families are income-eligible. Management and HCBS Services. In addition 4 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT • Institutional Deeming. This eligibility pathway by federal law. If the applicant(s) is eligible for identifies children in the DDS system whose Medi-Cal through more than one pathway, the families are not income-eligible for Medi-Cal, process is designed to automatically base eligibility but who could benefit from enrolling in the on what is most beneficial (in terms of scope of waiver because they live in a community benefits and share of cost) for the applicant(s). If setting and require an ICF level of care. an RC has determined that an individual requires Because of the needed level of care, this an ICF level of care, but that they may not be pathway disregards the parents’ income and eligible for Medi-Cal through typical income-based considers only the child’s income to determine pathways and should be considered under Medi-Cal eligibility. (A child’s income includes institutional deeming, they will send the county a any child support or trust fund income.) DHCS referral form indicating that the “eligibility Institutional deeming also is an option for determination waives parental and spousal a married adult who requires an ICF level income and resources.” The county will then of care, but whose spouse’s income would send an application directly to the consumer and disqualify them for Medi-Cal. In this case, consumer’s family. The DHCS waiver referral form the spouse’s income can be disregarded instructs the county to send both the consumer in determining Medi-Cal eligibility. Overall, as well as the RC a notice when the Medi-Cal somewhat fewer than 10 percent of DDS determination has been completed. In addition, consumers enrolled in Medi-Cal are eligible via the DHCS Medi-Cal Eligibility Procedures Manual institutional deeming and most are children. notes that the county may share ongoing eligibility • Other. There are a few other ways DDS information with the RC. consumers can enroll in Medi-Cal. For Medi-Cal Enrollment Assistance Options example, until the age of 26, current and Are Available. There are several options available former youth in the foster care system to assist individuals with Medi-Cal applications, are automatically eligible for Medi-Cal some of which are tied to the Covered California (approximately 1.4 percent of DDS consumers application process. For example, a public agency enrolled in Medi-Cal are eligible for (RCs are considered public agencies in regulations) this reason). can file an application on behalf of an individual who cannot apply on their own. An applicant can Counties Manage Medi-Cal Enrollment. While designate someone as their Medi-Cal authorized RCs manage waiver enrollment and DDS manages representative (RCs or individual RC service 1915(i) SPA reimbursements, county governments coordinators can be designated as such) to assist manage Medi-Cal eligibility determinations, with the application and interact with the county. In including for DDS consumers. California uses a addition, county eligibility workers can be placed federally approved application, which is the same for both Figure 2 Medi-Cal and Covered California. People may apply online, by mail, Main Medi-Cal Eligibility Pathways Among in person at the county office, or Department of Developmental Services Consumers by phone. The eligibility process 2019-20 uses information about each Under Age 18 family member in a household— Medi-Cal Eligibility Pathway Total Age 18 and Older such as income, resources, size SSI/SSP 61% 44% 73% of household, and disability—to Income 22 29 17 determine the scope of benefits Institutionally deemed 9 21 1 available to the family and the Othera 8 6 9 family’s share of cost, if any Totals 100% 100% 100% (most often, there is no share a Other includes current and former foster youth under age 26. of cost). The process is guided www.lao.ca.gov 5 analysis full gutter AN LAO REPORT off-site (such as at a hospital) or make off-site visits is responsible for ensuring the family has to assist applicants. Via Covered California, certain reviewed and signed the DDS choice form. In organizations—including nonprofit community addition, a service coordinator may identify a organizations—can become Certified Application consumer as potentially eligible for the waiver Entities or Certified Enrollment Entities with certified and alert federal programs staff. counselors. The latter can enroll an applicant in Medi-Cal Can Be Used for Primary or Medi-Cal (or a Covered California plan). Secondary Insurance Coverage. If an individual, RCs Manage Waiver Enrollment. Two different such as a child who is eligible through institutional types of RC staff manage waiver enrollment: deeming, already has private health insurance • Qualified Intellectual Disability coverage, Medi-Cal can act as a secondary payer Professionals (QIDPs) Ensure Consumers for primary insurance co-pays or uncovered costs. Meet Requirements for Waiver Enrollment. In some instances, a family may be required to Most RCs have small teams of dedicated pay a share of cost for health care services before staff who specialize in the area of federal Medi-Cal payments are provided. This typically programs. These staff include one or more happens when income is higher (either the family’s QIDPs, as required by DDS’ agreement income under typical income-based pathways or with the federal government. In addition to the child’s income under institutional deeming). ascertaining whether a consumer meets For a Small Share of Beneficiaries, Medi-Cal the ICF level of care criteria for initial waiver Seeks Repayment for Services From Their enrollment, QIDPs also manage required Estates After Death. The Medi-Cal program is annual waiver recertifications. In addition, federally required to seek repayment from the federal programs staff routinely review case estates of Medi-Cal beneficiaries upon their death, records to see who else might be eligible for if they have an estate subject to probate and the waiver. The federal programs teams may meet other criteria. The criteria were narrowed terminate consumers from the waiver if the by state statute in 2017 to limit estate recovery level of care required has changed or the to the minimum required by federal law. Estate consumer has lost Medi-Cal eligibility. DDS recovery applies to an individual who either was and the federal government regularly audit permanently institutionalized (at a SNF, ICF, or other RCs to ensure federal waiver reimbursements medical facility) or received HCBS services at age have been claimed properly. 55 or older. It does not apply if there is a surviving • RC Service Coordinators Work Directly spouse or registered domestic partner, a surviving With Families. RC service coordinators work child under age 21, or a surviving child who is blind directly with consumers and their families or disabled. If the individual owned a home at the to facilitate waiver enrollment with support time of death that is worth 50 percent or less than from QIDPs. The service coordinator typically the average home in the county, that home is not subject to estate recovery. FINDINGS In this section, we first provide a summary About Eight in Ten DDS Consumers Already of Medi-Cal, waiver, and 1915(i) SPA statistics Are Enrolled in Medi-Cal. Figure 3 shows about among DDS consumers. We then discuss the 254,000 out of about 320,000 DDS consumers (or limits to potential Medi-Cal uptake (and thus 79 percent) were enrolled in Medi-Cal in 2019-20. waiver and 1915(i) SPA enrollment), some of Of the 254,000 enrolled in Medi-Cal, a total of the possible reasons people may choose not to 187,000 (or 74 percent) received at least one enroll, and some of the challenges that exist in the RC-coordinated service, a prerequisite for waiver enrollment process. or 1915(i) SPA eligibility; about 132,000 of these 6 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT Figure 3 Assessing Current and Potential Eligibility Among DDS Consumers for Federal HCBS Funding About 7,000 Children Are Potentially Eligible, but Not Currently Enrolled Lanterman consumers 320,000 Already enrolled in Medi-Cal? NO YES 67,000 254,000 At least one regional center-coordinated service? YES NO YES NO Not eligible Not eligible 30,000 187,000 37,000 67,000 Enrolled in waiver 132,000 1915(i) SPA reimbursement 48,000 Neither waiver nor 1915(i) SPA reimbursement Many of these individuals reside in a SNF or ICF, 7,000 making them largely ineligible for HCBS funding. Adults DDS/RCs indicate most eligible adults are already enrolled; these adults 16,000 might be undocumented or have incomes too high to qualify for Medi-Cal. Children 14,000 Eligible via institutional deeming? Potentially Likely Yes No Estimated number of children who would 7,000 not meet the ICF level of care criteria. Estimated number of children who might 7,000 qualify via institutional deeming. Note: Consumers counts are approximate and based on 2019-20 data. DDS = Department of Developmental Services; HCBS = home- and community-based services; ICF = intermediate care facility; RC = regional center; SNF = skilled nursing facility; and SPA = state plan amendment. www.lao.ca.gov 7 analysis full gutter AN LAO REPORT consumers (or 52 percent of those enrolled in Uptake Potential Medi-Cal) were enrolled in the waiver, while about Potential Additional Enrollment of DDS 48,000 (or 19 percent of those enrolled in Medi-Cal) Consumers in Medi-Cal Is Fairly Limited. The received 1915(i) SPA reimbursement. proportion of DDS consumers enrolled in Medi-Cal Among the 7,000 who received an has increased over the past decade. In 2010, RC-coordinated service, but did not receive waiver 74 percent of consumers were enrolled in Medi-Cal, or 1915(i) SPA reimbursement, many lived in ICFs whereas today, 79 percent are enrolled. Among or SNFs, which, for the most part, makes them children, enrollment has increased by more than ineligible for HCBS funding. Furthermore, some 10 percentage points since 2010, from 59 percent of the 7,000 were enrolled in a waiver program to 71 percent. The nearby box describes some administered by another department. As noted of the efforts taken in recent years to increase earlier, individuals only can be enrolled in one enrollment. Consequently, most consumers eligible waiver at a time. for Medi-Cal likely already are enrolled. About 67,000 DDS consumers (or 21 percent) Uptake Potential Likely Limited to Children were not enrolled in Medi-Cal, but importantly, more Through Institutional Deeming. Of the than half of these consumers (about 37,000) did approximately 30,000 individuals who were not not receive an RC-coordinated service and would enrolled in Medi-Cal in 2019-20 and who did not be eligible for waiver enrollment or would not receive an RC-coordinated service, about 16,000 receive 1915(i) SPA reimbursement. Below, we were adults. Both DDS and RCs indicate that most discuss the potential for enrolling the remaining adults who are eligible for Medi-Cal are already 30,000 individuals. enrolled, meaning that this group likely includes Previous Efforts to Increase Federal Reimbursement for RC-Coordinated Services There have been several initiatives in the Department of Developmental Services (DDS) system to maximize the number of consumers drawing down federal Medicaid home- and community-based services (HCBS) funding. For example, DDS used to set waiver enrollment targets for regional centers (RCs) and provide a payment to RCs for each new consumer enrolled in the waiver, although this incentive was eliminated in 2010-11 as a cost-savings measure. In 2009, the state pursued the Medicaid state plan amendment (1915(i) SPA) in order to receive federal reimbursement for Medi-Cal-enrolled consumers who received RC-coordinated HCBS services but did not require an intermediate care facility level of care. Chapter 37 of 2011 (AB 104, Committee on Budget) added a new requirement that upon intake and assessment for RC services, the consumer must provide a copy of their health benefit card, in part to allow RCs to maximize federal waiver and 1915(i) SPA reimbursements among those enrolled in Medi-Cal. RCs’ contracts with DDS also stipulate that the RC will pursue an “aggressive enrollment effort” to ensure willing and eligible consumers are enrolled in the waiver. The combined effect of these efforts (and potentially the rollout of the Patient Protection and Affordable Care Act) has boosted the overall percentage of DDS consumers receiving federal Medicaid HCBS funding to about 56 percent (about 71 percent of consumers enrolled in Medi-Cal). The proportion of all consumers enrolled in the waiver (just over 40 percent) has increased several percentage points since 2006-07 and the introduction of the 1915(i) SPA has led to another 15 percent of DDS consumers drawing down federal funding for their RC-coordinated HCBS services. 8 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT adults who are not eligible for some reason, for RC-coordinated HCBS services, DDS can seek example, being an undocumented immigrant or federal reimbursement for those services—the having income that is too high. remainder of the report focuses on Medi-Cal and The remaining group of about 14,000 consumers waiver enrollment. are children. To receive federally matched Medicaid Reasons Offered for Not Enrolling in Medi-Cal funding, these children would have to have legal or the Waiver or Being Hesitant to Do So. immigration status and either be income-eligible Some themes emerged about reasons certain through their family or qualify through institutional families either do not want to enroll their consumer deeming. We do not expect all 14,000 would meet family member in Medi-Cal or the waiver or that these criteria. We generally assume that if a child’s made them hesitant in the process of doing family is income-eligible for Medi-Cal, they likely so. The following issues appear to happen with would have enrolled already. This means the most some frequency: viable eligibility pathway is institutional deeming, • Preference for their current commercial health which insurance. (a) ignores the family’s income and looks solely at • Doubt that there is any benefit to enrolling in the child’s income and (b) requires that the child Medi-Cal (especially since the consumer will need an ICF level of care (which qualifies them receive the same RC-coordinated services for the waiver). Even ignoring the family’s income, regardless). however, some of these children may have their own income from a trust or from child support • Hesitancy or unwillingness to provide sensitive at a level that disqualifies them for Medi-Cal. personal and income information to Medi-Cal, Furthermore, using current waiver enrollment particularly through institutional deeming (to proportions as a guide, we know that at least some qualify a child for institutional deeming, the of these children do not require an ICF level of family still has to provide information about care. (In addition, we can assume that families of each family member). In addition, if the parent children with a particularly high level of need likely is undocumented, the hesitancy to provide have used the institutional deeming option already.) sensitive information is heightened. Finally, we know that RC staff regularly review • Concerns among families that they are consumers’ casefiles to determine if there are “waiving” some kind of right or control by individuals who might be eligible for Medi-Cal who enrolling their child in the waiver. are not enrolled. Based on these factors, as well • Concerns among families that the DDS choice as discussions with DDS, we estimate that about form (which asks about institutional settings) half, at most, of the potential pool of children, or and/or that the phrase “institutional deeming” about 7,000 children, could enroll in Medi-Cal via might mean they are agreeing to place their institutional deeming. consumer family member in an institution. Issues that appear to be less common include: Medi-Cal and Waiver Enrollment • Perceived stigma about accessing Medi-Cal, Challenges which is understood to be a government We spoke to DDS, the Association of Regional program for low-income individuals. Center Agencies, several RCs, several families, • Concerns about accessing a benefit they Disability Rights California, and the County perceive as meant for more needy families Welfare Directors Association, and conducted (and potentially depriving a needier family of a survey of RCs (19 of 21 responded) to better this benefit). understand the Medi-Cal and waiver enrollment • Having to meet with their RC service processes and reasons that some families may coordinator annually (rather than choose not to enroll or have trouble enrolling. every three years) for the purposes of Because participating in the 1915(i) SPA does not waiver recertification. require anything additional of consumers—once • Concerns about Medi-Cal estate recovery. they are enrolled in Medi-Cal and begin to receive www.lao.ca.gov 9 analysis full gutter AN LAO REPORT Challenges Associated With the Medi-Cal • Knowledge of DDS. When a county has a Enrollment Processes. Our findings indicate that high rate of turnover among Medi-Cal eligibility the Medi-Cal initial enrollment and annual renewal workers, understanding of the DDS system processes have some challenges, both for RCs and and of the institutional deeming process for families. These include: in particular often is lacking. For example, even the nomenclature used for institutional • Familiarity. Some families want to, or deeming is different. While DDS and RCs use potentially want to, enroll their child the phrase “institutional deeming,” the county in Medi-Cal, but lack awareness or and Medi-Cal Eligibility Procedures Manual understanding of Medi-Cal and the potential typically use “DDS waiver” or “DD waiver.” benefits. • Communication Between Counties and • Paperwork. Some families have trouble RCs. Although the referral form that RCs completing Medi-Cal paperwork or providing send to counties indicate that the county required documentation. In addition, both RCs should send a notification back to the RC and families indicate that families who have when the Medi-Cal eligibility determination is enrolled their child in Medi-Cal are frustrated complete, some RCs say the county does not by the amount of paperwork required at initial notify them. This makes tracking Medi-Cal enrollment and at annual renewal. enrollment (and claiming federal funding) more • Time Lines. If a family has been referred for difficult for RCs. institutional deeming, they have 30 days after receiving the Medi-Cal application to submit Challenges Associated With Waiver it, along with required documentation, back Enrollment Process. RCs note that the DDS to the county before the referral expires. choice form and the DHCS waiver referral RCs indicate this 30-day turnaround can be form are provided only in English even though problematic for some families. For consumers many consumers and their families are more already enrolled in Medi-Cal, if they miss the fluent in other languages. They note that under annual renewal deadline, they are terminated institutional deeming, the requirement that the from Medi-Cal and have to begin the initial child be receiving an RC-coordinated service enrollment process anew. can be complicated by a lack of available service providers. This was raised several times in the • Lack of Liaisons. RCs note that the context of respite services. For example, the family Medi-Cal enrollment process (particularly may be authorized by the RC to receive respite when they are recommending a family enroll services, but they may be unable to find a respite in Medi-Cal via institutional deeming) goes provider. This compromises both waiver and much more smoothly when the county has Medi-Cal eligibility since eligibility under institutional a liaison or eligibility worker dedicated to deeming hinges on receipt of RC-coordinated working with RC staff and RC families and services. Finally, several RCs indicated that a lack who is knowledgeable of the DDS system. of standardized waiver training from DDS makes it Many counties do not have dedicated difficult for RC service coordinators to understand staff, however. the process. ASSESSMENT In the first part of our assessment below, we eligible DDS consumers. We estimate the potential estimate the potential fiscal effect if the state fiscal effect in the DDS budget and then on were successful in maximizing Medi-Cal and state spending overall. In the second part of our waiver enrollments among the pool of potentially assessment, we consider and evaluate potential 10 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT options for increasing these enrollments. Each regular Medi-Cal health insurance costs. Most option comes with a potential administrative cost to DDS consumers who are enrolled in Medi-Cal implement it, as well as trade-offs and likely varying via institutional deeming are in fee-for-service levels of success at increasing Medi-Cal and waiver Medi-Cal (rather than in a managed care plan). enrollments. We discuss these considerations for In 2019-20, among DDS consumers under age each option. 18 and eligible through institutional deeming, the average annual per person fee-for-service cost FISCAL IMPLICATIONS OF in Medi-Cal (excluding any costs reflected in the DDS budget) was about $10,000 General Fund INCREASING MEDI-CAL AND ($20,000 total funds). These Medi-Cal costs include WAIVER UPTAKE AMONG DDS IHSS costs. If all 7,000 children could be enrolled, CONSUMERS we estimate 2019-20 Medi-Cal costs at roughly $70 million General Fund ($140 million total funds). Trying to maximize federal support of the DDS This amount—$70 million General Fund— system (and thus reduce state costs in the DDS represents a potential maximum cost. The Medi-Cal budget) was the original impetus for this report. costs for children newly enrolled via institutional While we estimate that increased Medi-Cal and deeming potentially could be lower than the costs waiver uptake would result in modest state savings for children already enrolled through institutional in the DDS budget, there would be costs for the deeming (because those with more intensive needs Medi-Cal benefits administered by other state may have sought this option already). departments. We estimate that these costs would Bottom Line for the State—A Net Cost. outweigh the savings in the DDS budget, resulting Enrolling more DDS consumers under the age in a net cost to the state. of 18 in Medi-Cal and the waiver via institutional Fiscal Effect in the DDS System deeming would result in net costs to the state. While we estimate that enrolling an additional As discussed in the previous section, the most 7,000 children in Medi-Cal would save about likely pool of potential new enrollees is children who $24 million General Fund in the DDS system, the would be eligible for the waiver under institutional other Medi-Cal costs for these children would be deeming—at most, about 7,000 in 2019-20. At a about $70 million General Fund. Consequently, per person cost of about $7,000 in 2019-20, the the net General Fund costs would be $46 million, state spent about $49 million General Fund for or about $6,600 for each child added (based on the RC-coordinated services provided to these data from 2019-20). Importantly, this cost estimate children. If we assume that all of these children does not include administrative costs to increase were eligible for Medi-Cal and the waiver via enrollment, which are discussed in the next section. institutional deeming, that all of them were enrolled, and that the DDS costs of the children’s services WAYS TO INCREASE MEDI-CAL AND remained roughly the same, DDS would save about WAIVER ENROLLMENT AMONG DDS half that cost—$24 million—due to federal Medicaid reimbursements (at the 50 percent match rate for CONSUMERS HCBS services). While enrolling more DDS consumers in Medi-Cal Added State Costs Outside the DDS would increase state costs, increasing Medi-Cal System uptake among these consumers could have other benefits and address other legislative goals. Although DDS likely could achieve some savings For example, while consumers’ RC-coordinated by drawing down federal funding for children who services would not change necessarily after are currently 100 percent state funded, there enrolling in Medi-Cal, they would now be able to would be added Medi-Cal costs outside the access other services outside the DDS system DDS system for services such as IHSS and for through the Medi-Cal program. This could advance www.lao.ca.gov 11 analysis full gutter AN LAO REPORT the legislative goals of improving access to needed the final budget package; instead, our office was services across the state’s various health and asked to submit this report. human services programs. Below, we assess Potential Cost to Require Medi-Cal four main approaches that we have identified Enrollment. There would be standard additional that could be taken separately or in combination administrative costs to process an increased to increase uptake in Medi-Cal and the waiver: number of Medi-Cal and waiver applications (this (1) requiring enrollment among those who are assumes the onus is on the family to proactively eligible, (2) incentivizing enrollment, (3) providing submit the application). (If DDS or RCs were to hands-on enrollment assistance, and (4) providing assist families in the application process, the more education and improved materials to families costs for those added services would be similar and RC staff. We also estimate the potential cost to the costs of the third and fourth options we to implement each option. (These costs—largely describe below.) For families that choose not to administrative in nature—are separate from and in enroll their consumer family member in Medi-Cal, addition to the programmatic net costs of increased there would be administrative costs—likely less Medi-Cal and waiver enrollments that result from than $1 million annually—for RCs to bill and collect implementation of the options.) We discuss some payment from those families for half the cost of any of the main advantages and challenges associated RC-coordinated services provided to the consumer. with each option and assess each option using the Advantages of Requiring Medi-Cal following criteria: Enrollment. Requiring Medi-Cal enrollment— or otherwise requiring the family to cover the • Is the Option a Cost-Effective Way to federal portion of the cost of RC-coordinated Increase Medi-Cal and Waiver Enrollment? services—would be the most direct method for Would the option likely result in significantly trying to increase Medi-Cal enrollment among increased Medi-Cal and waiver enrollment Medi-Cal-eligible DDS consumers. This approach among DDS consumers? Are the costs could persuade families that have hesitated or reasonable given the associated fiscal and been unwilling to apply for Medi-Cal (or who policy benefits? Are there any unintended perceive a stigma) to do so by providing a outcomes? financial disincentive. • Is the Option Feasible? Would the option be Challenges With Requiring Medi-Cal easy to implement and operationalize across Enrollment. Making Medi-Cal enrollment a the 21 RCs? requirement could discourage families from seeking • Is the Option Equitable? How would the RC-coordinated services in the first place or from option affect different groups and consumers? accessing all of the RC-coordinated services for How does the option impact consumers’ which the consumer is authorized. Moreover, some access to services? individuals and families uncomfortable with signing up for Medi-Cal may not be able to afford what Require Enrollment Among Those would have been the federal portion of the cost of Who Are Eligible the RC-coordinated services. Consequently, this approach could be more punitive in nature than Requiring Enrollment Was Proposed in the three alternative approaches discussed below, 2020. In the Governor’s 2020-21 May Revision, given that a family would have to pay for or forgo the administration proposed requiring consumers services if they did not want to enroll the consumer to enroll in Medi-Cal (if eligible) to enable RCs to in Medi-Cal. While the requirement would not seek Medicaid reimbursements for RC-coordinated negate the statutory entitlement to RC-coordinated services. If the consumer chose not to enroll in services provided by the Lanterman Act, it would Medi-Cal when eligible, they would have been create a new prerequisite (applying generally to required to pay the RC the equivalent of what all DDS consumers) to receiving services that did Medicaid would have paid for RC-coordinated not exist before. (We note that in the DDS system, services. This proposal was not adopted as part of 12 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT there currently is one program, Self-Determination, Incentivize Enrollment that recently began requiring Medi-Cal enrollment if Another approach to increase Medi-Cal uptake one is eligible. We describe the program and new among DDS consumers is to provide an incentive to requirement in the nearby box.) consumers and their families for enrolling. One such Assessment of Requiring Medi-Cal incentive currently exists in the DDS system for Enrollment. This option would be the most likely families whose minor child receives DDS services. of the four to maximize Medi-Cal enrollment among The fees associated with two of three family fee DDS consumers in a relatively cost-effective way. programs—the Family Cost Participation Program We do not anticipate significant administrative and the Annual Family Program Fee—are waived or feasibility hurdles since counties and RCs when the minor consumer is enrolled in Medi-Cal. already manage Medi-Cal and waiver enrollment, The extent to which these programs (which were respectively. Because this requirement could implemented in 2005 and 2011, respectively) led to discourage some consumers from seeking increased enrollment in Medi-Cal (because families RC services, however, this option likely would wished to avoid paying the fees) is unclear. While have disparate impacts among consumers. In DDS Medi-Cal enrollment data show a slight uptick particular, this option could reduce access among in enrollment among children (from 59.4 percent consumers whose parents who are undocumented to 62.3 percent) between 2010 (before the Annual or are otherwise hesitant to enroll in Medi-Cal, Family Program Fee took effect) and 2012, the but who cannot afford to pay a share of cost for cause of this uptick could have been the result RC-coordinated services. Moreover, this option of more than one factor. We note that Medi-Cal would create a pre-requisite for Lanterman Act enrollment of children as of 2019-20 (70.9 percent) services that did not exist previously. was much higher than in 2012 (62.3 percent). This increase could reflect the waiver of family fees, Self-Determination Program Requires Medi-Cal Enrollment When Its Participants Are Eligible Relatively New Home- and Community-Based Services (HCBS) Waiver Helps Pay for the Self-Determination Program (SDP). The Department of Developmental Services (DDS) receives Medicaid funding for a small number of consumers who are enrolled in Medi-Cal and DDS’ SDP (about 750 people as of August 31, 2021). Medicaid funding is provided through an HCBS waiver approved in 2018 (which we refer to as the “SDP waiver”). The SDP waiver has the same intermediate care facility level of care criteria as the waiver. The number of consumers enrolled in this program will most likely increase, as the program was made available statewide on July 1, 2021 after a three-year phase-in period (during which enrollment was limited to 2,500 consumers). SDP Will Require Medi-Cal Enrollment, if Eligible. Although participation in the SDP is not limited to individuals who are eligible for Medi-Cal (as it was during the phase-in period), legislation associated with the recently enacted 2021-22 budget stipulates that consumers who are eligible for Medi-Cal must apply for it in a timely manner in order to participate in the program. (Currently, DDS is working on the details of how to implement this new policy.) Under the new SDP policy, Medi-Cal-eligible DDS consumers who do not wish to enroll in Medi-Cal could not participate in Self-Determination. While they still would be able to access regular RC-coordinated services under the Lanterman Act at no cost to them, they would have less control over the design of their service plan and selection of service providers. www.lao.ca.gov 13 analysis full gutter AN LAO REPORT rollout of the Patient Protection and Affordable Provide Hands-On Enrollment Care Act in 2014, efforts made by RCs to increase Assistance enrollment, more families needing Medi-Cal For families that have trouble navigating the generally, or a combination of these. Medi-Cal application process, another approach Cost to Incentivize Enrollment. The state would is to provide hands-on assistance. Such incur a cost to administer and pay for incentives, assistance could take different forms, but some however, the total cost is uncertain since it would options include: depend on how incentives are designed. A simple hypothetical example is a cash incentive to newly • Provide Dedicated Liaisons at the County. enrolled consumers. A $100 incentive (as an Ensuring these liaisons understand the DDS example) for each of the 7,000 consumers would system and institutional deeming in particular cost $700,000. There would be trade-offs with any would be important. incentive design, however. For instance, would • Have County Eligibility Workers On-Site at incentives only be provided to newly enrolled RCs. Depending on the number of consumers consumers? Would incentives be provided annually served, these eligibility workers could work at to ensure people renew their Medi-Cal enrollment? RCs part time or full time. Are there noncash incentive options? What level of • Encourage Families to Allow RC Staff to incentive would have the desired effect of causing Act as Authorized Representatives for people to enroll? Consumers. Doing so would allow RC staff Advantages of Incentivizing Enrollment. to assist with Medi-Cal applications and Properly targeted incentives could make going follow up with the county. If a family is not through the Medi-Cal application process more comfortable making RC staff an authorized attractive to families that are hesitant due to representative, RC staff still could provide administrative burdens and other similar concerns. more hands-on assistance to families who Challenges With Incentivizing Enrollment. An need it. incentive approach would not guarantee consumers enroll in Medi-Cal. Moreover, what types of Costs to Provide Hands-On Enrollment incentives would be most effective at encouraging Assistance. This option would require more staff at families to enroll consumers in Medi-Cal counties and/or at RCs. Based on the current cost are unknown. of a county eligibility worker, adding at least one new full-time eligibility worker in each of the state’s Assessment of Incentivizing Enrollment. 58 counties (for example) to act as a dedicated Design and implementation of this approach would liaison or to work on-site at RCs would cost be relatively complex and the cost is uncertain. approximately $10 million. Based on the current In addition, how best to structure the incentive to cost of an RC specialist-type employee, adding have the intended effect is unknown, especially one or two specialists in each of the state’s 21 RCs since incentives already exist for the likely pool would cost approximately $2 million to $5 million. of potential enrollees (children). Given existing Medicaid reimbursements would cover some of the incentives, the effectiveness of additional incentives costs of these additional county and RC staff. may be limited. Furthermore, we are not aware of obvious examples or precedents for an incentive Advantages of Providing Hands-On approach in other health and human services Enrollment Assistance. One or more of the programs. If the Legislature pursued this approach, approaches described above would not dissuade a we suggest it consider who would benefit from family from seeking RC services (as the requirement receiving incentives—only those consumers newly approach might) and could alleviate some of the enrolling in Medi-Cal or those already enrolled in administrative burden and confusion associated Medi-Cal as well? with enrolling in Medi-Cal. Families already enrolled in Medi-Cal also could benefit from a more help. For example, county and/or RC staff could 14 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT provide families reminders about Medi-Cal renewal each household member, despite the family seeking deadlines and offer to help with the renewal Medi-Cal exclusively for the child who is a DDS process. In addition, having dedicated county consumer. This process likely cannot be changed liaisons or having county eligibility workers on-site easily, however, given that the Medi-Cal application at RCs would make the waiver enrollment process form (which is also the Covered California form) and easier for RCs since they would have county staff process for determining eligibility follows federal readily available to answer questions and provide guidelines and has federal approval. helpful information (such as the dates by which There are other aspects of the enrollment families must renew their Medi-Cal enrollment). process or presentation of information, however, Challenges With Providing Hands-On that would be much easier to address. For Enrollment Assistance. Just because hands-on example, some families may be unaware of the enrollment assistance is available does not mean range of potential Medi-Cal benefits, such as IHSS, a family will take advantage of it and use it to or that they could have Medi-Cal cover private enroll their family member in Medi-Cal. Moreover, insurance co-pays or other out-of-pocket medical providing dedicated county liaisons and/or eligibility expenses of their child. Increasing education workers for DDS consumers would increase county and providing improved materials could come in staffing costs. Were the state to require counties the form of better standardization of information, to provide this service, the state likely would have requirements about when and how information is to pay for the associated cost. If RCs acted as provided, increased opportunities for providing the authorized representatives or provided assistance education (such as webinars or workshops), and in another way, this would add costs to the RC increased training for RC service coordinators who operations budgets. then relay information to families. For example, the Assessment of Providing Hands-On following changes could be considered: Enrollment Assistance. While there is no • Waiver-related forms (the DDS choice form guarantee more consumers would enroll in and the DHCS waiver referral form) are only Medi-Cal, providing more hands-on assistance provided in English currently. These and other to help them enroll could address some of the educational materials could be translated into issues raised in interviews and surveys about the other languages. application process being difficult and confusing. • DDS and DHCS could change the language These changes could benefit both those already used on forms and in educational materials, enrolled in Medi-Cal and those newly enrolling. such as waiver and institutional deeming, to Moreover, improving access to Medi-Cal enrollment make them more user-friendly and accessible. services could help those families and consumers They could consult with families and other who are most deterred by the process enroll. stakeholders to select language that is more Provide More Education and Improved understandable. Materials About Medi-Cal and the • Education could be provided in formats that are accessible to families from a wide range Waiver to Families and RC Staff of backgrounds. For example, this might We heard from RCs and families that certain require online or in-person events be offered aspects of the Medi-Cal and waiver enrollment in multiple languages or have interpreters process or the way that these programs are present. presented to families could be improved. Some • The terminology used by RC and county of these aspects are within the state’s control to staff could be standardized to reduce change easily, while others are not. For example, miscommunication between these agencies. the institutional deeming process requires the • More information could be provided to families family to complete the full Medi-Cal application, about the statutory changes made in 2017 to providing personal and income information about www.lao.ca.gov 15 analysis full gutter AN LAO REPORT limit what is recovered from the estates of combination with hands-on enrollment assistance, deceased beneficiaries. this approach could dispel misinformation about • DDS could engage all 21 RCs in regular Medi-Cal. For some families, understanding training and educational opportunities the other benefits of Medi-Cal outside the DDS to ensure RC staff, including service system, such as IHSS and/or coverage of private coordinators, understand Medi-Cal, the full insurance co-pays, could be incentive enough for range of Medi-Cal benefits potentially available them to apply. Moreover, providing better and more to consumers, the waiver, and enrollment consistent information could have benefits for those processes for each, among other topics. families already enrolled in Medi-Cal. These types of RC trainings would have Challenges With Providing More Education the added benefit of providing RC staff the and Improved Materials. Increased education opportunity to share their own best practices would not guarantee a family would enroll the and discuss examples of complex cases. consumer in Medi-Cal. Moreover, given the relatively limited pool of possible enrollees, the Costs to Providing More Education and cost of the outreach could outweigh the benefits Improved Materials. There likely would be costs of enrolling more consumers in Medi-Cal and in the low millions of dollars for this approach. the waiver. While we expect some of these costs (such as Assessment of Option to Provide More changing forms or standardizing information) could Education and Improved Materials. This be absorbed by DDS, adding staff to develop and approach would include numerous low-cost translate educational materials or conduct forums options for increasing awareness about Medi-Cal or trainings (or paying a contractor for these benefits and the enrollment process. It also is services) would increase costs to some degree highly feasible—it would involve changes to (likely not more than $2 million in total). Some forms; translation of forms; and development activities involving translation or interpretation and implementation of trainings, webinars, and likely could be covered by a recent ongoing other outreach and education options. While augmentation DDS received in the 2021-22 budget some of these efforts would take more time, ($10 million General Fund) for language access and planning, and stakeholder engagement than cultural competency orientations and training. others, they do not require changing anything Advantages of Providing More Education significant about enrollment rules or regulations. and Improved Materials. Families could make This option could improve equity by ensuring that more informed decisions based on consistent and all families understand the range of benefits for more comprehensive information about Medi-Cal which they are available, in a language and format with better educational outreach. Particularly in they understand. RECOMMENDATIONS Based on our fiscal assessment, enrolling more However, if the primary legislative goal were to DDS consumers in Medi-Cal and the waiver would maximize uptake in benefit programs for which not save the state money on net and actually would individuals are eligible, the Legislature could increase state costs given that more individuals consider option 3 (providing hands-on enrollment would be receiving state benefits across programs assistance) and/or option 4 (providing more in several departments. Accordingly, if the primary education and improved materials to families and legislative goal of increasing Medi-Cal and waiver RC staff). The relative benefits of option 3 versus enrollments in DDS were to save money, then option 4 depends on legislative priorities. For our analysis suggests that maximizing these example, if the Legislature would like to increase enrollments would not achieve that result. enrollments among the eligible, but do so without 16 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT increasing administrative costs significantly, we enrollments among at least some of the eligible, but recommend it require DDS to pursue option 4. If currently unenrolled, individuals. the Legislature is less worried about administrative We do not recommend the Legislature pursue costs, and sees benefit in helping both new options 1 (requiring enrollment) or 2 (incentivizing enrollees as well as those already enrolled with enrollment). Option 1—which had been proposed hands-on assistance, it could consider requiring by the administration as a budget solution in DDS and counties to pursue option 3. At a 2020—not only would not save the state money minimum, we recommend the Legislature require on net, but it potentially would discourage some DDS and DHCS to translate forms (the DDS low-income or undocumented families from seeking choice form and the DHCS waiver referral form) needed RC-coordinated services. Option 2 would into languages used by DDS consumers and their come with an uncertain cost, be complicated families. This is a simple, low-cost way to increase to design and implement, and may not be particularly effective. CONCLUSION The purpose of this report was to explore although more enrollments would save the state ways to increase Medi-Cal enrollment among money in the DDS system, they would lead to a DDS consumers as a way to increase federal net cost to the state once other Medi-Cal costs reimbursements through the waiver and 1915(i) are considered. The Legislature still might see a SPA and to provide a fiscal estimate of the total policy rationale for enrolling more eligible individuals impact on state spending. We find that the potential in Medi-Cal, however, and we find that providing for increasing Medi-Cal enrollment among DDS hands-on assistance and improving and expanding consumers is limited, given that most eligible adults education and awareness about the Medi-Cal and are enrolled already and many children do not waiver programs would be the best approaches for receive an RC-coordinated service (a prerequisite achieving that goal. for institutional deeming). Moreover, we find that www.lao.ca.gov 17 analysis full gutter AN LAO REPORT LAO PUBLICATIONS This report was prepared by Sonja Petek, and reviewed by Mark C. Newton and Carolyn Chu. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. To request publications call (916) 445-4656. This report and others, as well as an e-mail subscription service, are available on the LAO’s website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento, CA 95814. 18 LEGISLATIVE ANALYST’S OFFICE