BILL ANALYSIS                                                                                                                                                                                                    Ó






                             SENATE COMMITTEE ON HEALTH
                          Senator Ed Hernandez, O.D., Chair

          BILL NO:       SB 1341
          AUTHOR:        Mitchell
          AMENDED:       April 7, 2014
          HEARING DATE:  April 30, 2014
          CONSULTANT:    Bain

           SUBJECT  :  Medi-Cal: Statewide Automated Welfare System.
           
          SUMMARY  : Requires the Statewide Automated Welfare System to be  
          the system of record for Medi-Cal and to contain all Medi-Cal  
          eligibility rules and case management functionality. Authorizes  
          the California Healthcare Eligibility, Enrollment, and Retention  
          System to house the business rules necessary for an eligibility  
          determination to be made for a Modified Adjusted Gross Income  
          eligibility determination. Specifies the manner in which the  
          functionality to create and send notices of action for Medi-Cal  
          and advanced premium tax credits would be implemented.

          Existing law:
          1.Requires the Office of Systems Integration (OSI) to implement  
            a statewide automated welfare system for the following public  
            assistance programs:

                  a.        The CalWORKs program;
                  b.        CalFresh;
                  c.        The Medi-Cal program;
                  d.        The foster care program;
                  e.        The refugee program; and, 
                  f.        County medical services programs.

          2.Requires statewide implementation of the Statewide Automated  
            Welfare System (SAWS) for the programs listed in 1) above to  
            be achieved through no more than four county consortia,  
            including the Interim SAWS Consortium, and the Los Angeles  
            Eligibility, Automated Determination, Evaluation, and  
            Reporting System (LEADER). Requires OSI to oversee the  
            migration of the 39 counties composing the C-IV Consortium  
            into a system jointly designed by the 39 counties plus Los  
            Angeles County under the LEADER Replacement System contract.  
            Requires this migration to result in a new consortium to  
            replace the LEADER and C-IV Consortia.
          
          This bill:
                                                         Continued---



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          1.Requires SAWS to be the system of record for Medi-Cal, and  
            requires SAWS to contain all Medi-Cal eligibility rules and  
            case management functionality.

          2.Permits, as an exception to 1) above, the business rules  
            necessary for an eligibility determination to be made under  
            the Modified Adjusted Gross Income (MAGI) rules pursuant to  
            the federal Patient Protection and Affordable Care Act (ACA)  
            to be housed in the California Healthcare Eligibility,  
            Enrollment, and Retention System (CALHEERS). Requires, if DHCS  
            implements this authority to house the MAGI business rules in  
            CalHEERS, these business rules to be made available to the  
            SAWS consortia through an automated interface in order for the  
            consortia to determine eligibility for Medi-Cal under the MAGI  
            rules.

          3.Requires, effective January 1, 2016, the functionality to  
            create and send notices of action for Medi-Cal and advanced  
            premium tax credits (APTC), to be implemented consistent with  
            the following:

                  a.        Requires SAWS to be used to generate noticing  
                    language and NOA documents, and to send NOA documents  
                    for all Medi-Cal programs (MAGI and non-MAGI).

                  b.        Requires CalHEERS to be used to:

                        i.             Generate noticing language for  
                         APTC, including, but not limited to, Medi-Cal  
                         denial noticing language related to APTC  
                         approvals; and,

                        ii.            Generate and send NOA documents for  
                         the APTC only program. These two provisions apply  
                         if DHCS exercises its authority to house the MAGI  
                         business rules in CalHEERS.

                  c.        Requires SAWS to be used to combine the  
                    noticing language for Medi-Cal programs generated by  
                    SAWS and the noticing language for APTCs generated by  
                    CalHEERS into one notice, and requires SAWS to be used  
                    to send the document as one combined notice for all  
                    programs in any mixed eligibility cases that include  
                    an approval or approvals for MAGI Medi-Cal eligibility  
                    determinations, non-MAGI Medi-Cal eligibility  
                    determinations, or both, and APTC approvals. This  




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                    provision applies if DHCS exercises its authority to  
                    house the MAGI business rules in CalHEERS.

           FISCAL EFFECT  :  This bill has not been analyzed by a fiscal  
          committee.

           COMMENTS  :  
           1.Author's statement. According to the author, this bill will  
            clarify the respective roles of SAWS and CalHEERS in order to  
            minimize confusion and errors related to Medi-Cal eligibility  
            under the ACA. This bill will also ensure that NOAs are able  
            to be tailored in the manner consistent with legal  
            requirements, and will protect the counties' ability to  
            correct erroneous denials or benefits assignments.

          2.Background. The federal ACA changed the income eligibility  
            rules for Medicaid for the newly eligible and some of the  
            currently eligible to a tax-based system for counting  
            individual or household income called Modified Adjusted Gross  
            Income (MAGI). These MAGI income counting eligibility rules  
            are also used to calculate eligibility for APTCs and  
            cost-sharing subsidies in Covered California. 

          
          CalHEERS contains the business rules for MAGI eligibility  
            determinations and is used by both Covered California and  
            counties in determining eligibility for APTC and MAGI  
            Medi-Cal. CalHEERS is a web-based application portal where  
            individuals and small businesses can research, compare, check  
            their eligibility for, apply, and purchase health coverage.  
            CalHEERS was designed to interface with various federal,  
            state, and local information technology systems to perform the  
            administrative functions necessary for the purchase of health  
            insurance. For example, CalHEERS is required to interface with  
            a federal data hub (a database that consolidates data from the  
            Internal Revenue Service, Social Security Administration, and  
            other federal entities) to assess income, citizenship, and  
            other data necessary to determine eligibility for various ACA  
            health coverage options. CalHEERS must interface with the  
            three SAWS consortia, which have their own eligibility  
            determination functionality built into their own system (the  
            three consortia are LEADER, California Work Opportunity and  
            Responsibility to Kids Information Network [CalWin], and  
            Consortium IV [C-IV]). The interface between SAWS and CalHEERS  
            went live on January 21, 2014, but it continues to be  




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            upgraded. 
          3.Notices of Action. Existing law requires county social service  
            departments to notify beneficiaries in writing of their  
            Medi-Cal-only eligibility or ineligibility, and of any changes  
            made in their eligibility status or share of cost. These  
            notifications are called a "Notice of Action." NOAs inform  
            Medi-Cal beneficiaries of:

                  a.        Any approval, denial or discontinuance of  
                    eligibility; 

                  b.        A change in the beneficiary's share of cost; 

                  c.        The reason an action is being taken and the  
                    law or regulation that requires the action (if the  
                    action is a denial, discontinuance or increase in  
                    share of cost); and, 

                  d.        The right to request a state hearing.

            NOAs must also include the name and telephone number of the  
            eligibility worker who completed the eligibility  
            determination, and the date the form was completed. As  
            currently designed, CalHEERS does not allow counties to  
            create, edit, and send NOAs for Medi-Cal.

          1.Prior legislation. AB 1296 (Bonilla), Chapter 641, Statutes of  
            2013 enacts the Health Care Eligibility, Enrollment and  
            Retention Act, requiring state entities who administer health  
            care coverage programs to undertake a variety of activities  
            related to eligibility, enrollment and renewal of health care  
            coverage through Medi-Cal, the Healthy Families Program, and  
            Covered California. AB 1296 required that an individual  
            screened as not eligible for MAGI Medi-Cal but who may be  
            potentially eligible for Medi-Cal on another basis to have his  
            or her application or case forwarded to the Medi-Cal program  
            for an eligibility determination.

          2.Support. This bill is jointly sponsored by the County Welfare  
            Directors Association (CWDA) and the Service Employees  
            International Union. CWDA argues, in light of the decision to  
            build CalHEERS, an agreement was reached between the  
            Administration, Covered California, and the counties that  
            reflected existing statute naming SAWS as the system of record  
            for Medi-Cal and requiring Medi-Cal eligibility functions to  
            be in SAWS. Per the agreement, CalHEERS would serve as the  




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            system that applies the new MAGI rules, and SAWS was to  
            proceed with all other eligibility and enrollment case  
            functions. CWDA states the intent of SAWS serving as the  
            system of record is to ensure program efficiency, efficacy,  
            continuity, and cohesiveness via multi-program case  
            management, and to allow for ease of access to Medi-Cal while  
            providing a more simplified process. This bill would codify  
            the agreed upon automation approach designed to  
            comprehensively and seamlessly serve families' needs for both  
            their health care and human service needs.  This approach  
            allows families and individuals to obtain coordinated  
            services, both when they initially apply and as their  
            circumstances change.


          The second component of this bill is which entities issue NOAs.  
            CWDA states a key issue with the design of CalHEERS is that is  
            it does not enable counties to create, edit, and send NOAs for  
            Medi-Cal. NOAs are the documents that inform applicants and  
            beneficiaries of their eligibility results and provide them  
            with information on how to appeal decisions made about their  
            case. Without the ability to customize notices in the manner  
            consistent legal requirements, CWDA states clients will  
            receive significantly less informative or incomplete notices,  
            leading to increased questions and confusion about what is  
            happening with their case and potentially making it more  
            difficult for them to exercise their due process rights.
            Western Center on Law & Poverty (WCLP) writes it supports  
            state law making clear that SAWS is the system of record for  
            Medi-Cal and should have all the Medi-Cal eligibility rules -  
            with the caveat that the SAWS can access the new Medi-Cal  
            rules through an interface with CalHEERS. WCLP states, as  
            advocates for low-income consumers, it knows that many of its  
            clients qualify for multiple public programs such as CalWORKs,  
            CalFresh and Medi-Cal, and having one system and entity  
            maintaining their benefits is both consumer-friendly for  
            Californians and efficient administratively. Regarding NOAs,  
            WCLP states it has advocated for understandable, thorough,  
            timely notices telling consumers about their eligibility and  
            their rights. Sadly, this goal has been elusive and the  
            notices neither understandable nor timely. Given the many  
            competing demands on CalHEERS, WCLP says it has determined  
            that consumers' interests would be better served by having the  
            Medi-Cal notices generated in SAWS with the important caveat  
            that consumers should receive consolidated notices advising  




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            them about their eligibility for both Medi-Cal and Covered  
            California.

          3.Drafting issue. Under existing law, until July 1, 2015,  
            CalHEERS is jointly managed by DHCS and Covered California.  
            This bill designates DHCS as the entity that would be  
            authorized to decide if the business rules necessary for a  
            MAGI eligibility determination are housed in CalHEERS. In  
            discussions with the one of the bill's sponsors, they  
            indicated it was not intending that this bill change which  
            entity makes the decision on this issue. An amendment is  
            needed to clarify that the decision-making entity is not  
            changed by this bill. 


           SUPPORT AND OPPOSITION  :
          Support:  County Welfare Directors Association (co-sponsor)
          Services Employees International Union California (co-sponsor)
                    Tehama County Department of Social Services  
                    (co-sponsor)
                    Alameda County Social Services Agency
                    American Federation of State, County and Municipal  
                    Employees, AFL-CIO
                    California State Association of Counties
                    County of San Bernardino
                    County of San Diego
                    Del Norte County Board of Supervisors
                    San Mateo County Board of Supervisors
                    Santa Cruz County Board of Supervisors
                    Sonoma County Board of Supervisors
                    Ventura County Board of Supervisors
                    Western Center on Law & Poverty

          Oppose:   None received

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