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--- SB 1341 | Page 2 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 SB 1341 | Page 3 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 SB 1341 | Page 4 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 SB 1341 | Page 5 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 SB 1341 | Page 6 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 -- END -