BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 1341 (Mitchell) - Medi-Cal: Statewide Automated Welfare
System.
Amended: May 6, 2014 Policy Vote: Health 7-0
Urgency: No Mandate: No
Hearing Date: May 19, 2014 Consultant: Brendan McCarthy
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 1341 would require the Statewide Automated
Welfare System to be the system of record for the Medi-Cal
program. The bill would specify the process for sending notices
of action to applicants for Medi-Cal and subsidized coverage
through Covered California.
Fiscal Impact:
One-time anticipated cost of about $6 million to make
system changes to the Statewide Automated Welfare System, to
allow counties to issue notices of action (General Fund and
federal funds). While county-led consortia would incur costs
to upgrade the systems, those costs would be considered
Medi-Cal administrative costs and would be paid through the
Medi-Cal program. Federal funding of at least 50 percent
would be available for those costs and it may be possible
for the state to receive an enhanced federal match up to 90
percent.
Potential cost savings to counties, possibly in the tens of
millions, depending on the additional workload they are
likely to see due to existing problems with the notice of
action process (General Fund and federal funds). Based on
recent problems with notifications to applicants by Covered
California and the requirement that most notices of action
will be created by Covered California, rather than the
counties as has been the historic practice, the counties
anticipate a great deal of additional administrative work to
assist confused applicants and applicants who have been
improperly denied eligibility. By gaining the ability to
send notices of action, the counties indicate that they will
be able to fix erroneous eligibility determinations and
provide additional information in a notice of action. The
SB 1341 (Mitchell)
Page 1
counties believe this should reduce administrative workload
going forward.
Background: Historically, county welfare departments processed
most Medi-Cal applications, made eligibility determinations, and
sent notices of action to applicants (to inform them about the
outcome of their application and provide additional information
about the process). Counties use one of three Statewide
Automated Welfare Systems to process eligibility determinations.
Pursuant to the federal Affordable Care Act, the state has made
several very significant changes to the Medi-Cal program. The
state generally uses a new standard for determining eligibility
for Medi-Cal (modified adjusted gross income or MAGI) and the
state has expanded eligibility for Medi-Cal. Also, the state has
set up Covered California to provide a single point of entry for
applications for Medi-Cal and subsidized health care coverage.
Under current practice, Covered California processes
applications for health care coverage and determines eligibility
for subsidized coverage or Medi-Cal eligibility under MAGI.
Medi-Cal eligibility information is then sent to the counties.
However, Covered California currently sends out notices of
action for the eligibility determinations it has made. Prior to
2014, county eligibility workers had the ability to modify
notices of action before they were sent out, to correct any
errors in eligibility determinations. Under current practice
they cannot. This has led to confusion by applicants when
erroneous eligibility determinations have been made by Covered
California and the counties cannot correct those errors before
applicants are notified.
Proposed Law: SB 1341 would require the Statewide Automated
Welfare System to be the system of record for the Medi-Cal
program.
Specific provisions of the bill would:
Require the Statewide Automated Welfare System to be the
system of record for the Medi-Cal program, and to contain
eligibility rules and case management functions for the
program;
Authorize CalHEERS to be used to make MAGI-based
eligibility determinations for Medi-Cal;
Require the Statewide Automated Welfare System to be used
SB 1341 (Mitchell)
Page 2
to send out notices of action for all Medi-Cal programs;
Allow CalHEERS to be used notices of denial for Medi-Cal
when an applicant is eligible for subsidized coverage
through Covered California;
Require the Statewide Automated Welfare System to be used
to send a notice of action for any household that has both
Medi-Cal eligible and subsidized coverage eligible
individuals;
Makes the notice of action requirements operative on
January 1, 2016.