BILL ANALYSIS �
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THIRD READING
Bill No: SB 1341
Author: Mitchell (D)
Amended: 5/6/14
Vote: 21
SENATE HEALTH COMMITTEE : 7-0, 4/30/14
AYES: Hernandez, Morrell, De Le�n, DeSaulnier, Evans, Monning,
Wolk
NO VOTE RECORDED: Beall, Nielsen
SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/23/14
AYES: De Le�n, Walters, Gaines, Hill, Lara, Padilla, Steinberg
SUBJECT : Medi-Cal: Statewide Automated Welfare System
SOURCE : County Welfare Directors Association
Services Employees International Union California
Tehama County Department of Social Services
DIGEST : This bill requires the Statewide Automated Welfare
System (SAWS) 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 (CalHEERS) to
house the business rules necessary for an eligibility
determination to be made for a Modified Adjusted Gross Income
(MAGI) 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.
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ANALYSIS : 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.
1.Requires statewide implementation of 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:
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 MAGI rules pursuant to the federal Patient Protection and
Affordable Care Act (ACA) to be housed in CalHEERS. Requires,
if this authority is implemented, 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:
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A. Requires SAWS to be used to generate noticing language
and notice of Action (NOA) documents, and to send NOA
documents for all Medi-Cal programs (MAGI and non-MAGI).
B. Requires CalHEERS to be used to:
Generate noticing language for APTC, including, but
not limited to, Medi-Cal denial noticing language related
to APTC approvals; and,
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.
A. 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 provision applies if DHCS exercises its authority to
house the MAGI business rules in CalHEERS.
Background
The 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 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,
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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 upgraded.
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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
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% would be available for those costs and it may be
possible for the state to receive an enhanced federal match
up to 90%.
Potential cost savings to counties, possibly in the tens of
millions, depending on the additional workload they are
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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
counties believe this should reduce administrative workload
going forward.
SUPPORT : (Verified 5/23/14)
County Welfare Directors Association (co-source)
Services Employees International Union California (co-source)
Tehama County Department of Social Services (co-source)
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
ARGUMENTS IN 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 system
that applies the new MAGI rules, and SAWS was to proceed with
all other eligibility and enrollment case functions. CWDA states
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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 codifies 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.
JL:nl 5/23/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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