BILL ANALYSIS �
SB 1341
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Date of Hearing: June 24, 2014
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
SB 1341 (Mitchell) - As Amended: May 6, 2014
SENATE VOTE : 35-0
SUBJECT : Medi-Cal: Statewide Automated Welfare System.
SUMMARY : 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.
Specifically, this bill :
1)Allows 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).
2)Requires, if the Department of Health Care Services (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, 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). If DHCS chooses to house the MAGI
business rules in CalHEERS:
a) Requires CalHEERS to be used to generate noticing
language for premium tax credit program; and,
b) Requires SAWS be used to combine the noticing language
for Medi-Cal programs generated by SAWS and the noticing
language for premium tax credit programs generated by
CalHEERS into one notice, and requires SAWS to be the
system used to send the document as one combined notice, as
specified.
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EXISTING LAW :
1)Requires the Office of Systems Integration (OSI) to implement
a statewide automated system for California Work Opportunity
and Responsibility to Kids program (CalWORKs), CalFresh,
Medi-Cal, foster care, refugee program, and County medical
services programs. The system that was eventually developed
is now known as SAWS.
2)Requires statewide implementation of SAWS to be achieved
through no more than four county consortia and requires OSI to
oversee the migration of counties in different systems into
SAWS by specified times.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
1)One-time anticipated cost of about $6 million to make system
changes to the SAWS, to allow counties to issue NOAs (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%.
2)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 NOAs 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 NOAs 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.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill will
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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 MAGI. These MAGI
eligibility rules are also used to calculate eligibility for
advance premium tax credits (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,
and Consortium IV). The interface between SAWS and CalHEERS
went live on January 21, 2014, but it continues to needed
significant upgrades and fixes.
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 NOAs. NOAs inform Medi-Cal
beneficiaries of:
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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.
4)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 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
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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, WCLP adds, 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 them about their eligibility for both
Medi-Cal and Covered California.
5)PREVIOUS 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.
REGISTERED SUPPORT / OPPOSITION :
Support
County Welfare Directors Association of California (sponsor)
Alameda County Board of Supervisors
Butte County Department of Employment and Social Services
Calaveras Health and Human Services Agency
California State Association of Counties
City and County of San Francisco
Colusa County Board of Supervisors
Contra Costa County Board of Supervisors
Contra Costa County Employment & Human Services Department
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County of San Diego
Del Norte County Board of Supervisors
Health Access California
Imperial County Board of Supervisors
Kings County Human Services Agency
Lake County Department of Social Services
LIUNA Locals 777 & 792
Los Angeles County Board of Supervisors
Nevada County Department of Social Services
Riverside County Department of Social Services
San Luis Obispo County Department of Social Services
San Mateo County Board of Supervisors
SEIU California
Stanislaus County Community Services Agency
Tehama County Social Services
Ventura County Board of Supervisors
Western Center on Law and Poverty
Opposition
None on file.
Analysis Prepared by : Roger Dunstan / HEALTH / (916) 319-2097