Health and Human Services
Proposed Budget-Balancing Reductions

Total budget-balancing reductions for the HHSA amount to $246.6 million ($181.1 million General Fund) and 11.2 positions in 2007-08 and $4.5 billion ($2.7 billion General Fund) and 367.5 positions in 2008-09. These reductions assume necessary statutory changes will be enacted by March 1, 2008.

Programs exempted from reductions include emergency medical assets, food borne illness and lead testing, Department of Mental Health state hospitals, funding for the California Child Support Automated System (CCSAS) to minimize unnecessary added risk to the project, funding to local child support agencies due to the nexus between local agency funding and support to the CCSAS project, certain Children's Outreach Initiative activities, and various areas within Medi-Cal (including audits and investigations, third-party liability, and long-term care rates for certain nursing facilities).

The major reductions are described below:


DEPARTMENT OF HEALTH CARE SERVICES
  • $33.4 million in 2007-08 and $602.4 million in 2008-09 from reducing Medi-Cal provider rates for physicians and other medical and service providers. A proportionate reduction will be made to managed care rates.
  • $34.4 million in 2008-09 by shifting federal Safety Net Care Pool payments from designated public hospitals to the portions of the California Children's Services (CCS), the Genetically Handicapped Persons, the Medically Indigent Adult-Long-term Care, and the Breast and Cervical Cancer Treatment programs, which are eligible for these funds. This shift will allow a corresponding reduction in General Fund for these programs.
  • $30 million in 2008-09 by reducing reimbursement rates for hospitals that do not contract with Medi-Cal.
  • $56.8 million in 2008-09 payments from a reduction in the payments to certain long-term care facilities.
  • $24 million in 2008-09 from reduced Medi-Cal Disproportionate Share Hospital replacement payments for private hospitals. These payments are allocated to hospitals based on their uncompensated Medi-Cal and uninsured care costs.
  • $10 million in 2007-08 and $134 million in 2008-09 by eliminating certain Medi-Cal optional benefits for adults including incontinence creams and washes, acupuncture, dental, audiology, optometry, optical, chiropractic, podiatry, psychology, and speech therapy.
  • $4.2 million in 2007-08 and $50.1 million in 2008-09 related to stopping the payment of Medicare Part B premiums for Medi-Cal share-of-cost beneficiaries who do not become Medi-Cal certified by meeting their share-of-cost during the month. These individuals are Medi-Cal eligible but have adjusted income that exceeds 129 percent of the Federal Poverty Level and have not spent down their excess income. They will have the option to pay their own premiums to maintain their Medicare Part B benefits.
  • $92.2 million in 2008-09 by reducing the 12 month Medi-Cal eligibility period for children and restoring quarterly status reports for both children and parents. Currently, children's eligibility is determined annually, while parent's eligibility is determined semi-annually. This proposal would reinstate quarterly status reports, which would allow an evaluation of the person's eligibility for Medi-Cal on a quarterly basis.
  • $75.8 million in 2008-09 in Medi-Cal payments to counties. Adjustments include: elimination of the California Necessities Index-based cost-of-living adjustment that would be provided to county eligibility, administrative, and support positions; elimination of caseload growth funding that is used to hire additional county staff to address increased workload due to increases in Medi-Cal eligibles; a reduction of the county administration base, which provides funding for staff, support, and staff development costs associated with the Medi-Cal eligibility process; and reductions in funding for administration of the CCS and Child Health Disability Prevention programs.

DEPARTMENT OF PUBLIC HEALTH
  • $11 million in 2008-09 for AIDS programs. This reduction will be achieved by reducing state support and local assistance for various programs, including AIDS Education and Prevention, AIDS Epidemiology Studies and Surveillance, AIDS Drug Assistance, and HIV Counseling and Testing. At this reduced level of funding, the state will continue to meet the federal maintenance-of-effort requirement for receipt of Ryan White Act funds.
  • $5.4 million for family health programs. This will result in a reduced level of state support and local assistance funding for case management services for at-risk teens, domestic violence prevention activities, and education activities including breastfeeding, nutrition, and Sudden Infant Death Syndrome risk reduction.
  • $3.3 million for local chronic disease programs. This will result in a reduced level of state support and local assistance funding for cancer and injury prevention surveillance activities, developing public health interventions, and monitoring environmental contaminants.

MANAGED RISK MEDICAL INSURANCE BOARD
  • $41.9 million in 2008-09 by reducing rates for Healthy Families Program plans, increasing premiums and co-pays, and instituting an annual cap on dental benefits.

DEPARTMENT OF DEVELOPMENTAL SERVICES
  • $348.3 million ($235.1 million General Fund) in 2008-09 through extension of existing Regional Center cost containment measures, including rate freezes on targeted program categories that are scheduled to sunset June 30, 2008.
  • $18.3 million ($14.2 million General Fund) in 2008-09 to freeze rates negotiated by regional centers for all provider types not yet frozen and to set parameters or limits on the rates for new providers with whom the regional centers may negotiate.
  • $0.8 million General Fund in 2008-09 to expand the Family Cost Participation Program (FCPP) by assessing a share of the cost of respite, day care, and camping services to parents of Early Start consumers and by expanding the share of cost scale so that families between 400 percent of the Federal Poverty Level (FPL) and 500 percent of the FPL will pay 10 percent of the cost of these services and families at 2,000 percent of the FPL or above will pay 100 percent of the cost of these services.

DEPARTMENT OF MENTAL HEALTH
  • $8.2 million General Fund in 2007-08 and $23.8 million General Fund in 2008-09 for managed care primarily by eliminating the annual cost-of-living increase and reducing the non-inpatient State Maximum Allowance (SMA).
  • $6.7 million General Fund in 2007-08 and $46.3 million General Fund in 2008-09 for the Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) program. The savings would be achieved primarily by requiring prior authorization by mental health providers for EPSDT day treatment that exceeds six months, eliminating the annual cost-of-living increase, and reducing the non-inpatient State Maximum Allowance (SMA).

DEPARTMENT OF SOCIAL SERVICES
  • $73.7 million in 2007-08 and $389.1 million in 2008-09 for the CalWORKs program. The savings would be achieved as part of a reform proposal intended to improve the state's work participation rate, as necessary to avoid federal sanctions. The proposal combines work incentives with sanctions for not meeting work requirements.
  • $83.7 million in 2008-09 in reduced Child Welfare Services allocations to counties. Counties will decide how to apportion the reduced allocation.
  • $6.8 million in 2007-08 and $81.5 million in 2008-09 for foster care and adoptions programs. The proposal would reduce rates for Foster Family Agencies, foster family homes, group homes, Adoptions Assistance, and Kin-GAP recipients.
  • $23.3 million in 2007-08 and $300.3 million in 2008-09 for the SSI/SSP program, achieved by suspending the June 2008 and June 2009 state COLAs. Recipients will still see increased benefit payments in both years due to provision of the federal COLAs.
  • $109.4 million in 2008-09 for the In-Home Supportive Services (IHSS) program by reducing the hours allocated to IHSS recipients for non-medical services.
  • $3.4 million in 2007-08 and $44 million in 2008-09 by eliminating the Interim Statewide Automated Welfare System (ISAWS) Migration project. The current ISAWS system remains fully operational and eliminating the ISAWS Migration project prevents the need to make reductions and introduce significant risk in other critical projects.
  • $2.3 million in 2008-09 by reducing community care licensing random visits. Under this proposal, 14 percent of facilities would receive random inspections annually. No reduction will be made to follow-up inspection schedules for facilities that have previously been found to be out of compliance with licensing standards.
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CHAPTER HIGHLIGHTS for Health and Human Services Back to Top

 Proposed Workload Budget
image of black pointing arrowProposed Budget-Balancing Reductions
 Other Special Session Issues
 Program Enhancements and Other Budget Adjustments
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Proposed Budget Detail - Health and Human Services
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