California As A Bellwether

Executive Briefing | by | July 24, 2015


Athena Mandros
Athena Mandros

If you are looking for trends in the health and human services industry, you should be looking towards California, as it may very well be the “bellwether” of policy change. If you aren’t familiar with the term, it references an archaic practice wherein shepherds would place a bell on one of the sheep leading their flock. The bell alerted the shepherd to where the flock was heading. Today, the term is used to describe a leader or trendsetter.

So why is California a bellwether? Part of the reason is its size. California has over 38 million residents and more than 12 million Medicaid enrollees. Additionally, California is geographically diverse – there are dense urban areas, suburbs, rural areas, and nearly empty deserts. With this diversity, parts of California mimics nearly every state in the country. California’s demographics alone, however, do not make it a bellwether – it’s also a center for rapid policy innovation.

California was one of the first states to expand Medicaid under the Patient Protection and Affordable Care Act (PPACA). And looking across the Medicaid system (or Medi-Cal, as the program is named in California), behavioral health system, intellectual/developmental disabilities (I/DD) system, and child welfare system, there are large changes on the horizon. From more managed care, to increased performance transparency, and a greater focus on community-based care, these state policies embody many of the national trends that are shaping the health and human services field. We’ll cover all of these trends over the next week, but today I want to focus specifically on the changes that are influencing the Medi-Cal delivery system.

Like many states, California has largely moved to a managed care delivery system. Just last December, 68% of the population was enrolled in managed care. Seven months later, 80% of the population was enrolled in managed care (see California Behavioral Health System State Profile Report). This jump occurred because in December 2014, the remaining seniors and persons with disabilities were enrolled in managed care (see California Shifting 24,000 Seniors & Persons With Disabilities In 19 Counties To Medi-Cal Managed Care). Additionally, California has pushed to enroll dual eligibles in managed care plans.

In 2013, California adopted the Coordinated Care Initiative (CCI). The CCI is designed to better coordinate care for individuals with complex care needs, including dual eligibles. The CCI has three components: a dual eligible demonstration, Medicaid managed care for dual eligibles, and managed long-term services and supports (LTSS). In 2014, California partnered with the Centers for Medicare and Medicaid Services (CMS) to implement a dual demonstration, called Cal Medi-Connect. Cal Medi-Connect enrolls dual eligibles in seven counties (Los Angeles, San Diego, Riverside, San Bernardino, San Mateo, Santa Clara, and Orange County) into managed care plans that receive a blended rate to provide physical health, some behavioral health, and LTSS. Like many other states, however, the demonstration has had some hiccups and may not be scalable (see CalOptima’s OneCare Health Plan Problems Delay Participation In California Dual Eligible Pilot, New Lawsuit Filed To Block Duals Plan, and Orange County Enrollment Update). Additionally, California is requiring dual eligibles in these counties to receive their Medi-Cal benefits through managed care if they choose not to participate in the demonstration (see California Creates Two Options For Dual Eligibles – Mandatory Enrollment In Medicaid Managed Care Or Dual Eligibles Demonstration).

Finally, like many other states, California is testing whether managed LTSS is a viable option for all Medi-Cal enrollees. As the last part of CCI, individuals who reside in the dual eligible demonstration counties must receive long-term services and supports from the Medicaid plan. If this demonstration is successful, California will expand managed LTSS to the rest of the state.

The behavioral health system is California also differs from the rest of the country and can be considered a bit of an anomaly. Behavioral health services are managed by a variety of different systems. The physical health plans are responsible for traditional behavioral health services for individuals without serious mental illness (SMI). For individuals in need of more intensive behavioral health services, each county operates a mental health plan (MHP) that provides specialty mental health services. MHPs are reimbursed for all services by the state and are not at-risk for services provided. The Medicaid waiver that allows for this system of carving out management of specialty behavioral health services to county mental health plans was just renewed for another five years (see California’s Mental Health Carve-Out Preserved For Five Years, But With New Performance Transparency Requirements). Finally, the state provides some addiction treatment services and mental health pharmacy through Drug Medi-Cal, a fee-for-service program run by the state.

Tune in over the next week as we take a closer look at the California market and what is in store for the behavioral health market. And, be sure to join us in San Diego on August 26 and 27 for The 2015 OPEN MINDS California Management Best Practices Institute.


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