DHCS Provides Budget Overview to Assembly Subcommittee No. 1 on Health and Human Services

As budget hearings continue to ramp up, this week the Assembly Budget Subcommittee No. 1 on Health and Human Services convened two hearings. Monday’s hearing focused on issues related to the Department of Health Care Services (DHCS) and the Department of Managed Health Care, while Thursday’s hearing focused on the Department of Rehabilitation and the Department of Developmental Services.

On Monday, DHCS Director Jennifer Kent provided members with an overview of the DHCS budget of roughly $104.5 billion for FY 2018-19. She highlighted key policy changes reflected in the Governor’s budget proposal, including the proposed 50 percent increase to home health rates for fee-for-service and waiver populations, utilizing Proposition 56 funds. In addition, she noted the proposed increase of $232 million in Proposition 56 funding to maintain supplemental payments negotiated in last year’s budget and provide supplemental payments to physician and dental providers.

Director Kent also reiterated the estimates included in the Governor’s budget for the Children’s Health Insurance Program (CHIP) was prior to the reauthorization by Congress. In light of this, the May Revision will update estimates to take into consideration the reauthorization at the enhanced federal match of 88 percent. During her comments, she also alluded to the proposed elimination of the 340B Program, which would be discussed further in an upcoming hearing.

Committee members demonstrated an interest in the Administration’s Proposition 55 calculation. Recall, in 2016 voters passed Proposition 55, which extended a tax on high-income earners in California. The proposition requires the Administration to perform a calculation to determine if additional funding is available for Medi-Cal. The Administration’s calculation did not result in additional funding for Medi-Cal. Members specifically questioned the Administration’s application of the additional $3.5 billion deposit into the Rainy Day fund. The topic will be revisited in a future hearing.

All items for the subcommittee hearing were left open. A complete agenda can be found here.