CA $6.2 Billion Medicaid Waiver Approved

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One key facet of health care reform is Medicaid expansion.  The Affordable Care Act (ACA) gave states the option to expand Medicaid eligibility to all adults with incomes under 138% of the federal poverty line in order to reduce the number of low income individuals who are uninsured.  California, along with 29 other states and the District of Columbia, has expanded eligibility.

Waivers under section 1115 of the Social Security Act give states the opportunity to use federal funds to implement alternative approaches to provide Medicaid services.  Waivers must be approved by the Centers for Medicare & Medicaid Services (CMS) and are usually valid for 5 years.

After the ACA was signed into law, California implemented its “Bridge to Reform” program, which was pursuant to a section 1115 waiver that expired at the end of 2015.  CMS recently approved California’s latest section 1115 waiver request called “Medi-Cal 2020” that will provide $6.2 billion in federal funds to encourage further innovation in health care delivery, including ensuring access to care and payment based on the value of care rather than volume.

In particular, California will pursue reform in four areas:

  • Adoption of alternative payment methodologies and integration of care for public hospitals through a new plan called PRIME – Public Hospital Redesign and Incentives in Medi-Cal.  PRIME builds on the previous Delivery System Reform Incentive Payment program.
  • Creation and testing of new global payment approach for the uninsured in designated public hospital systems.  The Global Payment Program for Public Health System will focus on the value of care, rather than the volume, provided to the uninsured and encourage primary and preventive care.
  • Implementation of a dental pilot program for low income children, offering financial incentives to dental providers who render necessary preventive care and treatment.
  • Creation of a Whole Person Care (WPC) pilot program targeting high users of Medi-Cal services.  The goal of WPC is to better coordinate care, including mental and social services, in a patient-centered manner that improves health and well being through a more efficient and effective use of resources.