At first glance, it seems somewhat strange that California just enacted a law, proposed by the administration of Gov. Jerry Brown (D), giving the state an “escape clause” from participating in the massive CMS-backed Medicare-Medicaid dual eligibles demonstration program for which the Brown administration energetically applied and won approval. But further analysis shows the desire for an “out,” which it hopes not to use, largely comes down to two undeniable issues: time and money.
California is trying to shed a massive budget deficit that is forcing cuts in many state programs. Part of the cause of the budget deficit, in fact, is huge state spending on services for the approximately 1.1 million duals in the state, spending that the state hopes to slash with the aid of the duals demo. But the great care with which the demo is being prepared, under pressure from state and federal legislators and advocacy groups, means the starting date keeps getting pushed back and the size of the demo keeps getting scaled down. And that’s a problem since California had budgeted large savings coming from the demo for the upcoming fiscal year.
Jane Ogle, deputy director of the state’s Department of Health Care Services, says the bill (SB 94) passed June 17 and signed by Brown June 27, is mainly “just to keep our options open.” She explains that if the state, CMS and the health plans chosen for the program can’t reach the required agreement on three-way contracts in time or if the scaled-down program won’t save as much as the state projected in its budget, California could withdraw from the demo before it starts. It then could launch an already-authorized long-term support services (LTSS) program that figures to cut the state’s Medicaid costs for duals by avoiding unnecessary institutionalizations.
What do you think is likely to happen? Is the de-linking of the duals demo just “an insurance policy” step as Ogle says, or does it represent a bad case of cold feet or even buyer’s remorse? What is CMS likely to do about the new state law, which appears to violate its Memorandum of Understanding on the duals demo with California? Is this just a bluff in a high-stakes poker game, or is California really likely to pull the plug?
http://aishealth.com/blog/medicare-advantage-and-part-d/californias-duals-bill-head-scratcher-time-not-states-side
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