Governor’s proposed budget

posted by: Amed Realty in Uncategorized


Governor Brown’s proposed 16-17 budget


Here are some very high-level excerpts from the budget summary:


Managed Care Organization Tax: The Budget proposes a tax reform package to extend a federally allowable managed care organization tax. The Budget also assumes that revenues from the tax be placed in a special fund and be used to restore the 7‑percent reduction to the In‑Home Supportive Services ($236 million annually). Finally, the Budget assumes the tax is in place for three years starting in 2016‑17.


Coordinated Care Initiative: Under current law, the Director of Finance is required to annually send to the Legislature a determination of whether the CCI is cost‑effective. If the CCI is not cost‑effective, the program would automatically cease operation in the following fiscal year. If the managed care tax is not extended, the Budget projects net General Fund costs for the CCI of approximately $130 million in 2016‑17 and beyond due to the factors outlined above. The Administration proposes to continue to implement the CCI in 2016. Over the course of the next year, the Administration will seek ways to improve participation in the program and extend an allowable managed care organization tax. If the tax is not extended and participation is not improved by January 2017, the CCI would cease operating effective January 2018


In Home Supportive Services: The Budget includes $9.2 billion ($3 billion General Fund) for the IHSS program in 2016‑17, an 8.4‑percent increase over the revised 2015‑16 level. Average monthly caseload in this program is estimated to be 490,000 recipients in 2016‑17, a 4.9‑percent increase from the 2015 Budget Act projection. General Fund costs in this program have doubled since 2010‑11, while caseload has increased 12 percent. The Budget proposes to restore the current 7‑percent across‑the‑board reduction in service hours with proceeds from the managed care organization tax effective July 1, 2016. The cost to restore the 7‑percent reduction is estimated to be $236 million in 2016‑17. For additional information on the tax, refer to the Department of Health Care Services section. Implementation of the U.S. Department of Labor regulations that require overtime pay for domestic workers is estimated to cost $700.4 million ($331.3 million General Fund) in 2015‑16 and $942 million ($443.8 million General Fund) annually thereafter. Chapters 29 and 488, Statutes of 2014 (SB 855 and SB 873), limit providers to a 66‑hour workweek. Providers who work for multiple recipients will be paid for their travel time between recipients, up to 7 hours per week. In late December 2014, a federal district court ruled that a portion of the overtime pay regulations exceeded the Department of Labor’s authority and voided the regulations. In August 2015, however, a U.S. Court of Appeals upheld the regulations. The ruling was appealed to the U.S. Supreme Court, but in October 2015, the Supreme Court denied the plaintiff’s request for a motion to stay the appellate court’s decision. The Court has not yet decided whether to consider the case. To allow for an orderly transition, minimize confusion, and permit time for IHSS automation changes, implementation of the federal overtime rules for IHSS providers is anticipated to begin February 1, 2016. Increased rates to cover these costs for developmental services providers became effective December 1, 2015.


SSI/SSP and CAPI: The Budget includes $2.9 billion General Fund for the SSI/SSP program. This represents a 2.8‑percent increase ($76.8 million) over the revised 2015‑16 budget. The average monthly caseload in this program is estimated to be 1.3 million recipients in 2016‑17, a slight increase over the 2015‑16 projected level. The SSI/SSP caseload consists of 71‑percent disabled persons, 28‑percent aged, and 1‑percent blind. SSA applies an annual cost‑of‑living adjustment to the SSI portion of the grant equivalent to the year‑over‑year increase in the Consumer Price Index (CPI). The current CPI growth factor is a projected 1.7 percent for 2017. The Budget also includes $40.7 million General Fund for a cost‑of‑living increase to the SSP portion of the grant equivalent to the increase in the California Necessities Index, which is estimated to be 2.96 percent. The increase would be effective January 1, 2017 and represents the first state‑provided cost‑of‑living increase since 2006. Effective January 2016, maximum SSI/SSP grant levels are $889 per month for individuals and $1,496 per month for couples. Under the Budget, maximum SSI/SSP monthly grant levels will increase by $17 and $31 for individuals and couples, respectively, effective January 2017. CAPI benefits are equivalent to SSI/SSP benefits, less $10 per month for individuals and $20 per month for couples.


Developmental Services: In recognition of these demands, the Budget includes $80 million ($50 million General Fund) for the following targeted investments in the developmental services system: • Establish 4‑bed Alternative Residential Model homes rate—$46 million ($26 million General Fund). The rates for these homes are old and were originally based on a 6‑bed model, so providers have two fewer beds from which to derive revenue while maintaining the same overhead. The smaller 4‑bed model is increasingly used by regional centers. A large portion of regional center clients living outside their family home live in Alternative Residential Model homes. • Case Managers—$17 million ($12 million General Fund). The federal government mandates a maximum caseload for each case manager employed by a regional center. These ratios were eroded during the recession to preserve direct services to regional center consumers and will be improved by the funding provided in the Budget. • Compliance with Home and Community‑Based Services Waiver requirements—$15 million ($11 million General Fund). The Department will target rate increases to providers to transition services like segregated day programs and Governor’s Budget Summary – 2016-17 Health and Human Services 72 uEYnqQoZ1215 sheltered workshops to models that are more integrated in the community and consistent with the Home and Community‑Based Services Waiver. The Administration will also continue its work with the developmental services community to develop data‑driven solutions to the issues facing regional centers and providers. Any additional targeted spending proposals are expected to be funded from the proposed extension of the managed care organization tax.  .