County of Los Angeles Health and Mental Health Services

County of Los Angeles Health and Mental Health Services

FESIA A. DAVENPORT

Chief Executive Officer

DATE: TIME:

Wednesday, June 9, 2021 10:00 a.m.

DUE TO CLOSURE OF ALL COUNTY BUILDINGS, MEETING WILL BE HELD BY PHONE.

TO PARTICIPATE IN THE MEETING, PLEASE CALL AS FOLLOWS: DIAL-IN NUMBER: 1 (323) 776-6996 CONFERENCE ID: 479494149#

MS Teams link (Ctrl+Click to Follow Link) THIS TELECONFERENCE WILL BE MUTED FOR ALL CALLERS. PLEASE DIAL *6 TO

UNMUTE YOUR PHONE WHEN IT IS YOUR TIME TO SPEAK.

AGENDA

Members of the Public may address the Health and Mental Health Services Meeting on any agenda item. Two (2) minutes are allowed for each item.

I. Call to order

II. Presentation Item(s):

a. DHS: DHS Fiscal Outlook

b. DMH: Request Delegated Authority to Amend an Existing Legal Entity Contract with The People Concern to Increase the Maximum Contract Amount due to the Post Annual Cost Report Adjustment for Fiscal Year 2019-20

III. Items Continued from a Previous Meeting of the Board of Supervisors or from the Previous Agenda Review Meeting

IV. Items not on the posted agenda for matters requiring immediate action because of an emergency situation, or where the need to take immediate action came to the attention of the Department subsequent to the posting of the agenda

V. Public Comment

Page 1 of 2

VI. Adjournment Page 2 of 2

D R A F T

June 22, 2021

Los Angeles County Board of Supervisors

Hilda L. Solis

First District

Holly J. Mitchell

Second District

Sheila Kuehl

Third District

Janice Hahn

Fourth District

Kathryn Barger

Fifth District

TO:

Supervisor Hilda L. Solis, Chair

Supervisor Holly J. Mitchell

Supervisor Sheila Kuehl

Supervisor Janice Hahn

Supervisor Kathryn Barger

FROM:

Christina R. Ghaly, M.D. Director

SUBJECT: DEPARTMENT OF HEALTH SERVICES' (DHS) FISCAL OUTLOOK

Christina R. Ghaly, M.D.

Director

Hal F. Yee, Jr., M.D., Ph.D.

Chief Deputy Director, Clinical Affairs

Nina J. Park, M.D.

Chief Deputy Director, Population Health

Elizabeth M. Jacobi, J.D.

Administrative Deputy

313 N. Figueroa Street, Suite 912 Los Angeles, CA 90012

Tel: (213) 288-8050 Fax: (213) 481-0503

dhs.

"To advance the health of our patients and our communities by providing extraordinary care"

This is to provide an update to DHS' fiscal forecast for Fiscal Years (FY) 2020-21 through 2023-24 (Attachment I). The Department is forecasting a small surplus of $2.7 million in FY 2020-21. For each of the following fiscal years through FY 2023-24, we are projecting shortfalls. Due to the ongoing structural deficit, use of the Department's fund balance will be necessary to cover the anticipated shortfalls. We expect that by FY 2023-24, the estimated fund balance will be $56.4 million.

The forecast does not include the fiscal impacts that may result from a renewed five-year 1115 Waiver and/or the implementation of the "California Advancing and Innovating Medi-Cal" (CalAIM) program, discussed below.

Significant Updates Since Last Fiscal Outlook

1115 Waiver One-Year Extension

The Centers for Medicare and Medicaid Services (CMS) approved a one-year extension through December 31, 2021, including Whole Person Care (WPC) and the Global Payment Program (GPP). Under the prior Waiver, GPP was a combination of Disproportionate Share Hospital (DSH) and Safety Net Care Pool (SNCP) funds; however, the SNCP portion of GPP was discontinued effective June 30, 2020. The Department of Health Care Services (DHCS) has submitted proposed amendments to the Waiver's Special Terms and Conditions to reinstate SNCP effective July 1, 2020, and to continue SNCP funding throughout the one-year Waiver extension. A response from CMS is pending.

dhs.

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D R A F T

CalAIM

DHCS has been developing a multi-year plan called "CalAIM" under a 1915(b) waiver that would implement broad delivery system and program changes in the Medi-Cal program. In general, CalAIM services are patterned on a WPC approach that addresses the clinical and non-clinical circumstances of high-need patients whose health outcomes are, in part, driven by unmet social need, such as homelessness, food insecurity, etc. CalAIM incorporates some WPC services into Medi-Cal managed care with the aim of addressing some of the social determinants of health as well as reducing health disparities and inequities.

The CalAIM plan would provide "enhanced care management" (ECM), which is an interdisciplinary and comprehensive coordination of services, and "in lieu of services" (ILOS), which are alternative non-medical types of assistance, e.g., recuperative care, short-term post-hospitalization housing, sobering centers, and others. It is expected that CalAIM will become effective January 1, 2022, concurrent with the requested effective date of a renewed five-year 1115 Waiver. The Alliance for Health Integration is convening regular cross-departmental meetings between the Departments of Mental Health (DMH), Public Health, and DHS, including others where needed, to facilitate collaboration throughout the CalAIM planning process.

1115 Waiver Five-Year Renewal

DHCS is currently developing a five-year renewal of the 1115 Waiver which would be effective through December 31, 2026. The proposal includes full funding for SNCP and a redesigned GPP with two funding pools: 1) DSH/SNCP, and 2) an "equity" pool to fund expanded WPC-type services for the uninsured. The services for the uninsured would mirror those provided to Medi-Cal beneficiaries under CalAIM, e.g., ILOS. The five-year Waiver proposal must be submitted to CMS by June 30, 2021.

DHCS is also pursuing federal funding to support delivery system reform through an initiative called "Providing Access and Transforming Health (PATH). The PATH program will include payments to WPC providers for capacity building, infrastructure, and information technology system supports to help transform WPC services to communitybased ECM and ILOS. DHCS is planning to ask for $450.0 million in Year One, $300.0 million in Year Two, $250.0 million in Year Three, and $125.0 million for Years Four and Five, respectively.

In addition, the Waiver proposal includes Medi-Cal coverage for services, e.g., for medication, telehealth visits, and mental health services, that are provided to County jail inmates 30 days prior to their release, effective January 2023. DHCS is estimating the annual pre-release funding would amount to approximately $200.0 million statewide. Approval of the pre-release proposal would provide additional reimbursement to DHS

Each Supervisor June 22, 2021 Page 3

D R A F T

and enhance the county's ability to expand the scope of services needed by individuals in the Los Angeles County jail with acute medical, mental, and social challenges.

Disproportionate Share Hospital (DSH)

Under the ACA, reductions in DSH allotments were slated to begin in 2014. Since then, Congress has approved multiple delays and no reductions in DSH funding have occurred. Passed by Congress in December last year, the Consolidated Appropriations Act, 2021, eliminates Medicaid DSH reductions in federal fiscal year (FFY) 2021, and delays the remaining four years of cuts from taking effect until FFY 2024. At the appropriate time, as the expiration of the current delay period approaches, the Department will work with other California counties and our legislative advocates to ensure future DSH cuts are forestalled.

Medicaid Fiscal Accountability Regulation (MFAR)

We previously reported that CMS' Proposed Rule, MFAR, was expected to negatively affect Medicaid fee-for-service payments, supplemental payments, DSH payments, and health care-related taxes and provider-related donations. In a notice published in the January 19, 2021 Federal Registry, CMS officially withdrew the proposed regulation effective January 21, 2021.

Pending Issues

Medi-Cal Managed Care

Medi-Cal rules require that eligibility for beneficiaries must be redetermined on an annual basis. Many beneficiaries fall off the Medi-Cal rolls each year because they fail to comply with the redetermination requirements. In response to the COVID-19 pandemic, Governor Newsom issued an executive order on March 17, 2020 suspending the Medi-Cal redetermination requirement during the "State of Emergency" he declared on March 4, 2020. This action resulted in many more Medi-Cal beneficiaries retaining their eligible status.

Since the redetermination moratorium was put into place, there has been a consistent and significant increase in Medi-Cal managed care patients assigned to DHS. To illustrate, in March 2020, DHS' assigned members were 259,188; as of April 2021, the numbers have risen to 317,437, an increase of 58,249 members. This increase has had a major impact on Medi-Cal managed care capitation revenues during this period. While the State of Emergency order continues, it is expected that these numbers will continue to steadily increase. Once the order is lifted, the redetermination requirement will be reinstated. This is expected to result in a steady decline in members along with the associated capitation revenues. DHS will continue to process new Medi-Cal applications for eligible DHS patients and assist them with responding to a redetermination notice

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