HEALTH AND HUMAN SERVICES AGENCY - T. BELTON

 Review, consider and approve a Multi-Jurisdictional Letter in Opposition of California Department of Health Care Services Proposed Trailer Bill Legislation which contravenes the County Organized Health System Model; and Authorize the Board of Supervisors Chair to Sign the Letter.

SBC FILE NUMBER: 130

BACKGROUND AND HISTORY OF BOARD ACTIONS:

The San Benito County Board of Supervisors adopted Ordinance 1033 adding Chapter Chapter 11.17 to Title 11 of the San Benito County Code, Titled, "Santa Cruz- Monterey-Merced-San Benito-Mariposa Multi-County Managed Medical Care Commission" on September 14, 2021.  This step prepares San Benito County to implement the County Organized Health System (COHS) Model effective January 1, 2024, by contracting with the Central California Alliance for Health (the Alliance).  The Alliance is an award-winning regional non-profit health plan, operating since 1996 and serving over 390,000 beneficiaries, that would serve Medi-Cal beneficiaries in San Benito County.  A COHS is a publicly governed, Medi-Cal managed care plan specifically established under state statute to oversee the delivery of publicly assisted medical care. As a COHS plan, the Alliance places no limitations on Medi-Cal beneficiary enrollment into its plan, and they partner with all willing and qualified providers, including both traditional Medi-Cal safety net and private providers. The Alliance and other COHS plans leverage cost efficiency to expand member benefits, increase provider reimbursements, and expand delivery system capacity. Counties across California have worked with the state and federal authorities to form COHS plans to improve the Medi-Cal delivery system through local transparent governance, partnership, and collaboration.  

DISCUSSION:

The Governor has released a proposed "trailer bill" to the FY 2022-23 California state budget which would significantly undermine the ability for COHS to become effective in San Benito County.  If enacted, the legislation authorizes the California Department of Health Care Services (DHCS) to enter into a direct, no-bid contract with Kaiser Permanente for a statewide Medi-Cal managed care contract, even in counties currently served by a COHS, counties who are in the process of implementing a COHS, or counties served by a local initiative health plan.  The contract does not require Kaiser to be open to enrollment for any member in the area in which it serves, thus Kaiser is not required to accept all enrollees who wish access to the Kaiser plan.

The proposed legislation would prioritize private commercial interests over the interests of public entities and the people they serve. Additionally, as a budget trailer bill, this legislation will not go through the standard policy committee process that significant legislation deserves.

Through this legislation, the State and a commercial entity are claiming unilateral authority to grow the commercial entity's business in areas where the entity has historically prioritized commercial business rather than safety net health care services. This will create a two-tier Medi-Cal delivery system that prioritizes the desires of a commercial entity, and the limited enrollees it chooses to serve, over the needs of the public safety net system and those most in need in our county.

San Benito County made the decision to join the Alliance and transition to a COHS model through a public process with input from stakeholders about how to best meet the needs of our most vulnerable residents while ensuring the stability and viability of the Medi-Cal safety net. The trailer bill legislation proposes to materially alter significant state policy regarding public programs without the kind of public process historically relied upon to protect the public interest. This would set a concerning precedent that threatens the stability of our safety net network, exacerbates strains on our provider network, and would present new obstacles to advancing the transformation of the Medi-Cal delivery system.