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The 2020-21 Budget: Analysis of the Medi-Cal budget

The Legislative Analyst’s Office has just published the following report:

The 2020-21 Budget: Analysis of the Medi-Cal Budget

In this report, we provide a broad overview of major spending changes in the Governor’s proposed Medi-Cal budget, which would provide $26 billion from the General Fund for Medi-Cal in 2020-21. We also provide analysis on several key Medi-Cal issues described below.

We provide an update on the state’s recent submittal (early February 2020) of a modified managed care organization tax proposal.

We discuss a draft federal regulation on Medicaid financing that could have significant fiscal effects for Medi-Cal.

We review various proposals related to the Medi-Cal pharmacy benefit. We find that proposed changes to Medi-Cal pharmacy services could result in state savings, though likely not as high as the Governor assumes. We recommend enacting reporting requirements to track the potential savings as well as modifications to the proposed supplemental payment program for clinics affected by the pharmacy changes.

We describe the Governor’s proposal to expand comprehensive Medi-Cal coverage to otherwise eligible seniors aged 65 and older regardless of immigration status.

We review the Governor’s proposal for skilled nursing facility (SNF) rate reform. We find that the Governor’s proposal could potentially promote SNF quality, but the Legislature should ask the administration for more information before taking action.

We discuss issues related to county Medi-Cal administration and find that increased legislative oversight is warranted. We recommend that the Legislature ask the administration and counties to report on county performance. We also recommend that the Legislature adopt a plan to revisit the state’s approach to budgeting for county administration.

Finally, we assess the Governor’s proposal to end the dental managed care pilots and transition all Medi-Cal dental services to fee-for-service. We recommend approving the proposal assuming no new information showing clear dental managed care plan performance improvements.

This report is available using the following link: https://lao.ca.gov/Publications/Report/4161?utm_source=laowww&utm_medium=email&utm_campaign=4161

This article was released by the Legislative Analyst’s Office.