California gets $10B federal waiver commitment for Medi-Cal program

Amid the swirl of Tuesday's election coverage, California Gov. Arnold Schwarzenegger announced a $10 billion federal grant to expand health coverage for low-income uninsured residents and improve care for vulnerable populations.

The "Bridge to Reform" Medicaid waiver will be used to improve delivery of care under California's Medi-Cal program, which anticipates adding as many as 500,000 new patients while also smoothing the transition to 2014, when all aspects of health reform are scheduled to become law.

"I have long been committed to healthcare reform, and I am pleased that California is again taking the lead and setting an example for the rest of the nation in implementing reforms that will provide affordable and quality healthcare insurance to hundreds of thousands of currently uninsured Californians," said Schwarzenegger. "This agreement is great news for the people of our state because we will be able to expand coverage, improve the delivery of care and build a strong bridge to federal healthcare reform with increased federal resources."

The money is intended to help slow the rate of growth in healthcare costs in the state, with $3.3 billion earmarked for investments in California's public hospital safety net, $2.9 billion for additional coverage for low-income individuals and $3.9 billion to pay for uncompensated care costs incurred by providers.

The granting of California's waiver request follows a lengthy negotiation between the state and the Centers for Medicare & Medicaid Services. The federal waiver, granted under Section 1115(a) of the Social Security Act, is designed to allow states to pursue Medicaid program changes in an effort to deliver healthcare more effectively and efficiently. Any savings from the waiver are to be redirected to support service expansion and delivery system investment.

"The approval of this waiver is critical for the people of California," said California's Health and Human Services Agency Secretary Kim Belshé. "The waiver will position us to better serve low-income populations without coverage today, support our state's healthcare safety net and advance needed changes in our delivery system that will help position California to successfully implement federal reform."

Specific areas of focus for the state under the program include:

• Expanding coverage to an estimated 500,000 uninsured adults aged 19 to 64;
• Expanding the existing safety net care pool to provide payment for uncompensated care and ensure support for safety net hospitals and other critical state health programs that deliver services to the uninsured;
• Improving care coordination for up to 400,000 seniors and persons with disabilities who will gain access to more organized delivery of care in managed care plans, offering them more accountable and coordinated services and delivering improved health outcomes; and
• Establishing a delivery system reform incentive pool to support California's public hospitals in transforming their delivery systems to improve access, care coordination and health outcomes of the patients they serve.