California bill delays moving thousands of children to Medi-Cal managed Medicaid plan

California legislators passed a bill postponing a controversial plan that would have shifted tens of thousands of medically fragile children into Medi-Cal managed care plans.

The bill, AB 187, passed both houses Thursday and will be sent to Gov. Jerry Brown for his signature.

At issue was the fate of the California Children's Services program, which serves an estimated 180,000 children younger than 21 with serious medical condition, including spina bifida, cancer, cystic fibrosis and sickle cell disease.

State officials had been planning to fold the $2 billion program into its vast system of Medi-Cal managed care, initially transferring 31,000 CCS children into managed care plans starting next year. AB 187, if signed into law, postpones that date to 2017.

Families of CCS children, child advocates and the children's hospital lobby had criticized the state's transition plan, saying that Medi-Cal managed care hasn't worked well for other vulnerable populations and is particularly risky for severely ill kids whose lives depend on access to highly specialized care.

"The time frame is just too short to ensure that the managed care networks have enough pediatric specialists, and the financing is too complicated to sort out quickly," said Alex Johnson, executive director of the Children's Defense Fund-California. "Let's keep children where they are now. If we slow down and work together, we can get a program that works best for children and families."

Kausha King was particularly relieved by the bill's passage. She had worried about interruptions in care for her son Christian, 20, who lives with cerebral palsy and other serious health conditions.

"Oh my goodness, this is so exciting. I feel like this is a victory for families," said King, who lives in Concord and works as a liaison for families of children with special needs. "Now we can trust that our voices are being heard. My son will continue to receive the care that he needs and not be forced into a program that I believe could use a lot more work before it's implemented."

Even with an extra year to plan, moving tens of thousands of sick children into managed care programs will be a daunting task. Children's hospitals also will need to assess the financial impact of the move to managed care. CCS pays for care at higher rates than Medi-Cal.

About 90 percent of children served by CCS also qualify for Medi-Cal, the public insurance program for low-income Californians. Medi-Cal covers their general medical care, while CCS covers services related to their specific conditions.

CCS pays a fee for each service provided, whereas Medi-Cal increasingly is switching to a managed care approach, in which medical services are coordinated and covered under a single health plan for a fixed monthly payment.

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Based on concerns from families, children's advocates and health care providers, state officials have already changed their plans for the transition. They are now completing an evaluation of a pilot program in San Mateo County testing the state's "whole child" plan for moving children into Medi-Cal managed care. The evaluation had been planned, but not finished.

"We're encouraged that the (Department of Health Care Services) is moving in the right direction and listening to stakeholders," said Ann-Louise Kuhns, president and CEO of the California Children's Hospital Association. "It's better to do an evaluation before we start a large scale move. What the legislature recognized is that we need more time to make sure that, as we look at program improvements, we do this really carefully."

Kaiser Health News is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

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