OCTOBER 2019 Medi-Cal Explained FACT SHEET California’s California’s current State Plan and all State Plan Amendments (see below) submitted to and Medicaid State Plan approved by CMS to date are available at www. Amendments dhcs.ca.gov. Pacific Health Consultant Group team: Lisa Kodmur, What Is in California’s Medicaid Senior Health Care Consultant; Laura Hogan, Senior State Plan? Health Care Consultant; and Bobbie Wunsch, Founder and Partner The plan has eight sections: Single State Agency, Coverage and Eligibility, Services, Administration, What Is a Medicaid State Plan? Personnel Administration, Financial Administration, General Provisions, and MAGI-Based Income Every state that participates in the Medicaid pro- Methodologies. gram must create a State Plan that describes the scope of its Medicaid program, and must seek federal approval for that plan. The State Plan What Is a State Plan Amendment? serves as a contractual agreement between the When a state wants to substantially change how state Medicaid agency and the federal agency that it operates its Medicaid program, it must apply to oversees the Medicaid program, the Centers for change its State Plan by submitting a State Plan Medicare & Medicaid Services (CMS). CMS reviews Amendment (SPA) to CMS for approval. The State and approves the plan and determines if the ser- Plan describes the types of changes that warrant vices described are eligible for Federal Financial a SPA. SPAs may be driven by changes in federal Participation, also known as matching funds.1 law, state law, or state policy. For example, if a state wants to adjust a specific payment methodology Title XIX of the Social Security Act outlines what included in the State Plan, it must submit a SPA. must be included in a State Plan.2 Among other When a state decides to discontinue an optional things, it must describe how the state will: Medicaid benefit, it must likewise submit a SPA. ●● Create an agency to administer the Medicaid Note that not every change to the Medi-Cal program ●● Fund its share of Medicaid services The California Health Care Foundation is ded- ●● Serve all geographic areas of the state icated to advancing meaningful, measurable ●● Grantrights to Medicaid beneficiaries who are improvements in the way the health care delivery denied services system provides care to the ●● Deliver care in accordance with quality standards people of California, particularly those with low incomes and The plan also must define who is eligible for those whose needs are not well Medicaid services, as federal rules require that served by the status quo. We certain populations, such as children and preg- work to ensure that people have nant women, be included. States may choose to access to the care they need, cover additional populations. The State Plan also when they need it, at a price they can afford. describes required and optional services the state For more information, visit www.chcf.org. Medicaid agency will provide to beneficiaries. California Health Care Foundation www.chcf.org | 1 OCTOBER 2019 program requires a SPA; the state also implements and wants to include the services in its State Plan, changes through other means. For example, the it may submit the program as a SPA. An example is California Department of Health Care Services the In-Home Supportive Services (IHSS) Plus waiver (DHCS), which oversees Medi-Cal, released an that was transitioned to the IHSS Plus Program in “All Plan Letter”3 announcing changes to how September 2009 via a SPA.9 Medi-Cal health plans must distribute information to enrollees. This change in policy and operations What Is the Process and Timeline did not require a SPA. for State Plan Amendments? There is no limit to the number of SPAs a state Once the state submits a SPA proposal, CMS has may submit, nor is there a specific time frame 90 days to make a decision about approving it. during which it must submit SPAs. By September However, if CMS requests additional information 2019, California had submitted 33 SPAs to CMS for about the SPA, the timeline is paused until the new calendar year 2019, and 16 had been approved.4 information is received.10 In some instances, SPAs Examples of recent California SPAs include a can generate quite a bit of negotiation between request to authorize the Health Homes Program5 the state and CMS, with information requests and for Med-Cal beneficiaries with serious mental ill- responses stretching into years and with CMS ness, and a proposal to set reimbursement rates requesting modifications to the SPA proposal. for radiology services.6 Any proposed SPA must be Occasionally a SPA is withdrawn; for example, a posted publicly by DHCS before it is submitted to California SPA proposal to cover certain therapeutic CMS for approval. health services for foster youth was subsequently deemed unnecessary and withdrawn because the What Is the Difference Between state determined that the proposed services were a State Plan Amendment and a already required per the State Plan.11 Once CMS approves a SPA, the change is retroactive to the Medicaid Waiver? submission date. While both a SPA and a waiver allow a state Medicaid program to change the way it delivers care and ser- vices, they differ in several key ways. First, a waiver7 Prop 56 Physician Payments State Plan Amendment is generally used to test an innovative program- ■■ In November 2016 voters passed Proposition 56, the matic or policy change to see if it has the desired “California Healthcare, Research, and Prevention Tobacco outcome, such as reductions in cost or avoidable Tax Act,” which raised taxes on cigarettes and tobacco products. utilization of services. A SPA is not considered a test, ■■ Additional legislation directed some Prop 56–generated but rather a mechanism to solidify a policy or pro- funds to Medi-Cal to increase funding for existing gram change. Second, waivers are usually approved programs. for a specific duration such as five years, though ■■ DHCS developed a one-year supplemental payment program directing Prop 56 funds to physicians providing they may be renewed, and must be budget neutral specific services to Medi-Cal beneficiaries. — that is, not cost more than traditional Medicaid ■■ Becausethe program changed previously approved services. By contrast, SPAs generally have no end payment methodologies within the State Plan, DHCS submitted a State Plan Amendment. date (unless states request them) and do not have ■■ SPA17-030 was submitted September 28, 2017, and to show budget neutrality.8 Waivers may limit the approved by CMS December 5, 2017, for qualified population and geographic areas they serve; SPAs physician services rendered from July 1, 2017, through must cover all beneficiaries statewide. Last, waivers June 30, 2018. ■■ SPA18-0003 extended the payment program from July 1, may be restricted to a certain number of available 2018, through June 30, 2019. slots and may have waiting lists for those slots; SPAs ■■ SPA19-0021 extended the program from July 1, 2019, may not impose these kinds of limitations. If a state through December 31, 2021. eventually determines a waiver to be successful California Health Care Foundation www.chcf.org | 2 OCTOBER 2019 Endnotes 1. See CHCF publication Medi-Cal Explained Fact Sheet: The Medi-Cal Budget Process for more information on matching funds at www.chcf.org. 2. “Compilation of the Social Security Laws: State Plans for Medical Assistance,” Social Security Administration, n.d., www.ssa.gov. 3. Michelle Retke (chief, Managed Care Operation Division, DHCS) to all Medi-Cal Managed Care Plans, all-plan letter 19-003, California Dept. of Health Care Services, May 2, 2019, www.dhcs.ca.gov (PDF). 4. Proposed, pending, approved, and withdrawn SPAs can be viewed on the DHCS website at www.dhcs.ca.gov. 5. Approval of California State Plan Amendment CA-19-0001 “California Health Homes Program,” www.dhcs.ca.gov (PDF). 6. Approval of California State Plan Amendment CA-19-0003 “Reimbursement Rates for Radiology Services,” www. dhcs.ca.gov (PDF). 7. See October 2019 CHCF publication Medi-Cal Explained Fact Sheet: Medicaid Waivers in California that describes Medi-Cal waivers at www.chcf.org. 8. Medicaid and CHIP Payment and Access Commission (MACPAC): State Plan www.macpac.gov. 9. Approval of California State Plan Amendment CA-09-006, www.dhcs.ca.gov (PDF). 10.Brian Neale, “State Plan Amendment and 1915 Waiver Process Improvements to Improve Transparency and Efficiency and Reduce Burden,” CMS, November 6, 2017, www.medicaid.gov (PDF). 11.Toby Douglas (director, DHCS) to Gloria Nagle (assoc. regional administrator, CMS), June 18, 2014, www.dhcs. ca.gov (PDF). Medi-Cal Explained is an ongoing series on Medi-Cal for those who are new to the pro- gram, as well as those who need a refresher. To see other publications in this series, visit www.chcf.org/MC-explained. California Health Care Foundation www.chcf.org | 3