Many Californians on Medicaid, better known in the state as Medi-Cal, already struggle to access timely and quality care. Now, experts warn that millions more could lose coverage under H.R. 1, which makes sweeping changes to the country’s safety net programs.

Anticipating the fallout, a group of health foundations has formed the Future of Medi-Cal Commission. Its charge: creating a 10-year blueprint for a program that covers more than 14 million low-income residents and pays for key services from childbirth to nursing home care.

The commission’s co-chairs are Gov. Gavin Newsom’s former chief of staff, Ann O’Leary, and his former Health and Human Services secretary, Dr. Mark Ghaly, who led the state’s response to the COVID-19 pandemic.

The 29-member commission will begin meetings in January and will deliver recommendations in early 2027.

Ghaly discussed the commission and the challenges ahead. “Nothing forces you to think about these things more than the threat to your current existence,” Ghaly said.

This conversation has been edited for length and clarity.

What’s the origin story for this commission? Who decided it needs to exist and why?

The health foundations collectively that focus on programs like Medicaid and think about issues of equity … came together and said, “we’ve got to react and be prepared for the immediate shifts.” This is a forcing function moment — and a state like California, for its millions of people who benefit from Medi-Cal, but also the nation, have got to drive some process to consider: What does this all mean for the mission of supporting low-income people to be healthy and well?

Obviously H.R. 1 makes a lot of changes. What do you see as the biggest challenge for Medi-Cal right now?

There’s this big concern that a lot of people who have become confident and comfortable in their care may lose it, either through eligibility or if there are — God forbid — service cuts. Those are the things that I think are the “now” worries. The future worries are a little bit different. They include some of the things I just mentioned, but it’s also about sustainability and the growth and the cost of the program, and how we are sure we’re doing the right things that actually drive health outcomes to be better.

Speaking of costs, the Medi-Cal program has grown extensively over the last several years — some people say it’s grown too much, and earlier this year, the program went over budget. At which point does the program become too big?

Look, Medi-Cal has become a true health program, not just a healthcare program. [What that means is], it’s really thinking about all the things that go into creating healthy individuals, healthy families, healthy communities, and, by extension, a healthier state.

Has it grown too big? I think the piece of that that I appreciate and think is very important to dig into, is, are we doing all the things that matter? It’s great that we’re doing things to support health broadly, but are all the things that we’re paying for and creating the workforce for the things that make sense to do? I think that’s what is going to be a very interesting piece [for] this commission to dig into.

The state is freezing enrollment and cutting benefits already because of budget pressures. Are more service cuts and kicking people off the program in order to respond to the federal shifts inevitable?

It’s a hard question to respond to without the knowledge of what the other pressures are that the state’s going to face. You never want to say never, but I know this governor, I know the team there. They’re not going to want to make those kinds of cuts and decisions. But at the end of the day, the state has a responsibility with its budget to make sure it’s well and balanced.

What do you expect to happen to the commission’s recommendations?

I would like to think that what the commission writes and ends up with is something that is usable by policymakers.

What I like about the commission’s makeup, in part, is that it is a lot of operators. It’s a lot of people who can understand how the high-level idea might actually get implemented on the ground and through the different channels and levels of bureaucracy, which is a very big plus.

By the time the commission delivers its report, California will have a new governor. What should the next governor be thinking about and saying about these problems?

I would love our candidates to be really hungry to understand what they might come in and expect to do to support improving, modernizing and ensuring that California’s flagship Medi-Cal program is maintained and supported.

If you find a somewhat sophisticated candidate, and then elected governor, in the healthcare space, they’re going to see how it’s not that all roads lead to Medi-Cal, but Medi-Cal is a major freeway in the healthcare environment, and it is the one that she or he has the choice to really influence and control.

I’ll just add one other thing. Healthcare is a huge piece of the California economy. And I don’t mean just Medicaid; I mean broadly. Most every person in California thinks about, “How do I secure and preserve access to healthcare and live in a healthy community?” I think those are important priorities.

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The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule for inpatient and long-term care hospitals that builds on the Biden-Harris Administration’s key priorities to advance health equity and support underserved communities. As required by statute, the fiscal year (FY) 2024 inpatient prospective payment system (IPPS) and long-term care hospital prospective payment system (LTCH PPS) rule updates Medicare payments and policies for hospitals. The rule would also adopt hospital quality measures to foster safety, equity, and reduce preventable harm in the hospital setting. CMS is proposing to recognize homelessness as an indicator of increased resource utilization in the acute inpatient hospital setting, which may result in higher payment for certain hospital stays. This action aligns with the Administration’s goal of providing support to historically underserved and under-resourced communities.

“CMS is helping to build a resilient health care system that promotes good outcomes, patient safety, equity, and accessibility for everyone,” said CMS Administrator Chiquita Brooks-LaSure. “This proposed rule reflects our person-centric approach to better measure health care quality and safety in hospitals to reduce preventable harm and our commitment to ensure that people with Medicare in rural and underserved areas have improved access to high-quality health care.”

For acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting program and are meaningful electronic health record users, the proposed increase in operating payment rates for FY 2024 is projected to be 2.8%. This reflects an FY 2024 projected hospital market basket update of 3.0%, reduced by a projected 0.2 percentage point productivity adjustment. For FY 2024, CMS expects the proposed increase in operating and capital IPPS payment rates would generally increase hospital payments by $3.3 billion. For LTCHs, CMS proposes to increase the LTCH PPS standard Federal payment rate by 2.9%.  Overall, CMS expects LTCH payments under the dual-rate payment system to decrease by 0.9%, or $24 million, primarily due to a projected decrease in high-cost outlier payments in FY 2024 compared to FY 2023. 

“With this proposed rule, CMS is more accurately paying hospitals and recognizing for the first time that homelessness, as a social determinant of health, also impacts resource utilization,” said CMS Deputy Administrator Dr. Meena Seshamani. “Creating incentives for hospitals to provide excellent care for underserved populations lays the foundation for a health system that delivers higher-quality, more equitable, and safer care for everyone.”

Advancing Health Equity

CMS is proposing to make health equity adjustments in the Hospital Value-Based Purchasing Program by providing incentives to hospitals to perform well on existing measures and to those who care for high proportions of underserved individuals, as defined by dual eligibility status.  This builds on previous efforts to advance health equity through the finalized health equity adjustment in the Medicare Shared Savings Program and finalized policies in Medicare Advantage and Part D Star Ratings Program. CMS also proposes to recognize the higher costs that hospitals incur when treating people experiencing homelessness, when hospitals report social determinants of health codes on claims. In addition, CMS is requesting comment on how to further support safety-net hospitals.

CMS is also proposing that rural emergency hospitals could be designated as graduate medical education training sites. As a result, more medical residents would be able to train in rural settings, which can help address workforce shortages in these communities. This proposal builds on other policies to support access to care in rural and other underserved communities.   

Promoting Patient Safety

Consistent with the CMS National Quality Strategy and the HHS National Healthcare System Action Alliance to Advance Patient Safety goals to promote the highest quality outcomes and safest care for all individuals, the proposed set of quality measures aims to foster safety and equity and to reduce preventable harm in hospital settings. Among this set is a proposal to measure the rate of patients and residents in long-term care hospitals who are up to date on their COVID-19 vaccinations and new, additional measures for screenings for cancer and social drivers of health.

For a fact sheet on the proposed payment rule, visit: https://www.cms.gov/newsroom/fact-sheets/fy-2024-hospital-inpatient-prospective-payment-system-ipps-and-long-term-care-hospital-prospective.

The FY 2024 IPPS/LTCH PPS proposed rule has a 60-day comment period. The proposed rule can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection/2023-07389/medicare-program-proposed-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals

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“We have a moral responsibility to make sure that we do not leave people behind simply because they lack resources or live in certain zip codes,” Dr. Ruiz wrote. “As you expand the number of CVS vaccination sites in Southern California in the coming weeks, I urge you to prioritize high-risk, underserved communities like those in California’s 36th district. Not doing so will lead to further disparities and prolong the pandemic.”

Dr. Ruiz’s letter continues his advocacy for equitable vaccine distribution. Last week, Dr. Ruiz traveled to farmworker communities in the Eastern Coachella Valley to raise awareness about the importance of getting vaccinated against COVID-19.

“You can read the letter here.”

https://ruiz.house.gov/sites/ruiz.house.gov/files/2021-02-09_CVS%20Letter_Vaccination%20Site%20Locations_Final.pdf

Hernan Quintas • Contributed

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