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Governor’s Health Family Reforms: An Assessment

February 18, 2004 - The Governor's budget proposal to cap Healthy Families Program enrollment, while feasible and effective in addressing the state's fiscal problems, raises a number of issues. We recommend against this approach because other alternatives are available to the Legislature to hold down the cost of the Healthy Families Program.


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County Organized Managed Care Health Programs

February 18, 2004 - The Governor's budget plan assumes that the Health Plan of San Mateo (HPSM), which provides services to roughly 50,000 Medi-Cal beneficiaries, will not be in operation in 2004-05. The HPSM is one of the County Organized Health System (COHS)—a form of managed care—that contracts with Medi-Cal in eight counties. At least two of these plans reportedly face financial problems and others may in the future. The failure of HPSM or other COHS plans could prove costly to the state. Accordingly, we recommend that the Legislature initially reject the administration proposal to budget for the phase-out of HPSM and direct the Department of Health Services to explore alternatives that would permit it to remain in operation. The Legislature should also consider several options to address the COHS plan's financial problems in order to avoid an increase in General Fund costs and the other serious consequences of their loss for Medi-Cal beneficiaries.


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Assessing the Governor’s Medi-Cal Reform Proposals

February 18, 2004 - The Governor's budget plan offers a package of proposals for long-term reform of the Medi-Cal Program that it estimates would achieve General Fund savings of $400 million beginning in 2005-06. In general, the proposal warrants careful consideration by the Legislature given our projections of continued caseload and expenditure growth in the program and the state's fiscal difficulties. However, some key details of the proposal are still lacking. We recommend that the Legislature direct the Department of Health Services to present more detailed information about the reform plan at budget hearings so that it will be in a better position to assess the policy implications and savings that would actually be achieved by the administration's plan. We also recommend changes to (1) the request for staffing and funding to develop the proposal and (2) managed care enrollment procedures.


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Quality Improvement Fees Provide State Savings

February 18, 2004 - The Governor's budget plan offers a modified proposal for a "quality improvement assessment fee" on Medi-Cal managed care health plans to enable the state to draw down additional federal funds for support of the program. We recommend approval of the Governor's proposal to impose such a fee for Medi-Cal managed care health plans. In addition, we recommend that the Legislature explore the option of extending such a fee to mental health managed care.


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Health and Social Services Block Grant Not A Good Fit for Counties

February 18, 2004 - the Governor proposes to consolidate into a single block grant, funding for state-only programs which serve immigrants, and transfer these programs to the counties effective October 1, 2004. The proposal assumes that counties will achieve administrative efficiencies, so proposed block grant funding has been reduced by 5 percent. We recommend that the Legislature reject the proposal because the programs proposed for transfer to the counties are not well-suited for local control.


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Health and Social Services Caseload Enrollment Cap Flawed

February 18, 2004 - The Governor's budget plan proposes to establish limits on enrollments ("caps") for certain specified health and social services programs. We recommend that the Legislature consider the Governor's enrollment cap proposal on a case-by-case basis, weighing the potential fiscal benefits of capping each identified health and social services program against the complexities and issues relating to the creation of caseload caps. Based upon such an analysis, we recommend that nine be rejected, propose one be approved with some modifications, and make no recommendation regarding one cap proposal.


Report

Governor’s Child Care Reform Proposal: An Assessment

February 18, 2004 - The Governor's budget proposes a number of significant reforms to California's subsidized child care system. These proposals effectively prioritize limited child care resources. However, the Governor's proposals lack important policy, implementation, and administrative details that would help the Legislature weigh state savings against reducing child care services for a significant number of lower-income families. We evaluate the proposals' effect on children, families, and the state budget, and present some alternative approaches.


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Improving The State’s Medi-Cal Antifraud Program

February 18, 2004 - During the past four years, the Legislature has approved significant increases in resources to combat fraud in the Medi-Cal Program. While these actions have resulted in increased savings and allowed the state to avoid some additional program costs, fraud remains a major concern in the Medi-Cal program. In this analysis, we explain the structure of the Department of Health Services' (DHS) antifraud program and how it compares to national models of fraud control in fee-for-service Medicare and Medicaid. We identify areas in which the DHS could be more effective in combating Medi-Cal fraud and offer recommendations as to how DHS could better manage and structure its antifraud efforts. We also review the Governor's 2004-05 budget proposals for expansion of antifraud efforts and recommend changes. Reduce Item 4260-001-0001 by $2,354,000.


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Corrections Overtime Expenditures

February 18, 2004 - Despite recent oversight and administrative efforts by the Legislature and the Department of Corrections (CDC), the department's overtime expenditures are expected to remain over $230 million in the current year. In this analysis, we provide background information on this issue, then an update on the current status of overtime, and finally recommendations for controlling departmental overtime.


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Elimination of Inspector General Not Justified

February 18, 2004 - The Governor has recently indicated that he plan's to withdraw the administration's budget proposal to eliminate the Office of the Inspector General. We think that eliminating the office would result in reduced oversight of California's correctional system. We recommend retaining the office, and offer suggestions for strengthening it.


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Evaluating The Status of Parole Reforms

February 18, 2004 - The 2003-04 Budget Act required the Department of Corrections to implement a number of parole reforms designed to reduce parolee recidivism, and save money. We find that the department is experiencing implementation delays which will reduce the savings from these reforms. To achieve greater savings, we recommend that the Legislature consider further expansion of programs designed to prevent returns to prison.


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California Teleconnect Fund: An Assessment

February 18, 2004 - The Governor's budget proposes a significant reduction in expenditures for the California Teleconnect Fund (CTF) program, which provides discounts on telephone service and other advanced telecommunication services that provide access to the Internet (such as digital subscriber line [commonly referred to as DSL] services) to schools, libraries, and qualifying hospitals and community-based organizations. While we have concerns regarding the operation of the current program, we find this underfunding to be contrary to legislative direction. To address this, we recommend the California Public Utilities Commission report at budget hearings on the projected funding requirements of the program in the budget year. Furthermore, if the CTF program requires additional funding in 2004-05, we identify options for the Legislature to consider to provide additional funding for the program.


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State Park Services: Potential for Increased Private Sector Partnership

February 18, 2004 - We find other park jurisdictions contract with the private sector for the delivery of types of services not contracted out by the Department of Parks and Recreation. We recommend a pilot program to further explore the pros and cons, as well as the costs and benefits, of expanding these public-private partnering activities in state parks.


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Governor’s Resources Bond Expenditure Proposal

February 18, 2004 - The Governor has deferred the submittal of most of his resources bond expenditure proposals to later in the spring, leaving major gaps in programs traditionally funded from bond funds. We provide a framework to assist the Legislature in evaluating the forthcoming bond proposals; this includes ensuring that the Governor’s proposals reflect legislative priorities for bond funding.


Report

California Power Authority: Where Now?

February 18, 2004 - The budget proposes eliminating the California Consumer Power and Conservation Financing Authority (CPA). Although CPA has been unable to fulfill its core mission to finance new power plants, this has largely been due to market conditions. Given significant uncertainties regarding the adequacy of the state’s energy supply to meet future demand, we think retaining some of CPA’s functions (either within or outside CPA) has merit