5 Things California: Newsom’s budget, MFAR rule, Tayler Trotter

With a new year comes a new legislative session! Legislators are reconvening in Sacramento this week for what could be an ambitious year, catalyzed by the national political climate and some pent up enthusiasm for bigger reforms in health care.

We are tracking some early signals to see how the session will shape up, some of which we highlight in 5 Things we think are worth watching this week in California health care.



With help from Emily Boerger

1. Newsom’s budget to signal direction on health policy

This Friday, Gov. Newsom is expected to release his budget for the new fiscal year starting in July. After mixed reviews on health in his first year, some observers are wondering if there might be more ambition from Newsom with this week’s budget. However, one seasoned capitol insider tells us he anticipates “lots of meetings, lots of hearings, lots of talk…not a lot of definitive action” on health care from the gov’s office.

Democratic legislators are already out with a call to expand Medi-Cal to undocumented residents over 65. There is likely to be a push towards greater accountability on housing and mental health funds in the session as well, something we may hear Newsom speak to this week but which is expected to be a legislative focus.


2. The MFAR rule that no one commented on

CMS posted a draft rule on Nov. 18 that could potentially threaten hospital funding in California. Yet, of the 34 comment letters, the vast majority asked for an extension of the comment period rather than offering feedback on the rule itself. That’s a reasonable ask, given the holiday season, but it’s not clear CMS will listen.

The draft rule targets inter-governmental transfers (IGTs) as it seeks to “reduce questionable financing mechanisms.” California hospitals rely on IGTs for a portion of Medi-Cal financing, so any change to this formula could be a budget concern. This is on top of the $1.5 billion hit the rule would create by dismissing the MCO tax, according to the Legislative Analyst’s Office.

3. MHSA “issues for legislative consideration”

In a report to the Assembly Budget Subcommittee on Health and Human Services, the Legislative Analyst’s Office (LAO) outlined “issues for legislative consideration” related to the Mental Health Services Act (MHSA). MHSA provides funding to public community mental health through a 1% tax on incomes over $1 million.

Within the report, LAO identifies area of potential reform and possible legislative solutions. The reforms largely relate to developing a process of accountability and evaluation for MHSA program performance. Potential solutions include identifying and codifying “well-defined, measurable, and achievable” targets for MHSA interventions, and developing a framework to use outcome data to inform MHSA funding decisions.


4. Video: Tayler Trotter, Wellness Together

Tayler Trotter, MA, is an Associate Marriage and Family Therapist and school mental health specialist with Wellness Together, a nonprofit organization that partners with schools to increase access to mental health services for students and families. She joins us in this edition of “What They’re Watching” to discuss mental health therapy in schools and their work through a Blue Shield of California grant.

“The wonderful thing is that we provide about 10 sessions of individual therapy, along with possibly three sessions of family therapy as well… We go over cognitive behavioral therapy, providing coping skills, letting them look at maybe the way that they’re perceiving a situation and how it effects their mood. So, the student may be referred due to low mood, anxiety, sometimes anger, grief — it really depends on the situation. But if they feel like they need to speak to someone in more detail then we get the referral and work with them.”


5. Capretta: GOP on health care in 2020

Jim Capretta’s latest column for State of Reform evaluates the direction of a potential GOP plan to replace the Affordable Care Act. Capretta identifies four higher-profile initiatives that Republicans are most likely to embrace as they try to counter Democratic plans.

These initiatives include changes to health reimbursement arrangements, “liberalizing the rules” for selling short-term, limited duration insurances, and new rules around price transparency and drug pricing. From Capretta: “What is likely to emerge is a strategy focused on political messaging rather an actual plan, with an emphasis on the regulations and administrative actions taken by the president during his term. There also will be vigorous attacks on whatever reforms are endorsed by the eventual Democratic nominee.”