5 Things California: Reactions to the budget, DHCS director, Kimberly Gallo

We are covering the budget, the courts, and agency issues in this edition of 5 Things We’re Watching. If you’ve been reading us for a while, you’ll know these are meant to be five short reads on things we think are important for senior health care executives and health policy leaders to know something about.

You won’t think each of the five are perfect for you. But, hopefully one or two will stand out each edition as meaningful. So, if you ever have feedback, we’d certainly welcome it!



With help from Emily Boerger and Michael Goldberg



1. Insiders react to Newsom’s budget proposal

On January 10, Gov. Newsom submitted his 2020-21 state budget proposal to the Legislature. Topping off at a record $222.2 billion, the budget proposes significant investments in education, homeless services, health care, and a multitude of other programs.

Our reporters at State of Reform reached out to several health policy insiders for their take on the health reforms included in the budget proposal. From the proposed expansion of Medi-Cal to cover older undocumented Californians, to the ambitious proposal to create a state-owned generic drug label, the insiders offered both praise and concern for the budget.


2. DHCS director recruitment announcement

DHCS is still in the process of finding its next director, following Jennifer Kent’s resignation from the position in September. To assist in the search, consulting firm Wilcox Miller & Nelson sent us a “position fact sheet” for distribution to potential applicants outlining requirements and expectations of the job.

As described in the recruiting announcement, the new DHCS director will be charged with leading 4,000 employees, spending over $100 billion annually in public funds, and supporting the health care of over 13 million Californians. They will also be tasked with creating an execution plan around the implementation of the Medi-Cal Healthier California for All initiative. Resumes are due January 31st.

3. Lawsuit affirms Medi-Cal rates for OON providers

In a little noticed decision, the court decided in favor of LA Care against Dignity on the question of out of network reimbursement rates for post-stabilization inpatient services. The appellate court ruling affirmed a lower court decision that said out of network providers must take state-set rates for Medi-Cal beneficiaries. From LA Care CEO John Baackes: “If the court had ruled against L.A. Care, out-of-network providers could have billed Medi-Cal plans across the state anything they wanted—even higher rates than plans pay for commercial members.”

Notably, the very last paragraph of the 30-page ruling notes that a group of hospitals filed an amicus brief citing federal law that “prohibits states from directing a managed care plan’s expenditures, and therefore the Legislature and DHCS could not mandate that out-of-network poststabilization services be paid at the APR-DRG rates or any other rate.” The court felt that was beyond the scope of the appeal, but it sounds like the foundation of a new challenge to Medi-Cal financing from hospitals.

4. Video: Kimberly Gallo, San Diego County

Kimberly Gallo is the Director of Aging & Adult Services for San Diego County. She joins us in this edition of “What They’re Watching” to discuss San Diego County’s recently adopted Aging Roadmap and some of the biggest issues facing older adults in the state.

“Transportation — a lot of seniors are homebound and they might not be able to drive. So, we are really working on a regional level to look at transportation, whether it’s public transportation or ride-sharing, just to make sure that our seniors and older adults can get to their appointments. We work closely also with MTS and other agencies to ensure that, again, housebound seniors can get to the places that they need to be.”


5. Newsom appoints new state Medicaid director

Gov. Newsom announced last week his appointment of Jacey K. Cooper as the new state Medicaid director and chief deputy director of health care programs at DHCS. Cooper will take over the position from Mari Cantwell, who announced that she would leave DHCS at the end of this month.

From Newsom’s office: “Cooper has been senior advisor of health care programs and assistant deputy director of health care delivery systems at the Department of Health Care Services since 2016. She was vice president at Meridian Healthcare Partners and vice president of administrative services at the Kern Medical Center from 2014 to 2016. She held several positions at Kern Medical Center from 2010 to 2014, including special projects manager and executive director of managed care.”