Public Hospitals and the 2020-25 Proposed Waiver
California has done one of the best jobs of covering the uninsured and is continuing to make phenomenal progress with MediCal expansions and increased premium assistance in Covered California. This puts enormous pressure and provides extraordinary opportunities for public hospitals to evolve from their episodic emergency room centric delivery systems to provide a better-balanced continuum and continuity of care and services.
California’s earlier waivers in 1995, 2000 and 2005 put an emphasis on paying for outpatient care to the uninsured to supplement the DSH (Disproportionate Share Hospital) payments for hospital based care that were driven by their MediCal and uninsured inpatient census. The 2010 waiver was titled the “Bridge to Reform” and gave California counties a jump start in developing delivery systems and enrollment processes that looked more like MediCal managed care. The 2010 and 2015 waivers put an emphasis on quality improvement and system transformation for the state public hospitals (including UC and Districts).
This waiver acknowledges the need to continue improving quality, beefing up primary and outpatient care and transitioning from volume to value and outcomes.
It proposes to transition PRIME into a Quality Incentive Program aligned with the needs of the managed care delivery system. This applies to County Hospitals, District Hospitals and UC hospitals. The hospitals fund the match.
It proposes to continue the Global Payment Program (GPP) for the distribution of federal DSH funds while acknowledging the loss of FFP (federal funding) for hospitals’ supplemental payments. Again the public hospitals pay the match. This is a points based distribution system that places an emphasis on care in the most appropriate and cost effective settings. In other words, it helps public hospitals move away from an episodic, emergency room centric delivery system into a better balanced system that corresponds to the demands of effective managed care. RAND has evaluated GPP and reports an increase in outpatient, an increase in care to the uninsured and an improvement in coordination of care.
Prepared by: Lucien Wulsin
Dated: 1/25/20