Medicaid and Permanent Supportive Housing for Chronically Homeless Individuals: Emerging Practices From the Field. 3.3. California's Waiver


California's "Bridge to Reform" 1115 waiver authorized counties to create Low Income Health Programs (LIHPs) to prepare for the expansion of health coverage in 2014 under the Affordable Care Act. The waiver allowed each California county to decide whether to establish an LIHP, and most counties chose to do so.26 California's counties were responsible for providing or paying for basic health care services to indigent, uninsured residents and also for paying the nonfederal share of costs for the LIHPs. Counties had significant flexibility in setting eligibility criteria for LIHP enrollment. Some counties set enrollment caps (with waiting lists for enrollment); others limited eligibility to people with extremely low incomes (as low as 25 percent of the federal poverty level); and still others made LIHP enrollment available to anyone who would become eligible for Medicaid in 2014.27 Counties had to provide a minimum set of covered benefits and meet specified standards for providing access to care for enrolled patients. These standards were intended to move county health care delivery systems for indigent patients toward readiness to deliver care through managed care arrangements in 2014.

3.3.1. Expanding Coverage Through Healthy Way LA

Healthy Way LA, the Low Income Health Program established by the Los Angeles Department of Health Services under the state's 1115 waiver, had two components. The first, called the "matched" program, was for people who met the eligibility criteria established under the waiver for the county to receive Medicaid funding to match its own investment of general funds to pay the cost of care. The second component ("unmatched") provided care for people who remained uninsured because they did not meet eligibility requirements related to citizenship or length of permanent residency. This component was 100 percent county-funded.

Healthy Way LA covered both health care services delivered through the Department of Health Services' county hospitals and clinics and through a network of contracted community partner clinics that provide outpatient services.28 Healthy Way LA also provided coverage for some mental health services.

The county's share of mental health costs is provided by the Los Angeles County Department of Mental Health. Mental Health services were delivered to Healthy Way LA members through providers that are part of the county mental health system. County LIHPs were not required to cover substance use disorder services under the California waiver, and Healthy Way LA did not do so.29

Starting in 2011, coverage for uninsured people in Los Angeles County through enrollment in Healthy Way LA expanded rapidly. The county had earlier set a conservative enrollment target because of concerns about the availability of county funding to match federal reimbursement. In 2011 a new director of the Los Angeles Department of Health Services persuaded the county not to cap enrollment and instead to make an aggressive push to enroll all indigent people who were patients of Department of Health Services' hospitals, clinics, and community partner clinics. Full enrollment meant that the department would receive federal Medicaid funds to match county spending. The department launched Operation Full Enrollment in July 2011. Enrollment in the Healthy Way LA matched program expanded to more than 200,000 patients by the end of 2012--more than half of the Los Angeles County residents who became newly eligible for Medicaid (Medi-Cal) in 2014. By the end of 2013, enrollment was nearing 300,000.

With eligibility expansion for Medicaid in 2014, financing was expected to shift in ways that could change the incentives facing the Department of Health Services and its partners. The approach active under the 1115 waiver involved using county spending (certified public expenditures) for health care and mental health services provided to Healthy Way LA members to obtain matching federal funds. Therefore, the department had few incentives to enroll people who were not already receiving or seeking health care from providers who are part of the Healthy Way LA provider network.

Beginning in 2014, however, newly eligible people, including those transitioning from Healthy Way LA to Medicaid (Medi-Cal), are being enrolled into managed care plans, and Medicaid financing for the plans is in the form of capitated, per-member per-month payments.30 In Los Angeles, the managed care health plans make capitated per-member per-month payments to the Department of Health Services for all members who have been assigned to one of the department's clinics for primary care. Anticipating this change, the Department of Health Services began pushing to enroll into Healthy Way LA many more of the eligible people who were not currently receiving care from department facilities or contract agencies, and added another 100,000 members by the end of 2013.

3.3.2. Changes in the Health Care System

The terms of California's 1115 waiver required Healthy Way LA to provide enrollees with timely access to primary care and other covered services. This requirement was intended to ensure that each LIHP would provide meaningful coverage for its members, rather than being only a mechanism to draw down federal match funding.

This statewide requirement was bolstered by Los Angeles County officials' recognition that the county health care delivery system needed major improvements to be ready for the opportunities and risks coming in 2014 with the shift to managed care financing.

Leaders at the Department of Health Services and its community partners hoped that significant changes in its hospitals, clinics, and other programs would induce patients who enrolled through Healthy Way LA to stay with their health care providers after their enrollment in Medicaid gives them other choices.

Providing better, more personalized care was one of Healthy Way LA's most significant changes. People who enrolled in Healthy Way LA were empaneled, meaning that they were assigned to a designated primary care provider or medical home at a county clinic or community partner clinic. Healthy Way members got priority for scheduling clinic appointments at their designated medical home, while people who had not enrolled in Healthy Way LA could still spend hours in crowded waiting rooms to get urgent care. Department of Health Services' clinicians were expected to serve a panel of enrolled Healthy Way LA patients. In addition, many of the physicians with administrative jobs in the department began spending at least part of their time delivering primary care. Patients began to see the same doctor or medical team each time they sought care--a situation that continues in the 2014 environment.

Electronic health records were another major focus. The Department of Health Services and its community partner clinics began working to develop and implement electronic health records and patient registries to better manage chronic illnesses. Efforts also began to better coordinate electronic data systems to facilitate information sharing among the county's hospitals and clinics. Electronic records and tools, such as patient registries, were expected to make it easier for providers to see a client's case history, medications, and other information needed to help the provider prepare for a visit and proactively manage all aspects of a client's care. It was expected that the data would also be used for quality assurance and outcome measurement.

These changes began significantly improving services in ways that benefit people experiencing homelessness or living in PSH. The county and community clinics that serve many people experiencing homelessness made substantial investments during 2011 and 2012 in helping them get enrolled into Healthy Way LA and connected to a primary care provider. These efforts continued in 2013 with additional support from philanthropy, including grants from the Conrad N. Hilton and Unihealth foundations.

During 2011 and much of 2012, the rapid increase in applications for enrollment in Healthy Way LA created significant backlogs in the county's processing systems. Requirements for applicants to submit documentation of citizenship or legal residency status contributed significantly to enrollment barriers and delays in application processing. Community partner clinics, including clinics that serve many patients experiencing homelessness and PSH residents, encountered major enrollment challenges. Thousands of applications submitted by clinics were stalled, creating significant cash flow problems for some clinics.31 By late 2012, application backlogs were finally being reduced and the clinics were receiving more of the revenues that had been promised for enrolling and serving Healthy Way LA members.

As one of the ways to improve the health care system, the Department of Health Services would like to create a more robust approach to providing home health services, particularly for people with complex medical and behavioral health needs. Whether these services can be Medicaid-reimbursed depends on whether California pursues an amendment to the Medicaid state plan to offer optional home health services authorized by the Affordable Care Act.

Department of Health Services' hospitals also have renewed their focus on reducing avoidable hospital admissions and shortening patient lengths of stay. The county hospital system has been widely perceived to be inefficient. Despite years of effort to switch access to care to outpatient settings, many people are admitted for unnecessary hospital stays. Furthermore, homeless patients often stay in the hospital longer than would be needed if better options for care were available upon their release. The department's leaders believe they can make significant improvements in the quality of health care if they can use the system's capacity more efficiently, moving resources around to achieve savings and provide better options for people who do not really need to be in a hospital or nursing home.

Changes for Previously Uninsured People

Being included in a health care insurance program under California's 1115 waiver is a big change for uninsured people who have been receiving care from the health care safety net. Uninsured people with extremely low incomes and no insurance coverage seek care only when they need it, and often later than desirable, when they are sicker. They often rely on hospital emergency rooms because they do not have an ongoing connection to a regular source of primary care. The tasks associated with enrolling in coverage, selecting and having an ongoing connection to a primary care provider, and following up to maintain coverage when required to submit paperwork to verify continued eligibility may be unfamiliar or a low priority for a person who is experiencing homelessness.

Despite the efforts of the Department of Health Services to expand coverage, individuals accustomed to relying on free clinics or uncompensated charity care in hospitals may have been reluctant to enroll in Healthy Way LA, expecting that they would still have access to free or low-cost care when they needed it. The resulting gaps in coverage disrupt both continuity of care for patients and payments for care providers. The department and its partner clinics put a lot of effort into working with patients to ensure that they would not only enroll in Healthy Way LA but also comply with requirements to submit the documentation needed to verify their continued eligibility for enrollment.32

To reach and serve more people who are homeless in LA, the Department of Health Services is opening a clinic in Skid Row, where the county already contracts with two community partner clinics, JWCH and LA Christian Health Center. The new clinic is located in a storefront on the ground floor of a new PSH project, the Star Apartments, developed by the Skid Row Housing Trust.

The two existing Skid Row clinics already serve hundreds of people experiencing homelessness, but the Department of Health Services believes there is a need for a county clinic because many of the patients who are homeless and who visit the emergency room at the nearby LA County University of Southern California hospital are not connected to ongoing care at JWCH or LA Christian Health Center. Department leaders also believe that planning and implementing service delivery at a clinic located in a PSH site (the Star Apartments) will give them a better understanding of some of the challenges facing the other clinics in the Skid Row area. This will help to drive decisions about what the county is willing to pay its partners to deliver care.

One goal of the county's new Skid Row clinic is to better connect patients experiencing homelessness to ongoing health care so they will come to the clinic instead of going to the hospital emergency room. The Department of Health Services' clinic, which opened in June 2013, serves as a hub for providing services to formerly homeless tenants who live in nearby PSH. It provides a base for nurses and other clinic staff who can deliver care through home visits to PSH tenants, and also for street outreach in the Skid Row area. Team models are being used to make care available in a convenient and accessible way. Team members "walk the streets of Skid Row" to establish ongoing, face-to-face connections with people needing care and other providers the community.

The department is also working to implement an e-consult system to provide much more timely access to consultation by a specialist, often while a patient is at a visit with a primary care provider. Instead of offering a patient an appointment with a specialist, which might take weeks or months to get, the primary care provider can share information electronically with the specialist and get a speedy response. It may even be possible to use webcams for a videoconference involving the patient, primary care provider, and specialist or for the primary care provider to send a picture to the specialist. The primary care provider can get advice about how to manage the patient's care without the need for a visit to the specialist, or the information shared by the providers may support a decision to offer the patient an appointment with the specialist immediately to address an urgent condition. If the specialist determines that additional tests are needed, the patient can get them done before going to see the specialist. At the time of our final site visit, e-consult implementation was beginning with patients in the county jail, for whom arranging visits with health care specialists is often difficult and costly. The expansion of e-consult services to other LA Department of Health Services' clinics was planned for 2013.

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