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Medi-Cal After the Public Health Emergency: What to Expect

California’s State of Emergency (“SOE”) for the COVID-19 pandemic is set to expire on February 28, 2023. The federal Public Health Emergency (“PHE”) will end on May 11, 2023, just over two months later. These emergency declarations, in place since January 2020, have allowed the federal and state governments to enact certain waivers and flexibilities for many healthcare-related requirements.


The Department of Health Care Services (“DHCS”) published its PHE unwinding plan on January 13, 2023. Most of the PHE flexibilities DHCS implemented in the Medi-Cal program have been authorized by the Centers for Medicare & Medicaid Services (“CMS”) through federal waivers. The authorities upon which these waivers are based have different unwinding requirements, which impacts the ability of the DHCS to make permanent changes to the Medi-Cal program and the timeline for reverting back to policies in place before the PHE.


As providers navigate the complexities of this unwinding process, here are 5 things to know about the Medi-Cal program going forward:


1. MEDI-CAL ELIGIBILITY REDETERMINATIONS SET TO RESUME


Prior to the PHE, states were required to perform annual eligibility redeterminations, meaning they checked each enrollee’s Medicaid eligibility and disenrolled individuals who no longer met enrollment requirements. In March 2020, Congress enacted the Families First Coronavirus Response Act (FFCRA), which provided states with an enhanced Federal Medical Assistance Percentage (“FMAP”), i.e., the share of Medicaid expenditures paid by the federal government, on the condition that states do not disenroll individuals from Medicaid during the PHE. This is referred to as the “continuous coverage” requirement.


The Consolidated Appropriations Act of 2023 (“CAA”) delinked the continuous coverage requirement from the end of the PHE, and established an end date to the requirement of March 31, 2023. Accordingly, states may resume eligibility redeterminations and disenrollments beginning in April.


In its unwinding plan, DHCS estimates that Medi-Cal disenrollments will total 2-3 million beneficiaries over the course of the unwinding period. To minimize this impact and promote continuity of care, Covered California has issued guidance outlining plans to automatically enroll in a Covered California plan those individuals who lose their Medi-Cal eligibility to ensure that they will not experience a gap in coverage. However, these individuals will still be required to opt-in to the plan to effectuate coverage, so safety net providers are expected to see an increase in the number of patients who are uninsured. This will likely be exacerbated by the expected volume increase of migrants needing care after the Title 42 public health order – which has been used to bar asylum seekers at the U.S.-Mexico border – expires at the end of the PHE.


2. PROVIDER EMERGENCY ENROLLMENT TO END


During the PHE, DHCS allowed for the expedited enrollment of Medi-Cal providers. The enrollment process was simple - providers were required to submit a Crossover Only application in PAVE, and then email DHCS an attestation that they have provided medical services to a Medi-Cal beneficiary affected by COVID-19 during the PHE. Providers who enrolled using this method were not subject to normal enrollment requirements including the payment of application fees, fingerprinting, criminal background checks, and licensure verification. Providers who were licensed only out-of-state were able to temporarily enroll under this waiver and receive compensation for providing services to Medi-Cal beneficiaries. The vast majority of providers who were approved through this emergency enrollment process were physicians and physician groups.


DHCS is ending this streamlined emergency enrollment process on March 17, 2023. DHCS intends to notify Medi-Cal providers who enrolled under this process that, in order to continue to participate, they must submit a complete application by June 15, 2023. If a full application is submitted, DHCS will not deactivate the emergency enrollment until review and screening of the full application have taken place. DHCS has until six-months after the end of the federal PHE to cease payments for providers enrolled under the emergency process, giving DHCS time to screen and process the applications and allow providers to correct any deficiencies in their applications.


3. MANY TELEHEALTH FLEXIBILITIES MADE PERMANENT


DHCS implemented many new telehealth flexibilities during the PHE via blanket waivers and disaster relief State Plan Amendments. DHCS also convened a Telehealth Advisory Workgroup, which set forth permanent telehealth policies that were adopted into law through SB 184 (2022) and AB 32 (2022). In December 2022, DHCS published a Telehealth Policy Proposal that explains how the new telehealth policies will be implemented after the PHE. The new policies getting permanently implemented include:

  • Broad coverage of synchronous (video and audio-only) and asynchronous (store and forward and e-consults) telehealth modalities.

  • Parity in reimbursement between in-person services and certain telehealth modalities including video, audio-only, and store and forward.

  • Brief virtual communications using web-based modalities such as live-chats and e-consults will be covered but excluded from payment parity.

  • Providers may establish new patients via synchronous video telehealth visits and in some cases (such as if a patient does not have access to video) via audio-only modalities.

  • FQHCs and RHCs may continue to use telehealth and be reimbursed at the full PPS rate.


Further, by 2024, providers that offer a telehealth service will be required to offer beneficiaries the choice of using a synchronous video modality. Telehealth providers will also be required to offer services via in-person face-to-face contact, or otherwise must link the beneficiary to in-person care. This will add an obligation on providers who have set up 100% remote practices during the pandemic, who will be required to provide both a referral and facilitation of in-person care such that the patient does not need to independently contact another provider to arrange for care.


4. PRIOR AUTHORIZATION WAIVERS TO EXPIRE


Early in the pandemic, DHCS implemented several flexibilities relating to prior authorization requirements, including suspending pre-approval requirements for all Medi-Cal covered benefit categories, extending pre-existing authorizations, and allowing services that were already authorized to continue without a renewed prior authorization. These flexibilities are set to terminate at the end of the federal PHE on May 11, 2023, and will not be renewed.


5. PHASEDOWN OF INCREASED FEDERAL FUNDING


During the PHE, each states’ FMAP was increased by 6.2%. This raised California’s FMAP from 50% to 56.2%. Thus, for every $1 in state funds spent on Medi-Cal, California is currently drawing down $1.28 from the federal government. The CAA phases down this increase, permanently taking California’s FMAP back to the standard 50% beginning January 1, 2024. After the phasedown, California will only draw down $1 for every dollar spent.


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For more information on Medi-Cal requirements after the PHE, please contact Felicia Sze or Kyle Brierly.


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