16 minute read
Reshaping the Medi-Cal Dental Program — Evolving Oral Health Care in California
Jennifer Kent, MPA
California’s Medicaid program, Medi-Cal, is the largest in the nation with over 14 million low-income Californians currently enrolled as of June 2021. 1 For perspective, the next largest Medicaid program is the state of New York, with 7.2 million beneficiaries as of September 2021. 2 With such a large population and complicated program, enacting meaningful, direct and notable change is often difficult. When I became director of the Department of Health Care Services (DHCS) in February 2015, I often said that running the Medi-Cal program was like steering a cargo ship: The program was slow and built to travel long distances and carry a heavy load — it was not a speedboat. Given the vulnerable populations served by Medi- Cal, it is also a management challenge to spend dedicated, focused time on a single element of the program when it spans eligibility, fiscal, information technology, legal and policy areas. There is often not a lot of flexibility or luxury to choose the area of the department that a director wants to work on. Rather, a single issue or public headline can dominate a department for weeks, if not months. Advocates, providers, counties, policymakers, federal agencies and state oversight agencies also have significant input into the priorities of the department, which creates a distinctly unique set of balancing these oftenoppositional demands. It was hard to satisfy anyone, much less everyone.
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As a new director, one of the very first issues to catch my attention was the Medi-Cal Dental Program. But then again, it was not hard to miss! I walked into a department that had already received one extremely critical external report, with another one pending, on the failure of the program to provide basic dental care to millions of low-income Californians, especially children. Between the California state auditor’s December 2014 report “California Department of Health Care Services: Weaknesses in its Medi-Cal Dental Program Limit Children’s Access to Dental Care” and the Little Hoover Commission’s April 2016 report “Fixing Denti-Cal,” the department was under a lot of pressure to make quick improvements in a program that had been largely ignored for years. Those problems included an unacceptable utilization of preventive services, diminishing provider participation rates, lagging reimbursement rates and general staff apathy. An example in the auditor’s report noted that a federal Centers for Medicare & Medicaid Services (CMS) report had indicated that California’s utilization rate of 43.9% was the 12th worst among states in fiscal year 2013. And one of the most telling data points was our own DHCS data: 11 counties had no providers willing to accept new Medi-Cal patients and 16 counties had provider-to-patient ratios above 1:2,000. We also knew that there was at least one county without a single participating dentist. Based on all of these facts, I knew I had problem that needed a variety of solutions, each of which would require time, patience and persistence.
What To Fix First? Money
As the audits and external reports pointed out, the dental rates in Medi- Cal were low. But simply throwing money at the program is not as easy as it sounds. Most notably, I worked for a governor who was famously (and proudly) tightfisted. At some point, Gov. Jerry Brown had given a placard to one of his senior staff that stated: “Responsibility is a form of compensation.” We liked to joke that we were highly compensated in his administration. Due to the governor’s perspective on this issue, DHCS could not get rate increases by simply asking. Rather, DHCS had to demonstrate to the Department of Finance that there were legal ramifications (such as federal disallowances or sanctions) that required such a rate increase. And a “demonstration” of this magnitude was often still rejected after multiple meetings and documents. Adding to the governor’s general opposition to rate increases in Medi-Cal, the state of California was also bolstered by its recent U.S. Supreme Court victory in Douglas v. Independent Living Centers 3 (2012) regarding the ability of a state to reduce Medicaid rates and the inability of providers to challenge those reductions. Due to the legal and fiscal environment in 2015-16, it was clear that a straightforward rate increase would not be successful. Lastly, we knew that a rate increase, even if provided, would be so small as to be almost unnoticed by providers and would not correct years of static funding in the program.
Administration
Given the fiscal situation of the state budget and the reluctance of the governor to approve across-the-board rate increases, we also focused on the other aspects of the program that were not budget related. We heard loud and clear from dentists about the administrative burden of participating in the Medi-Cal Dental Program, including the length of the provider application and the unnecessary or overly burdensome treatment authorization process for several procedures. These changes were easier (although not as easy as it sounds) to address. The program staff worked with representatives from the California Dental Association (CDA) and individual providers to understand the barriers to participation and suggestions on improvements. Based on these meetings, the dental provider application was dramatically shortened to the “bare essentials” as required by federal law and a number of prior authorizations were removed. A longer-term initiative was also started to add dental providers into the DHCS provider enrollment portal (PAVE) so that new and renewing dental providers could more easily apply electronically.
Management
John C. Maxwell has a favorite quote that perfectly describes how I approached changes to the Medi-Cal Dental Program: The pessimist complains about the wind. The optimist expects it to change. The leader adjusts the sails.
When I first met with the dental division staff shortly after I became DHCS director, I distinctly remember one staff member who fell asleep during our meeting, and the acting division chief spent the better part of our time together explaining all the reasons why the program could not change, mostly because “it had always been done that way.” I left that meeting and promptly decided that a significant staff overhaul was warranted. Within a week, that acting division chief had been reassigned to another part of DHCS — which ultimately led to their decision to retire a week later. We had a few dental consultants who were not meeting expectations and those contracts were ended. Other staff decided that perhaps their future was in a different program or state agency. All of these changes were expected and part of the necessary change that would lead to a better program — and while I knew it was going to be a little bumpy in the interim, I felt it would ultimately be successful as long as a solid team was being established in its place. Thankfully, we were able to recruit a dynamic and thoughtful division chief, and we were able to attract other individuals who are still working in the program and are as committed to improving the program as when they started.
Location
The Medi-Cal Dental Program had been located in Rancho Cordova, California, for many years near the location of Delta Dental’s headquarters. Given the cost and availability of office space for state agencies in downtown Sacramento, this remote location was not necessarily unusual. However, based on a variety of issues, it became clear that a relocation of the program to the DHCS headquarters would be an important factor in changing the culture of the division and ensuring that executive leadership was able to help support the new division chief. While this change was in development, one event helped expedite the move: a box of cash.
Fraud is not new to Medi-Cal. Unfortunately, when a program as large as California’s exists, there are always a few individuals who look to take financial advantage. Former directors of DHCS have appeared on “60 Minutes” and CNN defending the department after extremely damaging fraud investigations and explaining how they would change the program to better protect public funds from fraud and corruption. DHCS has had employees led out of the department in handcuffs, and the FBI has seized documents from our own offices. While there is always a lot of bad publicity around fraud in public programs, the increasing use of technology, including data analytics and more sophisticated claims systems, has reduced fraud, especially when coupled with aggressive state and federal prosecutions. 4 As you can imagine, it is one of the most disappointing and disheartening events that can happen to a director to see unscrupulous individuals abusing a program that has so many reputable providers and deserving beneficiaries. The final straw about relocating the Medi-Cal Dental Program was when I got a call late one night reporting that a box of cash had been found in the program’s mailroom stacked next to other boxes containing dental molds and other packages for the program staff. This box, however, had no mailing address and no return address — and contained over $18,000 in cash ($50s and $100s all wrapped in plastic). It is not surprising that to this day, all these years later, the individual “mailing” this package and the individual “expecting” this package have never come forward looking for their lost parcel. Thus, the dental program was expeditiously moved into the main headquarters of DHCS, and we moved onward.
Opportunity Knocks
State Medicaid programs have a series of authorities and mechanisms to operate their programs, and California has traditionally used a variety of these methods to accomplish initiatives that would otherwise not be possible or fiscally allowable using a more traditional Medicaid authority. Dating back to the early 2000s, California has employed the use of a Section 1115 Demonstration (1115) Waiver authority to make significant changes in its Medi-Cal program. Without being overly technical, a state can make a series of calculations to demonstrate to the federal government that the 1115 waiver will either be budget neutral or save the federal government funds. This waiver calculation allows for a state to use these “savings” to otherwise support a state’s waiver initiative and fund items that would not otherwise be eligible for Medicaid funding. While the state’s initial 1115 waiver in 2005 was primarily used to support California’s designated public hospitals, it also contained the first of many coverage expansions for individuals otherwise not eligible for Medi-Cal. With each five-year waiver period, California has increasingly used these 1115 waiver funds to expand coverage, transform public hospital systems and fund innovative programs such as the Dental Transformation Initiative.
As the state was negotiating its 1115 waiver in 2015, we were mindful of the fact that substantial Medi-Cal provider rate increases would not be forthcoming in the state budget. So, when the federal government indicated that it was rejecting earlier waiver concepts but that a small portion of funding was available over the five-year waiver period ($750 million), we seized the opportunity and created the Dental Transformation Initiative (DTI). I still remember sitting next to the state Medicaid director as we were on a call with the federal officials from the Centers for Medicare & Medicaid Services and nodding together as they explained the limited items they would consider acceptable. We immediately said in unison, “We want it for dental, please.” This infusion of cash was not only important to lift the dental program into a place where it could demonstrate new ways of delivering care, such as the local dental pilot programs and the caries risk assessment, but it also signaled to both DHCS staff and providers that we were collectively aligned in our goals to bring better quality dental care to California patients. I considered this the first important building block that showed we were truly committed to improving the dental program and were not on the defensive and merely responding to audits and negative reports.
Once DHCS realized that funds were going to be available to help restore the dental program, it quickly became necessary to establish an advisory group of external experts to help the program set goals and desired outcomes. CDA was quick to provide both staff and clinical expertise to the DHCS staff as we developed utilization goals and worked through the details of the structure of the DTI. While there was pressure from the Little Hoover Commission, the California state auditor and state policymakers about the need to set ambitious goals for utilization, the state has traditionally relied on a mix of federal targets or benchmarking against other state Medicaid programs as a way to ascertain the success of a program benefit or modification. In this particular instance, the state also worked closely with CDA to pull research from other academic sources, especially for the pediatric dental standards. Ultimately, the state relies on a compilation of material to set program goals, targets and benchmarks.
Getting a Seat at the Table
As part of the DHCS official stakeholder process, there is a committee known as the “Stakeholder Advisory Committee,” which was originally composed of a small number of providers, health plans, advocates and counties. The original committee was created as part of the state’s 1115 waiver process in 2010 and met quarterly with DHCS executives. While the meetings were public, there was very little input that members of the public could participate in, including attendees from CDA. As part of the effort to improve the Medi-Cal Dental Program and build a stronger relationship with organized dentistry, DHCS offered a designated seat to CDA so the issues of oral health would be more prominently heard and included when it came to the overall administration of the Medi-Cal program. This seat continues to be held by a representative from CDA, which has led to an overall more responsive relationship between the association and the program staff. It has also been an important reminder to everyone, both DHCS staff and other interested parties, to not forget the role that oral health plays in the overall health of a beneficiary.
Restoration of Adult Dental and Restoration of Rates
Data play an important role in the Medicaid program, and the abundance of such data finally allowed the DHCS to successfully advocate within the administration to the Department of Finance and the governor’s office that the 10% provider rate reduction as enacted via AB 975 be restored in the dental program. While a few services such as the rates paid to dental pediatric surgery centers were exempt from these rate cuts, most were not. This rate restoration, as indicated earlier, was not necessarily significant enough on its own or large enough to increase provider participation in any meaningful way, but it was part of a larger package of improvements to the program that signaled positive changes.
The Game Changer Proposition 56
On Nov. 8, 2016, the efforts of CDA (along with the California Medical Association and other key organizations) were successful in convincing a majority of California voters to approve Proposition 56 — the California Healthcare, Research and Prevention Tobacco Tax Act. A portion of the additional $2 tax on tobacco products made a once impossible goal possible, and this dedicated piece of Proposition 56 has enabled supplemental payments for restorative, endodontic, prosthodontic, oral and maxillofacial, adjunctive and preventive services, which generally equaled a 40% increase in the established base Medi-Cal rate. For certain codes or procedures, DHCS made a specific dollar increase that equaled a 100% or greater increase in the service code. As dental providers saw this increase in their reimbursements, it became exceedingly important to ensure the stability of the Proposition 56 supplemental rates in order to retain the existing providers but also attract new providers in the program.
Growing a Medi-Cal Dental Workforce
As with all program changes in Medi-Cal, it often takes many years for the full impact of the change to be seen. Even with positive changes such as the Proposition 56 supplemental payments, we knew it would take several years for utilization to increase to levels that fully reflected provider acceptance and participation in the program. After the first year of Proposition 56 rate increases, DHCS was faced with leftover funds that had not been earmarked. Rather than allow the funds to be “swept” back into the state general fund (which was definitely the preference of the Department of Finance), we reached out to the California Medical Association and CDA. We proposed to use the leftover $220 million for physician and dental loan repayment. And this loan repayment program was not just any loan repayment program — the CalHealthCares program was designed in a way to fundamentally alter the career path of physicians and dentists when starting out. We suspected that many providers wanted to serve in underserved areas or work with underserved populations, but simply could not because the economics of that kind of population could not support them as they established their practice, paid off their student loans and looked to their future home and life. CalHealthCares will pay up to $300,000 in qualified student loans for providers who have graduated within the past five years and are willing to commit to a third of their patient caseload being Medi-Cal patients. To date, almost 80 dentists have been awarded loan repayments from CalHealthCares, and it is expected that several more cohorts will be announced in the next few years.
To Summarize: Change Is Hard
As this brief article demonstrates, the myriad changes that have been made in the Medi-Cal Dental Program over the past five to six years have taken time to fully come to fruition and may continue to evolve in future years. Given the exciting changes that continue to be on the horizon, including an integrated dental benefit in cooperation with the Health Plan of San Mateo, I believe that the audits and negative reports were actually helpful in bringing attention to a program that had been largely ignored and not prioritized for improvement. While there are still plenty of issues that could be addressed, I think the department, in cooperation with CDA, can be proud of the progress that was made and the progress that remains to be achieved.
REFERENCES
1. Department of Health Care Services, September 2021. Medi-Cal Monthly Eligible Fast Facts.
2. New York State Department of Health. Medicaid enrollment by county.
3. The Supreme Court of the United States. Douglas v. Independent Living Centers.
4. State of California Department of Justice, Office of the Attorney General. Medi-Cal fraud.
5. California State Assembly, Committee on Budget. 2011 Assembly budget committee reports.
THE AUTHOR, Jennifer Kent, MPA, can be reached at jennifer@thekentgroup.org.
