|
Date: |
October 27, 2026, and November 17, 2026 |
20 |
Title
Receive County Medical Services (CMS) Reform Analysis, Approve Recommendations on Reforms to CMS, Approve Amendments to Board Policy A-67, and Adopt an Ordinance Amending the San Diego County Administrative Code Relating to Liens for Health and Human Services Costs (10/27/2026 - First Reading; 11/17/2026 - Second Reading, unless the ordinance is modified on second reading) (Districts: All)
End
Overview
On March 3, 2026 (17), the San Diego County Board of Supervisors (Board) approved a comprehensive review of County Medical Services (CMS), an effort brought forward by the Social Safety Net and Behavioral Health Systems Transformation Ad Hoc Subcommittee (Subcommittee).
As part of this action, the Board directed the Chief Administrative Officer (CAO) to analyze the feasibility, fiscal implications, and equity impacts of targeted reforms to CMS and make recommendations, including but not limited to: revisions to CMS eligibility standards; modernization of enrollment processes; eliminating the CMS lien requirements and reforming existing property limits; expanding phone and virtual application options; reviewing covered services; analysis of how cost-sharing protocols impact patients’ ability to access services; review the branding and renaming of CMS to be reflective of potential revisions to eligibility standards; and evaluating fiscal impacts associated with any proposed changes.
Additionally, the Board directed the CAO, in coordination with the Subcommittee, to engage collaboratively with organizations representing hospitals in the region, with primary emphasis on acute care hospitals, for the purpose of obtaining input related to the evaluation and development of the recommendations outlined.
Today’s item requests the Board receive the CMS Reform Analysis; approve implementation of the initial recommended changes to the CMS program for 2027; adopt revised Board Policy A-67 on Indigent Care (formerly Primary Care Services) and amend the sunset date; and adopt an Ordinance amending the San Diego County Administrative Code relating to liens for Health and Human Services costs.
Today’s item supports the County of San Diego’s vision of a just, sustainable, and resilient future for all, specifically, those communities and populations that have been historically left behind, as well as the regional Live Well San Diego vision of healthy, safe, and thriving communities by strengthening the safety net and ensuring County residents have access to health care and resources amidst State and federal policy changes.
Body
Recommendation by Chief Administrative Officer:
1) Receive the County Medical Services (CMS) Reform Analysis.
2) Direct the Chief Administrative Officer (CAO) to proceed with implementation of the recommended reforms to the CMS program described below, and provide various updates on implementation to the Board via memorandum in Spring 2027 and annually beginning in Fall 2027 through December 2029:
a) Authorize implementation of the recommended changes to the CMS program beginning December 2026 as follows:
1. Remove property liens and in-person appointment requirement;
2. Remove the credit check requirement;
3. Eliminate the reimbursement agreement requirement;
4. Simplify the CMS application process by reducing paperwork and administrative burden;
5. Align property limits for CMS eligibility with Medi-Cal limits;
6. Increase transparency and accessibility of the CMS application and enrollment process;
7. Enhance transparency of Administrative Service Organization (ASO) oversight;
8. Increase application assistance by expanding the Hospital Outstation Point of Entry (HOPE) Program to pilot community health clinics;
9. Align appeal timelines for CMS application denials with Medi-Cal timeframe;
10. Align appeal timelines for CMS service denials with Medi-Cal timeframe;
11. Clarify the Emergency Department follow up Policy & Procedure.
b) Return to the Board with recommended action plans for implementation on the following CMS reforms subject to more robust analysis and evaluation of program enrollment trends with the initial set of reforms described in Recommendation 2a, and subject to available funding:
1. Include Emergency Department follow-up care as a covered CMS benefit without prior authorization;
2. Remove the requirement to have a Medi-Cal denial in hospitals
3. Simplify the Share of Cost;
4. Remove the requirement of prior authorization for labs and diagnostics;
5. Simplify the CMS application process by aligning with the Medi-Cal application;
6. Extend the initial certification time period.
3) Approve amendments to Board Policy A-67 - Indigent Care and extend the sunset review date to December 31, 2033.
4) Direct the Chief Administrative Officer to continue to evaluate the following significant expansions to eligibility and coverage and report back to the Board of Supervisors in Spring 2027 with updates, and at least once annually thereafter through December 2029, and if substantial funding is identified, return to the Board of Supervisors with recommended action plans for implementation subject to further evaluation and overall funding availability:
1. Include Medi-Cal eligible individuals who do not meet Medi-Cal work requirements (19-64-year-olds);
2. Expand age criteria to include 19-20-year-olds;
3. Expand CMS eligibility to residents affected by Federal Immigration-Based Medi-Cal eligibility restrictions;
4. Include Medi-Cal eligible individuals who are terminated for procedural non-compliance;
5. Align CMS retroactive coverage timeline with Medi-Cal;
6. Expand dental services;
7. Include mild to moderate mental health services;
8. Include pregnancy and family planning services;
9. Include transplant services;
10. Include preventive care.
5) Approve the introduction of the Ordinance (first reading):
AN ORDINANCE AMENDING THE SAN DIEGO COUNTY ADMINISTRATIVE CODE RELATING TO LIENS FOR HEALTH AND HUMAN SERVICES COSTS
If on October 27, 2026, the Board takes action as recommended in item 5 above, then, on November 17, 2026:
6) Consider and adopt the ordinance (second reading):
AN ORDINANCE AMENDING THE SAN DIEGO COUNTY ADMINISTRATIVE CODE RELATING TO LIENS FOR HEALTH AND HUMAN SERVICES COSTS
7) End
Equity Impact Statement
Medi-Cal beneficiaries are predominantly low-income, with a maximum income of $22,000 per year for a single-person household to qualify for coverage in most circumstances. In San Diego County, 44% of the Medi-Cal population are Hispanic, 53% are between the ages of 19-64, and approximately one-third primarily speak a language other than English.
Beginning January 1, 2027, federal changes under House Resolution 1 (H.R. 1) will impact individuals enrolled in Medi-Cal by adding work and community engagement requirements. These requirements apply to individuals ages 19 through 64 enrolled in, or applying for, Medi-Cal, and are identified as able-bodied adults without dependents. An estimated 68,761 San Diego County residents may lose Medi-Cal coverage due to these new requirements. Additionally, approximately 17,141 noncitizens currently receiving federally funded full-scope Medi-Cal may lose comprehensive coverage.
H.R. 1 is expected to place additional demands on and impact the fiscal stability of San Diego County’s safety net. The actions recommended today represent an important step toward addressing these challenges by identifying opportunities for the County of San Diego’s indigent care program to be streamlined, more accessible, and more transparent. Recommendations also include continuing to identify solutions that address the increase in the number of uninsured individuals in San Diego County to ensure equitable access to care for the indigent population.
Sustainability Impact Statement
Today’s proposed action supports the County of San Diego (County) Sustainability Goal #1 to engage the community in meaningful ways; Sustainability Goal #2 to provide just and equitable access to County services; and Sustainability Goal #4 to protect the health and well-being of everyone in the region. Specifically, the CMS program acts as a safety net, providing access to emergency care for certain low-income adults who are not eligible for other health coverage programs and have no other means of support.
Fiscal Impact Statement
Funds for today’s request are included in the Fiscal Year (FY) 2026-28 Operational Plan in Health and Human Services Agency. If approved, this request is estimated to result in costs of $179,990 in FY 2026-27 and $308,600 in FY 2027-28. The breakdown of estimated fiscal impact of recommended changes to CMS is outlined in Attachment A. The fiscal impact noted will be absorbed by existing County staff currently budgeted and projected savings in the existing Tobacco Settlement Funds allocation. The available funding source is existing Tobacco Settlement Funds appropriations.
There will be future fiscal impacts associated with further implementation of CMS reforms referenced in this board action. Staff will return to the Board for consideration and approval of any other future fiscal impacts that may result from the recommendations. Upon return by staff, funding will need to be incorporated into mid-year action or future operational plans based on available funding. There is no change in net General Fund cost and no additional staff years.
Business Impact Statement
N/A
Advisory Board Statement
This item was presented as a discussion item for the Social Services Advisory Board on July 8, 2026, the Health Services Advisory Board on July 21, 2026, the Behavioral Health Advisory Board on September 3, 2026, and the Healthy San Diego Consumer and Professional Advisory Committee on July 9, 2026, and September 24, 2026, to provide opportunities for input. This item was presented as an informational item to the Behavioral Health Advisory Board on October 1, 2026, and to the Health Services Advisory Board on October 13, 2026, with representatives in attendance from the Social Services Advisory Board and the Healthy San Diego Consumer and Professional Advisory Board.
Background
On March 3, 2026 (17), the San Diego County Board of Supervisors (Board) approved a comprehensive review of County Medical Services (CMS). This initiative was brought forward by the Social Safety Net and Behavioral Health Systems Transformation Ad Hoc Subcommittee (Subcommittee) to recommend reforms in anticipation of federal and State healthcare coverage changes.
As part of this action on March 3, 2026 (17), the Board directed staff to analyze the feasibility, fiscal implications, and equity impacts of targeted reforms to CMS and make recommendations, including but not limited to: revisions to CMS eligibility; modernization of enrollment processes; eliminating the CMS lien requirements and reforming existing property limits; expanding phone and virtual application options; reviewing covered services, including how medical need is defined and evaluated, Emergency Department follow-up visits, pharmacy access, lab work, and diagnostic testing; analysis of how cost-sharing protocols impact patients’ ability to access services; review the branding and renaming of CMS to be reflective of potential revisions to eligibility standards; and evaluating fiscal impacts associated with any proposed changes.
Stakeholder Engagement
As part of the Board direction, the Health and Human Services Agency (HHSA) engaged collaboratively with organizations representing hospitals in the region, with primary emphasis on acute care hospitals, for the purpose of obtaining input related to the evaluation and development of the recommendations outlined in coordination with the Subcommittee.
To gather input on potential changes to the current CMS program from stakeholders, five virtual listening sessions were held with participants representing hospitals, community health centers, community-based organizations, consumers, advocates, and health care partners.
In addition to the listening sessions, the County received written input, convened one-on-one meetings with partners and provided regular updates to the following advisory bodies:
• Health Services Advisory Board
• Healthy San Diego Consumer and Professional Advisory Committee
• Social Services Advisory Board
• Behavioral Health Advisory Board
Key themes identified through the listening sessions were shared with the Advisory Boards, whose feedback informed the recommendations to reform CMS presented in today’s item. While stakeholders expressed interest in expanding the scope of services available to CMS recipients, they emphasized that streamlining the application process and expanding eligibility should be the primary priorities. Additional information regarding stakeholder engagement and feedback is detailed in CMS Reform Analysis (Attachment A).
Summary of CMS Reform Analysis
The County analyzed the current CMS program and examined options to update CMS eligibility, enrollment, covered services, and delivery model. Guided by stakeholder input, the analysis explored potential reforms, including but not limited to the directed items. Additional details are outlined in Attachment A.
The comprehensive CMS analysis evaluates costs, trade-offs, and community impacts across program eligibility, covered services, and administrative processes. Insights from internal reviews and stakeholder feedback revealed consistent themes that informed the development of proposed program modifications. After careful consideration of the assessed options for reform, the following recommendations were developed in consultation with the Subcommittee and informed by stakeholder input. The reforms are categorized as follows:
• Recommended CMS Reforms: If approved by the Board, County staff will begin preparations to implement reforms described in Recommendation 2a.1-11 in December 2026. These reforms are intended to increase program participation by streamlining processes and removing barriers to enrollment. Additional proposed reforms will require further analysis and evaluation to determine appropriate next steps.
• Future CMS reforms dependent on funding opportunities: These reforms include significant expansions to program eligibility and coverage for consideration pending identification of substantial new funding.
Proceed with Implementation of the Recommendation 2 Reforms to the CMS program
The proposed CMS reforms outlined below focus on streamlining administrative and eligibility processes. The recommended reforms under Recommendation 2a include:
1. Remove property liens and in-person appointment requirement: Eliminate the property lien requirement from the CMS application process and take steps to revoke existing liens recorded related to CMS provision or enrollment, eliminating the requirement for applicants to repay the cost of services through property liens. This reform will also eliminate the requirement for in-person application appointments.
Implementation of this reform will necessitate an amendment to San Diego County Administrative Code Section 238 to remove the authorization for the Health and Human Services Deputy Chief Administrative Officer (DCAO) or designated representative, and the Director of the Office of Revenue and Recovery to secure payment by requiring execution and filing of liens consistent with Welfare and Institutions Code (WIC) 17109. In addition, the amendment will direct the DCAO and Director of Revenue and Recovery to immediately cease all collection activities and take measures to revoke any existing lien recorded under the CMS program prior to the effective date of this ordinance. Attachment D and E include the strikeout and clean versions of the Ordinance.
2. Remove the credit check authorization requirement: Eliminate the credit check authorization form and discontinue credit checks as part of the CMS application process.
3. Eliminate the reimbursement agreement requirement: Remove the Reimbursement Agreement form and revise the reimbursement requirements elsewhere within the application.
Recommendations 2.a.1-3 will be implemented December 2026.
4. Simplify the CMS application process by reducing paperwork: Reduce the documentation required to apply for CMS by eliminating forms related to property liens, credit checks, and reimbursement agreements. Eliminating in-person application appointment requirements to reduce the burden on applicants. Verbal signatures will continue to be accepted by phone and the possibility of enhancing the process by including online signatures will continue to be explored. Additional process improvements under consideration, including automatically initiating a CMS application following a Medi-Cal denial, may further simplify enrollment.
Recommendation 2.a.4 will be implemented between December 2026 and June 2027.
5. Align property limits for CMS eligibility with Medi-Cal: Align CMS property eligibility limits with Medi-Cal requirements to simplify the application process and reduce duplicative documentation. This alignment may also facilitate the use of information applicants have already provided through the Medi-Cal application process.
Recommendation 2.a.5 will be implemented between July and December 2027.
6. Increase transparency and accessibility of the CMS application and enrollment process: Modernize how CMS information is presented and shared to assist the public and providers in accessing CMS. Planned improvements include updating the CMS Patient Handbook and CMS Provider Handbook, redesigning the website, and utilizing QR codes and other tools to improve access to program information.
7. Enhance Administrative Service Organization (ASO) oversight: Reinforce oversight of the ASO in the areas of audits, clinical oversight, quality assurance and utilization management and publish updated policies on County CMS website. Additionally, quarterly program reporting will be established to support these efforts.
8. Increase Medi-Cal and CMS application assistance: Expand the Hospital Outstation Point of Entry (HOPE) Program to additional community health clinics as a pilot to increase dedicated County eligibility support for applicants and community-based application assisters in these critical locations. Staff will report back to the Board in Spring 2027 with results of the pilot and will return if resources are needed for expansion to additional sites.
Recommendations 2.a.6-8 will be implemented between December 2026 and December 2027. Updates may continue through 2028 as needed to reflect any future changes to the CMS program.
9. Align appeal timeline for CMS application denials with Medi-Cal: Align appeal timelines for CMS application denials with those for Medi-Cal. The proposed reform also includes coverage of service costs during the appeal process, consistent with the applicable Medi-Cal process, to simplify program participation
10. Align appeal timeline for CMS service denials with Medi-Cal: Align appeal timelines for CMS service denials with those for Medi-Cal to promote consistency and simplify participation in the CMS program.
11. Clarify Emergency Department follow up Policy & Procedure: Stakeholders requested that Emergency Department follow-up care be covered by CMS without prior authorization. This fully requested reform is listed in the next section as an item to monitor and evaluate further in 2027-2028. However, the initial analysis identified the following two actions that can be taken in 2027 to address voiced concerns:
a. Revise CMS policy and procedure documents to remove language that Emergency Department follow-up care is "never covered", and
b. Amend CMS contracts with Federally Qualified Health Centers to ensure capacity for timely Emergency Department follow-up visits.
Recommendations 2.a.9-11 will be implemented between July and December 2027.
Building on the implementation of the initial CMS reforms outlined above, HHSA will further evaluate program enrollment trends and assess the impacts of these changes to inform recommendations for the next phase of CMS reforms. Staff will return to the Board with recommended action plans for the following reforms as described in Recommendation 2b, subject to the results of this evaluation and the availability of funding:
1. Include Emergency Department follow-up care as a covered CMS benefit without prior authorization: Monitor service denials and access to care for follow-up care at Emergency Departments between 2027-2028.
2. Remove the requirement to have a Medi-Cal denial in hospitals: Throughout 2027, develop case scenarios, monitor, and analyze data to identify trends and impact of the CMS policy.
3. Simplify the Share of Cost: In 2027, a proposal to modernize cost sharing by moving away from the Share of Cost model and towards a co-payment structure will be developed. This would replace the current model in which applicants with a household income falling between 0-165% of the Federal Poverty Level (FPL) may be eligible for CMS at no cost. Applicants with a household income falling between 165-350% FPL may be eligible for CMS Hardship program with or without a Share of Cost.
4. Stakeholders also suggested eliminating the Share of Cost for the CMS Hardship program altogether. This would result in zero share of cost for any CMS participants. Staff do not recommend moving forward with this reform at this time as additional information and analysis is needed. Instead, it is recommended to simplify the Share of Cost as described and monitor data to determine if additional reforms are needed.
5. Remove the requirement of prior authorization for labs and diagnostics: Currently, labs ordered as part of a referral to a specialist require prior authorization, which may delay care and add administrative burden. In 2027, research will be conducted on the health care industry standards and policies related to lab prior authorizations. Updates to the CMS policy will be considered in 2028.
6. Simplify the CMS application process by aligning with the Medi-Cal application: In 2027 and 2028, continue working with the State to update their Medi-Cal application system to incorporate the CMS application. This would create a single system that streamlines moving from a Medi-Cal denial to initiating the CMS process. Additionally, it reduces the County staff administrative burden. A financial analysis and updated workflows for patients, providers, and County staff will be developed throughout 2028, and will be considered for implementation in 2029.
7. Extend the initial certification time period: Stakeholder feedback included extending the CMS initial certification from six months to one year. However, staff do not recommend moving forward with this reform in order to align with the Medi-Cal renewal timeline, which will be every six months beginning January 1, 2027. This allows for a process of ensuring the most vulnerable individuals at risk of losing Medi-Cal are assisted with reestablishing their coverage rather than relying on the payer of last resort.
Expansions to eligibility and coverage pending identification of substantial funding:
Analysis of the options listed below are for consideration pending identification of substantial new funding.
1. Include Medi-Cal eligible individuals who do not meet Medi-Cal work requirements (19-64-year-olds): State and federal changes to Medi-Cal eligibility will begin January 1, 2027, which, over time as Medi-Cal renewals are due, will provide valuable data to the County to understand the full impact of these changes and identify how utilization of the CMS program may change. Throughout 2027, these trends will be monitored, and fiscal analyses will be conducted to provide a recommendation on changes to the CMS policy to be considered for implementation in 2028.
2. Expand age criteria to include 19-20-year-olds: Currently, CMS eligibility includes 21-64-year-olds, however the H.R.1 work requirements for able bodied adults without dependents impacts 19-64-year-old Medi-Cal beneficiaries. The impact of this new requirement will be monitored and analyzed throughout 2027.
3. Expand CMS eligibility to residents affected by federal immigration-based Medi-Cal eligibility restrictions: Beginning July 2027, federal and state changes will impact access to full scope Medi-Cal for many individuals based on their immigration status. In 2028, a fiscal impact study will be conducted to inform the development of a recommendation related to expanding the list of immigration statuses.
4. Include Medi-Cal eligible individuals who are terminated for procedural non-compliance: It is expected that new, additional documentation requirements for applying for, or renewing, Medi-Cal will create barriers to successfully applying for coverage. This will result in eligible individuals having their coverage terminated. Additionally, individuals who are not impacted by H.R. 1 but may still have challenges with providing the necessary Medi-Cal application documentation. This impact will be monitored and analyzed in 2028.
5. Align CMS retroactive coverage timeline with Medi-Cal: CMS retroactive coverage can be aligned with Medi-Cal to continue streamlining and simplifying the CMS program. To ensure this change can be implemented effectively, data will be collected and analyzed throughout 2028, with a final recommendation to be proposed in 2029.
6. Expand dental services: Stakeholder feedback included expanding services to include non-emergency and preventive dental care, with a focus on people with diabetes and heart disease. To understand the fiscal impact of adding this service, data will be gathered and analyzed in 2028 to provide a specific recommendation on what the CMS program would cover by the end of the year.
7. Include mild to moderate mental health services: Currently, CMS does not cover mental health services. Expanding service coverage to include mild to moderate mental health will fill a gap in access to care, as severe mental health services are covered by other programs. In 2028, the County will coordinate with community providers for their input on changes to the CMS policy and data will be analyzed to understand the financial impact of expanding coverage. A proposal for implementation will be provided in 2029.
8. Include pregnancy and family planning services: Stakeholder feedback included consideration of CMS coverage for pregnancy and family planning. In 2028, an analysis will take place to identify the specific services that may be covered and the fiscal impact to develop a recommendation to be considered in 2028.
9. Include transplant services: Stakeholder feedback included consideration of CMS coverage for transplants. In 2028, an analysis will take place to identify the specific services that may be covered and the fiscal impact to develop a recommendation to be considered in 2028.
10. Include preventive services: There was significant stakeholder interest in expanding CMS coverage to include preventive services, including cancer screenings and immunizations. Analysis of anticipated utilization rates and fiscal impact will take place in 2027.
Adopt Revised Board Policy A-67
On May 10, 1977, the Board of Supervisors adopted Board Policy A-67 on Primary Care Services, which established a governing policy for the provision of primary care services to legal residents of San Diego County in accordance with Section 17000 of the Welfare and Institutions Code.
Board Policy A-67 was last updated on November 19, 2019, and is set to sunset on December 31, 2026. Since the County must review its local policy for continuation or revision, this is an opportunity to consider options for how CMS can best address local medical needs in a changing local, State, and federal health care landscape.
Attachment B includes a strikeout version of Board Policy A-67 reflecting the proposed revisions based on the recommended CMS reforms, and Attachment C provides the corresponding clean version incorporating the proposed updates.
Proposed updates to the policy include:
1. Revise the subject of the policy from Primary Care Services to Indigent Care: Reflect the policy’s broader purpose of guiding the County’s approach to fulfilling its indigent care obligations under California WIC Section 17000 for indigent care and update references throughout the policy.
2. Remove outdated background information: Eliminate background language that no longer reflects the current CMS program.
3. Update the County vision statement: Revise the vision statement referenced in the policy to reflect the County’s current vision.
4. Add the following to HHSA responsibilities in administration of this policy:
a. Align the CMS application processes, administrative procedures and timelines with Medi-Cal, where feasible and where alignment improves patient access.
b. Align CMS program policies and procedures with health care industry standards, where feasible and where alignment improves patient access.
c. Maintain CMS program eligibility requirements, policy, and procedures in the County Medical Services Program Guide and make this information available to the public.
Today’s item requests the Board receive the CMS Reform Analysis; approve implementation of the initial recommended changes to the CMS program for 2027; adopt revised Board Policy A-67 on Indigent Care (formerly Primary Care Services) and amend the sunset date; and adopt an Ordinance amending the San Diego County Administrative Code relating to liens for Health and Human Services costs.
Staff will report back to the Board in Spring 2027 with an update on implementation progress and any progress on monitoring and evaluation of additional CMS reforms for consideration. Recommendations for future CMS reforms will be brought forth to the Board for approval prior to implementation. In addition, staff will continue to work in close collaboration with the Subcommittee and stakeholders on implementation and continued reform of the CMS program.
Linkage To the County of San Diego Strategic Plan
This action supports the County of San Diego 2026-2031 Strategic Plan initiatives of Community and Equity by ensuring access for all to health and social services, providing services that enhance the community’s well-being, and ensuring the capability to respond to the needs of individuals in the community.
Respectfully submitted,
Ebony N. Shelton
Chief Administrative Officer
Attachments
Attachment A- County Medical Services Reform Analysis
Attachment B- Board Policy A-67 (Strikeout)
Attachment C- Board Policy A-67 (Clean)
Attachment D- Ordinance Amending Administrative Code (Strikeout)
Attachment E- Ordinance Amending Administrative Code (Clean)
Attachment F- Summary of Proposed Ordinance Amending Administrative Code