BILL NUMBER: AB 2820 CHAPTERED 09/21/04 CHAPTER 632 FILED WITH SECRETARY OF STATE SEPTEMBER 21, 2004 APPROVED BY GOVERNOR SEPTEMBER 21, 2004 PASSED THE SENATE AUGUST 25, 2004 PASSED THE ASSEMBLY APRIL 29, 2004 AMENDED IN ASSEMBLY APRIL 13, 2004 INTRODUCED BY Assembly Member Daucher FEBRUARY 20, 2004 An act to amend Sections 1570.7, 1572, 1579, 1588.5, 1588.7, 1589, and 1591 of the Health and Safety Code, and to amend Sections 14526 and 14573 of the Welfare and Institutions Code, relating to adult day health care. LEGISLATIVE COUNSEL'S DIGEST AB 2820, Daucher. Adult day health care: administration. (1) The existing California Adult Day Health Care Act provides for the implementation of adult day health care center oversight by the State Department of Health Services, and authorizes that department to enter into an interagency agreement with the California Department of Aging for the administration of that oversight. The act establishes a Long-Term Care Committee in the California Department of Aging and requires the committee to function as an advisory body to the California Department of Aging and to advise the Director of the California Department of Aging regarding development of, licensing of, Medi-Cal reimbursement for, and utilization control issues for, community-based long-term care programs. This bill would abolish the Long-Term Care Committee. (2) The act requires the department, subject to the availability of funds, to conduct a grants-in-aid program to assist in establishing new adult day health care centers and stabilizing or expanding the health care operations of specified licensed adult day health care centers. The act requires the department to give special consideration to an applicant in a rural area. The act requires that funds be awarded only after a specific review process of an applicant's grant proposal. This bill would make changes to the review process and would change the definition of a rural service area. (3) The act authorizes the department, subject to the appropriation of funds, to establish planning and development grants for public or private nonprofit applicants that request assistance in conducting feasibility and needs analysis for new adult day health care centers, and that meet other criteria. This bill would eliminate the additional criteria. (4) The act requires the director, when the director intends to seek the suspension or revocation of a license, to notify the licensee of the proposed suspension or revocation and, at the same time, serve the licensee with an accusation. Upon receipt of a notice of defense from the licensee, the act requires the director to set the matter for hearing within 5 days. This bill would authorize the director to temporarily suspend a license prior to that hearing when he or she determines that the suspension is necessary to protect the health and safety of the participants. The bill would provide that the temporary suspension remain in effect until the hearing is completed and the director has made a final determination on the merits. (5) Existing law requires an adult day health care provider to provide services for persons eligible to receive benefits under the Medi-Cal program only to those participants living within its service area, with exceptions. This bill would eliminate that requirement. (6) Existing law provides that initial Medi-Cal certification for adult day health care providers expires 12 months from the date of issuance, but authorizes an extension for a period of not more than 60 days. Prior to approving renewal of Medi-Cal certification, the act requires the department and the California Department of Aging to conduct a financial review and onsite medical and management reviews with the licensing review. This bill would authorize certification extension for more than one period of not more than 60 days and, prior to renewing a Medi-Cal certification, would require only the California Department of Aging to conduct those reviews. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1570.7 of the Health and Safety Code is amended to read: 1570.7. As used in this chapter: (a) "Adult day health care" means an organized day program of therapeutic, social, and health activities and services provided pursuant to this chapter to elderly persons with functional impairments, either physical or mental, for the purpose of restoring or maintaining optimal capacity for self-care. Provided on a short-term basis, adult day health care serves as a transition from a health facility or home health program to personal independence. Provided on a long-term basis, it serves as an alternative to institutionalization in a long-term health care facility when 24-hour skilled nursing care is not medically necessary or viewed as desirable by the recipient or his or her family. (b) "Adult day health center" or "adult day health care center" means a licensed and certified facility that provides adult day health care. (c) "Department" or "state department" means the State Department of Health Services. (d) "Director" means the Director of Health Services. (e) "Elderly" or "older person" means a person 55 years of age or older, but also includes other adults who are chronically ill or impaired and who would benefit from adult day health care. (f) "Individual plan of care" means a plan designed to provide recipients of adult day health care with appropriate treatment in accordance with the assessed needs of each individual. (g) "License" means a basic permit to operate an adult day health care center. With respect to a health facility licensed pursuant to Chapter 2 (commencing with Section 1250), "license" means a special permit, as defined by Section 1251.5, empowering the health facility to provide adult day health care services. (h) "Maintenance program" means procedures and exercises that are provided to a participant, pursuant to Section 1580, in order to generally maintain existing function. These procedures and exercises are planned by a licensed or certified therapist and are provided by a person who has been trained by a licensed or certified therapist and who is directly supervised by a nurse or by a licensed or certified therapist. (i) "Restorative therapy" means physical, occupational, and speech therapy, and psychiatric and psychological services that are planned and provided by a licensed or certified therapist. The therapy and services may also be provided by an assistant or aide under the appropriate supervision of a licensed therapist, as determined by the licensed therapist. The therapy and services are provided to restore function, when there is an expectation that the condition will improve significantly in a reasonable period of time, as determined by the multidisciplinary assessment team. SEC. 2. Section 1572 of the Health and Safety Code is amended to read: 1572. (a) The functions and duties of the State Department of Health Services provided for under this chapter shall be performed by the California Department of Aging commencing on the date those functions are transferred from the State Department of Health Services to the California Department of Aging. The authority, functions, and responsibility for the administration of the adult day health care program by the California Department of Aging and the State Department of Health Services shall be defined in an interagency agreement between the two departments that specifies how the departments will work together. (b) The interagency agreement shall specify that the California Department of Aging is designated by the department as the agency responsible for community long-term care programs. At a minimum, the interagency agreement shall clarify each department's responsibilities on issues involving licensure and certification of adult day health care providers, payment of adult day health care claims, prior authorization of services, promulgation of regulations, and development of adult day health care Medi-Cal rates. In addition, this agreement shall specify that the California Department of Aging is responsible for making recommendations to the department regarding licensure as specified in subdivision (c). The interagency agreement shall specify that the department shall delegate to the California Department of Aging the responsibility of performing the financial reviews and the resolution of audit appeals that are necessary to ensure program integrity. The agreement shall specify that the financial reviews shall be performed only to the extent that resources are budgeted for this purpose. This agreement shall also include provisions whereby the department and the California Department of Aging shall collaborate in the development and implementation of health programs and services for older persons and functionally impaired adults. (c) The Director of the California Department of Aging shall make recommendations regarding licensure to the Licensing and Certification Division in the State Department of Health Services. The recommendation shall be based on all of the following criteria: (1) An evaluation of the ability of the applicant to provide adult day health care in accordance with the requirements of this chapter and regulations adopted hereunder. (2) Other criteria that the director deems necessary to protect public health and safety. SEC. 3. Section 1579 of the Health and Safety Code is amended to read: 1579. (a) A rural alternative adult day health care center shall operate its programs a minimum of three days weekly, unless the program can justify, to the satisfaction of the department, fewer days of operation due to space, staff, financial, or participant reasons. (b) Any program desiring to become a parent center and develop a satellite program may be located in an area that does not meet the population requirements of the rural service areas and need not be in the same county as a satellite. The satellite shall be located in an area that meets the population requirements of a rural service area, and shall be located within a reasonable distance of the parent center to allow sharing of administration, services, and supervision. Parent and satellite centers shall be located in the same licensing district office. (c) Notwithstanding any other provision of law, the administrator or program director of a parent center may, with the approval of the department, serve as the administrator or program director for up to three additional satellite sites. (d) For the purposes of this section, the following definitions apply: (1) "Parent" means a licensed and certified adult day health care center that establishes one or more satellites. A satellite may be in the county of the parent or a rural service area. The parent center shall provide administration, supervision, and, with the approval of the department, may share services and staff with one or more satellite centers. The parent center's license and certification shall cover adult day health care services at one or more satellites. (2) "Rural alternative adult day health care center" means an adult day health care center located in a rural service area. (3) "Rural service area" means an identified service area within one hour driving time from the center and with two or more of the following characteristics: (A) Is more than one-half hour direct driving time from an urban area of 50,000 population or more. (B) Has no other adult day health care center within one-half hour direct driving time. (C) Has geographic or climatic barriers, including, but not limited to, snow, fog, ice, mountains, inadequate highways, or weather, that make transportation to another adult day health care center impractical. (D) Is located in a county with an overall population density of less than 100 persons per square mile. (E) Can demonstrate in the application for licensure that a shortage of qualified professionals exists in the county or identified service area. (4) "Satellite" means an adult day health care center established in a rural service area by an existing licensed and certified adult day health care center for the purposes of extending rural adult day health care services to another location. A satellite shall be located close enough to the adult day health center so that administration, supervision, and services may be shared in a manner that does not compromise care and makes it unnecessary for the satellite to be separately licensed. Each satellite shall meet fire and life safety regulations and laws. Prior approval from the department is required before operating or opening a satellite. SEC. 4. Section 1588.5 of the Health and Safety Code is amended to read: 1588.5. In developing policies and priorities pertaining to the allocation of grant funds, the department shall give primary consideration to the following factors: (a) The applicant's immediate need for funds. (b) The demonstrated community support for the project. (c) The applicant's long-term prospects for financial stability. (d) The applicant's demonstrated marketing strategies. (e) The applicant's ability to provide innovative services and to coordinate with other services in the continuum of care. (f) Special consideration shall be given to an applicant who is in one or more of the following categories: (1) Applicants in rural areas. (2) Applicants in counties where there are no other centers or in areas where there are no other centers within one hour driving time from the proposed site. (3) Applicants who will deliver services in an area with a high elderly ethnic minority population when compared to the total elderly population of the area. (4) Applicants who will deliver services in an area with a high percentage of elderly Medi-Cal beneficiaries when compared to the total elderly population of the area. SEC. 5. Section 1588.7 of the Health and Safety Code is amended to read: 1588.7. (a) The department, unless otherwise specified in the interagency agreement entered into pursuant to Section 1572 or pursuant to annual Budget Act requirements, shall adopt specific guidelines for the establishment of grant-supported activities, including criteria for evaluation of each activity and monitoring to assure compliance with grant conditions and applicable regulations of the department. Funds shall be awarded only after the applicant's proposal is approved by the department or the California Department of Aging pursuant to the guidelines established for these grants. (b) The department, unless otherwise specified by annual Budget Act requirements, shall develop a contract with each selected project. SEC. 6. Section 1589 of the Health and Safety Code is amended to read: 1589. Subject to the appropriation of funds pursuant to the annual Budget Act, the department may establish planning and development grants for public or private nonprofit applicants that request assistance in conducting feasibility and needs analysis for new adult day health care centers. SEC. 7. Section 1591 of the Health and Safety Code is amended to read: 1591. (a) When the director intends to seek the suspension or revocation of a license, the director shall notify the licensee of the proposed suspension or revocation and, at the same time, shall serve the person with an accusation. Upon receipt of a notice of defense from the licensee, the director shall set the matter for hearing within five days. The director shall make a final determination as to whether to suspend or revoke the license within 30 days after the original hearing has been completed. (b) The director may temporarily suspend a license prior to a hearing when he or she determines that the suspension is necessary to protect the health and safety of the participants. In the event of a prehearing suspension, the director shall notify the licensee of the suspension and its effective date and, at the same time, shall serve the licensee with an accusation. Within 15 days of receiving a notice of defense from the licensee, the director shall set the matter for a hearing that shall be held as soon as possible, but not later than 30 days after receipt of the notice. The temporary suspension shall remain in effect until the hearing is completed and the director has made a final determination on the merits, which shall be made within 30 days after the hearing has been completed. SEC. 8. Section 14526 of the Welfare and Institutions Code is amended to read: 14526. Participation in an adult day health care program shall require prior authorization by the department. The authorization request shall be initiated by the provider and shall include the results of the assessment screening conducted by the provider's multidisciplinary team and the resulting individualized plan of care. Participation shall begin upon application by the prospective participant or upon referral from community or health agencies, or the physician, hospital, family, or friends of a potential participant. SEC. 9. Section 14573 of the Welfare and Institutions Code is amended to read: 14573. (a) Initial Medi-Cal certification for adult day health care providers shall expire 12 months from the date of issuance. The director shall specify any date he or she determines is reasonably necessary because of the record of the applicant and to carry out the purposes of this chapter, but not more than 24 months from the date of issuance, when renewal of the certification shall expire. The certification may be extended for periods of not more than 60 days if the department determines it to be necessary. (b) Before certification renewal the provider shall submit with the application for renewal a report according to department specifications that includes an analysis of income and expenditures, continued demonstrated community need, services, participant statistics and outcome, and adherence to policies and procedures. (c) Prior to approving renewal of Medi-Cal certification, the California Department of Aging shall conduct a financial review and onsite medical and management reviews. The reviews shall be conducted by a team of persons with appropriate technical skills. The management review shall be performed by the entity responsible for directing and coordinating the program, as specified in the interagency agreement entered into pursuant to Section 1572 of the Health and Safety Code. (d) Where the director determines that the public interests would be served thereby, a public hearing may be held on any renewal application subject to this section. The findings of the departmental program and licensing reviews and the provider's annual evaluation report shall be presented at the hearing.