BILL NUMBER: AB 1434 INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Dymally FEBRUARY 23, 2007 An act to add Section 14132.455 to the Welfare and Institutions Code, relating to Medi-Cal. LEGISLATIVE COUNSEL'S DIGEST AB 1434, as introduced, Dymally. Medi-Cal: home health care services. Existing law establishes the Medi-Cal program, administered by the State Department of Health Care Services, under which basic health care services are covered, including home health agency services. This bill would require the department to implement a ratesetting system, subject to federal approval and the availability of federal funds, that reflects the costs and services associated with quality home health agency services, pursuant to specified criteria. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 14132.455 is added to the Welfare and Institutions Code, to read: 14132.455. (a) It is the intent of the Legislature to devise a Medi-Cal home health agency service reimbursement methodology that more effectively ensures individual access to appropriate home health agency services, promotes quality home health services, advances decent wages and benefits for home health agency workers, supports provider compliance with all applicable state and federal requirements, encourages administrative efficiency, and provides for annual rate increases to reflect changes in the cost of furnishing quality home health agency services. (b) As used in this section, "home health agency services" means those services referenced in subdivisions (j) and (t) of Section 14132. (c) The department shall, in accordance with subdivision (d), implement a ratesetting system, subject to federal approval and the availability of federal funds, that reflects the costs and services associated with quality home health agency services. This ratesetting system shall be effective commencing on July 1, 2008, and shall be implemented commencing on the first day of the month following federal approval. The department may retroactively, to the extent permitted by law, increase and make payment of rates to home health agencies. (d) The department shall establish rates pursuant to this article for home health agency services as follows: (1) (A) For home health agency services that are reimbursed by the department on a per-visit allowance, the department shall set rates that reflect 100 percent of the statewide average projected cost for a visit by a registered nurse, licensed vocational nurse, physical therapist, occupational therapist, speech language therapist, medical social worker, or certified home health aide to a home health agency patient, including appropriate direct and indirect costs applicable to those visits. The department shall establish rates on the basis of the home health agency cost data reported in the most recent available home health agency Medicare cost reports, projected to the rate year beginning July 1, 2007, by use of the Medicare market basket index. (B) The department shall update the per-visit rates annually. As often as appropriate to take into account cost changes applicable to home health services, and at least once every three years, the department shall conduct an analysis of the home health agency cost data reported in the most recent available home health agency Medicare cost reports, and establish updated rates for home health agency visits by projecting that data to the rate year by use of the Medicare market basket index. (C) For rate years when the department does not revise the per-visit rates pursuant to the methodology set forth in subparagraph (B), the department shall update the previous year rates to the rate year to reflect the increase in the Medicare market basket index. (2) (A) For home health agency services that are reimbursed by the department on a hourly basis, the department shall set hourly rates that reflect 100 percent of the statewide average projected hourly salary for a registered nurse, licensed vocational nurse, physical therapist, occupational therapist, speech language therapist, medical social worker, or certified home health aide. The department shall establish rates on the basis of a current salary survey, and project hourly salaries to the rate year beginning July 1, 2007, by use of the Medicare market basket index. The department shall then add 50 percent to those salary amounts to reimburse home health agencies for payroll taxes, workers' compensation, transportation, administrative overhead, and other costs. (B) The department shall update the hourly rates annually. As often as appropriate to take into account cost changes applicable to home health agency services, and at least once every three years, the department shall conduct or use the results of a current salary survey, plus 30 percent and establish updated hourly rates for home health agency services by projecting this data to the rate year by use of the Medicare market basket index. (C) For rate years when the department does not revise the hourly rates pursuant to the methodology set forth in subparagraph (B), the department shall update the previous year rates to the rate year to reflect the increase in the Medicare market basket index.