BILL ANALYSIS AB 369 Page 1 ASSEMBLY THIRD READING AB 369 (Yamada) As Amended April 13, 2009 Majority vote HEALTH 18-0 APPROPRIATIONS 14-3 ------------------------------------------------------------------ |Ayes:|Jones, Fletcher, Adams, |Ayes:|De Leon, Ammiano, Charles | | |Ammiano, Block, Carter, | |Calderon, Davis, Duvall, | | |Conway, De La Torre, De | |Fuentes, Hall, | | |Leon, Emmerson, Hall, | |John A. Perez, Price, | | |Hayashi, Hernandez, | |Skinner, Solorio, Audra | | |Bonnie Lowenthal, Nava, | |Strickland, Torlakson, | | |V. Manuel Perez, Salas, | |Krekorian | | | Audra | | | | |Strickland | | | | | | | | ------------------------------------------------------------------ ----------------------------------------------------------------- | | |Nays:|Nielsen, Harkey, Miller | | | | | | ----------------------------------------------------------------- SUMMARY : Creates an exemption to the existing Medi-Cal certification moratorium for Adult Day Health Centers (ADHCs) which will allow the opening of two new, publicly financed ADHCs. Specifically, this bill exempts from the current moratorium a state-owned and operated property, for which planning began before 2002, that is funded by state bonds and federal grants to serve California veterans. EXISTING LAW : 1)Establishes the California ADHC Act which requires licensure and regulation of ADHC centers with administrative responsibility shared between the State Department of Public Health (DPH), the California Department of Aging, and the Department of Health Care Services (DHCS) pursuant to an interagency agreement. 2)Authorizes DPH to implement one year moratoriums on certification and enrollment in the Medi-Cal Program of new adult day health care centers on a statewide or regional basis with certain statutory exceptions. AB 369 Page 2 FISCAL EFFECT : According to the Assembly Appropriations Committee, one-time costs during ramp up of $114,000 (50% General Fund (GF)) and annual costs $450,000 (50% GF) to provide ADHC services to 40 Medi-Cal eligible individuals eventually enrolled over fiscal years 2010-11 and 2011-12 at the ADHC programs at two veterans' medical campuses that will be opening at the end of calendar year 2010. Annual costs per ADHC participant are $11,000. COMMENTS : This bill, according to the sponsor, the California Association for Adult Day Services (CAADS), creates an exemption to the ADHC moratorium on Medi-Cal certification to permit two ADHCs operated by the California Department of Veterans Affairs (CDVA) to become eligible for Medi-Cal reimbursement. CDVA is constructing two large veteran's campuses, one in Ventura County and another in Lancaster, which will include multi-level housing and medical services intended to incorporate ADHC within their planned care continuum. The availability of ADHC, notes the sponsor, is a key component of these publicly funded operations, and the Medi-Cal moratorium has had the unintended effect of preventing ADHC services within the new facilities. ADHC is an organized day program of therapeutic, social, and health activities and services provided to elderly persons with functional impairments, either physical or mental, at risk of institutional placement. The sponsor notes that ADHCs employ a multidisciplinary team approach providing multiple services under one roof. These services include skilled nursing care, physical therapy, social services, meals, speech therapy, and socialization in order to reduce the risk factors which could lead to placement into more expensive care settings. California offers ADHC as an optional Medi-Cal benefit to reduce utilization of nursing homes, emergency rooms, and hospitals. According to CAADS, roughly 42,000 Medi-Cal beneficiaries are now served by 350 ADHCs in this state. The 2004-05 California State Budget authorized the DHCS to impose a moratorium on the certification of new ADHCs after August 2004. The moratorium was implemented in response to the very rapid growth in ADHCs in certain regions of the state. The moratorium has been renewed every year since 2004. However, the Legislature has, over the last five years, authorized several exemptions to allow expansion of specific ADHC operations. AB 369 Page 3 ADHCs were initially required to be nonprofit, charitable facilities until 1994, when legislation (SB 1492 (Mello), Chapter 1121, Statutes of 1994) authorized for-profit companies to develop ADHCs. In recent years the number of centers has grown from 72 to nearly 350 stand alone operations. This rapid growth brought higher state costs, according to this committee's analysis of prior legislation, and DHCS became increasingly concerned that some centers provided only minimal services and failed to comply with state requirements. In 2004, the federal Centers for Medicare and Medicaid Services directed California to shift ADHC from an optional Medi-Cal benefit to a home and community based waiver program. The rapid growth, compliance concerns, and change in structure led the Legislature to impose the moratorium. In 2002, according to the CDVA Web site, planning for three large veteran's facilities, one in Ventura County, one in Lancaster, and one in West Los Angeles, was initiated following passage of the Veterans Home Bond Act of 2000 (AB 2559 (Wesson), Chapter 216, Statutes of 2002). The three facilities are financed with federal veteran's home grants and state bond funding totaling $229 million, of which 60% is from federal sources. All three sites are intended to provide multilevel housing and medical services for eligible veterans. The two sites nearest completion, Ventura and Lancaster, incorporate ADHC services as well as assisted living and nursing care units within their continuum of care design. CAADS indicates that both projects had sought approval for up to 100 licensed ADHC slots, but anticipate only 20 enrollees at each facility for the first few years of operation. Absent this legislation, residents of the two facilities will, according to the sponsor, be placed in the campus Medi-Cal nursing home with higher state costs and less personal independence for the beneficiary. Analysis Prepared by : Tanya Robinson-Taylor / HEALTH / (916) 319-2097 FN: 0001203