BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 369
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          ASSEMBLY THIRD READING
          AB 369 (Yamada)
          As Amended April 13, 2009
          Majority vote 

           HEALTH       18-0               APPROPRIATIONS      14-3        
           
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          |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                |     |                           |
          |     |                          |     |                           |
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          |     |                          |Nays:|Nielsen, Harkey, Miller   |
          |     |                          |     |                          |
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           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
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           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
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          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 


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