BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: AB 369
A
AUTHOR: Yamada
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AMENDED: June 22, 2009
HEARING DATE: July 8, 2009
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CONSULTANT:
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Bain/
9
SUBJECT
Adult day health care centers
SUMMARY
Exempts two veterans' facilities (one in Ventura and one in
Lancaster) from the moratorium on the certification and
enrollment of new Adult Day Health Care (ADHC) centers into
Medi-Cal.
CHANGES TO EXISTING LAW
Existing law:
Existing law establishes ADHC services as a Medi-Cal
benefit for Medi-Cal beneficiaries who generally meet
certain criteria, including being 18 years of age or older,
having a request for ADHC services from a health care
provider, having one or more chronic or postacute medical,
cognitive, or mental health conditions, and having
functional impairments in two or more activities of daily
living, instrumental activities of daily living, or one or
more of each, and requires assistance or supervision in
performing these activities.
Existing law authorizes DHCS to implement a one-year
moratorium on the certification and enrollment into the
Medi-Cal program of new ADHC centers on a statewide basis
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or within a geographic area, subject to certain
limitations. Existing law permits the director of DHCS to
extend this moratorium, if necessary, to coincide with the
implementation date of the ADHC centers waiver.
Existing law exempts certain applicants from this
moratorium.
This bill:
This bill exempts from the ADHC moratorium state-owned and
operated property for which facility planning began during
or before 2002 that was funded by state bonds and federal
grants to serve veterans who reside in California. This
criteria describes two veterans' facilities (one in Ventura
and one in Lancaster) run by the California Department of
Veterans Affairs (CDVA).
FISCAL IMPACT
According to the Assembly Appropriations Committee,
one-time costs during ramp up of $114,000 (50 percent
General Fund (GF)) and annual costs of $450,000 (50 percent
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.
BACKGROUND AND DISCUSSION
According to the author, two veterans' facilities (one in
Ventura and one in Lancaster) run by CDVA plan to open
ADHCs as part of their campuses. These facilities intend
to incorporate these ADHCs into other long-term care
services they will provide to veterans in the area. These
facilities are going to be funded through a variety of
outside sources, (private insurance and U.S. Department of
Veterans Affairs grants). All other costs will be absorbed
by the CDVA operating budget, which comes from the state
General Fund (GF). A potential source of funds to offset
these GF expenditures would be through federal Medicaid
reimbursement for services provided to Medi-Cal-eligible
individuals receiving services at the ADHC center.
However, a moratorium on the enrollment of new Medi-Cal
ADHC providers would prevent this from occurring.
STAFF ANALYSIS OF ASSEMBLY BILL 369 (Yamada) Page
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In order to permit these two centers to receive Medi-Cal
certification and to enroll as providers, an exemption from
the current Medi-Cal moratorium is required. AB 369
creates a very narrow, specifically tailored exemption from
the moratorium for only these two facilities. It would
enable the state to draw down federal matching dollars
through the Medicaid program for Medi-Cal-eligible
individuals receiving ADHC services, thus reducing the GF
costs of these facilities by drawing down federal funds the
state would not otherwise receive.
Background on ADHC
ADHC is an organized day program of therapeutic, social and
health activities and services provided to elderly persons
or other persons with physical or mental impairments for
the purpose of restoring or maintaining optimal capacity
for self-care. Under federal law, ADHC services are an
"optional benefit" for states to provide. The Adult Day
Health Medi-Cal Law establishes adult day health care
services as a Medi-Cal benefit for Medi-Cal beneficiaries
who meet certain criteria. Specifically, ADHC services are
provided to Medi-Cal beneficiaries who have medical or
psychiatric impairments who have a written request for ADHC
services from a physician, a multi-disciplinary team
assessment, a signed participation agreement, and approval
from DHCS. ADHC centers must provide rehabilitation
services (physical, occupational and speech therapy
services), medical services supervised by the participant's
personal physician or staff physician, nursing service,
psychiatric and psychological services, medical social
services, planned recreational and social activities, and
non-medical transportation (if necessary) to and from
participants' homes. There are over 300 ADHC centers that
are Medi-Cal providers throughout California. Expenditures
in 2008-09 for ADHC services were $409 million ($204.7
million GF). The average number of monthly users of ADHC
services in 2008-09 was 36,586.
ADHC moratorium
Since 2004, current law has authorized DHCS to implement a
one-year moratorium on the certification and enrollment
into the Medi-Cal program of new ADHC centers on a
statewide basis, or within a geographic area, with
specified exemptions from the moratorium. DHCS' May 2009
Medi-Cal Estimate indicates the moratorium has been
STAFF ANALYSIS OF ASSEMBLY BILL 369 (Yamada) Page
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extended through the 2009-10 fiscal year. Existing law
exempts certain applicants from this moratorium, including
the following:
Programs of All-Inclusive Care for the Elderly (PACE).
Federally qualified health centers.
Federally qualified rural health clinic.
An applicant with the physical location of the ADHC
center in an unserved area (defined as a county having no
licensed and certified ADHC centers within its geographic
boundary).
An applicant for certification as an ADHC that meets
specified criteria, such as being located in particular
counties (San Francisco, Napa and Los Angeles are three
such counties).
Background on veterans homes
The overall mission of California veterans homes (VH) is to
"provide the state's aged or disabled veterans with
rehabilitative, residential, and medical care and services
in a home-like environment." In order to be eligible for
admission to a VH, an applicant must be age 62 or older (or
younger if disabled), a resident of California, and have
served honorably in the military. CDVA currently operates
VHs with campuses in Yountville, Barstow, Chula Vista, and
is constructing three new VHs in Ventura, Lancaster, and
West Los Angeles. The two sites nearing completion
(Ventura and Lancaster) will incorporate ADHC services, as
well as assisted living (known as residential care
facilities for the elderly), within their continuum of care
design. Those residents who grow to the point where they
need skilled nursing care will be transferred to the main
campus in West Los Angeles or one of the other three homes
in the system that offer skilled nursing facility level of
care.
Arguments in support
The California Association for Adult Day Services (CAADS)
argues that ADHC is a cornerstone in the long-term care
continuum and will play a vital role within the campuses
operated by CDVA. CAADS argues that the ability of these
two veteran-focused ADHC centers to pursue their Medi-Cal
certification is critical to their planned operations.
CAADS argues this bill will conserve limited operating
funds by bringing in federal dollars for veterans eligible
STAFF ANALYSIS OF ASSEMBLY BILL 369 (Yamada) Page
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for Medi-Cal. CAADS points out that if CDVA provides
services without Medi-Cal certification, all expenses for
Medi-Cal-eligible veterans will come from CDVA's operating
funds, leaving federal dollars on the table. CAADS
concludes that in the current budget environment, it makes
sense to maximize all sources of non-state GF.
ADHC budget
The Governor's May Revision proposes to eliminate ADHC
services from Medi-Cal for a savings of $341.1 million
($170.6 million GF). Initially, the Administration
proposed to limit AHDC services to 3 days per week and to
increase DHCS Audit & Investigations staff by an additional
15 positions. These proposals were rescinded, and the ADHC
benefit was instead proposed for elimination. The Budget
Conference Committee rejected the Governor's proposal, and
instead adopted a conference committee compromise that
imposed a temporary three-day ADHC benefit cap, a Medi-Cal
rate freeze, minimum standards, a workgroup on medical
acuity, and on-site treatment authorization requests for a
savings of $25 million GF.
Previous legislation
SB 1103 (Committee on Budget and Fiscal Review), Chapter
228, Statutes of 2004, authorized DHCS to impose a
moratorium on the certification and enrollment into
Medi-Cal of new ADHC providers.
AB 131, Chapter 80, Statutes of 2005 and AB 1807, Chapter
74, Statutes of 2006, which were both health budget trailer
bills, modified the required exemptions from the ADHC
moratorium.
AB 827 (Hancock) of 2008 would, as of August 2010, repealed
DHCS' authority to impose an ADHC moratorium. AB 827 was
held on the Assembly Appropriations Committee suspense
file.
SB 1755 (Chesbro), Chapter 691, Statutes of 2006, made
numerous changes to the ADHC program, including narrowing
the eligibility and medical necessity criteria, requiring
DHCS to perform field audits, and establishing a
reimbursement methodology and a reimbursement limit for
ADHC services on a prospective cost basis for services
provided to each participant, pursuant to his or her
STAFF ANALYSIS OF ASSEMBLY BILL 369 (Yamada) Page
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individual plan of care.
PRIOR ACTIONS
Assembly Floor: 78-0
Assembly Appropriations:14-3
Assembly Health: 18-0
POSITIONS
Support: Aging Services of California
California Alliance for Retired Americans
California Association for Adult Day Services
California Commission on Aging
Congress of California Seniors
Oppose: None received
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