BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
369 (Yamada)
Hearing Date: 8/27/2009 Amended: 8/24/2009
Consultant: Katie Johnson Policy Vote: Health 11-0
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BILL SUMMARY: AB 369 would exempt specified state-owned
veterans' homes from a moratorium prohibiting the enrollment of
adult day health care centers into the Medi-Cal program.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
CDVA budget offset $0 $135 $120 General
(savings)
Medi-Cal benefits $0 $105 $120 General/
(costs) $0 $135 $120 Federal
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STAFF COMMENTS: SUSPENSE FILE.
Existing law authorizes the Department of Health Care Services
(DHCS) to implement and extend a one-year moratorium on the
certification and enrollment of new adult day health care (ADHC)
centers into the Medi-Cal program. This moratorium has been in
place since 2004. Existing law exempts certain applicants from
this moratorium.
This bill would exempt 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. The state currently operates 3 veterans'
homes in Barstow, Chula Vista, and Yountville, has 3 under
construction in Lancaster, Ventura, and West Los Angeles, and
has a request for proposal out for two more in Fresno and
Redding.
Although this bill would technically exempt at least 5 of the 8
facilities from the ADHC moratorium, the California Department
of Veterans Affairs (CDVA) currently plans to provide ADHC
services at only the Lancaster and Ventura sites. It appears to
be the author's intent to exempt only these two facilities from
the moratorium. Thus, as clarification, staff recommends that
the bill be amended to specifically exempt the Lancaster and
Ventura veterans' homes.
CDVA plans to delay the opening of the ADHC centers at the
Lancaster and Ventura homes until at least July 1, 2010. The
Budget Conference Committee suspended the opening of both of
these centers for one year for a General Fund savings of $1.8
million.
Additionally, the Budget Conference Committee limited ADHC
services to Medi-Cal beneficiaries to a maximum of 3 days per
week, instead of 5 days, for a savings of $25
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AB 369 (Yamada)
million. Thus, if CDVA were to claim reimbursement from Medi-Cal
for its eligible veterans, it would be able to claim for a
maximum of 3 days until the cap is lifted.
CDVA plans to provide for 49 beds for ADHC services at each of
the Lancaster and Ventura homes for a total cost of about $1.8
million annually; approximately 20 percent of the veterans to be
served would be Medi-Cal eligible-20 veterans. CDVA would
receive federal reimbursements of approximately $69 per
participant in the ADHC programs and enrollees would pay a fee
of $85, or a percentage of $85 depending on an individual's
income. To the extent that patient contributions and federal
reimbursements do not cover the cost of operating the ADHCs,
CDVA would make up the difference with state General Fund
moneys. In this case, the total cost of providing services to
Medi-Cal beneficiaries would be approximately $240,000 annually.
Medi-Cal costs are generally shared equally between the federal
government (FF) and state general fund (GF). However, as a
result of the passage of the American Reinvestment and Recovery
Act (ARRA) in February of 2009, the Federal Medical Assistance
Percentage (FMAP) increased from 50 percent to 61.59 percent.
Thus, retroactively from October 1, 2008 through December 31,
2010, the federal government would pay for approximately 62
percent and the state general fund would pay for 38 percent of
benefit-related Medi-Cal expenditures. After December 31, 2010,
the FMAP reduces to 50 percent FF, 50 percent GF.
Thus, if CDVA certifies and enrolls its ADHCs in the Medi-Cal
program, it would be possible to offset some state General Fund
costs with federal financial participation, for annual General
Fund savings of $150,000 prior to December 31, 2010, and
$120,000 after January 1, 2011.
However, if the non-state funds-patient contributions and
federal reimbursements-completely cover the costs of operating
the ADHC centers, including the cost of providing services to
Medi-Cal beneficiaries, there would be a cost to the state if
CDVA were to claim Medi-Cal reimbursement because it would be
unnecessary to use General Fund moneys for a program that was
already solvent. If this was the case, claiming Medi-Cal
reimbursement, about $76 per day, for the approximately 20
eligible veterans would be: $90,000 General Fund, $150,000
federal funds annually prior to December 31, 2010, and $120,000
General Fund, $120,000 federal funds each year after January 1,
2011.
The August 24 amendments limit the exemption from the ADHC
moratorium called for in this bill to only the William J. "Pete"
Knight Veterans Home of California, Lancaster; and the Veterans
Home of California, Ventura.