BILL NUMBER: AB 411	AMENDED
	BILL TEXT

	AMENDED IN SENATE  SEPTEMBER 2, 2009
	AMENDED IN ASSEMBLY  JUNE 1, 2009
	AMENDED IN ASSEMBLY  MAY 6, 2009
	AMENDED IN ASSEMBLY  APRIL 16, 2009

INTRODUCED BY   Assembly  Members   Garrick
    and Harkey  
Member   De La Torre 
    (  Coauthor:   Assembly Member  
Jones   ) 
    (   Coauthors:   Senators  
Alquist   and Strickland   ) 

                        FEBRUARY 23, 2009

    An act relating to health facilities.   An
act to amend Sections 1324.20, 1324.21, and 1324.27 of the Health and
Safety Code, and to amend Section 14126.033 of the Welfare and
Institutions Code, relating to skilled nursing facilities, and
declaring the urgency thereof, to take effect immediately. 


	LEGISLATIVE COUNSEL'S DIGEST


   AB 411, as amended,  Garrick   De La Torre
 .  Health facilities: seismic safety.  
Skilled nursi   ng facilities: quality assurance fee:
Medi-Cal reimbursement.  
   Existing law, as long as prescribed conditions are met, provides
for the imposition of a uniform quality assurance fee on skilled
nursing facilities, subject to prescribed exemptions, to be
administered by the Director of Health Care Services and deposited in
the State Treasury to be available to enhance federal financial
participation in the Medi-Cal program or to provide additional
reimbursement to, and support facility quality improvement efforts
in, licensed skilled nursing facilities. Existing law provides that
the quality assurance fee shall be based upon the entire net revenue
of all skilled nursing facilities subject to the fee, except an
exempt facility, as defined to include, among other facilities, a
skilled nursing facility that is part of a continuing care retirement
community. Violation of these provisions is a misdemeanor. 

   This bill would eliminate the exemption for a skilled nursing
facility that is part of a continuing care retirement community. By
changing the definition of a crime, this bill would impose a
state-mandated local program.  
   Existing law provides that for the 2005-06 rate year and
subsequent rate years through and including the 2010-11 rate year,
the net revenue projected for all skilled nursing facilities subject
to the fee shall be based on the prior rate year's data.  
   This bill would require the prior rate year's data to be updated
to the midpoint of the upcoming rate year.  
   Existing law, the Medi-Cal Long-Term Reimbursement Act, requires
the department to implement a cost-based reimbursement rate
methodology for freestanding skilled nursing facilities, excluding
skilled nursing facilities that are a distinct part of a facility
that is licensed as a general acute care hospital. Reimbursement
rates for these facilities are funded by a combination of federal
funds and moneys collected pursuant to the above-described uniform
quality assurance fees. Existing law provides that this rate
methodology shall cease to be implemented on July 31, 2011, with
these provisions to be repealed on January 1, 2012. Existing law
provides, for the 2009-10 and 2010-11 rate years, that the weighted
average Medi-Cal reimbursement rate required for purposes of the
above-described provisions shall not be increased with respect to the
weighted average Medi-Cal reimbursement rate for the 2008-09 rate
year.  
   This bill would, instead, provide that for the 2009-10 rate year,
the weighted average Medi-Cal reimbursement rate required for
purposes of the above-described provisions shall not exceed 2.5% of
the weighted average Medi-Cal reimbursement rate for the prior fiscal
year.  
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that no reimbursement is required by this
act for a specified reason.  
   This bill would declare that it is to take effect immediately as
an urgency statute.  
   Existing law, the Alfred E. Alquist Hospital Facilities Seismic
Safety Act of 1983, establishes, under the jurisdiction of the Office
of Statewide Health Planning and Development, a program of seismic
safety building standards for certain hospitals constructed on and
after March 7, 1973. Existing law authorizes the office to assess an
application fee for the review of facilities' design and
construction, and requires that full and complete plans be submitted
to the office for review and approval.  
   Existing law requires that, after January 1, 2008, any general
acute care hospital building that is determined to be a potential
risk of collapse or pose significant loss of life be used only for
nonacute care hospital purposes, except that the office may grant an
extension under prescribed circumstances. Existing law allows certain
hospital owners who do not have the financial capacity to bring
certain buildings into compliance by 2013 to, instead, replace those
buildings by January 1, 2020.  
   This bill would require a health care district that has been
denied an extension of the seismic retrofit and replacement deadlines
to make a specified report to the office.  
   Because this bill would impose additional duties upon local
officials, this bill would create a state-mandated local program.
 
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions. 
   Vote:  majority   2/3  . Appropriation:
no. Fiscal committee: yes. State-mandated local program:  no
  yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 1324.20 of the  
Health and Safety Code   is amended to read: 
   1324.20.  For purposes of this article, the following definitions
shall apply: 
   (a) "Continuing care retirement community" means a provider of a
continuum of services, including independent living services,
assisted living services as defined in paragraph (5) of subdivision
(a) of Section 1771, and skilled nursing care, on a single campus,
that is subject to Section 1791, or a provider of such a continuum of
services on a single campus that has not received a Letter of
Exemption pursuant to subdivision (b) of Section 1771.3. 

   (b) 
    (a)  "Exempt facility" means  a skilled nursing
facility that is part of a continuing care retirement community,
 a skilled nursing facility operated by the state or another
public entity, a unit that provides pediatric subacute services in a
skilled nursing facility, a skilled nursing facility that is
certified by the State Department of Mental Health for a special
treatment program and is an institution for mental disease as defined
in Section 1396d(i) of Title 42 of the United States Code, or a
skilled nursing facility that is a distinct part of a facility that
is licensed as a general acute care hospital. 
   (c) 
    (b)  (1) "Net revenue" means gross resident revenue for
routine nursing services and ancillary services provided to all
residents by a skilled nursing facility, less Medicare revenue for
routine and ancillary services, including Medicare revenue for
services provided to residents covered under a Medicare managed care
plan, less payer discounts and applicable contractual allowances as
permitted under federal law and regulation.
   (2) Notwithstanding paragraph (1), for the 2009-10 and 2010-11
rate years, "net revenue" means gross resident revenue for routine
nursing services and ancillary services provided to all residents by
a skilled nursing facility, including Medicare revenue for routine
and ancillary services and Medicare revenue for services provided to
residents covered under a Medicare managed care plan, less payer
discounts and applicable contractual allowances as permitted under
federal law and regulation. To implement this paragraph, the
department shall request federal approval pursuant to Section
1324.27.
   (3) "Net revenue" does not mean charitable contributions and bad
debt. 
   (d) 
    (c)  "Payer discounts and contractual allowances" means
the difference between the facility's resident charges for routine or
ancillary services and the actual amount paid. 
   (e) 
    (d)  "Skilled nursing facility" means a licensed
facility as defined in subdivision (c) of Section 1250.
   SEC. 2.    Section 1324.21 of the   Health
and Safety Code   is amended to read: 
   1324.21.  (a) For facilities licensed under subdivision (c) of
Section 1250, there shall be imposed each state fiscal year a uniform
quality assurance fee per resident day. The uniform quality
assurance fee shall be based upon the entire net revenue of all
skilled nursing facilities subject to the fee, except an exempt
facility, as defined in Section 1324.20, calculated in accordance
with subdivision (b).
   (b) The amount of the uniform quality assurance fee to be assessed
per resident day shall be determined based on the aggregate net
revenue of skilled nursing facilities subject to the fee, in
accordance with the methodology outlined in the request for federal
approval required by Section 1324.27 and in regulations, provider
bulletins, or other similar instructions. The uniform quality
assurance fee shall be calculated as follows:
   (1) (A) For the rate year 2004-05, the net revenue shall be
projected for all skilled nursing facilities subject to the fee. The
projection of net revenue shall be based on prior rate year data.
Once determined, the aggregate projected net revenue for all
facilities shall be multiplied by 2.7 percent, as determined under
the approved methodology, and then divided by the projected total
resident days of all providers subject to the fee.
   (B) Notwithstanding subparagraph (A), the Director of Health Care
Services may increase the amount of the fee up to 3 percent of the
aggregate projected net revenue if necessary for the implementation
of Article 3.8 (commencing with Section 14126) of Chapter 7 of Part 3
of Division 9 of the Welfare and Institutions Code.
   (2) For the  rate year  2005-06  rate year
 and subsequent rate years through and including the 2010-11
rate year, the net revenue shall be projected for all skilled nursing
facilities subject to the uniform quality assurance fee. The
projection of net revenue shall be based on the prior rate year's
data  updated to the midpoint of the upcoming rate year  .
Once determined, the aggregate projected net revenue for all
facilities shall be multiplied by 6 percent, as determined under the
approved methodology, and then divided by the projected total
resident days of all providers subject to the fee. The amounts so
determined shall be subject to the provisions of subdivision (d).
   (c) The director may assess and collect a nonuniform fee
consistent with the methodology approved pursuant to Section 1324.27.

   (d) In no case shall the fees collected annually pursuant to this
article, taken together with applicable licensing fees, exceed the
amounts allowable under federal law.
   (e) If there is a delay in the implementation of this article for
any reason, including a delay in the approval of the quality
assurance fee and methodology by the federal Centers for Medicare and
Medicaid Services, in the 2004-05 rate year or in any other rate
year, all of the following shall apply:
   (1) Any facility subject to the fee may be assessed the amount the
facility will be required to pay to the department, but shall not be
required to pay the fee until the methodology is approved and
Medi-Cal rates are increased in accordance with paragraph (2) of
subdivision (a) of Section 1324.28 and the increased rates are paid
to facilities.
   (2) The department may retroactively increase and make payment of
rates to facilities.
   (3) Facilities that have been assessed a fee by the department
shall pay the fee assessed within 60 days of the date rates are
increased in accordance with paragraph (2) of subdivision (a) of
Section 1324.28 and paid to facilities.
   (4) The department shall accept a facility's payment
notwithstanding that the payment is submitted in a subsequent fiscal
year than the fiscal year in which the fee is assessed.
   SEC. 3.    Section 1324.27 of the   Health
and Safety Code   is amended to read: 
   1324.27.  (a) (1) The department shall request approval from the
federal Centers for Medicare and Medicaid Services for the
implementation of this article. In making this request, the
department shall seek specific approval from the federal Centers for
Medicare and Medicaid Services to exempt facilities identified in
subdivision (b)   (a)  of Section 1324.20,
including the submission of a request for waiver of broad-based
requirement, waiver of uniform fee requirement, or both, pursuant to
paragraphs (1) and (2) of subdivision (e) of Section 433.68 of Title
42 of the Code of Federal Regulations.
   (2) The director may alter the methodology specified in this
article, to the extent necessary to meet the requirements of federal
law or regulations or to obtain federal approval. The Director of
Health  Care  Services may also add new categories of exempt
facilities or apply a nonuniform fee to the skilled nursing
facilities subject to the fee in order to meet requirements of
federal law or regulations. The Director of Health  Care
Services may apply a zero fee to one or more exempt categories of
facilities, if necessary to obtain federal approval.
   (3) If after seeking federal approval, federal approval is not
obtained, this article shall not be implemented.
   (b) The department shall make retrospective adjustments, as
necessary, to the amounts calculated pursuant to Section 1324.21 in
order to assure that the aggregate quality assurance fee for any
particular state fiscal year does not exceed 6 percent of the
aggregate annual net revenue of facilities subject to the fee.
   SEC. 4.    Section 14126.033 of the  
Welfare and Institutions Code   is amended to read: 
   14126.033.  (a) This article, including Section 14126.031, shall
be funded as follows:
   (1) General Fund moneys appropriated for purposes of this article
pursuant to Section 6 of the act adding this section shall be used
for increasing rates, except as provided in Section 14126.031, for
freestanding skilled nursing facilities, and shall be consistent with
the approved methodology required to be submitted to the federal
Centers for Medicare and Medicaid Services pursuant to Article 7.6
(commencing with Section 1324.20) of Chapter 2 of Division 2 of the
Health and Safety Code.
   (2) (A) Notwithstanding Section 14126.023, for the 2005-06 rate
year, the maximum annual increase in the weighted average Medi-Cal
rate required for purposes of this article shall not exceed 8 percent
of the weighted average Medi-Cal reimbursement rate for the 2004-05
rate year as adjusted for the change in the cost to the facility to
comply with the nursing facility quality assurance fee for the
2005-06 rate year, as required under subdivision (b) of Section
1324.21 of the Health and Safety Code, plus the total projected
Medi-Cal cost to the facility of complying with new state or federal
mandates.
   (B) Beginning with the 2006-07 rate year, the maximum annual
increase in the weighted average Medi-Cal reimbursement rate required
for purposes of this article shall not exceed 5 percent of the
weighted average Medi-Cal reimbursement rate for the prior fiscal
year, as adjusted for the projected cost of complying with new state
or federal mandates.
   (C) Beginning with the 2007-08 rate year and continuing through
the 2008-09 rate year, the maximum annual increase in the weighted
average Medi-Cal reimbursement rate required for purposes of this
article shall not exceed 5.5 percent of the weighted average Medi-Cal
reimbursement rate for the prior fiscal year, as adjusted for the
projected cost of complying with new state or federal mandates.
   (D) For the 2009-10  and 2010-11 rate years  
rate year  , the weighted average Medi-Cal reimbursement rate
required for purposes of this article shall not  be increased
with respect to   exceed 2.5 percent of  the
weighted average Medi-Cal reimbursement rate for the  2008-09
rate   prior fiscal  year, as adjusted for the
projected cost of complying with new state or federal mandates.
   (E) To the extent that new rates are projected to exceed the
adjusted limits calculated pursuant to subparagraphs (A) to (D),
inclusive, as applicable, the department shall adjust each skilled
nursing facility's projected rate for the applicable rate year by an
equal percentage.
   (b) The rate methodology shall cease to be implemented on and
after July 31, 2011.
   (c) (1) It is the intent of the Legislature that the
implementation of this article result in individual access to
appropriate long-term care services, quality resident care, decent
wages and benefits for nursing home workers, a stable workforce,
provider compliance with all applicable state and federal
requirements, and administrative efficiency.
   (2) Not later than December 1, 2006, the Bureau of State Audits
shall conduct an accountability evaluation of the department's
progress toward implementing a facility-specific reimbursement
system, including a review of data to ensure that the new system is
appropriately reimbursing facilities within specified cost categories
and a review of the fiscal impact of the new system on the General
Fund.
   (3) Not later than January 1, 2007, to the extent information is
available for the three years immediately preceding the
implementation of this article, the department shall provide baseline
information in a report to the Legislature on all of the following:
   (A) The number and percent of freestanding skilled nursing
facilities that complied with minimum staffing requirements.
   (B) The staffing levels prior to the implementation of this
article.
   (C) The staffing retention rates prior to the implementation of
this article.
   (D) The numbers and percentage of freestanding skilled nursing
facilities with findings of immediate jeopardy, substandard quality
of care, or actual harm, as determined by the certification survey of
each freestanding skilled nursing facility conducted prior to the
implementation of this article.
   (E) The number of freestanding skilled nursing facilities that
received state citations and the number and class of citations issued
during calendar year 2004.
   (F) The average wage and benefits for employees prior to the
implementation of this article.
   (4) Not later than January 1, 2009, the department shall provide a
report to the Legislature that does both of the following:
   (A) Compares the information required in paragraph (2) to that
same information two years after the implementation of this article.
   (B) Reports on the extent to which residents who had expressed a
preference to return to the community, as provided in Section 1418.81
of the Health and Safety Code, were able to return to the community.

   (5) The department may contract for the reports required under
this subdivision.
   (d) This section shall become inoperative on July 31, 2011, and as
of January 1, 2012, is repealed, unless a later enacted statute,
that is enacted before January 1, 2012, deletes or extends the dates
on which it becomes inoperative and is repealed.
   SEC. 5.    No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution. 
   SEC. 6.    This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
 
   In order to ensure that skilled nursing facility services are
adequately available at the earliest possible time, it is necessary
that this act take effect immediately.  
  SECTION 1.    On or before March 1, 2010, a health
care district established pursuant to Division 23 (commencing with
Section 32000) that owns or operates a general acute care hospital
building and has been denied a request for an extension of the
seismic retrofit and replacement deadlines shall report to the office
both of the following:
   (a) The health care district's efforts to comply with the seismic
retrofit and replacement deadlines, including, but not limited to,
the reassessment of the structural performance level of a general
acute care hospital building owned by the health care district.
   (b) The health care district's efforts to secure passage of a
local bond measure to fund seismic safety compliance, including the
failure or passage of a ballot measure to approve the issuance of
these bonds, the extent to which the number of voters who voted in
favor the ballot measure exceeded 50 percent of the votes cast but
failed to reach the percentage of votes required for passage and the
extent to which the vote requirement is a barrier to the ability of
the health care district to obtain necessary revenues to comply with
the seismic safety deadlines and standards.  
  SEC. 2.    If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code.