BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: AB 411
A
AUTHOR: De La Torre
B
AMENDED: September 2, 2009
HEARING DATE: September 8, 2009
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CONSULTANT:
1
Bain
1
SUBJECT
Skilled nursing facilities: quality assurance fee:
Medi-Cal reimbursement.
SUMMARY
This bill requires a skilled nursing facility (SNF) that is
part of a continuing care retirement community to pay the
SNF quality assurance fee until July 31, 2011 by
eliminating an exemption from paying the fee for such
facilities. Additionally, this bill repeals a requirement
that the weighted average Medi-Cal SNF reimbursement rate
for the 2009-10 and 2010-11 rate years not be increased
over the amount in the 2008-09 year. Instead, this bill
would require, for the 2009-10 rate year, the weighted
average Medi-Cal SNF reimbursement rate to not exceed 2.5
percent of the weighted average Medi-Cal reimbursement rate
for the prior fiscal year. Additionally, this bill would
result in an increase in the weighted average Medi-Cal SNF
reimbursement rate for the 2010-11 rate year in an amount
not to exceed 5 percent of the prior fiscal year. This
bill would take effect immediately as an urgency statute.
CHANGES TO EXISTING LAW
Existing law:
Existing law defines a SNF as a health facility that
Continued---
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provides skilled nursing care and supportive care to
patients whose primary need is the availability of skilled
nursing care on an extended basis.
Existing law imposes on SNFs a uniform quality assurance
fee (QAF) per resident day. Under current law, the QAF is
no longer collected on and after July 31, 2011. The QAF is
based on the entire net revenue of all skilled nursing
facilities subject to the fee. SNFs that are defined in
existing law as an "exempt facility" do not pay the QAF.
Existing law defines an "exempt facility" for purposes of
the exemption from paying the QAF to include a SNF that is
part of a continuing care retirement community (CCRC). A
CCRC is defined as either:
A provider of a continuum of services, including
independent living services, assisted living services,
and skilled nursing care on a single campus which has a
certificate of authority from the Department of Social
Services, or,
A provider of such a continuum of services on a single
campus that has not received a Letter of Exemption under
a specified provision of existing law.
Existing law requires DHCS, through the Medi-Cal Long-Term
Care Reimbursement Act (Act), to develop and implement a
facility-specific cost-based Medi-Cal reimbursement rate
methodology that reflects the sum of the projected cost of
specified cost categories and pass-through costs for SNFs.
Under existing law, the rate methodology sunsets July 31,
2011. Existing law makes the Act operative only as long as
there is a QAF approved by the federal Centers for Medicare
and Medicaid Services.
Existing law prohibits, for the 2009-10 and 2010-11 rate
years, the weighted average Medi-Cal reimbursement rate for
SNFs from being increased above the weighted average
Medi-Cal reimbursement rate for the 2008-09 rate year, as
adjusted for the projected cost of complying with new state
or federal mandates.
Existing law requires, through the 2010-11 rate year, net
revenue to be projected for all SNFs subject to the QAF.
The projection of net revenue is required to be based on
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the prior rate year's data.
This bill:
This bill would delete the exemption from paying the QAF
for SNFs that are part of a CCRC.
This bill would repeal, for the 2009-10 and 2010-11 rate
years, the provision prohibiting the weighted average
Medi-Cal reimbursement rate from being increased above the
weighted average Medi-Cal reimbursement rate for the
2008-09 rate year, as adjusted for the projected cost of
complying with new state or federal mandates. This bill
would instead prohibit, for the 2009-10 rate year, the
weighted average Medi-Cal reimbursement rate from exceeding
2.5 percent of the weighted average Medi-Cal reimbursement
rate for the prior fiscal year (2008-09), as adjusted for
the projected cost of complying with new state or federal
mandates. Under this bill, the weighted average Medi-Cal
reimbursement rate for 2010-11 could not exceed 5 percent
of the weighted average Medi-Cal reimbursement rate for the
prior fiscal year under another provision of existing law
that would become operative as a result of the change made
by this bill.
This bill would also revise the requirement that net
revenue be projected for all SNF subject to the QAF based
on the prior rate year's date and instead require the
projection of net revenue to be based on the prior rate
year's data updated to the midpoint of the upcoming rate
year .
This bill would take effect immediately as an urgency
statute.
FISCAL IMPACT
The current version of this bill has not been analyzed by a
fiscal committee.
CAHF/SEIU revenue and expenditure model. The CAHF/SEIU
model developed for this bill assumes expanding the QAF to
SNFs that are part of a continuing care retirement
community would generate (after reimbursement for the
payment of the QAF), an additional $29.7 million in revenue
in 2009-10. The model's estimated cost of increasing the
cap from zero to 2.5 percent for 2009-10 would result in
STAFF ANALYSIS OF ASSEMBLY BILL 411 (De La Torre) Page
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increased total fund expenditures of $75.5 million for all
SNFs. Under the enhanced federal matching rate in effect
under the federal stimulus bill (instead of the normal 50
percent state/50 percent federal match, the state share is
38.41 percent and the federal share is 61.49 percent until
January 1, 2011), federal expenditures would be $46.5
million and state GF expenditures would be $28.9 million
($46.5 + $28.9 = $75.5). Because the QAF generates an
additional $29.7 million and the increased state
expenditures are $28.9, the "net" gain to the General Fund
would be $707,820 ($29,707,370 - $28,999,550 = $707,820),
which would mean, assuming the assumptions are accurate,
the bill would be budget neutral for 2008-09.
However, the enhanced federal matching rate under the
stimulus bill only covers the first six months of the
2010-11 state fiscal year. Beginning January 1, 2011, the
state likely reverts to its standard 50/50 matching rate.
The additional revenue generated by this bill would no
longer be sufficient to cover the increased costs resulting
from the cap reverting to up to 5 percent in 2010-11 as a
result of this bill.
CAHF estimate of facilities that will beging paying QAF.
For its model, CAHF assumes this bill requires 143 SNFs
that are currently exempt to begin paying the QAF. Of
these 143 facilities, 65 are part of continuing care
retirement communities (CCRC) and 78 are multi-level
facilities (MLF). The chart belows shows CAHF's estimates
of the total number of skilled nursing facility days
provided by CCRCs and MLFs, and the number and percentage
of those days that are paid for by Medi-Cal. The number
and percentage of Medi-Cal days served by each of the 143
facilities has not been provided.
As noted above, these facilities are exempt from paying the
QAF. CAHF indicates 944 SNFs currently pay the QAF on 30.2
million days and have a Medi-Cal census of 69.1 percent
(20.8 million Medi-Cal days).
------------------------------------------------------------
| | | | |
------------------------------------------------------------
|--------+---------+--------------+---------------+----------|
|Type of | Number | Total SNF | SNF Medi-Cal |% |
|Facility| of | Days | Days | Medi-Cal|
| |Facilitie| | | |
STAFF ANALYSIS OF ASSEMBLY BILL 411 (De La Torre) Page
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| | s | | | |
|--------+---------+--------------+---------------+----------|
| CCRC | 65 | 1,207,051 | 292,589 | 24.2% |
|--------+---------+--------------+---------------+----------|
| MLF | 78 | 2,057,508 | 1,041,234 | 50.6% |
|--------+---------+--------------+---------------+----------|
| Total | 143 | 3,264,559 | 1,333,823 |40.9% |
------------------------------------------------------------
BACKGROUND AND DISCUSSION
The author argues this bill would adjust the SNF QAF to
provide funding necessary for Medi-Cal to recognize a
portion of recent SNF cost increases without reducing any
of the General Fund savings generated from recent budget
actions in this area for 2009-10. The author states the
funding previously built into the AB 1629 methodology was
reduced by 5 percent, and the QAF paid by SNFs was
increased by nearly $30 million annually as a result of
budget actions. Because facility rates are re-calculated
each year based on spending decisions that were made two
years previously, the author argues this 5 percent
reduction and fee increase ignores legitimate facility
costs and undermines the integrity of the relationship
between the QAF and related facility/General Fund costs.
The author states this bill expands the QAF by
eliminating the current QAF exemption for a SNF that is
part of a multi-level facility or CCRC, thus capturing
additional revenue. This bill uses the estimated $28
million in funding generated by extending the QAF to draw
down federal funds necessary to establish a 2.5 percent
growth cap on all SNF rates for 2009-10.
Background
AB 1629 (Frommer), Chapter 875, Statutes of 2004
established the QAF and the Medi-Cal Long-Term Care
Reimbursement Act. The QAF is based on the aggregate
projected net revenue for SNFs subject to the fee,
multiplied by 6 percent, and then divided by the projected
total resident days of all SNFs subject to the fee. The
resulting revenue is made available to draw down a federal
match in the Medi-Cal program to provide additional
reimbursement to, and support SNF quality improvement
efforts.
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AB 1629 also changed the Medi-Cal reimbursement rates for
SNFs from a flat rate amount to a cost-based
facility-specific rate. Prior to the enactment of AB 1629,
SNF rates were based on the location (one of three regions
in the state) and size of the facility (whether the
facility had 60 or more beds). AB 1629 requires DHCS to
develop a facility-specific rate methodology that reflects
the sum of the projected cost of five cost categories and
pass-through costs, subject to a maximum annual cap.
The goal of the Act, as contained in legislative intent
language in AB 1629, is to devise a Medi-Cal long-term care
reimbursement methodology that more effectively:
Ensures individual access to appropriate long-term care
services;
Promotes quality resident care;
Advances decent wages and benefits for nursing home
workers;
Supports provider compliance with all applicable state
and federal requirements; and,
Encourages administrative efficiency.
The QAF was implemented in March 2006 and was estimated
during the 2009 May Revise to generate $282 million in
2008-09. For the 2008-9 rate year, the QAF was $9.05 per
resident day for SNFs with total annual resident days of
less than 100,000, and $8.05 for SNFs with total annual
resident days equal to or greater than 100,000 (a limited
number of facilities). Before AB 1629, DHCS indicates the
statewide weighted average Medi-Cal reimbursement rate for
SNFs was $118.06 per day in 2004. The current Medi-Cal
weighted average is approximately $162 with the QAF and
approximately $153 without the QAF (the amount of the QAF
is included in the higher rate in SNFs that pay the QAF).
Change to QAF exemptions
Existing law exempts specified facilities from the QAF.
This bill deletes the exemption from the QAF for SNFs that
are part of a CCRC. Facilities currently exempt from the
QAF include the following:
A SNF that is part of a CCRC;
A SNF operated by the state or another public entity;
A unit that provides pediatric subacute services in a
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SNF;
A SNF that is certified by the Department of Mental
Health for a special treatment program and is an
institution for mental disease; and,
A SNF that is a distinct part of a facility that is
licensed as a general acute care hospital.
Change to maximum annual increase in weighted average
reimbursement rate
AB 1629 required Medi-Cal rates for SNFs to be specific to
individual facilities, but also established a maximum
annual cap that limits the amount that rates can be
increased on average for all SNFs (the weighted average
Medi-Cal reimbursement rate), plus the total projected
Medi-Cal cost to the facility of complying with state and
federal mandates.
This cap has varied by rate year, with the first three rate
years (2005-06, 2006-07, 2007-08 and thereafter)
established by AB 1629. For those three years, the cap was
up to 8 percent, up to 5 percent, and up to 5.5 percent,
respectively, of the weighted average Medi-Cal
reimbursement rate in the previous fiscal year. Subsequent
year caps were established in the health budget trailer
bills. AB 203 (Committee on Budget), Chapter 188, Statutes
of 2007, continued the 5.5 percent cap of 2007-08 for
2008-09. AB 1183 (Committee on Budget), Chapter 758,
Statutes of 2008 established the cap for the 2009-10 and
2010-11 rate years of up to 5 percent of the prior fiscal
year.
As part of the budget revision enacted in July 2009, ABX4 5
(Evans), Chapter 5, Statutes of 2009 repealed a provision
of the previous year's trailer bill (AB 1183) that would
have provided a maximum annual increase in the weighted
average Medi-Cal SNF reimbursement rate of not more than 5
percent for 2009-10 and 2010-11, based on the previous
year's reimbursement rate. Under ABX4 5, the weighted
average Medi-Cal SNF reimbursement rates for 2009-10 and
2010-11 rate years will instead not be increased over the
weighted average Medi-Cal reimbursement rate in effect for
2008-09 rate year.
This bill would repeal that provision of ABX4 5. It would
instead provide, for the 2009-10 rate year, that the
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weighted average Medi-Cal reimbursement rate cannot exceed
2.5 percent of the weighted average Medi-Cal reimbursement
rate for the prior fiscal year (2008-09). The weighted
average Medi-Cal reimbursement rate for 2010-11 would be up
to 5 percent of the weighted average Medi-Cal reimbursement
rate for the prior fiscal year under another provision of
existing law that would become operative as a result of the
change made by this bill.
Change to SNF revenue projection
Existing law requires through the 2010-11 rate year, the
net revenue to be projected for all SNFs subject to the
QAF. The projection of net revenue is based on the prior
rate year's data. This bill would require the projection
of new revenue based on the prior rate year's date to be
updated to the midpoint of the upcoming rate year . The
rationale for this change is to be consistent with other
rate base economic updates used in other long-term care
rate settings, and to bring the base revenue used to
calculate the QAF closer to current actual revenue.
Stakeholder workgroup
The health budget trailer bill of 2008, AB 1183, required
DHCS to convene a workgroup of 18 interested stakeholders
(six representing facilities, six representing consumers
and six representing SNF labor groups ) to make
recommendations to DHCS to ensure compliance with the
intent of AB 1629. In developing recommendations, AB 1183
directed the stakeholder workgroup to consider the
structure of, and potential changes to, the
facility-specific rate setting system that may improve the
quality of resident care. The stakeholder workgroup
members were also allowed to take into account any other
factors deemed relevant to ensure the quality of resident
care. DHCS is required to review and analyze all
recommendations from the stakeholder workgroup, individual
workgroup members, and any other interested stakeholders.
By no later than March 1, 2009, DHCS must deliver to the
Legislature, both of the following:
The complete recommendations of the stakeholder
workgroup, individual workgroup members, and any other
interested stakeholders.
DHCS' analysis of the feasibility to implement the
proposed recommendations.
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The workgroup met seven times between November 2008 and the
end of January 2009, and DHCS has established a website
which contains recommendations from the stakeholder
workgroup members. Areas with consensus of the 18
stakeholder workgroup members were the following:
improving and updating the current Medi-Cal SNF cost
reporting methodology; shortening the time frame between
facility expenditures and Medi-Cal reimbursement rate
adjustments; adjusting the reimbursement methodology and
reporting requirements for costs associated with
transitioning patients to community-based care; and,
developing a system for defining, collecting and reporting
data on quality of care and qualify of life in SNFs. DHCS'
analysis of the feasibility of the proposed recommendations
has not been provided to the Legislature.
Arguments in support
The California Association of Health Facilities (CAHF)
writes in support that this bill would adjust the QAF
created under AB 1629 to provide funding necessary for
Medi-Cal to recognize a portion of recent nursing facility
cost increases, without reducing any of the 2009-10 General
Fund savings generated from the previous budget action in
this area.
CAHF argues the structure established by AB 1629 over the
last five years has stabilized an industry on the brink of
collapse (nearly 20 percent of the facilities were in
bankruptcy and many others were in various states of
financial failure); has offset General Fund expenses for
SNF care by more than $280 million per year; has increased
federal financial participation in SNF services from 50
percent to 58 percent of total costs; has improved facility
staffing levels and wages by tying actual facility labor
costs directly to the Medi-Cal reimbursement, and has
increased system accountability by bringing reimbursement
more in line with individual facility costs,
recognizing/encouraging spending in the right areas and
increasing the number of facility audits/reviews.
CAHF argues this bill captures additional revenue by
eliminating the current QAF exemption for a SNF that is
part of a multi-level or CCRC and uses the estimated $28
million in new funding generated by this adjustment to
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leverage the federal funds necessary to establish a 2.5
percent growth cap on all facility rates for 2009-10. CAHF
states these particular facilities were originally exempted
from the fee (even though their rates are calculated under
the AB 1629 methodology) because they were part of a
multi-level or continuing care retirement community, and it
was generally believed that Medi-Cal was incidental to
their overall volume of services. CAHF states that
Medi-Cal rates for these facilities have increased by an
average of 34 percent since AB 1629 was implemented, and
Medi-Cal currently accounts for nearly 40 percent of their
total nursing facility days. CAHF states maintaining an
exemption for these facilities, while simultaneously
reducing rates and raising fees for those facilities that
do pay the QAF, is no longer an option. CAHF argues most
providers who would now be required to pay a fee under this
proposal have already recovered their costs via substantial
Medi-Cal rate increases from prior years. CAHF states
others can recover any related costs by expanding their
Medi-Cal participation, or increasing revenue from other
payer sources.
CAHF states as a result of the current economic climate, the
funding previously built into the AB 1629 methodology was
reduced by 5 percent and the QAF was increased in July.
Because facility rates are re-calculated each year based on
spending decisions that were made two years prior, this 5
percent reduction and fee increase ignores legitimate facility
costs and undermines the integrity of the relationship between
the QAF and related facility/General Fund costs. CAHF argues
the adoption of this bill would maximize the use of available
federal funds, provide a more equitable distribution of
fees/funds, and that it preserves the quality of nursing
facility services throughout the state. CAHF concludes that
this measure would also maintain the internal integrity of the
QAF and related Medi-Cal reimbursement methodology, which
benefits patients, providers, employees and the General Fund
alike.
The Service Employees International Union (SEIU) writes in
support that, without the increase in the global cap, a
majority of nursing homes represented by SEIU will face
flat or reduced reimbursement, endangering improvements in
wages and benefits won by SEIU for these low-wage workers.
SEIU states AB 1629 completely restructured the
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reimbursement system for nursing homes in combination with
a QAF to fund the improvements. SEIU states that nursing
homes are now paid (under AB 1629) up to 90 percent of
actual labor costs and 50 percent of administrative costs,
and nursing homes that pay better wages and staff better
are paid more, and nursing homes with lower wages and fewer
staff are paid less. SEIU states that numerous academic
studies show a strong correlation between better wages,
better staffing and better outcomes for nursing home
residents. SEIU states AB 1629 has increased nursing home
reimbursement, and increased starting wages. SEIU states
an increase in the global cap of 2.5 percent resulting from
this bill is sufficient to ensure that most, but not all,
nursing homes are able to honor their commitments to their
workers. SEIU states this bill is budget neutral for
2009-10 through funding provided by a modest extension of
the existing nursing home provider fee to the small number
of nursing homes on the campuses of CCRCs. SEIU states the
nursing homes on the campuses of CCRCs benefit from the
improved Medi-Cal reimbursement without paying the QAF that
is paid by other nursing homes.
The Congress of California Seniors (CCS) writes in support
that SNFs have been able to stabilize financially as a
result of the rate reforms contained in AB 1629, but they
are facing many of the economic challenges confronting
other institutions during the current economic downturn.
The 2.5 percent increase in this bill will allow most
facilities to meet mounting cost increases in the health
care industry, and to meet multi-year labor contracts
negotiated before the economic downturn. Under this bill,
CCS argues facilities should be able to do this without
diminishing patient care for the frail elderly population
which they serve. CCS and Gray Panthers Sacramento argue
this bill is a "win-win" proposition for patients and
facilities. The Older Women's League of California (OWLC)
write in support that it saw the need for increased
revenues provided by AB 1629, and five years later, OWLC
sees the need for the provisions of this bill.
Arguments in opposition
Aging Services of California, which represents nonprofit
senior living and care facilities, writes in opposition
that CCRCs have been exempted from the QAF since its
inception in substantial part because they do not serve
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Medi-Cal beneficiaries, or if they do, it is an
overwhelmingly small percentage of their population, and
CCRCs will thus bear the burden of the this tax without
receiving the benefit of higher Medi-Cal reimbursement.
ASC states that because of the last-minute amendments to
this bill, it does not have the luxury to conduct and
provide an immediate in-depth modeling or analysis of
current Medi-Cal caseload or growth in this patient
population by its members, but the 68 CCRC members of ASC
contest the assertion of proponents of this measure of the
proportion of Medi-Cal estimated to be served by CCRC. ASC
estimates (on behalf of its members) an estimated
percentage of Medi-Cal days at roughly 10 percent of SNF
days. ASC states this bill will impose a bed tax on these
facilities, the revenues of which will then be used to
increase reimbursement for other facilities, and there will
be no benefit to the overwhelming majority of CCRCs. ASC
states that unfortunately, the imposition of this tax on
these facilities may ultimately fall on their residents
through the need to increase monthly rates in order to
accommodate this new tax. ASC and several individual
retirement communities argue this bill taxes seniors who
have been responsible and saved their money and planned for
their own retirement, and this bill directly contradicts
the state's stated goal of caring for frail and disabled
persons in the least restrictive setting possible, known as
the Olmstead requirement. ASC and several facilities argue
that taxing seniors to bolster institutional care when most
community-based care is being decimated sets aging policy
back 20 years.
Disability Rights California (DRC), writes that it is
outraged at the idea of rewarding nursing homes with more
income when virtually all the home and community-based
long-term care services, which are cheaper and vastly more
preferred by the people who need long-term care, have been
slashed. DRC argues the AB 1629 reimbursement methodology
rewards providers with a guaranteed profit, and the
increased provider tax in this bill should be used to close
the enormous gap between what the General Fund spends and
the QAF currently provides, and not to further reward the
owners of nursing homes.
DRC and the Silicon Valley Independent Living Center
(SVILC) argue that despite the 35 percent increase in
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nursing home spending in California in the last five years,
nursing home care has not improved, citing as examples
(from 2004 to 2007) a 57 percent increase in public
complaints to DPH, a 76 percent increase in complaint
allegations, a 76 percent increase in complaint
allegations, a 53 percent increase in immediate jeopardy,
actual harm and substandard quality of care, a 48 percent
increase in DPH-issued citations, and an increase in the
number of "AA" citations for violations that directly led
to a resident's death from 11 in 2004 to 23 in 2007. DRC
argues, in the case of CCRC, a considerable portion of the
cost of this expanded provider tax in this bill will
undoubtedly be paid by the private pay residents, who will
get no benefit from it. DRC and SVILC argue this bill
provides for no improvements in care, no increase in
staffing and no increase in wages for front-line workers.
DRC argues the Legislature should not perpetuate and expand
the AB 1629 reimbursement system without amending it to
produce real quality improvement.
Central Coast Center for Independent Living (CCCIL) writes
in opposition that this bill will provide additional
funding for nursing homes when all other community-based
services and programs are being cut and even eliminated
altogether. CCCIL states that people with disabilities
will be forced into institutions as a result of the state's
fiscal meltdown, but even with the rate increase provided
by this legislation, there will not be any improvement in
the quality of care in facilities through increased
staffing or other improvements. CCCIL concludes by arguing
that people with disabilities need fully funded community
supports such as In Home Supportive Services, Social
Security, Medi-Cal, Linkages and many others, not
additional funding for nursing homes.
Concerns
The California Advocates for Nursing Home Reform (CANHR)
writes expressing concerns about this bill, arguing the
last-minute process to accomplish these changes through a
"gut and amend" means these proposals have not been subject
to any type of public review, and that there is no
emergency need to amend the reimbursement system in this
fashion or provide a rate increase to SNFs.
CAHNR argues Medi-Cal payments to skilled nursing
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facilities were frozen at FY 2008-09 levels, but that
Medi-Cal skilled nursing facility rates have increased by
37 percent since 2004, well above inflation, and SNF
receive bonus payments from Medi-Cal of 8 percent on top of
their labor costs to spend or pocket as they wish. In
contrast, CAHNR states home-and community-based service
programs have taken very large cuts, greatly threatening
the ability of seniors and persons with disabilities to
obtain needed long-term care services at home. CAHNR
states it is likely that many will be forced into nursing
homes at great cost to the state. CAHNR argues if
California has more money to spend on long-term care
services, there are far more pressing needs than giving
nursing home operators another rate increase. In better
times, CAHNR states it, would welcome a rate increase for
nursing homes, but these are not better times. CAHNR
argues the proposal to require CCRCs to pay the QAF
deserves careful consideration, as CAHNR often hears
complaints from residents of private SNFs that the QAF gets
passed on to them, but they get no benefits. CCRC residents
may have similar objections to this proposal, but they may
have no opportunity to raise them before the Legislature
acts on this bill. CAHNR argues, although Medi-Cal
spending on skilled nursing facilities has greatly
increased since AB 1629 was enacted, care has not improved,
and reforming the rate system should take priority over
this bill. CAHNR states last year, the Legislature
established a workgroup to make reform recommendations to
AB 1629, and CANHR was part of that workgroup. CAHNR
indicates its recommendations would provide the
accountability that is so lacking in this system but,
unfortunately, DHCS has not submitted a report to the
Legislature that was due in March 2009.
Prior legislation
a)AB 1629 (Frommer) establishes the QAF and the Act.
b)AB 360 (Frommer), Chapter 508, Statutes of 2005, among
other provisions, exempts a unit of a SNF that provides
pediatric subacute services and SNFs designated as an
institution for mental diseases from the
facility-specific rate setting system and QAF established
by AB 1629.
c)AB 203 (Committee on Budget), Chapter 188, Statutes of
2007, the 2007-08 health budget trailer bill, among other
provisions, extends the QAF and QAF-related statutory
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provisions to July 31, 2009.
d)AB 1183 (Committee on Budget), Chapter 758, Statutes of
2008, extended the QAF and QAF-related statutory
provisions to July 31, 2011, established a 5 percent
overall rate cap for the 2009-10 and 2010-11 rate years,
and established a stakeholder workgroup.
e)SB 434 (Romero) of 2008 would have modified the
stakeholder workgroup provisions of AB 1183 by increasing
the number of consumer representatives, required
workgroup approval of the DHCS report to the Legislature,
and required legislative, academic and state participants
in the stakeholder process to be non-voting members. SB
434 passed the Assembly but the Senate re-referred the
bill to Senate Rules and no further action was taken.
f)ABX4 5 (Evans), Chapter 5, Statutes of 2009 was passed by
the Legislature and signed by the Governor in July of
this year as part of the budget revision. ABX4 5
increased the amount of revenue subject to the QAF, for
the 2009-10 and 2010-11 rate years to include Medicare
revenue for routine and ancillary services and Medicare
revenue for services provided to residents covered under
a Medicare managed care plan. In addition, ABX4 5
repealed the provision that provided a maximum annual
increase in the weighted average Medi-Cal reimbursement
rate of not more than 5 percent of the weighted average
Medi-Cal reimbursement rate for the prior fiscal year for
2009-10 and 2010-11. Under ABX4 5, the weighted average
Medi-Cal reimbursement rates for 2009-10 and 2010-11 rate
years will instead not be increased over the weighted
average Medi-Cal reimbursement rate in effect for 2008-09
rate year.
PRIOR ACTIONS
Prior votes not relevant. As passed by the Assembly, this
bill dealt with hospital seismic safety.
COMMENTS
1.CAHF/SEIU revenue and expenditure model. The CAHF/SEIU
model developed for this bill assumes expanding the QAF
to SNFs that are part of a CCRC would generate sufficient
funds to be "revenue neutral" to account for the 2.5
percent increase in the cap in 2009-10. However, when
the enhanced federal matching rate ends after the first
STAFF ANALYSIS OF ASSEMBLY BILL 411 (De La Torre) Page
16
six months of the 2010-11 fiscal year and the cap
increases to up to 5 percent as a result of this bill,
the additional revenue generated by this bill will no
longer be sufficient to cover the increased costs
resulting from this bill. Amendments would be needed to
ensure this bill is revenue neutral for the 2010-11 year.
POSITIONS
Support: California Association of Health Facilities
Congress of California Seniors
Older Women's League of California
Gray Panthers Sacramento
Service Employees International Union
Oppose: Aging Services of California
Ararat Nursing Facility
Bethany Home
California Association of Public Authorities for
In-Home Supportive Services
Center for Independent Living - Fresno
Central Coast Center for Independent Living
Disability Rights California
Front Porch
Lytton Gardens
Nevada-Sierra Regional In-Home Supportive
Services Public Authority
Placer Independent Resource Services
Silicon Valley Independent Living Center
The Alhambra Retirement Community and Lutheran
Health Facility
Vista Del Monte
Westminster Gardens
Several individuals
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