BILL ANALYSIS AB 682 Page 1 ASSEMBLY THIRD READING AB 682 (Bonnie Lowenthal) As Amended June 1, 2009 Majority vote HUMAN SERVICES 4-2 APPROPRIATIONS 12-5 ------------------------------------------------------------------- |Ayes:|Beall, Ammiano, |Ayes:|De Leon, Ammiano, Charles | | |Portantino, Torres | |Calderon, Davis, Fuentes, | | | | |Hall, John A. Perez, Price, | | | | |Skinner, Solorio, | | | | |Torlakson, Krekorian | | | | | | ------------------------------------------------------------------- ----------------------------------------------------------------- |Nays:|Tom Berryhill, Logue |Nays:|Nielsen, Duvall, Harkey, | | | | |Miller, Audra Strickland | ----------------------------------------------------------------- SUMMARY : Requires the state Department of Social Services (DSS) to evaluate implementation of provisions intended to combat fraud in the In-Home Supportive Services (IHSS) program. Specifically, this bill : 1)Requires that, beginning January 1, 2010, DSS dedicate two positions to evaluate implementation of five specific anti-fraud provisions of the Welfare and Institutions Code related to the IHSS program and authorizes DSS to fill the positions either by using existing resources or, if an appropriation is provided for that purpose, by adding new positions. 2)Requires DSS, in consultation with the state Department of Health Care Services, the district attorney in the county with the largest caseload, and stakeholders, including IHSS consumers and providers, to provide a report to the Legislature by December 31, 2010, which shall do all of the following with respect to IHSS-related fraud: a) Identify the magnitude of fraud in terms of the total dollars inappropriately spent or removed from the program, and the number of consumers harmed or placed at risk of harm as a result of fraudulent activity, through instances AB 682 Page 2 resulting in a fraud conviction between January 1, 2005 and January 1, 2010; b) Identify the number of people involved in fraud for each of the following categories: IHSS providers, IHSS consumers, state workers, county workers, and others. In the case of "others," the report shall describe the function of the persons committing fraud with specificity but without revealing personal identifying information; and, c) Provide recommendations on the best means to combat IHSS fraud. 3)States legislative findings and declarations, as follows: a) The IHSS program is the one of the fastest growing programs in the state, and will continue to grow; b) Wage and benefit increases also contribute to overall spending in the IHSS program; but, wages are, in most instances, little more than minimum wages, benefits tend to be fewer than in other jobs, and common benefits, such as sick leave, are not available to IHSS workers; and, c) While evidence of IHSS-related fraud is believed to be very low, with such a large growing program, it is imperative that the state and stakeholders adhere to a zero-tolerance policy on fraud because fraud has the potential to harm the IHSS program by removing valuable resources. 4)States the Legislature's intent to determine the extent and type of IHSS-related fraud in order to evaluate existing antifraud provisions and make revisions as necessary to ensure that the IHSS program carries out its mission of providing services to seniors and people with disabilities. 5)Provides that the requirements for evaluating and reporting on IHSS-related fraud shall become operative only if funds are made available from the Governor's proposed funding increase for IHSS quality assurance in the 2009-10 DSS budget, and the proposed funding increase is adopted. AB 682 Page 3 6)Provides that the provisions of the bill will sunset on January 1, 2011, unless the sunset is deleted or extended by a later enacted statute; but, also provides that, if the provision requiring the report to the Legislature is repealed, the report must nonetheless be prepared and delivered. EXISTING LAW : 1)Establishes the IHSS program to provide personal services and home care for 444,000 eligible poor, aged, blind and disabled individuals by an average of 325,000 providers throughout the state to enable recipients to remain in their own homes and avoid institutionalization. 2)Provides that DSS supervises the IHSS program at the state level and that counties administer services at the local level. 3)Provides for funding of the IHSS program through a combination of about 50% federal (Medicaid), 32% state, and 18% county dollars. 4)Defines "fraud" for purposes of the IHSS program to mean: "The intentional deception or misrepresentation made by a person with the knowledge that the deception could result in some unauthorized benefit to himself or herself or some other person. Fraud also includes any act that constitutes fraud under applicable federal or state law." 5)Specifies the responsibilities of DSS, DHCS and the counties for various quality assurance activities, including activities to ensure program integrity, including fraud detection and prevention. 6)Prohibits persons who have been convicted of certain crimes, including fraud against a government health care or supportive services program, within the preceding 10 years from providing or receiving IHSS services. 7)Provides for the recovery of overpayments to IHSS providers and, if the overpayment is determined to be the result of fraud by the service provider, prohibits future payments to the provider for up to 10 years following conviction or the term of incarceration following the conviction for fraud. AB 682 Page 4 FISCAL EFFECT : According to the Assembly Appropriations Committee, one-time costs in the range $350,000 General Fund for two limited-term dedicated positions and for the workload associated with the stakeholder process and producing the required report. COMMENTS : Background : The IHSS Program helps pay for services so that the elderly, disabled, or blind individuals can remain in their own homes and avoid institutionalization. IHSS services include, but are not limited to, housecleaning, meal preparation, laundry, grocery shopping, personal care services (such as bowel and bladder care, bathing, grooming and paramedical services), accompaniment to medical appointments, and protective supervision for people with mental impairments. IHSS consists of four programs, including: Personal Care Services Program (PCSP), IHSS Plus Waiver Program (IPW), IHSS Residual Program (IRP), and Medi-Cal Waiver Personal Care Program (MWPCS). The PCSP, IPW, and IRP are administered at the county level by county welfare departments and at the State level by the Adult Programs Division within DSS. The Medi-Cal Waiver Personal Care Services (MWPCS) Program is administered through Department of Health Care Services. A portion of the costs for IHSS services are paid by federal funding. The entire program consists of over 444,000 recipients and on average 325,000 IHSS workers. In 2004, as part of the Budget trailer bill, SB 1104 (Committee on Budget and Fiscal Review), the Legislature imposed a number of mandatory duties on DSS, DHCS and the counties with respect to quality, cost controls and program integrity within the IHSS program. Among other things, SB 1104 defined and distinguished between "fraud" and "overpayments," with fraud being limited to traditional prosecutable acts of intentional misrepresntation, while overpayment was defined broadly to include all instances in which providers are paid in excess of the amount for authorized services, whether fraudulent or not. SB 1104 authorized DHCS to investigate fraud in the provision or receipt of supportive services, and required counties to refer instances of suspected fraud to DHCS for investigation. It required DHCS to notify DSS, the county, and the county's nonprofit consortium or public authority, if any, of a determination that a provider has engaged in fraud. AB 682 Page 5 Need for the bill : According to the author, notwithstanding quality assurance measures implemented through SB 1104, "insinuations of widespread fraud persist." The author suggests that these insinuations may be unjustified, noting that there is a "disconnect between perception and fact" that is "not acceptable for such a large and growing state program. ... If we can identify fraud, we can stop it. But we can't diminsh funding for the program based on anecdotal evidence." This bill is intended to collect data and document instances of fraud within the IHSS program. Analysis Prepared by : Eric Gelber / HUM. S. / (916) 319-2089 FN: 0001344