BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 682
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          ASSEMBLY THIRD READING
          AB 682 (Bonnie Lowenthal)
          As Amended  June 1, 2009
          Majority vote 

           HUMAN SERVICES      4-2         APPROPRIATIONS      12-5        
           
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          |Ayes:|Beall, Ammiano,           |Ayes:|De Leon, Ammiano, Charles   |
          |     |Portantino, Torres        |     |Calderon, Davis, Fuentes,   |
          |     |                          |     |Hall, John A. Perez, Price, |
          |     |                          |     |Skinner, Solorio,           |
          |     |                          |     |Torlakson, Krekorian        |
          |     |                          |     |                            |
           ------------------------------------------------------------------- 
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          |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  








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               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.









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          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.








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           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.








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           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 

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