BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 2645 (Chesbro) Hearing Date: 08/02/2010 Amended: 06/21/2010 Consultant: Dan Troy Policy Vote: Health 7-0 _________________________________________________________________ ____ BILL SUMMARY: AB 2645, an urgency measure, would require reimbursement rates for services at institutions for mental disorders that are certified as skilled nursing facilities to be the same as they were on July 1, 2009, from July 1, 2010 through June 30, 2012. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund IMD-SNFs ($3,000 to $6,000), annually, for two years Local _________________________________________________________________ ____ STAFF COMMENTS: Institutions for mental disorders (IMDs) are defined as hospitals, nursing facilities, or other institutions of more than 16 beds that are primarily engaged in providing diagnosis, treatment, or care of persons with mental diseases. IMDs fall into a variety of categories, including skilled nursing facilities (SNFs), as licensed by the Department of Public Health. According to the bill's sponsor, the County Mental Health Directors Association (CMHDA), there are 24 IMD-SNF's licensed in the state to which this bill would apply. Current reimbursement rates for IMD-SNFs range from $136.22 to $190.23 per day depending on region, the number of beds, and other factors, and funding is the responsibility of county governments (pursuant to realignment). Current law establishes an annual 4.7 percent increase to these reimbursement rates. This bill would effectively eliminate this statutory rate increase for the 2010-11 and 2011-12 fiscal years. While there is no comprehensive statewide cost data available to precisely forecast this bill's cost savings for counties, information provided from some impacted counties suggests that annual savings would range from $3 million to $6 million. Chapter 5 of the Statutes of 2009 (ABx4 5), froze the reimbursement rates of a variety of licensed facilities, including certain skilled nursing facilities, at 2008-09 levels. This measure did not include IMD-SNFs.