BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 641
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          CONCURRENCE IN SENATE AMENDMENTS
          AB 641 (Feuer)
          As Amended August 23, 2011
          Majority vote
           
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          |ASSEMBLY:  |52-24|(May 23, 2011)  |SENATE: |24-14|(September 7,  |
          |           |     |                |        |     |2011)          |
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           Original Committee Reference:    HEALTH  

           SUMMARY  :  Eliminates the citation review conference (CRC) process 
          from the citation appeals process for long-term care (LTC) 
          facilities, and allows fines to be levied from both state and 
          federal agencies when an incident violates both state and federal 
          laws.  Requires the Department of Health Care Services (DHCS) to 
          consider, at the initial application or upon redetermination for 
          the Medi-Cal LTC benefit, whether an undue hardship exists for 
          eligibility for home and facility care under specified 
          circumstances relating to the transfer of assets. 

           The Senate amendments  

          1)Require, in addition to existing undue hardship provisions, DHCS 
            to consider, at initial application or upon redetermination for 
            the Medi-Cal LTC benefit, whether an undue hardship exists prior 
            to finding a person ineligible for Medi-Cal.

          2)Provide that an undue hardship shall be found under the following 
            conditions:

             a)   The applicant has transferred ownership interest in the 
               shared principal residence to his or her same-sex spouse or 
               registered domestic partner;

             b)   The applicant has transferred ownership interest in assets 
               other than the principal residence to his or her same-sex 
               spouse or registered domestic partner in an amount that does 
               not exceed the community spouse resource allowance that would 
               be available if the person was an opposite-sex spouse; or,

             c)   The applicant has transferred income or right to receive 
               income to his or her same-sex spouse or registered domestic 
               partner and the amount does not exceed the amount that would 
               be allowed if the person was an opposite-sex spouse. 







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          3)Require DHCS to seek federal approval, including by state plan 
            amendment as needed, retroactive to January 1, 2012, and provide 
            that the provisions of 1) and 2) above are to be implemented only 
            to the extent federal approval and federal financial 
            participation is available and authorizes implementation by 
            all-county letter without the requirement of adopting 
            regulations.

          4)Delete the provisions that increase increases the maximum penalty 
            amount for class "B" citations for LTC facilities from $1,000 to 
            $2,000.

          5)Make other technical and clarifying changes. 



           EXISTING LAW  :

          1)Establishes the Medi-Cal Program, administered by DHCS, which 
            provides comprehensive health benefits to low-income children, 
            their parents or caretaker relatives, pregnant women, elderly, 
            blind or disabled persons, LTC facility residents, and refugees 
            who meet specified eligibility criteria.

          2)Establishes eligibility criteria for Medi-Cal home and 
            community-based care (HCBC) and LTC facility services.

          3)Requires DHCS to consider whether an undue hardship exists prior 
            to finding a person ineligible for HCBC or LTC services.

          4)Provides for the inspection and licensure of long-term health 
            care facilities (LTC facilities) by the Department of Public 
            Health (DPH).

          5)Establishes the Long-Term Care, Health, Safety, and Security Act 
            of 1973 (LTC Safety Act), which permits DPH to assess penalties 
            against LTC facilities for violation of prescribed state 
            statutes, regulations, and federal standards pertaining to 
            patient care.  Prohibits the issuance of both a citation pursuant 
            to state laws and the recommendation that a federal civil 
            monetary penalty be imposed for the same action.

          6)Requires monies collected as a result of the penalties imposed 
            pursuant to the LTC Safety Act, to be deposited into either the 
            State Health Facilities Citation Penalties Account or the Federal 







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            Health Facilities Citation Penalties Account (State and Federal 
            Accounts), and used, upon appropriation by the Legislature, for 
            the protection of health or property of residents of LTC 
            facilities.

           AS PASSED BY THE ASSEMBLY  , this bill streamlined the citation 
          appeals process for LTC by facilities by eliminating the CRC, 
          increased the maximum fine for class "B" citations for LTC 
          facilities and allowed fines to be levied from both state and 
          federal agencies when an incident violates both state and federal 
          laws.  

           FISCAL EFFECT  :  According to the Senate Appropriations Committee:

                              Fiscal Impact (in thousands)
           Major Provisions         2011-12      2012-13       2013-14     Fund
           Reduction in CDPH      redirect $470 annually to other assignments 
          Special*
          workload

          Increase in penalty    potentially significant          Special**
          revenue

          Lost Medi-Cal          potentially significant, likely in 
          theGeneral/***
          share-of-cost revenue  high hundreds of thousands to    Federal
                                 millions of dollars

          * State Department of Public Health Licensing and Certification 
          Program Fund
          **State and Federal Health Facilities Citation Penalty Account
          ***50% federal, 50% General Fund 

           COMMENTS  :  According to the author, LTC facilities are unable to 
          resolve citations they feel are unwarranted and LTC facility 
          residents, who may have been violated, do not receive justice in a 
          timely manner due to the prolonged citation review conference (CRC) 
          appeals process which at times can take years.  The author 
          maintains that it makes sense to remove the CRC appeals process as 
          an available option to LTC facilities in favor of the more trusted 
          appeals processes in existing law, such as an administrative law 
          judge or a California Superior Court.

          AB 19 X1(Blumenfield), Chapter 4, Statutes of 2011-12 First 
          Extraordinary Session, increased the upper limit of the penalty 
          range for Class B citations from $1,000 to $2,000 in conjunction 







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          with the extension of the Medi-Cal Quality Assessment Fee on LTC 
          facilities.  This provision was therefore removed from this bill. 

          The author also argues that California is one of a few states that 
          bar a monetary penalty from both a state and federal agency when a 
          LTC facility action involves noncompliance with both a state and 
          federal law.  The author asserts that it makes sense to allow both 
          entities to act if the laws of either were violated.  By removing 
          this prohibition, this bill allows DPH to make a recommendation to 
          the federal Centers for Medicare and Medicaid Services (CMS) to 
          levy a monetary penalty.  According to the author, there are no 
          requirements in this bill that such levies should be done for each 
          and every citation and this bill provides DPH with the discretion 
          to cite a higher penalty for the most egregious violations.

          In June 10, 2011, CMS issued a State Medicaid Directors letter 
          regarding same sex partners and Medicaid liens, transfers of 
          assets, and estate recovery.  Specifically, the letter restated the 
          federal policy that states have considerable flexibility in 
          determining whether undue hardship exists and the circumstances 
          under which they will impose transfer of assets penalties.  The 
          letter further states that because of this flexibility, states may 
          adopt criteria that recognize that imposing transfer of assets 
          penalties on the basis of the transfer of ownership interest in a 
          shared home to a same-sex spouse or domestic partner would 
          constitute an undue hardship.  This bill exercises this state 
          flexibility with regard to ownership in a shared home.  The author 
          has also included the transfer of assets other than interest in a 
          shared home and transfer of income in the definition of undue 
          hardship.  

          DHCS has advised the author that under current estate recovery 
          procedures, estate recovery is deferred for the lifetime of a 
          surviving registered domestic partner or same-sex spouse.  
          Therefore, the DHCS Estate Recovery program would not place a lien 
          on the home or take other actions to recover from the estate for 
          the lifetime of the registered domestic partner or same-sex spouse 
          similar to the exemption in state and federal law for opposite-sex 
          spouses.

          This bill was substantially amended in the Senate and the 
          provisions relating to undue hardship have not been heard by an 
          Assembly policy committee.


           Analysis Prepared by  :    Marjorie Swartz / HEALTH / (916) 319-2097  







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