BILL ANALYSIS Ó AB 641 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 641 (Feuer) As Amended August 23, 2011 Majority vote ----------------------------------------------------------------- |ASSEMBLY: |52-24|(May 23, 2011) |SENATE: |24-14|(September 7, | | | | | | |2011) | ----------------------------------------------------------------- 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. AB 641 Page 2 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 AB 641 Page 3 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 AB 641 Page 4 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 AB 641 Page 5 FN: 0002814