BILL ANALYSIS Ó
AB 471
Page 1
Date of Hearing: April 16, 2013
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
AB 471 (Atkins) - As Introduced: February 19, 2013
SUBJECT : Medi-Cal: Program of All-Inclusive Care for the
Elderly.
SUMMARY : Deletes the current limitation for the Department of
Health Care Services (DHCS) to enter into up to 15 contracts for
implementation of the Program of All-Inclusive Care for the
Elderly (PACE), in so doing, authorizes an unlimited number of
contracts.
EXISTING LAW :
1)Creates, under federal law, PACE as a provider category
regulated by the Centers for Medicare and Medicaid Services
(CMS), and reimbursed under the Medicare and Medicaid
(Medi-Cal in California) programs.
2)Establishes the Medi-Cal program, administered by DHCS, to
provide comprehensive health care and long-term services and
supports (LTSS) to pregnant women, children, and to seniors,
and people with disabilities (SPDs).
3)Establishes Medicare as a federal health insurance program to
provide coverage to eligible individuals who are disabled or
over age 65.
4)Authorizes DHCS to contract with up to 15 public or private
nonprofit PACE organizations for implementation of the PACE
program to implement its responsibilities as the Medicaid
single state agency.
5)Establishes the PACE program as a Medi-Cal benefit, subject to
utilization controls and eligibility criteria that require
that the beneficiary be certified as eligible for nursing
facility services based on Medi-Cal criteria.
6)Requires DHCS to establish Medi-Cal capitation rates to be
paid to each PACE organization that are no less than 90% of
the fee-for-service (FFS) equivalent cost.
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7)Requires DHCS to seek federal approval to establish a pilot
program in up to eight counties for Medi-Cal beneficiaries
who are dually eligible for Medicare and Medi-Cal (dual
eligibles), under which DHCS can require that dual eligibles
are assigned as mandatory enrollees into Medi-Cal managed care
(MCMC) plans.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to CalPACE, the sponsor, this
bill is needed to remove the cap on the number of PACE
programs DHCS can contract with and will allow PACE to scale
up to meet the growing demand for PACE services by frail
seniors, and is consistent with the state's goal of expanding
models of integrated care for SPDs. Current state law sets a
limit of 15 PACE programs in the state. The number of PACE
programs is rapidly approaching the 15-program limit.
Currently, six PACE programs operate in seven counties. Two
additional programs are expected to start operation in 2013.
There are an additional four programs that are in the
application stage and several other organizations are actively
exploring developing PACE programs.
2)BACKGROUND . PACE programs are comprehensive community-based
care models for frail, chronically ill older adults whose
significant functional and cognitive impairments make them
nursing home eligible. The first PACE program, On Lok,
started in the Chinatown section of San Francisco in 1971.
Begun as an alternative to nursing home care in the Chinese
community, where institutionalization was a culturally
unacceptable option, it was a day health center where older
adults could receive health care supervision, social services,
and hot meals, then return to their own homes in the evening.
In 1979, On Lok launched a Medicare-funded demonstration of
the consolidated model of long-term care. In this model, the
program's interdisciplinary team develops, coordinates, and
provides all medical and social services for participants. In
1997, PACE became a permanent provider type under both
Medicare and Medicaid.
The dual recognition by Medicare and Medi-Cal allows integration
of comprehensive services, including acute and LTSS. PACE
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offers and manages all the medical, social and rehabilitative
service needs of enrollees to preserve or restore
independence, to allow them to remain in their homes and
communities, and to maintain their quality of life. The PACE
service package must include all Medicare and Medicaid
services provided by the state. In addition, PACE
organizations provide any service determined necessary by an
interdisciplinary team. Minimum services that must be
provided in PACE centers include primary care services, social
services, restorative therapies, personal care and supportive
services, nutritional counseling, recreational therapy, and
meals. Services are available 24 hours a day, 7 days a week,
and 365 days a year. Generally, these services are provided
in an adult day health center setting, but may also include
in-home and other referral services that enrollees may need.
This includes such services as medical specialists, laboratory
and other diagnostic services, and nursing home care.
Participants must be at least 55 years old, live in the PACE
service area, and be certified as eligible for nursing home
care. Enrollment in PACE is voluntary. PACE receives a fixed
monthly payment per enrollee from Medicare and Medicaid for
those who are dually eligible. The amounts are the same
during the contract year, regardless of the services an
enrollee may need. Persons enrolled in PACE may also have to
pay a monthly premium, depending on their eligibility for
Medicare and Medicaid. The Coordinated Care Initiative (CCI
or now renamed MediConnect) will follow a similar model,
although under CCI, plans will not initially be at full risk
for all LTSS. Also unlike any other MCMC plan, PACE plans are
authorized to accept full-risk capitation without obtaining a
Knox-Keene Health Care Service Plan Act of 1975 license from
the Department of Managed Health Care.
3)CCI . The 2012-13 Budget, as passed by the Legislature and
signed by the Governor included a modified version of the
Administration's 2012-13 Budget CCI proposal to expand the
dual demonstration projects, originally authorized in SB 208
(Steinberg) , Chapter 714, Statutes of 2010, in up to four
counties. The provisions, as modified by the Legislature, are
contained in SB 1008 (Budget and Fiscal Review Committee),
Chapter 33, Statutes of 2012, and SB 1036 (Budget and Fiscal
Review Committee), Chapter 45, Statutes of 2012, both of which
passed the Legislature and were signed by the Governor on June
27, 2012. SB 1008 included:
a) Authorization of the demonstration project in up to
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eight counties, to begin no sooner than March 1, 2013, and
requires DHCS to consult with the Legislature, federal
government, and stakeholders when determining the
implementation date;
b) Legislative intent for the demonstration project to
expand statewide within three years of the start of the
demonstration project and that expansion beyond the initial
eight counties be contingent upon statutory authorization
and a subsequent budget appropriation;
c) A requirement that dual beneficiaries be enrolled into a
demonstration site unless the beneficiary makes an
affirmative choice to opt out of enrollment or is enrolled
in the PACE Program or an AIDS Healthcare Foundation plan
as specified, or is otherwise exempt;
d) Provisions to allow dual beneficiaries who opt out of
enrollment in a demonstration site to choose to remain in
FFS Medicare or a Medicare Advantage (MA) plan for their
Medicare benefits, but shall be mandatorily enrolled into a
MCMC health plan for Medi-Cal benefits, with specified
exceptions;
e) A requirement, conditioned on federal approval, that a
beneficiary must remain enrolled in the Medicare portion of
the demonstration project on a mandatory basis for six
months from the date of initial enrollment and requirement
for continuity of care provisions;
f) A requirement that in the 2013 calendar year,
beneficiaries in MA and MA Special Needs Plans be exempt
from mandatory enrollment in the demonstration project, but
may voluntarily choose to enroll in the demonstration
project;
g) A requirement that dual eligibles be assigned as
mandatory enrollees into new or existing MCMC health plans
for their Medi-Cal benefits in counties participating in
the dual demonstration projects only, with specified
exemptions; and,
h) A requirement that, no sooner than March 1, 2013, all
Medi-Cal LTSS services, as defined, shall be services that
are covered under managed care plan contracts and shall be
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available only through managed care plans to beneficiaries
residing in counties participating in the dual
demonstration counties only.
4)Cal MEDIConnect . Federal approval for the California
Demonstration to Integrate Care for Dual Eligible
beneficiaries was received on March 27, 2013 in the form of a
Memorandum of Understanding (MOU), to test a capitated
financial alignment model and coordinate and integrate LTSS,
including IHSS. This component is the framework for the
demonstration allowing the combination of all Medicare and
Medi-Cal benefits into one plan. The MOU contains several
changes from the state's original proposal. Enrollment will
begin no earlier than October 2013. Beneficiaries would begin
receiving notices about their choices and upcoming changes no
earlier than July 2013. Beneficiaries who enroll in a Cal
MediConnect health plan can opt out at any time. California
originally proposed an initial six-month period, during which
eligible beneficiaries would have been required to remain in
the same health plan. The MOU allows for 456,000 total
beneficiaries to be eligible for enrollment into the Cal
MediConnect program. This is almost half the size called for
in the Governor's 2012-13 Budget Proposal of January 2012.
The number of enrollees in Los Angeles County will be capped
at 200,000 and enrollment will occur over a 15 month period.
There are also specified exempt populations, such as persons
with developmental disabilities receiving services through a
regional center, persons enrolled in specified waiver
programs, and except in San Mateo and Orange counties, persons
with end stage renal disease. In San Mateo enrollment will be
completed by January 1, 2014 and in the other six counties,
enrollment will be over a 12 month period.
Enrollment will be passive, meaning that an eligible individuals
will be notified of their right to select a plan no fewer than
60 days prior to the effective date of enrollment, and will
have the opportunity to opt out up until the last day of the
month prior to the effective date of enrollment. When no
active choice has been made, enrollment into a plan may be
conducted using a seamless, passive enrollment process that
provides the opportunity for beneficiaries to make a voluntary
choice to enroll or disenroll from the plan at any time.
Prior to the effective date of their enrollment, individuals
who would be passively enrolled will have the opportunity to
opt out and will receive sufficient notice and information
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with which to do so. The MOU further provides that
individuals enrolled in PACE are exempt from passive
enrollment, but may enroll in the Demonstration after they
have disenrolled from PACE.
In August of 2012, DHCS informed CMS of its intent to expand
PACE from the five contracts at 24 operational centers in
seven counties to additional counties and communities. DHCS
further stated that based on PACE's long track record with
proven results and the necessary strengths to improve outcome,
DHCS had taken steps to implement an expedited PACE enrollment
process proposed by the sponsors of this bill. This includes
phasing out enrollment caps and streamlined application review
timeframes.
5)SUPPORT . According to the sponsor, CalPACE, and other
supporters such as On Lok Senior Health Services, Sutter
SeniorCare PACE, St. Pauls Homes and Services for the Aging,
and AltaMed Health Services, the PACE model is centered on the
belief that it is better for the well-being of seniors with
chronic care needs and their families to be served in the
community whenever possible. According to these supporters,
PACE serves individuals who are age 55 or older who are
certified by the state to need nursing home care and who are
able to live safely in the community at the time of
enrollment. These supporters point out that although all PACE
enrollees must be certified to need nursing home care to
enroll in PACE, only 5-7% of PACE enrollees reside in a
nursing home at any given time. If a PACE enrollee does need
nursing home care, the PACE program pays for it and continues
to coordinate the enrollee's care. The supporters point out
that removing the cap on the number of programs will allow
PACE to scale up to meet the growing demand for PACE services
by frail seniors, and is consistent with the state's goal of
expanding models of integrated care for SPDs.
6)RELATED LEGISLATION . AB 518 (Yamada) establishes
Community-Based Adult Services (CBAS) as a benefit in the
Medi-Cal program. Specifies the criteria for eligibility,
requires that CBAS be provided at licensed Adult Day Health
Centers certified by the DHCS as CBAS providers as specified.
Requires CBAS providers to meet specified standards and,
beginning July 1, 2015, have a non-profit status. AB 518 is
pending in the Assembly Health Committee.
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7)PREVIOUS LEGISLATION .
a) AB 574 (Bonnie Lowenthal),Chapter 367, Statues of 2011,
increases the maximum number of allowable contracts between
the DHCS and PACE from 10 to 15 programs and updates the
statutes to reflect PACE's status change from a
demonstration project to a Medi-Cal optional benefit.
b) AB 2206 (Atkins) of 2011 would have authorized
disenrollment, regardless of any lock-in, of a person who
in any demonstration project established by DHCS for dually
eligibles, becomes eligible for PACE while enrolled in a
managed care plan participating in the demonstration
project and would have allowed the person to enroll in a
PACE plan and would have required managed care plans to
identify, through required assessments, enrollees who are
55 years of age and older who are at risk of being placed
in a nursing home and required the plan to notify the
person of their potential eligibility for PACE. AB 2206
was vetoed by the Governor who stated that PACE provides
fully integrated care to people age 55 and older who need
skilled nursing home type care, but can live in a community
setting; that California was the pioneer for PACE programs
in the nation, having started the first one of its kind in
the early 1970's. He further stated that he had signed AB
574 to expand PACE, so that more providers could use this
model and gives aging Californians the benefits of fully
integrated care. Since that time, his administration has
embarked on a large scale effort to coordinate care for
people who qualify for both the Medi-Cal and Medicare
programs. The CCI will similarly build on the integrated
care concept, using managed care plans to break down the
silos that currently exist between medical and long-term
care. Within this effort, there will be ample opportunity
for PACE to continue its mission and thrive as a model of
care. The Governor wrote that he will direct his
Administration to involve PACE providers as the initiative
rolls out. Enacting special provisions for PACE
eligibility and referral is not necessary at this time.
c) SB 1008 and SB 1036 authorize the CCI as an eight-county
pilot project to: i) integrate Medi-Cal and Medicare
benefits under managed care for dual eligibles; and, ii)
integrate LTSS under managed care for dual eligibles and
Medi-Cal-only SPDs.
d) SB 208 (Steinberg) implements the Section 1115(b)
Medicaid Demonstration Waiver from CMS entitled "A Bridge
to Reform Waiver." Among the provisions, this waiver
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authorized mandatory enrollment into MCPs of over 600,000
low-income SPDs who are eligible for Medi-Cal only (not
Medicare) in 16 counties.
REGISTERED SUPPORT / OPPOSITION :
Support
CalPACE (sponsor)
AltaMed Health Services
Brandman Centers for Senior Care
California Advocates for Nursing Home Reform
California Hospital Association
On Lok Senior Health
St. Pauls Homes and Services for the Aging
Sutter SeniorCare PACE
Opposition
None on file.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097