BILL ANALYSIS Ó
AB 518
Page 1
Date of Hearing: April 9, 2013
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
AB 518 (Yamada) - As Introduced: February 20, 2013
SUBJECT : Community-based adult services.
SUMMARY : 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 (ADHC) certified by the Department of Health
Care Services (DHCS) as CBAS providers as specified. Requires
CBAS providers to meet specified standards and, beginning July
1, 2015, have non-profit status. Requires the delivery of CBAS
through Medi-Cal managed care (MCMC), if available, unless the
individual is exempt from mandatory enrollment. Requires
submission of a quality assurance proposal to the Legislature
and specifies legislative findings, declarations, and intent.
Specifically, this bill :
1)Defines CBAS as an outpatient, facility-based program that
delivers nutrition services, professional nursing care,
therapeutic activities, facilitated participation in group or
individual activities, social services, personal care services
and, when specified in the individual plan of care, physical
therapy, occupational therapy, speech therapy, behavioral
health services, registered dietician services, and
transportation.
2)Establishes CBAS as a Medi-Cal benefit regardless of the
operational period specified in the Section 1115(a) Medicaid
Demonstration Waiver of 2012 entitled "Bridge to Reform" or a
court established settlement agreement.
3)Establishes eligibility criteria as follows:
a) A person who meets nursing facility-A level-of-care
criteria or above;
b) A person with a diagnosis by a physician as having an
organic, acquired or traumatic brain injury, or a chronic
mental illness, and requires assistance or supervision in
activities and instrumental activities of daily living;
AB 518
Page 2
c) Has a moderate to severe cognitive disorder such as
dementia or Alzheimer's disease;
d) Has mild cognitive impairment or moderate Alzheimer's
disease or other dementia and requires assistance or
supervision with activities and instrumental activities of
daily living;
e) Has a developmental disability that meets the definition
of a substantial disability; or,
f) A person 18 years old or older who meets all the
following criteria:
i) Has one or more chronic or post-acute medical,
cognitive, or mental health conditions, and a qualified
medical professional has requested ADHC services;
ii) Has functional impairments in two or more activities
of daily living, or one or more of each and requires
assistance or supervisions;
iii) Requires ongoing or intermittent protective
supervision, skilled observations, assessment, or
intervention to improve, stabilize, maintain, or minimize
deterioration of the medical, cognitive, or mental health
condition; and,
iv) Requires individually planned ADHC services
including, when necessary, the coordination of formal and
informal services outside of the ADHC program for the
individual and his or her family or caregiver support in
the living arrangement of his or her choice and to avoid
or delay the use of institutional services, including,
but not limited to, hospital emergency department
services, inpatient acute care hospital services,
inpatient mental health services, or placement in a
nursing facility or a nursing or intermediate care
facility for the developmentally disabled providing
continuous nursing care.
4)Requires CBAS to be provided at licensed ADHC centers
certified by DHCS as CBAS providers and provided pursuant to
an individual's Individualized Plan of Care, as developed by
the center's multidisciplinary team.
AB 518
Page 3
5)Requires, in a county where Medi-Cal benefits are provided
through managed care plans (MCPs), CBAS to only be available
to eligible individuals enrolled in a MCP unless the person is
exempt or does not qualify, in which case CBAS shall be
provided on a fee-for-service (FFS) basis.
6)Requires all Medi-Cal MCPs to at a minimum comply with the
settlement agreement of "Darling v. Douglas" ( Esther Darling,
et al. v. Toby Douglas , et al., (No.C-09-03798)) including,
but not limited to the following:
a) Authorize the number of days of service of CBAS to be
provided at the same amount and duration as would have
otherwise been authorized and provided in Medi-Cal on a FFS
basis. For beneficiaries receiving services on a FFS basis
as authorized by the DHCS on or before June 30, 2012, the
plan to not reduce or otherwise limit the services without
conducting a face-to-face evaluation;
b) Contract with any willing CBAS provider in the plan's
service area at no less than the prevailing Medi-Cal FFS
rates to provide CBAS. Requires MCPs to include all
contracting CBAS providers in its enrollee information
material; and,
c) Meet on a regular basis with CBAS providers and member
representatives on CBAS issues, including the service
authorization process and provider payments.
7)Requires CBAS providers to meet all applicable licensing and
Medi-Cal standards and requirements and to be enrolled as a
Medi-Cal waiver provider.
8)Requires, commencing July1, 2015, DHCS to only certify and
enroll new CBAS providers that have non-profit status.
9)Requires on or before March 1, 2014, and after consultation
with providers and consumer representatives, all MCPs to
develop and publish an implementation plan describing the
processes and criteria to determine eligibility for CBAS,
reauthorization of services and the criteria for determining
the number of days of service is to be provided. In no
instance shall a plan make eligibility for services more
restrictive or administratively burdensome than the terms of
AB 518
Page 4
the Darling v. Douglas settlement agreement.
10)Requires on or before July 1, 2014, DHCS to submit, after
consultation with CBAS providers, MCPs, consumers, and
consumer representatives, a quality assurance proposal to the
Legislature, which specifies how DHCS will address quality
assurance in the CBAS program under managed care.
11)Requires, unless otherwise specified, in the event of a
conflict between the provisions of this bill and the Special
Terms and Conditions (STCs) of California's Bridge to Reform
Section 1115(a) Medicaid Demonstration, the STCs to control.
EXISTING LAW :
1) Establishes the Medi-Cal program, to provide various
health and long-term services to low-income women and
children, seniors, and people with disabilities (SPDs).
2) Requires, under federal law, states to provide certain
health care benefits such as hospital inpatient and
outpatient care and allows states to provide certain
optional benefits in their Medicaid programs (Medi-Cal in
California).
3) Authorizes DHCS to enter into contracts with MCPs to
provide services to Medi-Cal enrollees.
4) Requires families, children, and SPDs to enroll in a
Medi-Cal MCP for health care services in specified
counties.
5) Establishes Medicare as a federal health insurance
program to provide coverage to eligible individuals who are
disabled or over age 65.
6) Establishes the Coordinated Care Initiative (CCI) that
requires DHCS to seek federal approval to establish
demonstration sites in up to eight counties to provide
coordinated Medi-Cal and Medicare benefits to persons
eligible for Medi-Cal and Medicare (dual eligible) and
authorizes DHCS to require SPDs who are eligible for
Medi-Cal only (not Medicare) to mandatorily enroll in MCMC
plans for Long Term Services and Support (LTSS).
AB 518
Page 5
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill is
necessary to place the terms of the settlement agreement
reached in the case known as " Darling v. Douglas ", into state
statute. The author states that until 2011, ADHC was provided
to low-income frail, nursing-home eligible SPDs for over 30
years as a Medi-Cal benefit. These services were provided at
licensed ADHC centers and include medical services, nursing
care, meals, social and therapeutic activities, and
transportation. Eligibility was based on an individual's
functional limitations, severity of chronic or post-acute
health conditions, and risk for nursing home placement. The
author points out that ADHC is an optional benefit, meaning
that states are not required to provide it as one of their
Medicaid benefits. According to the author, the Governor's
January 2011 Budget Plan proposed to eliminate ADHC as a
Medi-Cal benefit in order to achieve General Fund savings.
The author states that the Legislature agreed to the
elimination because of the ongoing fiscal crisis. However,
the author points out, the Legislature proposed as an
alternative a smaller program that would replace ADHC.
Unfortunately, the author states, this alternative, the
Keeping Adults Free from Institutions (KAFI) program was
vetoed by the Governor. The author argues that now that ADHC
has been eliminated, and KAFI vetoed, there is no statutorily
authorized benefit. In June 2011 Darling v. Douglas was filed
as a class action law suit to preserve ADHC as a benefit. The
author points out that the benefit now only exists as a
product of a settlement agreement from that law suit and only
until July of 2014. The benefit is also reflected in the
Bridge to Reform waiver, but the author states that the waiver
could be changed through administrative action with no input
from the Legislature.
2)BACKGROUND . ADHC is a licensed community-based day care
program providing participants with daily registered nursing
care, physical, occupational and speech language pathology
therapies, therapeutic activities and social services in one
setting. ADHC helps adults manage chronic disabling health
conditions while living in their home and community. Each ADHC
center has a multidisciplinary team of health professionals
AB 518
Page 6
who conduct a comprehensive assessment of each participant in
order to determine and plan the ADHC services needed to meet
an individual's specific health and social needs, pursuant to
an individual plan of care. A set of "core services" must be
provided to each participant including professional nursing
services, personal care and/or social services, therapeutic
activities, and at least one meal per day. In addition to
core services, ADHC centers offer other specialty services
such as physical therapy, occupational therapy, speech and
language pathology, dietetics, and mental health services.
ADHC centers also must provide transportation for participants
to and from the center. In 2009, according to DHCS more than
93% of ADHC participants were Medi-Cal enrollees.
Governor Schwarzenegger unsuccessfully proposed the elimination
of ADHC in 2009, after several years of cost-containment
actions had been adopted by the Legislature. In the Budget
Special Session of 2010, the Governor again proposed its
elimination for a savings of $350 million ($155.1 million
General Fund) assuming a June 1, 2010 implementation date,
which was again rejected by the Legislature. In his 2011-12
Budget Plan, Governor Brown also proposed the elimination of
ADHC as a Medi-Cal benefit. This time, elimination was
adopted by the Legislature in a budget trailer bill (AB 97
(Committee on Budget), Chapter 3, Statutes of 2011). In an
attempt to offer an alternative to the Administration's
proposed elimination, the Legislature passed AB 96
(Blumenfield) to enact KAFI and provide a framework for a
"capped" program (limited to roughly one-half the enrollment
of the ADHC program). AB 96 was vetoed. In his veto message,
the Governor stated:
"The bill would recreate, under a different name, the same
ADHC program that was eliminated as a Medi-Cal optional
benefit through the 2011-12 Budget Act. While my
Administration deeply shares the goal of "Keeping Adults
Free from Institutions," creating a new ADHC look-alike
program at this juncture is unnecessary and untimely. It
does not address the immediate need to transition ADHC
beneficiaries to other home- and community-based services
that can meet their needs, and would cause confusion for
both consumers and providers about when an ill-defined
"KAFI" program would be available.
In order to ensure that ADHC beneficiaries do not face the
AB 518
Page 7
risk of unnecessary institutionalization when the benefit
expires, my Administration is currently working with ADHCs,
MCPs, and local community-based organizations to ensure
that needed medical services and home and community-based
services are available. Additionally, in order to ensure
that there is enough time for transition to such services
DHCS recently extended the ADHC benefit through
administrative action until December 1, 2011, with federal
funding approval. Given the importance of these transition
efforts, I am directing DHCS to work with the Legislature,
stakeholders, MCPs, and home- and community-based services
providers to ensure that ADHC beneficiaries will have a
smooth transition to appropriate services, and those who
are most at risk of institutionalization have access to
services that will help them remain in the community.
Care in an integrated setting will be part of my
Administration's plan to improve long-term care. To the
extent that ADHC-type services can become part of an
integrated continuum of care, my Administration will work
to bring such providers into the conversation on how these
services can be efficiently and effectively delivered for
the benefit of consumers."
DHCS filed a state-plan amendment (SPA), in May of 2011, with
the Centers for Medicare and Medicaid Services (CMS) to seek
federal approval of the elimination of ADHC in California. In
June, seven plaintiffs filed suit against DHCS seeking relief
for violation of, among other laws, due process guaranteed by
the US Constitution, the Americans with Disabilities Act
(ADA), and federal rights to Medicaid services. These ADHC
clients, concerned about the loss of benefits for which there
were no identifiable replacement services, filed for an
injunction against the elimination of ADHC. While the law
suit was pending, CMS approved the elimination of ADHC and
elimination was scheduled for September 1, 2011. DHCS began
implementing its plan to transition ADHC participants to other
services. The plan included the enrollment of ADHC
participants in Medi-Cal MCPs to coordinate medical and social
support needs.
On July 12th, the Disability Rights Section of the Civil
Rights Division of the US Department of Justice filed a
Statement of Interest with their observation that elimination
of ADHC may deprive recipients of important rights related to
AB 518
Page 8
receiving care in the least restrictive setting under the ADA.
Subsequently, DHCS requested permission to delay elimination
of the ADHC optional benefit until December 1, 2011. In
November of 2011, both the state and the ADHC clients facing
the loss of benefits agreed to a settlement creating CBAS as
an alternative to ADHC. The court approved the settlement
agreement in January 2012. The settlement agreement expires
in July of 2014.
The settlement agreement extended ADHC until March 1, 2012.
(DHCS subsequently extended the ADHC program until March 31.)
Under the settlement, the ADHC program transitioned from a
Medi-Cal state plan optional benefit to the new CBAS program
and services are being provided through the Bridge to Reform
waiver, as of April 1, 2012. The waiver expires in November
2015. In approving the waiver amendment, CMS stated its
understanding that the CBAS program would provide benefits
consistent with the settlement agreement. According to CMS,
this would ensure continuation of the services being received
by current ADHC recipients until such time as they receive a
face-to-face assessment to determine whether they meet the
needs-based criteria for CBAS benefits. With the exception of
this transition, ADHC would be eliminated as a Medi-Cal
optional benefit. According to the waiver amendment, CBAS
center benefits will be delivered initially on a FFS basis
using a per diem rate and ultimately through MCPs to enrollees
who are found to meet a nursing facility level of care,
including individuals with mental illness, traumatic brain
injury and developmental disabilities, in geographic areas
that have CBAS centers. CMS further states that component
parts of the CBAS center benefit will also be available
through MCPs as unbundled services outside of CBAS centers on
a FFS basis for individuals who reside in geographic areas
that had ADHC centers as of December 1, 2011, but where CBAS
center capacity has been reached.
3)CBAS. Like ADHC, CBAS is an outpatient, facility-based
program that delivers skilled nursing care, skilled social
services, skilled therapies, personal care, meals,
transportation, and caregiver training and support. The
majority of CBAS beneficiaries are dually eligible for
Medi-Cal and Medicare. Under the terms of the settlement,
most beneficiaries must enroll into a Medi-Cal MCP to receive
the CBAS benefit. CBAS will provide services roughly
equivalent to those offered at ADHC centers, and funded at the
AB 518
Page 9
same rate, for patients who qualify. Eligibility is based on
medical need for those who are at risk for
institutionalization. The difference between CBAS and ADHC is
that CBAS will provide enhanced case management at home for
those who are not in imminent danger of institutionalization.
There is no cap on the number of individuals who can be
served, and services will be provided at no cost to
recipients.
The STCs that accompany the waiver amendment include specific
requirements that are consistent with the settlement
agreement. Some of the key components are:
a) Requiring face to face assessments and a second level of
review for those who were eligible for ADHC, but are
determined not to meet the level of care for CBAS, a
discharge plan for those found not eligible, and rights to
appeal;
b) Individualized plan of care, prepared by the CBAS
center's multidisciplinary team, as specified;
c) Specifying basic CBAS benefits including nutrition
services, professional nursing care, therapeutic activities
aimed at enhancing social, physical, or cognitive
functioning, facilitated participation in group or
individual activities, social services related to ensuring
necessary home care and coping with issues related to aging
and disability, and personal care services;
d) Specifying additional optional CBAS benefits including
physical therapy, occupational therapy, speech therapy,
behavioral health services for treatment or stabilization,
dietician services, and transportation;
e) A specified reimbursement methodology for a FFS payment
system and the requirement of the development of an
actuarially sound capitation rate to be paid to MCPs; and,
f) Enhanced case management (ECM) for Medi-Cal enrollees
who had received ADHC services and are determined
ineligible for CBAS or are eligible but exempted from
enrolling in managed care and choose to receive ECM as a
FFS benefit.
AB 518
Page 10
4)MCMC . Currently, MCMC serves about 5.2 million enrollees in
30 counties, or about 69% of the total Medi-Cal population.
There are three models of Medi-Cal MCPs. The oldest model is
the county organized health system (COHS). COHS plans serve
about one million enrollees through six health plans in 14
counties: Marin, Mendocino, Merced, Monterey, Napa, Orange,
San Mateo, San Luis Obispo, Santa Barbara, Santa Cruz, Solano,
Sonoma, Ventura, and Yolo. In the COHS model, DHCS contracts
with a health plan created by the County Board of Supervisors
and all Medi-Cal enrollees are in the same health plan. The
second model is the Two-Plan model in which there is a "Local
Initiative" and a "commercial plan". DHCS contracts with both
plans. The Two-Plan model serves about 3.6 million
beneficiaries in Alameda, Contra Costa, Fresno, Kern, Kings,
Los Angeles, Madera, Riverside, San Bernardino, San Francisco,
San Joaquin, Santa Clara, Stanislaus, and Tulare.
Two-counties employ the geographic managed care model:
Sacramento and San Diego. DHCS contracts with several
commercial plans in those counties and there are about 600,000
enrollees.
In November of 2010, when California obtained federal approval
for the Bridge to Reform Waiver, it included authorization for
mandatory enrollment into MCPs of over 600,000 low-income SPDs
who are eligible for Medi-Cal only (not Medicare) in 16
counties. Enrollment was phased in over a one-year period in
the affected counties; beginning on June 1, 2011. LTSSs were
carved-out. In the proposed 2012-13 Budget, the Brown
Administration requested authority from the Legislature to
allow a statewide CCI and proposed to include LTSS for dual
eligibles and SPDs into a coordinated delivery system that
would be delivered using managed care models. The LTSSs
proposed to be integrated included IHSS, CBAS, Multipurpose
Senior Services, and skilled-nursing facility services. The
Legislature enacted a modified version of the Governor's
proposal. The two major parts of the CCI are the "Duals
Demonstration" and "Managed Medi-Cal LTSS." The Duals
Demonstration is a voluntary three-year demonstration for dual
eligible beneficiaries to receive coordinated medical,
behavioral health, long-term institutional, and HCBS services
through a single organized delivery system. The demonstration
is limited to eight counties, beginning no sooner than March
2013. The eight counties selected are Alameda, Los Angeles,
Orange, Riverside, San Bernardino, San Diego, San Mateo, and
Santa Clara. The CCI will use a capitated payment model to
AB 518
Page 11
provide Medicare and Medi-Cal benefits through existing MCPs.
The Managed Medi-Cal LTSS requires Medi-Cal-only SPDs and dual
eligibles to receive their Medi-Cal LTSS and behavioral and
health care services through the same plans. Federal approval
for the dual eligible portion of the CCI was received on March
27, 2013 in the form of a Memorandum of Understanding, and is
now referred to as the Cal MediConnect Program. This
component is the framework for the demonstration allowing the
combination of all Medicare and Medi-Cal benefits into one
plan.
As part of the planned expansion of MCMC to rural counties, in
February 2013, DHCS announced that Anthem Blue Cross and
California Health and Wellness Plan, received Notices of
Intent to Award to provide MCMC service in the counties of
Alpine, Amador, Butte, Calaveras, Colusa, El Dorado, Glenn,
Inyo, Mariposa, Mono, Nevada, Placer, Plumas, Sierra, Sutter,
Tehama, Tuolumne, and Yuba. DHCS is also planning an
exclusive MCMC contract with the COHS Plan, Partnership
HealthPlan of California (PHC) for expansion in Del Norte,
Humboldt, Lassen, Modoc, Shasta, Siskiyou, and Trinity
counties. In addition, Lake and San Benito counties will
become COHS counties served by PHC and Central California
Alliance for Health, respectively. DHCS is currently working
with Imperial County on its MCP selection process.
5)SUPPORT . Supporters, including the Jewish Public Affairs
Committee of California, the National Association of Social
Workers and LeadingAge California, state that CBAS currently
operates under authority of a court order scheduled to expire
and the future of the program is uncertain without legislative
action. Supporters also argue in support that placing the
CBAS program into statute assures medically fragile
Californians and their families certainty and access to a
range of social and health support delivered in a clinical
setting that avoids costlier institutional placements. In
addition, according to these supporters, CBAS centers across
the state provide an invaluable service for seniors as a
location to receive healthcare, recreation, therapy, and
meals. Furthermore, CBAS centers provide important respite
care for family caregivers, which allow seniors to remain in
the home longer.
6)DOUBLE REFERRAL . This bill is double-referred, should it pass
out of this Committee, it will be referred to the Committee on
AB 518
Page 12
Aging and Long-Term Care.
7)PREVIOUS LEGISLATION .
a) SB 1008 (Committee on Budget and Fiscal Review), Chapter
33, Statutes of 2012 and SB 1036 (Committee on Budget and
Fiscal Review), Chapter 45, Statutes of 2012 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.
b) AB 96 would have established the KAFI program, and
required DHCS to submit an application to CMS to implement
the program. AB 96 was vetoed by Governor Brown.
c) AB 97 (Committee on Budget), Chapter 3, Statutes of
2011, among other provisions eliminates ADHC as a Medi-Cal
benefit.
d) SB 208 (Steinberg), Chapter 714, Statutes of 2010,
contains the provisions implementing Section 1115(b)
Medicaid Demonstration Waiver from CMS entitled "A Bridge
to Reform Waiver." Among the provisions, this waiver
authorized mandatory enrollment into MCPs of over 600,000
low-income SPDs who are eligible for Medi-Cal only (not
Medicare) in 16 counties.
e) SB 117 (Corbett), Chapter 165, Statutes of 2009, extends
the deadline by which the DHCS was required to establish a
new Medi-Cal rate reimbursement methodology for ADHCs, from
August 1, 2010 to August 1, 2012.
f) AB 572 (Berg), Chapter 648, Statutes of 2008 clarifies
requirements pertaining to ADHC hours of service, core
staff, and staff absences, transportation services, and
meal requirements.
g) SB 1755 (Chesbro), Chapter 691, Statutes of 2006,
establishes new eligibility criteria for ADHC services for
the purposes of Medi-Cal reimbursement, required the
Department of Health Services, (now DHCS), to establish a
cost-based Medi-Cal reimbursement methodology for AHDC
services, and establishes daily core services to be
provided by ADHC centers to each participant.
AB 518
Page 13
8)POLICY COMMENTS .
a) Statutory codification . The importance of statutory
codification of the court settlement and waiver terms
cannot be overstated. The history of the ADHC elimination
and creation of CBAS is rife with misinformation. This is
particularly concerning given the fragile nature of the
population, many of whom have cognitive disabilities. As
an example, when DHCS began requiring mandatory enrollment
into MCPs in order for an ADHC participant to continue to
receive services, Medicare providers told patients that
they would lose benefits, that the provider would not see
them anymore or that there would be increased copayments
and deductibles, even though the enrollment would not have
affected their Medicare benefits. As a result of this
misinformation, DHCS provided additional time for
enrollment before terminating CBAS services. One way to
limit such misinformation is to codify the specifications.
In the cited instance, DHCS was operating without such
codification. Currently, it would be nearly impossible to
determine the applicable law as one would have to know to
consult the terms of the Medicaid waiver and a court
settlement.
b) Technical amendments . In furtherance of the purpose of
this bill, clear legislative declaration of applicable law,
the author intends to delete references to the court
settlement and replace the language, where necessary with
clear and specific requirements and make other clarifying
and technical amendments.
c) Primacy of the STCs . The author states, as one of the
reasons for the bill, CBAS is only in the settlement
agreement and in the STCs of the waiver which allows DHCS
to make changes administratively with no input from the
Legislature. However this bill provides that "unless
otherwise specified, in the event of a conflict between any
provision of this bill and the STCs, the STCs shall
control." This is not consistent with the author's stated
purpose and should be deleted.
REGISTERED SUPPORT / OPPOSITION :
Support
AB 518
Page 14
California Welfare Director's Association
Jewish Public Affairs Committee of California
LeadingAge California
National Association of Social Workers
Opposition
None on file
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097