BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 518
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          Date of Hearing:   April 23, 2013

                   ASSEMBLY COMMITTEE ON AGING AND LONG-TERM CARE
                                Mariko Yamada, Chair
            AB 518 (Yamada and Blumenfield) - As Amended:  April 11, 2013
           
          SUBJECT  :   Community-Based Adult Services (CBAS)

           SUMMARY  :   Codifies various terms of "Darling vs. Douglas"  
          settlement agreement (Case No. C-09-03798 SBA, United States  
          District Court, Northern District of California), establishing  
          the CBAS, within statute.  Specifically,  this bill  :  

          1)Makes legislative findings and declarations regarding  
            California's support of the right to live in the most  
            integrated and community-based setting appropriate, and to be  
            free from unnecessary institutionalization. 

          2)Establishes legislative intent that provides for the  
            development of Medi-Cal policies and programs that:

            a)   Continue to assure that elderly, and younger people  
              living with disabilities, are not
               institutionalized inappropriately or prematurely;    

             b)   Provide for viable alternatives to institutionalization  
               by assuring the availability of appropriate services; 

               c)     Promotes adult day health options, such as CBAS,  
                 accessible to economically
                  disadvantaged elders and younger adults living with  
          disabilities; 

             d)   Ensures that programmatic standards offer certainty to  
               providers, regulators and beneficiaries; and,

             e)  Complies with California's Bridge to Reform Section  
               1115(a) Medicaid Demonstration Waiver. 

          1)Defines CBAS as an outpatient, facility-based program that  
            offers nursing, therapeutic activities, social services,  
            facilitated participation in group or individual activities,  
            social services, personal care services and other, more  
            complex care, when specified in the client's plan of care.









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          2)Establishes CBAS as a Medi-Cal benefit upon expiration of the  
            Darling vs. Douglas settlement agreement.

          3)Establishes eligibility criteria for CBAS services reflecting  
            the criteria of the Darling vs. Douglas settlement agreement.

          4)Limits access to CBAS to those enrolled in Medi-Cal managed  
            care (MCMC) in counties where the Department of Health Care  
            Services (DHCS) has implemented mandatory MCMC, with some  
            exceptions; and to those who are Medi-Cal beneficiaries in  
            counties where DHCS has not implemented mandatory MCMC and  
            CBAS is available.

          5)Requires that CBAS be provided at licensed Adult Day Health  
            Centers (ADHC) certified by DHCS as CBAS providers. 

          6)Requires MCMC plans to authorize service, for the same number  
            of days and the same duration, as provided in a Medi-Cal  
            fee-for-service basis, and requires face-to-face evaluations,  
            under certain conditions, as specified.

          7)Requires managed care plans (MCPs) to publish an  
            implementation plan that describes the process and criteria to  
            determine member eligibility for services, reauthorization of  
            services, and criteria for determining the number of days of  
            service to be provided.

          8) Requires eligibility standards to be no more restrictive, or  
            administrative burdensome, than under the terms of the Darling  
            vs. Douglas settlement agreement.  

          9)Requires CBAS providers to be "non-profit" entities exempt  
            from taxation under Section 501 (c)(3) of the Internal Revenue  
            Code, as of July 1, 2015.

          10)Requires submission of a quality assurance proposal to  
            relevant budget and policy committees of the Legislature after  
            the DHCS has consulted with CBAS providers, MCPs, consumers  
            and consumer representatives, which will address how DHCS will  
            address quality assurance within the CBAS program under  
            managed care.  

          11)Acknowledges that the terms of the CBAS settlement agreement,  
            as ordered by the Superior Courts of California, shall prevail  
            when programmatic conflicts arise through August of 2014 when  








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            the settlement agreement expires.   

           EXISTING LAW:  

          1)In partnership with the federal government, establishes the  
            Medi-Cal program, to provide various health and long-term  
            services to low-income women and children, seniors, and people  
            with disabilities.

          2)Authorizes DHCS to enter into contracts with MCPs to provide  
            services to Medi-Cal enrollees.

          3)Requires eligible families, children, seniors, and people with  
            disabilities to enroll in a Medi-Cal MCP for health care  
            services in specified counties.  

          4)Establishes the Coordinated Care Initiative (CCI) that  
            required DHCS to seek federal approval to establish  
            demonstration sites in up to eight counties to better serve  
            the state's eligible seniors and persons with disabilities by  
            integrating delivery of medical, behavioral, and long-term  
            care services, and to identify strategies to integrate  
            Medicare and Medi-Cal for people in both programs (dual  
            eligible).

          5)   Authorizes DHCS to require SPDs who are eligible for  
            Medi-Cal only to enroll in MCMC plans for Long-Term Services  
            and Support.

           FISCAL EFFECT  :   Unknown




          PURPOSE OF THE BILL:   Currently, no statute authorizes CBAS. The  
          program operates under authority of a court directive scheduled  
          to expire in August 2014, along with an administrative request  
          granted by the federal government through an "1115" waiver.  An  
          1115 waiver allows states to experiment, pilot or demonstrate  
          projects which are likely to assist in promoting the objectives  
          of the Medicaid program.  The 1115 waivers are flexible, so  
          states have room to develop Medicaid Plans that suit their  
          state's health care goals.  

          According to the author, without legislative action, the future  








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          of the CBAS program is uncertain after the court directive  
          issued in December of 2011, expires in August of 2014.  At that  
          time, program participants risk losing the vital health and  
          social services provided by CBAS, and the state risks further  
          costly court battles and more expensive institutional placements  
          for CBAS participants.  Placing the court-ordered CBAS program  
          into statute assures medically fragile Californians and their  
          families' certainty and access to a range of social and health  
          supports delivered in a clinical setting that avoids costlier  
          institutional placements.  Like daycare for children in working  
          families, this daytime care model for frail, elder or  
          functionally impaired adults is essential in order to meet the  
          moral, ethical, and legal duties of caregiving families.  

           BACKGROUND:  

           HISTORY  :  In 1978, California authorized the establishment of 5  
          Adult Day Health Care Programs in Sacramento, San Francisco and  
          San Diego.  For the next 20 years, the state extended start-up  
          grants to non-profit entities wishing to provide such services,  
          ultimately reaching a roughly $3.5 million investment amongst  
          about 66 sites.  A report at the time issued through the Offices  
          of Senator Henry Mello, identified state cost savings of about  
          $7 for every $1 spent on ADHC, and identified an unmet need of  
          roughly 600 sites. In 1994, SB 1492 (Mello), (Chapter 1121,  
          Statutes of 1994), removed that non-profit tax status  
          restrictions and permitted for profit companies to develop ADHC  
          programs.  Upon the passage of SB 1492, the number of centers  
          grew from 72 to over 350 in 2004.

          Since the rapid expansion early in the century, a multiplicity  
          of government initiated reforms occurred in what appears to be a  
          partial attempt to acknowledge the growth of the population  
          dependent upon adult day services, and find efficiencies.   
          Significant attention and legislative activity has been focused  
          on the dramatic growth of ADHC centers, and increased Medi-Cal  
          costs for ADHC.  Less acknowledged is why this rapid growth  
          occurred, even though Senator Mello's report described  
          significant unmet need.

          As the number of centers grew, the former Department of Health  
          services (DHS) expressed concerns that some centers were  
          providing only very limited services, and potentially engaging  
          in Medi-Cal fraud by not complying with state requirements,  
          although wide-spread fraud was never detected.  In addition, in  








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          2004 the federal CMS ordered California to change the ADHC  
          program from an optional Medicaid benefit to a home- and  
          community-based program provided through a 1915 (c) Medicaid  
          waiver.   As part of the 2004-05 budget, the Legislature  
          instituted a moratorium on new licenses for ADHC, with the  
          intent of enacting program reforms, and the moratorium remained  
          in effect.  The California Association of Adult Day Services  
          (CAADS), a professional organization representing ADHC providers  
          throughout California, working cooperatively with DHS, made  
          several attempts to secure a change in federal law that would  
          protect California's model of ADHC as an optional Medicaid  
          benefit, but those efforts failed.  In 2006, SB 1755 (Chesbro:  
          Chapter 691, statutes of 2007) revised eligibility and moved the  
          program to a cost-based reimbursement system.  Reforms in 2003  
          to limit the numbers of days of services was held a violation of  
          an individual's right to live in the most home-like, or  
          "integrated" environment.  In 2011, what the legislature  
          intended to be a program reduction turned into a full-scale  
          elimination.  Consumers sued in what is now known as the Darling  
          vs. Douglas case, and both the state and the plaintiffs settled  
          on a program to address the immediate and ongoing needs of  
          consumers, known as Community Based Adult Services, or CBAS.

          After a decade of instability, the loss of ADHC as an optional  
          Medi-Cal benefit in 2011 nearly devastated an entire industry of  
          day services upon which California's aging population, health  
          care providers and families have come to rely.  

           COMMUNITY BASED ADULT SERVICES:   CBAS assures that, like  
          children, elders and other adults with disabilities that require  
          health monitoring and health supervision and whom are at great  
          risk if left alone, in their homes to fend for themselves, have  
          access to necessary health supervision, services and supports.   
          Nursing homes and other institutional settings are rapidly  
          changing due to shorter hospital stays, better management of  
          chronic illnesses, and changing governmental policies that taken  
          together conspire in an increasing reliance upon home and  
          community-based options to meet the needs of long-term service  
          and support seeking populations.  Indeed, the Department of  
          Finance's Demographic Research unit predicts a 10% growth in the  
          general population between 2010 and 2020.  During the same  
          period, estimates are that the 65+ population will grow by 44%  
          and the 85+ population will grow by just over 20%.  

          During the recent transition period that saw the entire  








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          case-load of the Adult Day Health Care program assessed,  
          re-assessed, and services re-authorized to roughly 30,000  
          participants 48 sites with an accumulated case-load of over 3800  
          participants were shuttered.  As former ADHC enrollees began to  
          seek services under the terms of the CBAS settlement agreement,  
          reports of a range of concerns began to emerge.  By September  
          24, 2012 when this committee conducted an oversight hearing on  
          the ADHC to CBAS transition, eligibility determination  
          procedures, treatment authorizations, appeal hearing processes,  
          quality assurance, and access were all at issue.  Based on  
          testimony from a range of experts, due to the nature of the  
          fragility and vulnerability of the population seeking CBAS  
          services, questions or uncertainty about eligibility, treatment  
          authorizations, appeal hearings, quality assurance, or access  
          could result in an unnecessary and unintended  
          institutionalization, and anecdotal information collected by the  
          committee verified this misfortune.

          Providing permanent codification assures consumers, providers  
          and regulators with a clear articulation of the program  
          parameters to support the needs of dependent adults, define  
          services so providers can focus upon quality and services, and  
          establish a stable apparatus by which to regulate and monitor  
          the service in an efficient and beneficial manner.

           PREVIOUS LEGISLATION  :  

          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.

          AB 96 (Committee on Budget, 2011), 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.  

          AB 97 (Committee on Budget), Chapter 3, Statutes of 2011, among  
            other provisions eliminates
          ADHC as a Medi-Cal benefit.









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          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.

          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.  

          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.

          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.

           POLICY COMMENTS:   

           1)CHALLENGED BY A LACK OF INFORMATION:  AB 518 is intended to  
            codify the terms of the CBAS settlement agreement in state  
            statute in order that this model of service delivery remains  
            available to eligible populations.  Compelling demographics,  
            upward pressure of long-term health care costs, and consumer  
            preferences support the need for a reliable, uniform program.   
            Historical misinformation about fraud in the program has never  
            been fully documented.  Misinformation about the elimination  
            of the ADHC program and creation of, and migration to, the  
            CBAS program resulted in fear and anxiety among program  
            participants.  Even DHCS acknowledged these concerns and  
            extended the timeline for enrollment into the new CBAS program  
            in 2012.  Additional information about recent reductions to  
            the program "saving" the state money has not been fully  








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            documented.    

           Recommended amendments  :

          1)14590.10 which establishes legislative intent that  
            programmatic standards are codified to offer certainty to  
            providers and regulators.  Families, caregivers and  
            beneficiaries need the same level of confidence.  Therefore,  
            the following amendment is recommended for 14590.10:

             (e) Ensure programmatic standards are codified to offer  
             certainty to providers  and regulators   , regulators,  
             beneficiaries, their families, caregivers and communities  .

          2)14590.12 establishes CBAS as a Medi-Cal benefit.  The author  
            may wish to consider including language that assures that  
            managed care health plan contracts include provisions of CBAS  
            services. 

            14590.12. Notwithstanding the operational period of CBAS as  
            specified in the Special Terms and Conditions of California's  
            Bridge to Reform Sections 1115(a) Medicaid demonstration  
            (11-w-00192/9), and notwithstanding the duration of the CBAS  
            settlement agreement, case no. C-09-03798 SBA, CBAS shall be a  
            Medi-Cal benefit,  and shall be included as a covered service  
            in contracts with all managed health care plans, with  
            standards, eligibility criteria, and provisions that are at  
            least equal to those contained in the demonstration that is  
            operative at the time of enactment of this section.  Any  
            modifications to the CBAS program that differ from the Terms  
            and Conditions of the Demonstration shall be permitted only if  
            they offer more protections or permit greater access to CBAS.
           
          3)14590.19 calls for the DHCS to submit a plan for quality  
            assurance within the CBAS program.  14590.19 should be amended  
            as follows:

            14590.19 On or before July 1, 2014, and after consultation  
            with CBAS providers, managed care plans, consumers, and  
            consumer representatives, the department shall submit to  
            appropriate legislative budget and policy committees for  
            review and comment a quality assurance proposal, which shall  
            specify how the DHCS will address quality assurance in the  
            CBAS program  under managed care  .









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          This bill passed out of Assembly Health on April 9th with a vote  
          of 19-0.
          
           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Community Clinic Association of Los Angeles (CCALAC)
          County Welfare Directors Association (CWDA)
          LeadingAge California (formerly Aging Services of California)
          National Association of Social Workers, California Chapter  
          (NASW-CA)

           Opposition 
           
          None on file.
           
          Analysis Prepared by  :    Robert MacLaughlin / AGING & L.T.C. /  
          (916) 319-3990