BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 518
AUTHOR: Yamada and Blumenfield
AMENDED: May 30, 2013
HEARING DATE: June 12, 2013
CONSULTANT: Bain
SUBJECT : Community-based adult services.
SUMMARY : Continues Community Based Adult Services as a Medi-Cal
benefit and included as a covered service in contracts with all
Medi-Cal managed health care plans following the expiration of a
legal settlement and a Medicaid waiver in effect until August
2014, establishes eligibility criteria for Community Based Adult
Services, requires an Adult Day Health Center to meet specified
staffing standards, and establishes requirements for Community
Based Adult Services providers, including a requirement that the
Department of Health Care Services certify and enroll as new
Community Based Adult Services providers only those providers
that are exempt from taxation under Section 501(c)(3) of the
federal Internal Revenue Code, commencing July 1, 2015.
Existing law:
1.Establishes the Medi-Cal program, administered by the
Department of Health Care Services (DHCS), under which health
care services are provided to qualified, low-income persons.
2.Excludes, to the extent permitted by federal law, adult day
health care (ADHC) from coverage under the Medi-Cal program.
3.Authorizes DHCS to implement a one-year moratorium on the
certification and enrollment into the Medi-Cal program of new
ADHC centers on a statewide basis, or within a geographic
area, with specified exemptions from the moratorium. Permits
the director of DHCS to extend this moratorium, if necessary,
to coincide with the implementation date of the ADHC centers
waiver.
4.Requires DHCS, to the extent that federal financial
participation is available, and pursuant to a demonstration
project or waiver of federal law, to establish specified
Medi-Cal pilot projects in up to 8 counties, and requires
long-term services and supports (LTSS) to be available to
beneficiaries residing in counties participating in those
Continued---
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pilot projects. Includes Community Based Adult Services (CBAS)
within the definition of LTSS. This demonstration project is
known as the Coordinated Care Initiative (CCI).
5.Requires, as part of the CCI, all Medi-Cal LTSS to be services
covered under Medi-Cal managed care health plan contracts and
available only through plans to beneficiaries residing in
counties participating in the demonstration, with specified
exemptions.
This bill:
1.Requires CBAS to be a Medi-Cal benefit and to be included as a
covered service in all Medi-Cal managed health care plans,
with standards, eligibility criteria, and provisions that are
at least equal to those contained in the Special Terms and
Conditions (STCs) of California's Bridge to Reform Medicaid
Demonstration (Medicaid Demonstration). Only allows
modifications to the CBAS program that differ from the STCs if
they offer more protections or permit greater access to CBAS.
2.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.
3.Establishes eligibility criteria for participation in CBAS as
follows:
a. Individuals who meet both "Nursing Facility
Level of Care A" (NF-A) criteria, or above NF-A, and
who meet ADHC eligibility and medical necessity
criteria contained in specified provisions of law.
b. Individuals who have an organic, acquired, or
traumatic brain injury or chronic mental illness, as
defined and who meet ADHC eligibility and medical
necessity criteria contained in specified provisions
of existing law.
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c. Individuals who meet ADHC eligibility and
medical necessity criteria contained in specified
provisions of law and who demonstrate a need for
assistance or supervision with two of specified
Activities of Daily Living (ADLs)/Instrumental
Activities of Daily Living (IADLs) or one ADL/IADL and
money management, accessing resources, meal
preparation, or transportation;
d. Individuals who have moderate to severe
Alzheimer's disease or other dementia, characterized
by the descriptors of, or equivalent to, Stages 5, 6,
or 7 Alzheimer's disease and who meet ADHC eligibility
and medical necessity criteria contained in specified
provisions of existing law;
e. Individuals who have a mild cognitive
impairment, including moderate Alzheimer's Disease or
other dementia, characterized by the descriptors of,
or equivalent to, Stage 4 Alzheimer's Disease and meet
ADHC eligibility and medical necessity criteria
contained in specified provisions of existing law and
who must demonstrate a need for assistance or
supervision with two ADLs/IADLs; and,
f. Individuals who have a developmental
disability and meet the criteria for regional center
eligibility and who meet ADHC eligibility and medical
necessity criteria contained in specified provisions
of existing law.
4. Requires Medi-Cal managed care plans to contract for CBAS
with any willing ADHC center that is certified by DHCS as a
CBAS provider.
5. Requires, in counties where DHCS has implemented Medi-Cal
managed care, CBAS to be available only as a Medi-Cal managed
care benefit, except for individuals who are exempt from
enrollment in Medi-Cal managed care. Requires CBAS to be
provided as a fee-for-service Medi-Cal benefit to all
eligible Medi-Cal beneficiaries who qualify for CBAS in
counties that have not implemented Medi-Cal managed care.
6.Requires all Medi-Cal managed care plans, at a minimum, to do
all of the following:
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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 fee-for-service basis. Prohibits plans,
for beneficiaries receiving services on a
fee-for-service basis as authorized by DHCS on or
before June 30, 2012, from reducing or otherwise
limiting 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 fee-for-service rates to provide CBAS.
Requires plans to include all contracting CBAS
providers in its enrollee information material.
Permits plans to pay CBAS providers above the
prevailing Medi-Cal fee-for-service rates; 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 to be provided and available at licensed ADHC
centers that are certified by DHCS as CBAS providers, and
requires CBAS to be provided pursuant to a participant's
Individualized Plan of Care, as developed by the center's
multidisciplinary team.
8.Requires DHCS, commencing July 1, 2015, to certify and enroll
as new CBAS providers only those providers that are exempt
from taxation under Section 501(c)(3) of the Internal Revenue
Code. (IRC).
9.Requires CBAS providers to meet all applicable licensing,
Medi-Cal, and Medicaid Demonstration standards, including, but
not limited to, licensing and service standard provisions.
10.Requires CBAS providers to be enrolled as Medicaid
Demonstration providers and to meet the standards specified in
this bill and specified provisions of existing regulations.
11.Requires an ADHC center to meet specified staffing standards,
including requiring an administrator or program director to be
on duty at all times, requiring a registered nurse (RN) ratio
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of one RN for every 40 participants, requiring a half-time
licensed vocational nurse (LVN) for every increment of 10
participants in average daily attendance exceeding 40
participants, requiring at least one RN to be physically
present in the ADHC center at all times during the ADHC's
program hours in which participants are present.
12.Permits an ADHC to supplement the RN staff with LVN staff
with at least one RN physically present in the ADHC center at
times during the center's program hours in which participants
are present. Permits an LVN to be physically present with the
RN immediately available by telephone if needed for short
intervals, not to exceed 60 minutes.
13.Requires the program aid or nurse assistant staffing to be at
a ratio of one program aid or nurse assistant on duty for up
to 16 participants present in the building. Requires any
number of participants, up to the next 16 participants, an
additional program aid or nurse assistant.
14.Requires an ADHC's staffing requirements to be based on the
average of the previous quarter's average daily attendance
(ADA). Permits the ADA to be tied to various shifts within the
day or various days of the week so long as the ADHC center can
demonstrate that it is consistent.
15.Requires an ADHC to maintain policies and procedures for
providing supportive health care services to participants,
including participants with special needs.
16.Requires training for ADHC staff, including an initial
orientation for new staff, review of all updated policies and
procedures, hands-on instruction for new equipment and
procedures, and regular updates on state and federal
requirements. Requires training to be conducted and documented
on a quarterly basis and to include supporting documentation
on the information taught, attendees, and the qualifications
of the instructors.
17.Requires each Medi-Cal managed care plan, on or before March
1, 2014, and after consultation with providers and consumer
representatives, to develop and publish an implementation plan
that describes the processes and criteria to determine
eligibility for receiving CBAS, reauthorization of services,
and the criteria for determining the number of days of service
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to be provided. Prohibits a plan from making eligibility for
services more restrictive or administratively burdensome than
under the terms of the CBAS settlement agreement.
18.Requires DHCS, on or before July 1, 2014, and after
consultation with CBAS providers, managed care plans,
consumers, and consumer representatives, to submit to the
appropriate legislative budget and policy committees for
review and comment a quality assurance proposal, which
addresses how DHCS will address quality assurance in the CBAS
program.
19.Requires, unless otherwise specified in this bill, in the
event of a conflict between any provision of this bill and the
STCs, the STCs to control. Makes this provision inoperative on
August 31, 2014, and, as of January 1, 2015, is repealed.
20.States legislative intent in enacting the provisions of this
bill, including ensuring that elderly persons and adults with
disabilities are not institutionalized inappropriately or
prematurely, providing a viable alternative to
institutionalization, promoting adult day health options
(including CBAS), ensuring that that all laws, regulations,
and procedures governing CBAS are enforced equitably and that
all program flexibility provisions are administered equitably,
ensuring programmatic standards are codified to offer
certainty to providers and regulators, and ensuring compliance
with the STCs of the Medicaid Demonstration.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, unknown, but likely minor costs. No additional state
costs until at least August 2014, when the court directive from
Esther Darling, et al. v. Toby Douglas, et al., (No.C-09-03798)
expires. In addition, the federal waiver under which CBAS
services are being provided continues until November 2015.
Beyond that date, costs are uncertain but given the state's new
Coordinated Care Initiative (CCI), transitioning seniors and
people with disabilities (SPDs) into managed care plans, and the
role CBAS plays in the CCI, it seems unlikely significant
changes will occur.
PRIOR VOTES :
Assembly Health: 19- 0
Assembly Aging and Long Term Care:7- 0
Assembly Appropriations: 17- 0
Assembly Floor: 74- 0
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COMMENTS :
1.Author's statement. This bill establishes the CBAS program as
a Medi-Cal eligible benefit. In 2011, after more than thirty
years as a proven, cost effective program supporting frail,
nursing-home eligible seniors and persons with disabilities,
the Legislature eliminated ADHC as a Medi-Cal benefit. The
Legislature agreed to the elimination because of the ongoing
fiscal crisis with the hope, if not understanding, that a
similar, though smaller program would replace ADHC.
Subsequently, a lawsuit by consumers sought restoration. The
state and plaintiffs reached a settlement agreement that
created CBAS to satisfy the state's obligation to serve and
support program participants in community settings. CBAS, like
ADHC, is a day-long service that offers integrated social and
health care to "nursing home-eligible" persons in a group
setting. The services and support help participants stay
active and improve health. CBAS allows families to balance the
care needs of frail loved ones with other responsibilities
such as work. Currently, no statute authorizes CBAS. Program
participants risk losing the vital health and social services
provided by CBAS upon expiration of the temporary settlement
agreement. 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
during the work day.
2.Background ADHC and CBAS. All state Medicaid programs have the
option to provide and receive federal financial participation
for optional services, in addition to those services required
by federal law. ADHC was an optional community-based day
program in fee-for-service Medi-Cal for low-income elders and
younger disabled adults who are at risk for being placed in a
nursing home. ADHC services included physical therapy,
occupational therapy, speech therapy and recipient
transportation to and from the ADHC facility. Eligibility was
based on an individual's functional limitations, severity of
chronic or post-acute health conditions, and risk for nursing
home placement. ADHC services were provided at licensed ADHC
centers, and included medical services, nursing care, meals,
social and therapeutic activities, and transportation. ADHC
centers could be both for-profit and not-for-profit.
Governors Schwarzenegger and Brown both proposed the
elimination of ADHC as an optional Medi-Cal benefit. In March
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2011, Governor Brown signed AB 97 (Committee on Budget),
Chapter 3, Statutes of 2011 into law to eliminate ADHC as a
benefit in Medi-Cal, subject to approval by the federal CMS,
in order to achieve General Fund savings and because of
concerns over fraud in the program. In June 2011, the
Legislature passed AB 96 (Committee on Budget), which
authorized the creation of the Keeping Adults Free from
Institutions (KAFI) program to replace ADHC. In July of 2011,
the Governor vetoed AB 96, and instead proposed that his
Administration would develop an alternate plan to transition
ADHC participants to other services. In August 2011, DHCS
presented its plan for transitioning ADHC participants to
other services, which included the enrollment of ADHC
participants in Medi-Cal managed care. From mid-August through
October of 2011, DHCS began implementing the managed care
portion of its transition plan.
In June 2011, seven plaintiffs filed a class action lawsuit
with the U.S. District Court on behalf of ADHC participants.
The lawsuit, Esther Darling, et al. v. Toby Douglas, et al.,
was brought against DHCS to block the elimination of ADHC as
an optional Medi-Cal benefit, as the plaintiffs argued the
changes would place them at risk of unnecessary
institutionalization, violated their due process rights and
the restrictive eligibility criteria in a previous ADHC bill
violated Medicaid requirements. In November 2011, DHCS
announced that it had reached a settlement with plaintiffs to
resolve the lawsuit. Under the terms of the settlement, ADHC
will be eliminated and replaced by a new program called CBAS,
which would be included under the state's Medicaid
Demonstration. CBAS was defined in the settlement as an
outpatient facility based program that delivers skilled
nursing care, social services, therapies, personal care,
family/caregiver training and support, meals and
transportation to eligible beneficiaries. In January 2012, the
Court granted final approval of the settlement, which lasts
for 30 months or until August 2015. Medi-Cal managed care
plans operating in County Organized Health Systems counties
began covering CBAS on July 1, 2012, with the exception of
Gold Coast Health Plan in Ventura County. The remaining
managed care plans (the Two-Plan Model, the Geographic Managed
Care Plans and the GCHP) all began covering CBAS benefits on
October 1, 2012.
3.Prior legislation.
a. SB 1008 (Committee on Budget and Fiscal Review),
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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 (Committee on Budget) of 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.
c. AB 97 (Committee on Budget), Chapter 3, Statutes of
2011, health budget trailer bill, among other provisions,
eliminated ADHC as a Medi-Cal benefit.
d. SB 208 (Steinberg), Chapter 714, Statutes of 2010,
contains the provisions implementing Medicaid
Demonstration.
4.Support. AARP, the California Commission on Aging and the
National Association of Social Workers write in support of
this bill. AARP writes no statute currently authorizes CBAS,
and the program operates under authority of a court directive
scheduled to expire in 2014, along with an administrative
request granted by the federal government. Without legislative
action, AARP argues the future of this program is uncertain
after the court directive expires and program participants
risk losing the vital health and social services provided by
CBAS. In addition, proponents argue California risks further
costly court battles and more expensive institutional
placements for CBAS participants.
The Jewish Public Affairs Committee of California (JPAC) writes
in support of this bill codifying the CBAS settlement
agreement. JPAC states it wants to ensure there is statutory
language to refer to in the future to protect CBAS clients, as
well as this very important and cost saving program.
5.Support if amended. The California Association for Adult Day
Services (CAADS) writes it would support this bill if it were
amended, but it believes the prohibition against for-profit
entities will negatively impact the future expansion of and
access to ADHC services because a majority of non-profits have
opened with the support of cash grants from the state that are
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no longer available. CAADS request this provision be amended
out of the bill because it creates a policy that will
artificially and unnecessarily inhibit growth at the very time
that CBAS centers are needed to be strengthened in the new
paradigm of managed care. The Alzheimer's Association writes
it would support this bill if it were amended to reflect the
suggestions of CAADS.
6.Amendments. The author is proposing amendments in this bill to
correct a date reference to the settlement agreement, and to
conform the eligibility for care criteria in this bill to the
language in the settlement agreement, which allows a person to
be eligible for CBAS who meets a need for a nursing home level
of care, but who is residing in a board and care facility or
at home.
7.Policy issues.
a. Non-profit requirement. This bill requires DHCS,
commencing July 1, 2015, to certify and enroll as new
CBAS providers only those providers that are exempt from
taxation under Section 501(c)(3) of the IRC. This
non-profit provision is intended to "grandfather in"
existing for-profits and to apply prospectively to new
ADHC centers. When originally established, ADHC providers
were limited to non-profits and city or county
governments. In 1994, SB 1492 (Mello), Chapter 1121,
Statutes of 1994, permitted for profit companies to
participate in ADHC.
As part of the CBAS implementation, DHCS imposed a new
requirement that CBAS providers be not-for-profit. After
July 1, 2012, to remain or commence as an eligible CBAS
provider in the Medi-Cal program, a CBAS provider must
convert to a non-profit entity unless DHCS determines
that the CBAS provider satisfies one of the following
three exceptions to non-profit status:
i. The for-profit CBAS provider offers
program specialization that meets the specific
health needs of CBAS-eligible participants not
otherwise met by any other CBAS provider in the
participants' geographic area;
ii. The for-profit CBAS provider's operation
is necessary to preserve an adequate number of CBAS
providers so that CBAS-eligible participants can
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transition seamlessly from ADHC to CBAS without
interruption in services due to wait lists; or,
iii. DHCS determines that a provider needs
additional time beyond July 1, 2012, for the
for-profit provider to complete its conversion to
non-profit status.
Additionally, after July 1, 2012, DHCS retains the
discretion to reexamine whether one of the above-listed
exceptions for a for-profit CBAS provider still applies
to a CBAS provider, and in doing so, DHCS may withdraw
such exception for a for-profit CBAS provider as needed.
In a webinar explaining the change, DHCS indicated the
ADHC program was founded on non-profit providers, and
DHCS' action to require non-profit providers was to take
the program back to its original non-profit community
focus.
On December 31, 2012, the California Department of Aging
announced that DHCS decided to postpone until further
notice and no sooner than January 1, 2014 the
implementation of the requirement restricting CBAS
providers to non-profit legal status. As of May 2013,
there are 245 CBAS centers: 62 are non-profit and 183 are
for-profit.
b. Any willing provider. This bill requires Medi-Cal
managed care plans to contract with any willing (AWP)
CBAS provider in the plan's service area at no less than
the prevailing Medi-Cal fee-for-service rates to provide
CBAS. This requirement is similar to a provision of the
settlement agreement, which requires Medi-Cal managed
care plans to maintain contracts with and enable eligible
CBAS individuals to receive CBAS services through all
DHCS-approved CBAS providers within the plan's service
area.
AWP statutes provides greater consumer choice of
providers, but runs counter to a fundamental cornerstone
of managed care whereby health plans selectively contract
with health care providers based on the need to establish
an adequate network, and the quality and price of the
providers. AWP statutes have been found to increase costs
by reducing plans' ability to obtain price discounts and
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conduct effective utilization management. While the
increased cost effect of AWP in the context of Medi-Cal
is not likely to occur because the bill requires plans to
pay the prevailing Medi-Cal fee-for-service rates, the
AWP requirement may prevent plans from directing Medi-Cal
beneficiaries who are receiving CBAS services to centers
that provide higher quality services if an AWP
requirement is imposed.
SUPPORT AND OPPOSITION :
Support: AARP
California Commission on Aging
California Primary Care Association
County Welfare Directors Association
Jewish Public Affairs Committee of California
LeadingAge California
National Association of Social Workers,
California Chapter
Oppose: None received.
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