BILL ANALYSIS Ó
SENATE COMMITTEE ON VETERANS AFFAIRS
Senator Ben Hueso, Chair
BILL NO: AB 557 HEARING DATE: 6/11/13
AUTHOR: Yamada
VERSION: As introduced
FISCAL: Yes
VOTE: Majority
SUBJECT
Veterans' homes: accounting of charges.
DESCRIPTION
Summary : Changes the required font size and adds informational
language to the quarterly cost-accounting statements provided to
residents of state veterans homes.
Existing law :
1. A member (resident) of a state veterans home is required to pay fees
and charges as determined by the California Department of
Veterans Affairs (CalVet).
2. Requires the administrator of a state veterans home to provide each
member of the home with a quarterly statement or accounting
of all charges for the costs of care rendered to the member
in excess of the member fee. The quarterly statement or
accounting of charges must clearly indicate:
a. That the costs of care that may be incurred in
excess of the member contribution fee.
b. That if the veteran is a resident of the home at the
time of death, the home may disburse the veteran's moneys
or personal property for payment of unreimbursed excess
costs of care.
This bill :
1. Requires that the quarterly statements of all charges
for the costs of care rendered to the member in excess of
the member fee include language that if the veteran is a
resident of the home at the time of death, the home may use
his or her money or personal property that is in possession
of the home or outside the home for payment of unreimbursed
costs of care.
2. Requires that the statements and notices relating to the
statements shall be in a font size and type that complies
with the standards of the Americans with Disabilities Act
of 1990.
BACKGROUND
CalVet's Veterans Homes Division provides rehabilitative,
residential medical care and services in a homelike environment
for all veterans (and eligible veteran spouses) residing in the
State's six active veterans homes, which are located in
Yountville, Barstow, Chula Vista, Ventura, Lancaster, and West
Los Angeles. As of early 2013, more than 1,700 members resided
in these veterans homes. CalVet is scheduled to begin admitting
veterans in October 2013 at two new veterans homes located in
Fresno and Redding.
Funding for the annual operating expenses of the veterans homes
comes from the State's General Fund, and any revenues that the
Veterans Homes Division receives are subsequently remitted to
the General Fund. These sources of revenue include payments from
the United States Department of Veterans Affairs; reimbursements
from federal, state, or private insurance plans-including the
Medicare and Medi-Cal programs; and the fees that existing law
requires state home residents to pay fees in accordance with the
care they receive. The fees are determined by CalVet. There are
times when the residents' care exceeds the basic fee (e.g.
dental care, acute medical care, etc.).
The department may recover costs from the veteran's estate for
payment of funeral expenses or any obligation owed to the home,
including the cost of any care rendered by the home in excess of
the fees paid by the veteran to the home. Any funds of the
deceased veteran representing the cost of care rendered by the
home in excess of the fees paid by the veteran to the home shall
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be paid into the Morale, Welfare, and Recreation Fund. These
provisions apply only to veterans who became members of the home
on or after January 1, 1984.
Notice upon admission
Existing law also requires the administrator of each home,
whenever a veteran is admitted to a home, to provide the veteran
with written notice that the costs of care may be incurred in
excess of the member contribution fee. The notification must:
Include an explanation of circumstances under which the
member may incur costs that are in excess of the
contribution fee.
Specifically indicate that these excess costs of care
are costs in addition to, or above and beyond, the member
contribution fee.
Provide examples of "excess costs of care that are
frequently incurred by veterans."
Inform the member that he or she will receive a
quarterly accounting statement of the total excess costs of
care, but that the statement is provided for informational
purposes only.
Inform the veteran that, if he or she is a resident of
the home at the time of death, the home may disburse his or
her moneys or personal property for payment of unreimbursed
excess costs of care.
Include a statement advising the member to seek counsel
from a legal expert to protect his or her assets.
Include the terms and conditions upon which the member
fees and costs can be changed.
The notification must require the signature of the veteran that
acknowledges that he or she has read and understands the
notification. It must be written in straightforward, plain
language, avoiding technical terms as much as possible, and
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using a coherent and easily readable style.
A copy of the above notification, containing all required
information and titled in large font "NOTICE TO RESIDENTS," must
be conspicuously posted in each veterans home by the
administrator.
Quarterly statement
The home administrator also must provide each member with a
quarterly statement or accounting of all charges for the costs
of care rendered to the member in excess of the member fee, as
defined. The statement must include:
A statement that the charges for the excess costs of
care are provided to the member for informational purposes
only.
A statement that, if the veteran is a resident of the
home at the time of death, the home may use his or her
money or personal property that is in possession of the
home for payment of unreimbursed excess costs of care.
A statement that advises the member to seek counsel from
a legal expert to protect his or her assets.
Audit Report
In May 2013 the State Auditor released Audit Report 2012-119,
which examined CalVet's management of the veterans homes. The
report offered the following conclusions:
The department has not maximized its ability to generate
revenue for the care provided to its members. Between
fiscal years 2009-10 and 2011-12, CalVet generated revenues
to offset less than half of the cost to operate its
veterans homes. However, according to the chief financial
officer, before 2012 CalVet did not have policies and
procedures for consistently monitoring and increasing the
amount of revenue generated at the veterans homes. For
example:
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o CalVet headquarters did not have adequate controls
in place to ensure that the veterans homes were
consistently enrolling and monitoring the status of their
members in maintaining coverage in all medical insurance
and federal government-funded income programs for which
the members were eligible.
o CalVet headquarters did not have a process to
monitor whether eligible members were enrolled in private
medical insurance plans or in the Medicare and Medi-Cal
programs.
State laws and CalVet policies also limit the
department's ability to recover the full cost of providing
care to members of veterans homes while they are living at
a home and from using funds collected from members' estates
after they pass away to offset the costs of their care.
o Under state law, CalVet can use only a member's
annual income in determining the member's fee that CalVet
may charge; it is not allowed to consider a member's
assets other than income-which may include personal or
real property, stocks and bonds, and automobiles-in the
calculation.
o In addition, state law limits the total fees members
pay to a certain percentage of their annual income,
depending on the level of care he or she receives. For
example, according to state law, members at the
domiciliary level of care may be charged no more than
47.5 percent of their annual income for member fees,
while members in skilled nursing care may be charged no
more than 70 percent of their annual income. Therefore,
most members pay only a portion of their actual costs of
care while living at the veterans home. Because CalVet
offsets less than half of its annual operating
expenditures for the veterans homes with funds from
existing revenue sources, it should analyze its
cost-recovery models, including an evaluation of the
state laws that limit the amount of revenue CalVet can
collect for the care it provides to its members at the
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homes. We believe such an analysis would provide CalVet
with useful information that could help it determine how
best to offset the costs charged to the General Fund for
providing care to members.
COMMENT
Committee staff comments :
When residents are admitted to a home, they are given a notice
substantially similar to the one contemplated in this bill. The
notice is also permanently posted in the home. However, most of
the residents of the home are elderly and/or disabled and might
benefit from additional reminders located on their quarterly
statements. The additional cost of adding the advisory language
to the bill, while outside the scope of this committee's
analysis, seems likely to be relatively small and the language
might bring some peace of mind and/or avoid surprises for the
residents. It will also give residents more opportunities to
plan the disposition of their assets should they wish to do so.
Related Legislation :
AB 1823 (Yamada, Ch. 158, Stats. 2012 )
Requires that routine quarterly financial statements provided
to residents of California's six Veteran Homes also include
clearly written information about any prospective charges that
would be due at the time of the veteran's death, consistent
with the terms agreed to upon admission to the Veterans Home.
SB 950 (Wiggins, Ch. 509, Stats. 2010 )
This bill requires (1) the written notice to veterans to also
include the terms and conditions upon which the member fees and
costs can be changed, and (2) a signature from the veteran to
acknowledge that he or she has read and understands the notice.
SB 1281 (Haynes, Ch. 466, Stats. 2002 )
Requires a Veteran Home administrator to provide a quarterly
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statement showing the costs of care, as well as written notice,
upon admission to a California veterans' home, of costs that
may be incurred by the veteran.
POSITIONS
Sponsor: Author.
Support: None received.
Oppose: None received.
Analysis by: Wade Cooper Teasdale
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