BILL ANALYSIS Ó
SENATE COMMITTEE ON VETERANS AFFAIRS
Senator Ben Hueso, Chair
BILL NO: SB 1440 HEARING DATE: 4/8/14
AUTHOR: Wolk
VERSION: As amended, 4/1/14
FISCAL: Yes
VOTE: 21
SUBJECT
State veterans' homes: fees and charges.
DESCRIPTION
Existing law:
1.Provides for the establishment and operation of the Veterans
Home of California, within the California Department of
Veterans Affairs (CalVet), at various sites for aged and
disabled veterans and their nonveteran spouses, who meet
certain eligibility requirements.
2.Requires members (residents) of the homes to pay fees and
charges, as determined by CalVet.
3.Prohibits the total of a member's fees and charges for
specified types of care in any fiscal year from exceeding a
specified percentage of the member's annual income.
4.Requires nonveteran spouses. who become members of the home on
or after July 1, 2009, to pay fees and charges based on
either:
a. The level of care, as specified; or
b. An amount equal to the annual amount of federal per diem
received for a veteran member in domiciliary care,
whichever is greater, as provided.
This bill:
Alters the fee structure for nonveteran spouses residing in
state veterans homes. Requires nonveteran spouses to pay the
same fees and charges as paid by the veteran members of the home
and subject to the same prohibitions.
Note : This bill is identical to AB 488 (Cook, 2011), which
passed Assembly Veterans Affairs 8-0, then was held on
Suspense in Assembly Appropriations.
BACKGROUND
California state veterans homes
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 eight veterans homes, which are located in Barstow,
Chula Vista, Fresno, Lancaster. Redding, Ventura, West Los
Angeles, and Yountville. 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.
Levels of Care
The eight campuses offer different combinations of the following
levels of care that generate increasing levels of cost:
Independent living/domiciliary care (Barstow, Chula
Vista, Yountville):
This level of care is for residents able to perform
activities of daily living with, at most, minimal
assistance. Non-nursing employees provide limited
supervision. Residents have access to all of the Home's
services, activities, and medical care. Individuals can
transfer to higher levels of care as needed. Independent
living is also referred to as Domiciliary by CalVet and
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the USDVA.
Residential care/assisted living (All homes except
Barstow):
Residential Care Facilities for the Elderly (RCFE) are
available for residents who require minimal assistance
and supervision with some activities of daily living.
RCFE services may include care by licensed nurses. In the
future, memory care programs may be established within
the RCFEs.
Intermediate care (Barstow, Yountville):
This level is for residents who often require licensed
nursing assistance with medications and treatments, and
generally require unlicensed nursing assistance with
several daily living activities.
Skilled nursing care (Barstow, Chula Vista, Fresno,
Redding, West LA, Yountville):
This level provides 24-hour services of licensed nurses
and certified nursing assistants, and is more
comprehensive than intermediate care. Skilled nursing
residents have greater access to rehabilitation
therapies, nursing care, pharmacy management, structured
activities and clinical dietary services. May provide a
memory care program.
Home funding and member fees
Funding for the annual operating expenses of the veterans homes
comes from the State's General Fund, and any additional revenues
that the Veterans Homes Division receives are subsequently
remitted to the General Fund. These additional sources of
revenue primarily consist of reimbursements from five sources:
1. Medicare, a federally funded program which pays hospital
inpatient and outpatient care, and some skilled nursing
care;
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2. Medi-Cal, funded by the federal and state governments,
which pays skilled nursing facility daily rates and various
healthcare costs;
3. Member fees, which veterans' home residents pay in
accordance with their income and level of care;
4. So-called "aid and attendance," which are federal
payments for veterans who need personal care assistance;
and
5. The U.S. Department of Veterans Affairs (VA), which pays
a per diem rate for each veteran in the homes.
Member fee amounts are determined by CalVet, and that
determination takes into account those times when the costs of a
resident's care (e.g. dental care, acute medical care, etc.)
exceed the basic fee.
Under existing law, the total of the individual member's fees
and charges for any fiscal year shall not be greater than:
Forty-seven and one-half percent of the member's annual
income for domiciliary care.
Fifty-five percent of the member's annual income for
residential care for the elderly or assisted living.
Sixty-five percent of the member's annual income for
intermediate care.
Seventy percent of the member's annual income for
skilled nursing care.
Most veteran members are eligible to have the federal VA make
per diem payments to the state that help reduce costs to state
taxpayers. The federal VA manages the "State Veterans Home
Program," a grant program that provides federal assistance to
states by (a) participating in a percentage of the cost of
construction of state veterans homes and (b) paying per diem for
ongoing provision of care to eligible veterans residing in
federally recognized state veterans homes. The per diem is the
approved daily rate established by the VA to reimburse state
homes for providing specified levels of care to eligible
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veterans.
The federal "Basic State Home Per Diem Rates" for Fiscal Year
2014 are as follow:
Adult Day Health Care: $79.96 per day
Domiciliary: $43.32 per day
Nursing Homes: $100.37 per resident per day
In the 2009-10 Budget Act, the Legislature instituted a major
General Fund policy adjustment that affected home resident fees.
Specifically, it increased the amount of fees collected from
home residents from $17.2 million to $20 million - an increase
of $2.8 million.
Previously, residents paid fees based on a percentage of their
income, up to a dollar cap, with the percentage and cap
increasing as the level of care increases. The 2009 budget
proposal increased resident fees by:
Removing the dollar caps;
Increasing the percentage for the Residential Care for
the Elderly (RCFE); and
Revising the fee structure for nonveteran spouses to
more accurately reflect their share of costs because they
are ineligible for the federal per diem payments .
As a result of the 2009 Budget change, nonveteran spouses, who
become members of a veterans home on or after July 1, 2009, are
treated differently than veteran members. Nonveteran spouses now
pay fees and charges based either on (1) the level of care they
receive or (2) an amount equal to the annual federal per diem
received for a veteran member in domiciliary care, whichever is
greater. (The level-of-care payment is almost always equal or
higher than the per diem amount.) If the nonveteran member's
income is less than the annual amount of federal per diem for a
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veteran member in domiciliary care, the nonveteran member shall
pay a maximum of 90% of his or her annual income.
In May 2013 the State Auditor released Audit Report 2012-119,
which examined CalVet's management of the veterans homes. Among
the report's conclusions:
CalVet 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:
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.
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.
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
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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 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
1.Committee staff comments : SB 1440 would reverse the 2009
Budget Act language that requires new nonveteran spouses to
pay based on level of care instead of the scaled income caps
that protect the incomes of veteran members. The 2009
legislation was part of the Legislature's broad attempt to
address the state's fiscal crisis. Should SB 1440 pass this
policy committee, it is likely to undergo the same fiscal
scrutiny that the identical AB 488 (Cook, 2011) did in
Assembly Appropriations.
2.Related Legislation :
AB 488 (Cook, held Assembly Approps, 2011) mandates that
nonveteran spouses living in the home shall pay the same fees
and charges as the veteran spouse.
POSITIONS
Sponsor: Allied Council, State Veterans Home, Yountville.
Support: None on file.
Oppose: None on file.
Analysis by: Wade Cooper Teasdale
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