BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 1440 (Wolk) - Veterans' Homes: Fees
Amended: April 22, 2014 Policy Vote: VA 6-0
Urgency: No Mandate: No
Hearing Date: April 28, 2014
Consultant: Maureen Ortiz
This bill meets the criteria for referral to the Suspense file.
Bill Summary: SB 1440 revises the fee schedule for non-veteran
spouses who became residents of a state veterans' home after
July 1, 2009.
Fiscal Impact:
Approximately $280,000 revenue loss, potentially increasing
annually (General Fund)
The 2009-10 Budget Act, among other things, revised the fee
schedule for non-veteran spouses which resulted in new residents
paying higher amounts. Since the fees for existing spousal
residents were grandfathered at that time and therefore were NOT
increased, this measure will result in a fee reduction only to
spousal members who became residents after July 1, 2009. There
are currently 56 spousal members who were admitted after the
2009 fee change. The difference in revenue is approximately
$5,000 annually for each spouse and is paid from the General
Fund.
Background: The Department of Veterans Affairs' (CalVet)
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 1,900 members resided
in these veterans homes.
The eight veterans' homes offer different combinations of the
following levels of care that generate increasing levels of
cost:
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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 the USDVA.
Residential care/assisted living (All homes except Barstow):
Residential Care Facilities for the Elderly (RCFE) is available
for residents who require minimal assistance and supervision
with some activities of daily living. RCFE services may include
care by licensed nurses.
Intermediate care (Barstow, Yountville):
This level is for residents who often require licensed nursing
assistance with medications and treatments, and generally
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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.
Funding for the annual operating expenses of the veterans homes
comes from the State's General Fund, and any reimbursements the
department receives are then remitted back to the General Fund.
These reimbursements come from five sources:
a) Medicare, a federally funded program which pays hospital
inpatient and outpatient care, and some skilled nursing care;
b) Medi-Cal, funded by the federal and state governments, which
pays skilled nursing facility daily rates and various health
care costs;
c) Member fees paid by residents in accordance with their
income and level of care;
d) "Aid and Attendance," which are federal payments for
veterans who need personal care assistance; and
e) The U.S. Department of Veterans Affairs (USDVA), which pays
a per diem rate for each veteran in the homes.
Member fees are determined by the department, and are based on
circumstances when the cost of a resident's care (e.g. dental,
or acute medical care) exceeds the basic fee.
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Most veteran members are eligible for USDVA per diem payments
under 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 rate for ongoing provision of care to
eligible veterans residing in federally recognized state
veterans homes.
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
The 2009-10 Budget Act removed the cap on residential fees.
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 cap was based on
the classification of care are follows: $1,200 per month for
residential care, $2,300 per month for intermediate care, and
$2,500 per month for skilled nursing care. The 2009 budget
proposal additionally revised 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, 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
veteran member in domiciliary care, the nonveteran member shall
pay a maximum of 90% of his or her annual income.
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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 were that 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.
Proposed Law: SB 1440 alters the existing fee schedule that
nonveteran spouses are required to pay as residents of one of
the state veterans' home, and instead requires the nonveteran
spouses to pay the same fees and charges currently paid by
veteran members of the home.
Related Legislation: This bill is identical to AB 488 (Cook)
which was held on the Assembly Appropriations Committee Suspense
File in 2011.
Staff Comments: Existing law requires veterans who are members
of one of the state veterans' home, and non-veterans spouses who
were admitted prior to July 1, 2009, to pay fees and charges as
determined by the Department of Veterans Affairs, except that
the total of the individual member's fees and charges for any
fiscal year shall not be greater than the following schedule:
a) Forty-seven and one-half percent of the member's annual
income for domiciliary care.
b) Fifty-five percent of the member's annual income for
residential care for the elderly or assisted living.
c) Sixty-five percent of the member's annual income for
intermediate care.
d) Seventy percent of the member's annual income for
skilled nursing care.
For non-veteran spouses, current law requires those residents
who are admitted on or after July 1, 2009 to pay fees and
charges based on the level of care, or an amount equal to the
annual amount of federal per diem received for a veteran member
in domiciliary care - whichever is greater. However, if the
nonveteran spouse's income is less than the annual amount of
federal per diem for a veteran member in domiciliary care, he or
she is required to pay a maximum of 90 percent of his or her
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annual income.
SB 1440 will revert the 2009 fee change implemented in the 2009
Budget Act so that all non-veteran spouses will pay the same
fees that are charged to resident veterans.