BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 1440
Author: Wolk (D), et al.
Amended: 8/18/14
Vote: 21
SENATE VETERANS AFFAIRS COMMITTEE : 6-0, 4/8/14
AYES: Hueso, Knight, Block, Lieu, Nielsen, Roth
NO VOTE RECORDED: Correa, Vacancy
SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/23/14
AYES: De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg
SENATE FLOOR : 34-0, 5/27/14
AYES: Anderson, Beall, Block, Cannella, Corbett, Correa, De
León, DeSaulnier, Evans, Fuller, Gaines, Galgiani, Hancock,
Hernandez, Hill, Hueso, Huff, Jackson, Knight, Lara, Leno,
Mitchell, Monning, Morrell, Nielsen, Padilla, Pavley, Roth,
Steinberg, Torres, Vidak, Walters, Wolk, Wyland
NO VOTE RECORDED: Berryhill, Calderon, Lieu, Liu, Wright, Yee
ASSEMBLY FLOOR : 78-0, 8/27/14 - See last page for vote
SUBJECT : Veterans' homes: fees and charges
SOURCE : Allied Council, State Veterans' Home, Yountville
DIGEST : This bill requires nonveteran spouses to pay the same
fees and charges as paid by veteran members (residents) of a
veterans' home, as determined by the Department of Veterans
Affairs (CalVet), and subjects them to the same prohibitions.
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SB 1440
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Assembly Amendments add double-jointing language to prevent
chaptering out issues with AB 614 (Chávez).
ANALYSIS :
Existing law:
1.Provides for the establishment and operation of the Veterans
Home of California, within CalVet, at various sites for aged
and disabled veterans and their nonveteran spouses, who meet
certain eligibility requirements.
2.Requires residents of the homes to pay fees and charges, as
determined by CalVet.
3.Prohibits the total of a resident'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 residents 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 resident in domiciliary care,
whichever is greater, as provided.
This bill:
1.Alters the fee structure for nonveteran spouses residing in
state veterans' homes, and requires nonveteran spouses to pay
the same fees and charges as paid by the veteran residents of
the home and subjects them to the same prohibitions.
2.Contains double-jointing language to prevent chaptering out
issues with
AB 614 (Chávez).
Background
California state veterans' homes . CalVet's Veterans' Homes
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Division provides rehabilitative, residential medical care and
services in a homelike environment for all veterans (and
eligible 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 residents 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 the
U.S. Department of Veterans Affairs (VA).
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,
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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;
2.Medi-Cal, funded by the federal and state governments, which
pays skilled nursing facility daily rates and various
healthcare costs;
3.Resident 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 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:
47.5% of the resident's annual income for domiciliary care.
55% of the resident's annual income for residential care for
the elderly or assisted living.
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65% of the resident's annual income for intermediate care.
70% of the resident's annual income for skilled nursing care.
Most veteran residents are eligible to have the VA make per diem
payments to the state that help reduce costs to state taxpayers.
The 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 veterans.
The federal "Basic State Home Per Diem Rates" for Fiscal Year
2014 are as follows:
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:
1.Removing the dollar caps;
2.Increasing the percentage for RCFE; and
3.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.
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As a result of the 2009 Budget change, nonveteran spouses, who
become residents of a veterans' home on or after July 1, 2009,
are treated differently than veteran residents. 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 resident 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 resident's income is less than the annual amount of
federal per diem for a veteran resident in domiciliary care, the
nonveteran member shall pay a maximum of 90% of his/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:
1.CalVet has not maximized its ability to generate revenue for
the care provided to its residents. 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:
A. State laws and CalVet policies also limit its ability to
recover the full cost of providing care to residents of
veterans' homes while they are living at a home and from
using funds collected from residents' estates after they
pass away to offset the costs of their care.
B. Under state law, CalVet can use only a resident's annual
income in determining the member's fee that CalVet may
charge; it is not allowed to consider a resident's assets
other than income - which may include personal or real
property, stocks and bonds, and automobiles - in the
calculation.
C. In addition, state law limits the total fees residents
pay to a certain percentage of their annual income,
depending on the level of care he/she receives. For
example, according to state law, residents at the
domiciliary level of care may be charged no more than 47.5%
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of their annual income for resident fees, while residents
in skilled nursing care may be charged no more than 70% of
their annual income.
1.Therefore, most residents 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 residents 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 residents.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
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 bill will result in a fee reduction
only to spousal residents who became residents after July 1,
2009. There are currently 56 spousal residents 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.
SUPPORT : (Verified 8/27/14)
Allied Council, State Veterans' Home, Yountville (source)
ARGUMENTS IN SUPPORT : According to the author, "SB 1440 will
restore fairness and continuity to the veterans and their
spouses who live in our state's Veterans' Homes. Current law
requires non-veteran spouses to pay up to 90% of their income in
order to live at the veterans' home with their husband or wife.
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SB 1440 will allow these non-veteran spouses to live at our
veterans' home under the same fee schedule as their veteran
spouse. The current fee structure has caused couples to leave
the veterans' homes or to separate from their veteran spouse.
Our veterans and their spouses deserve a fair and level fee
structure."
ASSEMBLY FLOOR : 78-0, 8/27/14
AYES: Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Gray, Grove, Hagman, Hall, Roger Hernández, Holden,
Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Mansoor, Medina, Melendez, Mullin, Muratsuchi,
Nazarian, Nestande, Olsen, Pan, Patterson, Perea, John A.
Pérez, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon,
Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Wagner,
Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, Atkins
NO VOTE RECORDED: Harkey, Vacancy
AL:e 8/27/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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