BILL ANALYSIS Ó
SENATE COMMITTEE ON BUDGET AND FISCAL REVIEW
Senator Mark Leno, Chair
2015 - 2016 Regular
Bill No: AB 119 Hearing Date: June 15,
2015
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|Author: |Committee on Budget |
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|Version: |January 9, 2015 Introduced |
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|Urgency: |No |Fiscal: |No |
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|Consultant|Michelle Baass |
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Subject: Budget Act of 2015.
Summary: Budget Act of 2015: Nursing home quality assurance fee and rate
adjustments
Background: AB 1629 (Frommer), Chapter 875, Statutes of 2004, enacted the
Medi-Cal Long-Term Care Reimbursement Act of 2004, which
establishes a reimbursement system that bases Medi-Cal
reimbursements to skilled nursing facilities (SNFs) on the
actual cost of care. Prior to AB 1629, SNFs were paid a flat
rate per Medi-Cal resident. This flat rate system provided no
incentive for quality care and reimbursed SNFs for less than it
cost to care for their residents.
AB 1629 also allows the state to leverage new federal Medicaid
dollars by imposing a quality assurance fee (QAF) on SNFs. This
new federal funding is used to increase nursing-home
reimbursement rates. (Federal Medicaid law allows states to
impose such fees on certain health-care service providers and in
turn repay the providers through increased reimbursements.)
Because the costs of Medicaid reimbursements to health care
providers are split between states and the federal government,
this arrangement provides a method by which states can leverage
additional federal funds for the support of their Medicaid
programs and offset state costs. In 2015-16, it is projected
that the SNF QAF will offset over $500 million in General Fund
expenditures.
AB 119 (Committee on Budget) Page 2
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AB 1629 contained a sunset date of July 1, 2008 and has been
extended five times.
SB 853 (Committee on Budget and Fiscal Review), Chapter 717,
Statutes of 2010, established the Quality and Accountability
Supplemental Payment (QASP) program. Under the QASP program,
SNFs that meet minimum staffing standards can earn incentive
payouts from a pool of supplemental funds. The payouts are
awarded based on SNFs' performance on certain quality measures
(including clinical indicators), as well as SNFs' improvement on
these measures relative to the previous year. Under SB 853, a
portion of each year's weighted average rate increase was to be
set aside to fund the QASP payment pool. The set-aside amount
was $43 million in 2013-14, and $90 million in the 2014-15 rate
year. In 2013-14, about 477 out of 1,000 SNFs earned the QASP
payouts.
Proposed
Law: This bill contains necessary statutory changes to implement
the Budget Act of 2015 for the Department of Health Care
Services (DHCS). Specifically, this bill:
1.Extends the sunset date for the skilled nursing facility
rate-setting methodology established under AB 1629 (Frommer),
Chapter 875, Statutes of 2004, as well as the Quality
Assurance Fee (QAF) and Quality/Accountability Supplemental
Payment (QASP) programs, from July 31, 2015, to July 31, 2020.
2.Specifies that beginning in 2015-16, the annual increase in
the weighted average Medi-Cal reimbursement rate for skilled
nursing facilities would be 3.62 percent. (The rate increase
for 2013-14 and 2014-15 was three percent.)
3.Sets Quality Accountability Supplemental Payment Program
(QASP) payments at the same level as existed for 2014-15
(approximately $90 million per year).
4.Extends the DHCS Administrative Procedure Act (APA) exemption
through July 31, 2020, and the California Department of Public
Health (CDPH) Public Contract Code exemption through December
31, 2020.
5.Beginning with the 2015-16 fiscal year, incorporates direct
AB 119 (Committee on Budget) Page 3
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care staff retention as a performance measure for QASP to be
developed in consultation with representatives from the
long-term care industry, organized labor, and consumers.
6.Requires DHCS, in coordination with the Department of Public
Health, to report to the Assembly and Senate budget
subcommittees by May 1, 2016 regarding the quality and
accountability payments including its assessment of if these
payments are adequate to incentivize quality and are adequate
to sustain the program.
Fiscal
Effect: The QAF is estimated to generate $539.7 million in fee revenue
from August 1, 2015 through July 31, 2016 (accrual). This fee
revenue offsets General Fund expenditures used to reimburse
skilled nursing facilities in Medi-Cal.
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