BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 211| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 211 Author: Gomez (D), et al. Introduced:2/2/15 Vote: 21 SENATE HUMAN SERVICES COMMITTEE: 3-1, 6/23/15 AYES: McGuire, Hancock, Liu NOES: Nguyen NO VOTE RECORDED: Berryhill SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/27/15 AYES: Lara, Beall, Hill, Leyva, Mendoza NOES: Bates, Nielsen ASSEMBLY FLOOR: 58-20, 6/2/15 - See last page for vote SUBJECT: In-home supportive services SOURCE: UDW/AFSCME Local 3930 DIGEST: This bill de-links the establishment of a statewide public authority for the In-Home Supportive Services (IHSS) program, and its associated bargaining functions, from other provisions and timelines of the Coordinated Care Initiative (CCI). ANALYSIS: Existing law: 1) Establishes in state law a program of public Medi-Cal benefits to provide health care for people who lack sufficient annual income to meet the costs of health care, and whose other assets are so limited that their application AB 211 Page 2 toward the costs of such care would jeopardize the person or family's future minimum self-maintenance and security. (WIC 14000 et seq.) 2) Establishes the In-Home Supportive Services program to provide domestic supportive and personal care services for aged, blind or disabled individuals living at or below the poverty level for the purpose of enabling consumers to avoid institutionalization and remain safely in their homes. (WIC 12300 et seq.) 3) Requires each county to establish a public authority or nonprofit consortium for providers of IHSS to establish a registry to help consumers find workers, conduct background checks of prospective workers, provide training and serve as the employer of record for collective bargaining. Establishes that IHSS recipients shall retain the right to choose the individuals that provide their care and to hire, fire, recruit, select, train, or reject any provider, as specified. (WIC 12302.25 et seq.) 4) Establishes the CCI in eight counties, an integrated health and long-term managed care plan for individuals and seniors and persons with disabilities who receive both Medi-Cal and Medicare benefits, and includes IHSS within the managed care plans. (WIC 14182.16, WIC 14186.35) 5) Predicates establishment of a statewide bargaining authority, the California In-Home Supportive Services Authority, upon the completed enrollment of each demonstration county's CCI participants, and establishes this may happen no sooner than March 2013. (WIC 12300.7 (a)) 6) Deems inoperable the establishment of the statewide bargaining authority and related authority to obtain information about IHSS providers established in the CCI if the CCI becomes inoperative. (GOV 6253.2) 7) Creates an IHSS Maintenance Of Effort (MOE) requirement for each county and provides that this MOE shall be counted in lieu of the county's share of nonfederal costs of the county services block grant and IHSS administration AB 211 Page 3 requirements. Requires that the MOE becomes inoperative if the CCI is inoperative. (WIC 12306.15, 10101.1 (d), 12306 (f)) 8) Provides that each county's share of the costs of negotiated wage and benefit increases will remain during the period in which a county's MOE exists, however the MOE share will be in lieu of that share. Establishes that this becomes inoperative if the CCI becomes inoperative. (WIC 12306.1 (g) and (h)) 9) Requires that participating managed health care plans enter into an MOU with a county's public authority or related organization when a demonstration county has enrolled its eligible beneficiaries into the CCI. The MOU must include an agreement to continue to perform assessments and other specific activities. (WIC 14186.35) 10) Requires the state's Director of Finance to estimate the amount of net General Fund Savings gained from implementing the CCI and to suspend the CCI immediately if it is determined that no savings will be generated, as specified. Specifies which sections of statute shall be deleted if the CCI is deemed inoperative and requires that the statewide public authority cease to be the employer of record and the counties resume that role. (Section 34, Chapter 37, statutes of 2013) This bill: 1) Sets January 1, 2016, as the date that the California In-Home Supportive Services Authority assumes responsibility for statewide collective bargaining. 2) Deletes the state's ability to eliminate the statewide authority, including language identifying associated duties, and to return the role of employer of record to the counties should the CCI become inoperative. 3) Deletes the requirement to link the establishment of the statewide authority to a county's implementation of the CCI, and makes related language changes in numerous places in the AB 211 Page 4 statute. 4) Deletes the requirement that the establishment of the California In-Home Supportive Services Authority be tied to the completed enrollment of beneficiaries into the CCI and the notification of such by the director of the Department of Health Care Services (DHCS), and deletes redundant sections (WIC 12302.25, 12306.1) that have been replaced in statute. 5) De-links from the CCI the requirement that a county's IHSS MOE can be counted in lieu of a county's share of cost of negotiated wage and benefit increases. 6) Eliminates the requirement to revert a county's MOE share of cost to the original cost-sharing formula if the CCI is inoperative. 7) Changes the required date for plans to establish an MOU with county public authorities that transfers bargaining responsibility to the statewide authority from the implementation of the CCI in each county to January 1, 2016. 8) Eliminates from the list of codes that shall be deleted if the CCI becomes inoperative those codes that establish the In-Home Supportive Services Employer-Employee Relations Act, establish and define the duties of the statewide authority, establish the IHSS Fund, which is used to fund the statewide authority, require all counties to have a County IHSS MOE, as specified. Background The Coordinated Care Initiative. The CCI was established in the 2012 Budget Act (SB 1036, Committee on Budget and Fiscal Review, Chapter 45, Statutes of 2012) to integrate long-term services and supports, including IHSS, into managed care. The intent of the CCI was to bring dual eligible beneficiaries -- people who qualify for both Medicare and Medi-Cal - into the same plan. In California, there are about 1.1 million dual-eligible beneficiaries; as many as seven in ten are age 65 and older, and AB 211 Page 5 most are women. About one-third are younger people with disabilities. Initially, the integration into managed care was anticipated to begin in eight specified demonstration counties as early as March 2013, with the intent to ultimately expand statewide. But there have been delays in the implementation of the CCI, due in part to delayed approval from the federal Centers for Medicaid and Medicare Services (CMS). Seven counties remain in the pilot program. San Mateo County transitioned to the Statewide Authority in February 2015, followed by Los Angeles, Riverside, San Bernardino and San Diego counties. Santa Clara County is anticipated to transition January 2016 and finally Orange County in August 2016. Alameda is no longer participating due to concerns about one of its plans. Continued implementation of the CCI is statutorily dependent upon an annual determination by the Department of Finance (DOF) that there are net General Fund savings for CCI. If CCI is not cost-effective, all components of CCI would cease operation. According to DOF, several factors are threatening the solvency of the CCI, and it could cease operations, effective January 2017. 1)More than 100,000 participants were exempted, including Medicare Special Needs Plans and certain categories of Medi-Cal beneficiaries based on age or health condition. 2)Medicare and Medicaid savings were intended to be shared 50:50 with the federal government; however, the federal government reduced the amount of savings California was allowed to retain to approximately 25 to 30 percent. 3)The federal government allowed a 3.975 percent tax on managed care organizations through June 30, 2016 which is attributable to the state's participation in the CCI demonstration. However, recent federal guidance indicates that this tax will not be allowed to continue in its current form, and a special Legislative session has been convened to address methods to fix the MCO tax. 4)As of November, approximately 69 percent of eligible AB 211 Page 6 participants opted out of Cal MediConnect but initial projections suggested just a 33 percent opt-out rate. Of those that opted-out, about 80 percent are in the IHSS program. IHSS. The IHSS program is a county-administered Medi-Cal benefit which provides low-income individuals who are aged, blind or disabled with specified personal care and domestic services that allow them to remain safely in their own homes and to avoid institutionalization. IHSS services include tasks like feeding, bathing, bowel and bladder care, meal preparation and clean-up, laundry, and paramedical care. In an average month, about 462,000 recipients received care from approximately 470,000 IHSS providers, according to the Governor's budget. Nearly three-fourths of the providers are family members and half live with the recipient. Eligibility for IHSS is determined by county social workers who conduct an in-home assessment, and periodic reassessments, of an individual's ability to perform specific activities of daily living. Recipients are responsible for hiring, firing, directing and supervising their own IHSS provider or providers. The counties or public authorities must conduct a criminal background check and provide an orientation before a provider can receive payment. In most counties, local public authorities are designated as "employers of record" for collective bargaining purposes, while the state administers payroll, workers' compensation, and benefits. IHSS is funded through a combination of federal, state, and county money. The state historically has paid 65 percent and counties have paid 35 percent of the non-federal share of IHSS funding. The average annual cost of services per IHSS client is estimated to be around $14,217 ($1,185 per client per month) for 2015-16. Role of the Public Authority. In-home care was first provided in California in the 1950s through grants to eligible consumers who hired and paid their own providers. Over time, as the eligible population grew along with the desire to keep individuals in the most home-like setting, the IHSS program was developed and has grown to the nation's largest program of its type. Initially, care was provided by family members who received pay for a few hours of service. In the late 1980s state law established a AB 211 Page 7 county's responsibility to create a local public authority or non-profit consortium, which became a mandatory in 1999. Under the CCI, county public authorities will relinquish their employer of record status to the statewide IHSS bargaining authority, but will retain other duties, such as performing background checks and creating a registry for consumers to find appropriate caregivers. This bill broadens the statewide authority that currently exists within the CCI pilot counties to encompass all 58 counties. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to a Senate Appropriations Committee analysis, this bill results in potential costs (General Fund) in the high tens to hundreds of millions of dollars annually to the extent this measure results in an increase in IHSS provider wages and health benefits with the implementation of the Statewide Authority in all 58 counties effective January 1, 2016. It projected annual costs of about $6.9 million (50 percent General Fund, 50 percent federal funds) to the Department of Human Resources (CalHR) to implement and operate a collective bargaining platform on behalf of the Statewide Authority expanded to cover all 58 counties, and additional significant one-time General Fund costs to CalHR for limited-term staff and overtime required to support the workload imposed under the accelerated implementation date mandated in this measure. The analysis noted that to the extent the CCI would have otherwise become inoperative at some future date due to an estimate by the Director of Finance that the CCI would not generate net General Fund savings, as specified; the annual costs noted above would continue to be incurred. The counties' share of cost limited by the County IHSS MOE would not revert to the original cost-sharing formula, and CalHR/DSS costs would continue to support the activities of the Statewide Authority. AB 211 Page 8 SUPPORT: (Verified 8/28/15) AFSCME California Labor Federation OPPOSITION: (Verified 8/28/15) Department of Finance ARGUMENTS IN SUPPORT: According to the author, the 2012 statute that established the CCI also created a statewide authority to transfer employer bargaining responsibility for the IHSS program from the counties to the state. Under statute, only the eight identified counties implementing the pilot project would be included in the statewide authority, and only upon full implementation of the CCI. The author states that at the time the CCI statute was enacted, the Administration intended the CCI to become operative in all 58 counties by 2015; however, due to the unprecedented and complex nature of the CCI, it has experienced numerous implementation delays. The author states this bill is needed because there is no plan to transition collective bargaining responsibilities to the statewide authority in any of the remaining 51 counties. ARGUMENTS IN OPPOSITION: The Department of Finance writes that it is opposed to this bill because it would require the state to implement collective bargaining in all 58, even if the CCI were to become inoperative. The CCI is intended to be a complete package of reforms designed to improve care coordination for individuals who are eligible for benefits under Medicare and Medi-Cal. Allowing statewide bargaining responsibilities to function separately from the entirety of the CCI erodes the comprehensive nature of the initiative and places all fiscal risk of the CCI squarely on the state. ASSEMBLY FLOOR: 58-20, 6/2/15 AYES: Achadjian, Alejo, Bigelow, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, AB 211 Page 9 Cooper, Dababneh, Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger Hernández, Holden, Irwin, Jones-Sawyer, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mayes, McCarty, Medina, Mullin, Nazarian, O'Donnell, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Atkins NOES: Travis Allen, Baker, Brough, Dahle, Beth Gaines, Gallagher, Gatto, Grove, Hadley, Harper, Jones, Kim, Mathis, Melendez, Obernolte, Olsen, Patterson, Steinorth, Wagner, Wilk NO VOTE RECORDED: Chávez, Waldron Prepared by:Mareva Brown / HUMAN S. / (916) 651-1524 8/30/15 19:11:48 **** END ****