BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON HEALTH
                          Senator Ed Hernandez, O.D., Chair

          BILL NO:                    AB 1235             
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          |AUTHOR:        |Gipson                                         |
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          |VERSION:       |June 1, 2015                                   |
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          |HEARING DATE:  |July 1, 2015   |               |               |
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          |CONSULTANT:    |Scott Bain                                     |
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           SUBJECT  : Medi-Cal: beneficiary maintenance needs: home upkeep  
          allowances and transitional personal needs funds.

           SUMMARY  : Requires the home upkeep allowance (HUA) for eligible Medi-Cal  
          beneficiaries in long-term care facilities to be based on the  
          actual minimum cost of maintaining the resident's home (the HUA  
          is currently $209 a month). Allows a long-term care facility  
          resident who does not have a home to establish a transitional  
          personal needs fund of up to $7,500 to be set aside from the  
          income that otherwise would be applied toward the resident's  
          Medi-Cal share of cost for residing in the long term care  
          facility. The personal needs fund would be used to cover the  
          costs of securing a home for the individual.
          
          Existing law:
          1)Establishes the Medi-Cal program, which is administered by the  
            Department of Health Care Services (DHCS), under which  
            qualified low-income individuals receive health care services.  
            Qualified individuals under the Medi-Cal program include  
            medically needy persons and medically needy family persons who  
            meet the required eligibility criteria, including applicable  
            income requirements.

          2)Requires DHCS to establish the income levels for maintenance  
            need at the lowest levels that reasonably permit medically  
            needy persons to meet their basic needs for food, clothing,  
            and shelter, and for which federal financial participation  
            (FFP) will still be provided under federal Medicaid law. (The  
            medically needy Medi-Cal eligibility category are individuals  
            who fit into a federal benefit program category but whose  
            income or resources exceed eligibility levels. Medically needy  
            individuals become Medi-Cal eligible by having a share of cost  
            whereby the individual "spends down" to Medi-Cal eligibility  







          AB 1235 (Gipson)                                   Page 2 of ?
          
          
            levels.)

          3)Requires, for a Medi-Cal beneficiary in a medical institution  
            or nursing facility, the amount considered as required for  
            maintenance per month to be computed in accordance with, and  
            for those purposes required by federal Medicaid law and  
            regulations. Requires those amounts to be computed pursuant to  
            regulations which include providing for the following  
            purposes:

                  a)        Personal and incidental needs in the amount of  
                    not less than $35 per month while a patient. This is  
                    referred to as the "personal needs allowance." Permits  
                    DHCS to increase this amount, by regulation, as  
                    necessitated by increasing costs of personal and  
                    incidental needs. Prohibits a long term care (LTC)  
                    facility from charging an individual for the laundry  
                    services or periodic hair care; and,

                  b)        The upkeep and maintenance of the home. (This  
                    amount is referred to as the home upkeep allowance.)

          4)Establishes, through regulation, the HUA, which allows a  
            Medi-Cal beneficiary in a LTC facility to be able to retain an  
            amount of income for upkeep of a home in addition to the  
            personal and incidental needs allowance, if all of the  
            following conditions are met:

                  a)        The LTC patient's spouse or a family member of  
                    the LTC patient is not living in the home;
                  b)        The home, whether rented or owned by the LTC  
                    patient, is actually being maintained for the return  
                    of the LTC patient;
                  c)        There is a verified medical determination that  
                    the LTC patient, or when both spouses are in LTC,  
                    either spouse, is likely to return home within six  
                    months of the date LTC patient status was established;  
                    and,
                  d)        The income is deducted for not more than the  
                    six-month period. 

          5)Establishes, through regulation, a formula for determining the  
            amount of the HUA.

          This bill:








          AB 1235 (Gipson)                                   Page 3 of ?
          
          
          1)Requires the HUA to be available to LTC recipients who are  
            Medi-Cal recipients and meet the requirements of this bill.

          2)Requires a LTC facility resident who intends to leave the  
            facility and return to his or her existing home to be provided  
            with a HUA as follows:

                  a)        Requires the allowance to be set aside from  
                    the income that otherwise would be applied toward the  
                    resident's Medi-Cal share of cost (SOC) for residing  
                    in the facility;
                  b)        Requires the allowance to be based on the  
                    actual minimum cost of maintaining the resident's  
                    home, including, but not limited to, mortgage or rent,  
                    property taxes, and required insurance;
                  c)        Requires the allowance to be an exempt  
                    resource for purposes of determining eligibility for  
                    the Medi-Cal program; and,
                  d)        Requires the allowance to be available only if  
                    a physician has certified that the resident is likely  
                    to return to his or home within six months.

          3)Requires a transitional personal needs fund to be available to  
            long-term care recipients if a long-term care facility  
            resident does not have a home, but intends to leave the  
            facility and establish a home in the community. Requires the  
            transitional costs of establishing a home to be included in  
            his or her personal needs allowance. 

          4)Permits a resident to establish a transitional personal needs  
            fund, as follows:

                  a)        Requires the fund to be set aside from the  
                    income that otherwise would be applied toward the  
                    resident's Medi-Cal SOC for residing in the facility;
                  b)        Caps the total amount of the fund at $7,500;
                  c)        Requires the fund to be an exempt resource for  
                    purposes of determining eligibility for the Medi-Cal  
                    program; and,
                  d)        Requires the fund to be used to cover the  
                    costs of securing a home for the individual,  
                    including, but not limited to, rent, security and  
                    utility deposits, accessibility modifications  
                    necessary to meet the needs of the individual, and  
                    essential furnishings, including, but not limited to,  








          AB 1235 (Gipson)                                   Page 4 of ?
          
          
                    stoves, refrigerators, beds, towels, and bed linens.

          5)Requires, if the resident is unable to secure a home within  
            four months after the transitional personal needs fund has  
            reached the $7,500 amount, the fund to revert to the state to  
            defray the costs of the resident's care in the facility.

          6)Requires DHCS, in implementing this bill, to undertake all of  
            the following information and outreach activities:

                  a)        Inform residents in all Medi-Cal funded LTC  
                    facilities of the existence and availability of the  
                    HUA and the transitional needs personal needs fund;
                  b)        Include information on the existence and  
                    availability of the HUA and the transitional personal  
                    needs fund in the "Notice Regarding Standards for  
                    Medi-Cal Eligibility;" and,
                  c)        Notify all Medi-Cal branches, eligibility  
                    workers, LTC facilities, hospital discharge planners,  
                    and organizations receiving state funds to assist  
                    nursing home residents of the existence and  
                    availability of the HUA and the transitional personal  
                    needs fund.

          7)Requires DHCS to adopt, revise, or repeal regulations as  
            necessary to implement this bill. Requires regulations that  
            are inconsistent with this bill to be inoperative until DHCS  
            makes the regulatory changes required by this subdivision.

           FISCAL  
          EFFECT  :  The current version of this bill has not been analyzed  
          by a fiscal committee.

           PRIOR  
          VOTES  :  
          
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          |Assembly Floor:                     |79 - 1                      |
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          |Assembly Appropriations Committee:  |17 - 0                      |
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          |Assembly Health Committee:          |19 - 0                      |
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          AB 1235 (Gipson)                                   Page 5 of ?
          
          
          COMMENTS  :
          1)Author's statement. According to the author, AB 1235 seeks to  
            improve the quality of life for Medi-Cal recipients in nursing  
            facilities by increasing the HUA and providing greater  
            opportunities for people to transfer back into a community.  
            The current HUA is $209 a month, which is simply insufficient  
            to provide for the maintenance and upkeep of most homes in  
            California. This bill seeks to increase the allowance to  
            ensure that nursing facility residents have an allocation that  
            is enough for them to establish a home and will also save the  
            state in long-term costs.  Each resident who is able to  
            transition out of a nursing home is one less resident that the  
            state has to cover the high cost of nursing facility care  
            under Medi-Cal. In addition, even if residents continued to  
            use publicly funded services, such as IHSS, it would still be  
            less expensive and would save money in the long-term. This  
            recommendation came out of a report commissioned by the  
            California Health and Human Services Agency in 2009, entitled,  
            Home and Community-Based Long-Term Care: Recommendations to  
            Improve Access for Californians.

          2)Medi-Cal share of cost, HUA and personal needs allowance.  
            Medi-Cal provides coverage up to 138% of the federal poverty  
            level for parents and individuals age 65 and under (at or  
            below $1,354 a month for a single person and at or below  
            $21,187 for two people) at no cost. In addition, Medi-Cal  
            provides coverage for to individuals who are aged or disabled  
            up to of the 102% of the Federal Poverty Level (at or below  
            $1,200 a month for an individual) at no cost. 

          Individuals whose income exceeds the income levels or who do not  
            meet eligibility criteria for no-cost Medi-Cal can quality as  
            medically needy individuals. The medically needy program is a  
            way to extend Medi-Cal eligibility to individuals who do not  
            qualify for no-cost Medi-Cal, such as those with high medical  
            expenses whose income is too high to meet the income  
            eligibility threshold for no-cost Medi-Cal. The program  
            functions as a last resort for those whose incomes are modest  
            and are surpassed by their significant medical expenses. 

          Federal Medicaid law authorizes states to have an optional  
            deduction as allowance for home maintenance. California has  
            adopted this option, whereby Medi-Cal beneficiaries living in,  
            or who will be living in, a nursing home or other medical  
            facility can qualify for a Medi-Cal deduction called the HUA.  








          AB 1235 (Gipson)                                   Page 6 of ?
          
          
            The Medi-Cal HUA enables a beneficiary to keep $209 a month of  
            the individual's income for the maintenance and upkeep of the  
            person's home while the individual is temporarily residing in  
            the nursing home or other medical facility. To be eligible, a  
            LTC resident must have a home (whether rented or owned) that  
            is actually being maintained for the return of the LTC  
            patient, and there must be a verified medical determination  
            that the LTC patient is likely to return home within six  
            months. The HUA allowance can be allowed for up to a six month  
            period from the date the individual enters the nursing home. 

          DHCS does not have data on the number of individuals using the  
            HUA but the number is believed to be small. A 2008 paper  
            prepared for the state Olmstead Advisory Committee indicated  
            the Medi-Cal Eligibility Data System does not capture  
            information on who utilizes the HUA, but a survey of counties  
            identified low numbers of reported cases, and DHCS estimated  
            that 100 beneficiaries statewide claimed the HUA in any given  
            month.

          Individuals likely to use the HUA are more likely to be single  
            adults as current regulations prohibit the LTC's patient's  
            spouse or family member from living in the beneficiary's home.  
            In addition, the resources and income of a Medi-Cal nursing  
            home resident with a spouse or dependent at home (referred to  
            as the "community spouse") is treated differently from that of  
            a resident who has no spouse or dependent in the home. If a  
            nursing home resident on Medi-Cal has a community spouse  
            living at home, the community spouse is allowed to keep a  
            greater amount of the family income and assets in order that  
            he or she does not become impoverished. In contrast, a single  
            person with no spouse or dependent at home can retain only the  
            $35 for personal and incidental needs when the beneficiary  
            will reside in the facility for the entire month. This is also  
            called the "personal needs allowance." The state does not have  
            a transitional personal need fund as an exemption or deduction  
            from income in determining a beneficiary's Medi-Cal SOC as  
            this bill proposes.

            The personal needs deduction and HUA are deducted from the  
            individual's income in determining their share of cost for  
            LTC. For example, if an individual with a monthly income of  
            $1,300 who is residing in a skilled nursing facility (SNF)  
            would have the $35 personal needs deduction and $209 home  
            upkeep allowance subtracted from his or her monthly income  








          AB 1235 (Gipson)                                   Page 7 of ?
          
          
            ($1,300 - $35 - $209 = $1,056). The remaining amount of $1,056  
            would be the individual's monthly SOC.


          3)Related legislation. AB 1319 (Dababneh), increases the  
            personal and incidental needs deduction for Medi-Cal  
            beneficiaries residing in a licensed community care facility  
            from $20 to $50. AB 1319 is currently pending in the Senate  
            Rules Committee.
            
          4)Support. This bill is sponsored by Disability Rights  
            California (DRC) to help people who are in nursing homes  
            return to the community if that is their preference. DRC  
            writes that people trying to leave nursing homes face daunting  
            challenges, and none is more daunting than lack of affordable  
            accessible housing. DRC states that, as California seeks  
            federal funds to develop new housing, it also forces people to  
            lose the homes they already have when they enter a SNF, in a  
            policy which hasn't changed since the 1970s. This means that  
            people who can go home end up languishing in these facilities,  
            with the state paying ever-rising Medi-Cal SNF rates, in  
            contradiction of the wishes and civil rights of the residents,  
            fiscal responsibility, and common sense.

            DRC explains that Medi-Cal beneficiaries who go into nursing  
            homes have to turn over some of their income as a SOC if their  
            income exceeds certain levels, and depending on whether there  
            is a spouse living in the family home. Federal Medicaid law  
            allows an alternative for people who intend to return home can  
            use that SOC money to maintain their home. DRC states the  
            problem with the current $209 HUA is it is unchanged since the  
            1970s and the amount is insufficient. DRC states this bill  
            makes the home upkeep allowance a useful tool by tying the  
            allowance to the HUA amount to what is actually needed to  
            maintain the beneficiary's home as anything less than that  
            does not achieve the desired policy outcome. In addition, this  
            bill requires the state to publicize the HUA to nursing home  
            residents, prospective residents, discharge planners, and  
            Medi-Cal offices, as the existence of the HUA is not widely  
            known. 

            In addition to being an inadequate dollar amount, DRC states  
            the HUA does not help people who lost their homes but want to  
            find a new home and leave a long-term care facility. This bill  
            proposes a new transitional personal needs fund that would be  








          AB 1235 (Gipson)                                   Page 8 of ?
          
          
            deducted from the long-term care Medi-Cal beneficiary's SOC so  
            they can save income for up to three months to secure a home  
            or apartment. DRC states individual can accumulate up to  
            $7,500 (this amount was chosen because it is the maximum grant  
            amount in the California Community Transitions program), and  
            if the money is not used, it would revert to the state General  
            Fund. DRC states Medi-Cal would make up the beneficiary's SOC  
            so the nursing home would be made whole, and the short-term  
            cost of the new fund would be far outweighed by the cost  
            savings as people are able to leave facilities and use  
            community-based services, which are almost always less costly.
          
          5)Recommended amendment. This bill creates a new code section  
            but the provisions are not contingent upon the changes made by  
            this bill being contingent upon receipt of federal Medicaid  
            matching funds (commonly referred to as financial  
            participation) and federal approval. Staff recommends this  
            change be made to this bill.

          6)Policy questions. 
               a)     Should there be an upper limit on the HUA?  The HUA  
                 enables a beneficiary to keep $209 a month of his/her  
                 income for the maintenance and upkeep of their home while  
                 the individual is temporarily residing in the nursing  
                 home or other medical facility. DHCS did not have data on  
                 the number of individuals using the HUA allowance but the  
                 number is generally believed to be very low as this  
                 option is not well known. Instead of the current $209  
                 established through a formula in regulation, this bill  
                 would set in statute the allowance as an amount based on  
                 the actual minimum cost of maintaining the resident's  
                 home, including, but not limited to, mortgage or rent,  
                 property taxes, and required insurance. A 2009 report  
                 prepared for California Community Choices and the CA  
                 Health and Human Services Agency indicated the existing  
                 $209 is too low to maintain a home in California. 

               The argument for not having a fixed dollar amount is that  
                 is insufficient, and it prevents the option from being  
                 usable as a low dollar amount is considerably less than  
                 the typical cost of mortgage or rent payments. Increasing  
                 the HUA will allow institutionalized individuals to keep  
                 more income for maintenance and upkeep of their home,  
                 would provide with individual with enough income to be  
                 helpful in offsetting rental/mortgage costs, and an  








          AB 1235 (Gipson)                                   Page 9 of ?
          
          
                 increased HUA deduction would enable more people to be  
                 able to return home when discharged.

               b)     Federal Medicaid law requires states to have a  
                 personal needs allowance that is reasonable in amount for  
                 clothing and other personal needs of the individual while  
                 in the institution, and establishes minimum amounts. For  
                 an aged, blind or disabled individual, the amount must be  
                 at least $30 and $60 for an institutionalized couple if  
                 both spouses are aged, blind, or disabled. For other  
                 individuals, the personal needs allowance must a  
                 reasonable amount set by the agency, based on a  
                 reasonable difference in their personal needs from those  
                 of the aged, blind, and disabled. The current California  
                 personal needs allowance is $35. 

               This bill establishes a new transitional personal needs  
                 fund, caps the amount in the fund at $7,500, and requires  
                 money in the fund to be set aside from the income that  
                 otherwise would be applied toward the resident's Medi-Cal  
                 SOC for residing in the facility. While federal law  
                 requires the use of an allowance, federal law is silent  
                 on the creation of a fund. The bill sponsor indicates the  
                 Health Care Financing Administration (the predecessor to  
                 CMS) has granted states flexibility in determining what  
                 is an exempt resource for Medicaid eligibility purposes.  
                 Does federal Medicaid law permit the establishment of a  
                 fund, as this bill proposes?

           SUPPORT AND OPPOSITION  :
          Support:  Disability Rights California (sponsor)
                    American Federation of State, County and Municipal  
                    Employees
                    California Advocates for Nursing Home Reform
                    California Association of Public Authorities for IHSS
                    California Commission on Aging
                    California Senior Legislature
                    Contra Costa Advisory Council on Aging
                 
          Oppose:   None received



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