California Legislature—2015–16 Regular Session

Assembly Bill No. 1261

Introduced by Assembly Member Burke

(Coauthor: Assembly Member Brown)

February 27, 2015

An act to add Article 7 (commencing with Section 14590.10) to Chapter 8.7 of Part 3 of Division 9 of the Welfare and Institutions Code, relating to adult day health care.

LEGISLATIVE COUNSEL’S DIGEST

AB 1261, as introduced, Burke. Community-based adult services: adult day health care centers.

Existing law establishes the Medi-Cal program, administered by the State Department of Health Care Services, under which health care services are provided to qualified, low-income persons. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing law provides, to the extent permitted by federal law, that adult day health care (ADHC) be excluded from coverage under the Medi-Cal program.

This bill would establish the Community-Based Adult Services (CBAS) program as a Medi-Cal benefit and would specify eligibility requirements for participation in the CBAS program. The bill would require that CBAS providers be licensed as ADHC centers and certified by the California Department of Aging as CBAS providers. The bill would require CBAS providers to meet specified licensing requirements and to provide care in accordance with specified regulations. The bill would require that those provisions be implemented only if federal financial participation is available.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) California supports the dignity, independence, and choice
of seniors and persons with disabilities to live in the most integrated
setting appropriate, in their own home or a community-based
setting, and to be free from unnecessary institutionalization.

(b) The American population is swiftly aging. According to the
federal Centers for Disease Control and Prevention, in 2007
individuals 65 years of age and over represented 12.6 percent of
the American population; by 2030 it is estimated the older adult
population will reach 20 percent of the whole, with 70 million
adults over 65 years of age. Many of these adults will experience
disability and chronic conditions. The Alzheimer’s Association
reports that over five million Americans are living with
Alzheimer’s disease and that number will grow to 16 million by
2050, with the cost of caring for those individuals growing from
$203 billion in 2013 to $1.2 trillion by mid-century.

(c) According to the United States Census, California’s older
adult population is the country’s largest, with over four million
seniors currently residing in the state. The California Department
of Aging reports that one in every five Californians is now 60 years
of age or older and 40 percent of those individuals have a disability.
The state’s population is also diverse: just under one-half million
older adults in the state identify as Latino or Hispanic, 354,000
identify as Asian, over 182,000 as African American, and over
100,000 people as Native American, Pacific Islander, or multiracial.

(d) Adult Day Health Care (ADHC) was established in
California in 1974 as a service designed to meet the needs of older
adults and adults with disabilities in community settings rather
than in institutional care. ADHC centers are licensed daytime
health facilities that provide integrated services from a
multidisciplinary team including nurses, social workers,
occupational therapists, and other professionals.

(e) ADHC centers serve frail elders and other adults with
disabilities, chronic conditions, and complex care needs, such as
Alzheimer’s disease or other dementia, diabetes, high blood
pressure, mental health diagnoses, traumatic brain injury, and
people who have had a stroke or breathing problems or who cannot
take medications properly.

(f) ADHC centers also offer caregiver support, addressing
research findings that identify caregiver stress as a leading cause
of placement in a nursing facility, as well as putting the aging or
disabled adult at increased risk for abuse or neglect.

(g) ADHC services include health, therapeutic, and social
services including transportation; skilled nursing care; physical,
occupational, and speech therapy; medical social work services;
therapeutic exercise activities; protective supervision; activities
of daily living; brain-stimulating activities; and a nutritionally
balanced hot meal. Services are provided in accordance with a
person-centered care plan designed after a three-day
interdisciplinary team assessment that includes a home visit and
communication with the participant’s primary care physician.

(h) ADHC participants, who are at risk of institutionalization,
receive services in the center and return to their own homes at
night. According to a 2012 study by the California Medicaid
Research Institute, the statewide weighted average annual per
person nursing home cost for Medi-Cal/Medicare recipients in
California is $83,364, while the average annual expenditure per
person for ADHC for this population is $9,312.

(i) ADHC centers are licensed by the State Department of Public
Health and overseen by the California Department of Aging and
the State Department of Health Care Services.

(j) In 1977, Senator Henry Mello issued a report that identified
the need for 600 ADHC centers statewide to meet the needs of
California’s elder population. At its peak in 2004, approximately
360 ADHC centers provided care to over 40,000 medically fragile
Californians. In December 2013, there were a total of 270 open
ADHC centers in California, including 245 serving the Medi-Cal
population, two centers serving private-pay clients, and 23 centers
associated with Programs of All-Inclusive Care for the Elderly.
Medi-Cal recipients receiving services at ADHC centers totaled
28,777 persons.

(k) In 2015, 32 California counties do not have an adult day
health center, including Alpine, Amador, Calaveras, Colusa, Del
Norte, El Dorado, Glenn, Inyo, Kings, Lake, Lassen, Madera,
Mariposa, Mendocino, Modoc, Mono, Nevada, Placer, Plumas
San Benito, San Joaquin, San Luis Obispo, Sierra, Siskiyou,
Sonoma, Stanislaus, Sutter, Tehama, Trinity, Tulare, Tuolumne,
and Yuba.

(l) For many years, ADHC was a state plan optional benefit of
the Medi-Cal program, offering an integrated medical and social
services model of care that helped individuals continue to live
outside of nursing homes or other institutions.

(m) California’s adult day services have experienced significant
instability in recent years due to California’s fiscal crisis and
subsequent budget reductions. The Budget Act of 2011 and the
related trailer bill, Chapter 3 of the Statutes of 2011, eliminated
ADHC as a Medi-Cal optional State Plan benefit.

(n) A class action lawsuit, Esther Darling, et al. v. Toby Douglas,
et al., challenged the elimination of ADHC as a violation of the
Supreme Court decision in Olmstead v. L.C. The state settled the
lawsuit, agreeing to replace ADHC services with a new program
called Community-Based Adult Services (CBAS), effective April
1, 2012, to provide necessary medical and social services to
individuals with intensive health care needs. CBAS is a managed
care benefit, administered through California’s Medi-Cal Managed
Care Organizations. For CBAS-eligible individuals who do not
qualify for managed care enrollment and who have an approved
medical exemption or who reside in a county where managed care
is currently not available, CBAS services are provided as a
Medi-Cal fee-for-service benefit.

(o) The State Department of Health Care Services amended the
“California Bridge to Reform” Section 1115 Waiver to include
the new CBAS program, which was approved by the Centers for
Medicare and Medicaid Services on March 30, 2012, and renewed
on November 28, 2014. CBAS is operational under the Section
1115 Bridge to Reform Waiver through October 31, 2015.

(p) Adult day services and CBAS programs remain a source of
necessary skilled nursing, therapeutic services, personal care,
supervision, health monitoring, and caregiver support. The state’s
demographic forecast projects the continued growth of the aging
population at least through the year 2050, thereby increasing the
need and demand for integrated, community-based services.

(q) Continuation of a well-defined and well-regulated system
of CBAS programs is essential in order to meet the rapidly
changing needs of California’s diverse and aging population and
the state’s goals for the Coordinated Care Initiative.

(r) Ensuring that the key elements of the CBAS program are
codified in state law stabilizes the program’s structure and
eligibility framework in order to enable thousands of disabled and
frail Californians who rely upon adult day health programs today,
and those who will need this service in the future, to be able
continue to receive services that support them in remaining
independent and free of institutionalization for as long as possible.

SEC. 2.  

Article 7 (commencing with Section 14590.10) is
added to Chapter 8.7 of Part 3 of Division 9 of the Welfare and
Institutions Code, to read:

 

Article 7.  Community-Based Adult Services

 

14590.10.  

(a) Notwithstanding the operational period of CBAS
as specified in the Special Terms and Conditions of California’s
Bridge to Reform Section 1115(a) Medicaid Demonstration
(11-W-00193/9), and notwithstanding the duration of the CBAS
settlement agreement, Case No. C-09-03798 SBA, CBAS shall be
a Medi-Cal benefit, and shall be included as a covered service in
contracts with all managed health care plans, with standards,
eligibility criteria, and provisions that are at least equal to those
contained in the Special Terms and Conditions of the demonstration
on the date the act that added this section is chaptered. Any
modifications to the CBAS program that differ from the Special
Terms and Conditions of the demonstration shall be permitted only
if they offer more protections or permit greater access to CBAS.

(b) CBAS shall be available to beneficiaries who meet or exceed
the medical necessity criteria established in Section 14526.1 and
for whom one of the following criteria is present:

(1) The beneficiary meets or exceeds the “Nursing Facility Level
of Care A” (NF-A) criteria as set forth in the California Code of
Regulations.

(2) Both of the following apply to the beneficiary:

(A) (i) The beneficiary has a diagnosed organic, acquired, or
traumatic brain injury or a chronic mental disorder, or both.

(ii) For the purpose of this subparagraph, “chronic mental
disorder” means that the beneficiary has one or more of the
following diagnoses or their successor diagnoses included in the
most recent version of the Diagnostic and Statistical Manual of
Mental Disorders published by the American Psychiatric
Association:

(I) A pervasive developmental disorder.

(II) An attention deficit and disruptive behavior disorder.

(III) A feeding and eating disorder of infancy, childhood, or
adolescence.

(IV) An elimination disorder.

(V) A schizophrenia and other psychiatric disorder.

(VI) A mood disorder.

(VII) An anxiety disorder.

(VIII) A somatoform disorder.

(IX) A factitious disorder.

(X) A dissociative disorder.

(XI) Paraphilia.

(XII) An eating disorder.

(XIII) An impulse control disorder not elsewhere classified.

(XIV) An adjustment disorder.

(XV) A personality disorder.

(XVI) A medication-induced movement disorder.

(B) The beneficiary needs assistance or supervision as described
in clause (i) or (ii).

(i) The beneficiary needs assistance or supervision with at least
two of the following:

(I) Bathing.

(II) Dressing.

(III) Feeding himself or herself.

(IV) Toileting.

(V) Ambulating.

(VI) Transferring himself or herself.

(VII) Medication management.

(VIII) Hygiene.

(ii) The beneficiary needs assistance or supervision with at least
one of the activities identified in clause (i) and needs assistance
with at least one of the following:

(I) Money management.

(II) Accessing community and health resources.

(III) Meal preparation.

(IV) Transportation.

(3) The beneficiary has a moderate to severe cognitive disorder
such as dementia, including dementia characterized by the
descriptors of, or equivalent to, Stages 5, 6, or 7 of the Alzheimer’s
type.

(4) The beneficiary has a mild cognitive disorder such as
dementia, including dementia of the Alzheimer’s type, and needs
assistance or supervision with at least two of the activities described
in clause (i) of subparagraph (B) of paragraph (2).

(5) (A) The beneficiary has a developmental disability.

(B) For the purpose of this paragraph, “developmental disability”
means a disability that originates before the individual attains 18
years of age, continues, or can be expected to continue, indefinitely,
and constitutes a substantial disability for that individual as defined
in Section 54001 of Title 17 of the California Code of Regulations.

(c) (1) CBAS providers shall be licensed as adult day health
care centers and certified by the California Department of Aging
as CBAS providers, and shall meet the standards specified in this
chapter and Chapter 5 (commencing with Section 54001) of
Division 3 of Title 22 of the California Code of Regulations.

(2) CBAS providers shall meet all applicable licensing and
Medi-Cal standards, including, but not limited to, licensing
provisions in Division 2 (commencing with Section 1200) of the
Health and Safety Code, including Chapter 3.3 (commencing with
Section 1570) of Division 2 of the Health and Safety Code, and
shall provide services in accordance with Chapter 10 (commencing
with Section 78001) of Division 5 of Title 22 of the California
Code of Regulations.

(3) CBAS providers shall comply with the provisions of
California’s Bridge to Reform Section 1115(a) Medicaid
Demonstration (11-W-00193/9) and any successor demonstration.

(d) (1) In counties where the State Department of Health Care
Services has implemented Medi-Cal managed care, CBAS shall
be available as a Medi-Cal managed care benefit pursuant to
Section 14186.3, except that for individuals who qualify for CBAS,
but who are not qualified for, or who are exempt from, enrollment
in Medi-Cal managed care, CBAS shall be provided as a
fee-for-service Medi-Cal benefit.

(2) For Medi-Cal CBAS services provided through managed
care health plans, the plans shall reimburse contracted providers
at rates that are not less than Medi-Cal fee-for service (FFS) rates,
as published and revised by the State Department of Health Care
Services, including retroactive payment of any rate increment
based on State Department of Health Care Services retroactive
rate adjustments, for equivalent services on the date the services
were provided.

(e) For purposes of this section, “Community-Based Adult
Services” or “CBAS” means an outpatient, facility-based program,
provided pursuant to a participant’s individualized plan of care,
as developed by the center’s multidisciplinary team, that delivers
nutrition services, professional nursing care, therapeutic activities,
facilitated participation in group or individual activities, social
services, personal care services, and, when specified in the
individual plan of care, physical therapy, occupational therapy,
speech therapy, behavioral health services, registered dietician
services, and transportation.

(f) This section shall be implemented only if federal financial
participation is available.