BILL ANALYSIS Ó
AB 1261
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Date of Hearing: April 21, 2015
ASSEMBLY COMMITTEE ON AGING AND LONG-TERM CARE
Cheryl Brown, Chair
AB 1261
(Burke) - As Introduced February 27, 2015
SUBJECT: Community-based adult services: adult day health care
centers
SUMMARY: Establishes Community Based Adult Services Program
benefits as statutorily authorized Medi-Cal benefits.
Specifically, this bill:
Makes legislative findings and declarations that:
1)California supports the dignity, independence and choice of
seniors and persons with disabilities to live in the most
integrated setting appropriate, and to be free from
institutionalization, unless necessary.
2)The populations of persons 65 and older, and those afflicted
with Alzheimer's are anticipated to grow exponentially by
mid-century compared to the general population, as will the
costs associated with caring for them.
3)The US Census places the number of older adults in California
as higher than any other state, and that the California
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Department of Aging now reports that those 60 and over make-up
one-in-five Californians - 40 percent of whom are living with
a disability, many of whom represent diverse ethnic and
cultural heritage.
4)Adult Day Health Care (ADHC) was established in California in
1974 as a licensed alternative to nursing home care that
afforded participants challenged with Alzheimer's disease,
diabetes, high blood pressure, mental health needs, traumatic
brain injuries, stroke or breathing problems (to name a few)
the option to remain members of their communities by accessing
necessary services and supports from a multidisciplinary team
of professionals in a clinical day-time setting as needed, and
then returning to home, rather than permanently moving into a
nursing home.
5)ADHC also provides family caregivers support as a mechanism to
reduce unnecessary institutionalization, and reducing the risk
for abusive environments to develop.
6)ADHC services include health, therapeutic, and social services
such as transportation; care otherwise only available to
recipients in a nursing home; physical, occupational and
speech therapy; health supervision, mental stimulation, and
nutrition.
7)ADHC provides such services at an average annual cost of about
$9,312. Annual skilled nursing home care in California, an
alternative to Community Based Adult Services (CBAS)/ADHC,
currently averages about $83,364 according to the California
Medicaid Research Institute.
8)ADHC centers which provide CBAS services are licensed by the
Department of Public Health and overseen by the Departments of
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Aging, and Health Care Services.
9)Since 1977 California has documented unmet needs for ADHC when
a report identified a need for 600 sites statewide. At its
peak, California supported 360 sites, providing care to only
40,000 medically fragile Californians while approximately
300,000 individuals gained their care in nursing homes. By
2013, a total of 270 ADHC centers were in business serving
just 28,777 people while annual nursing home census remains at
about 300,000.
10)Residents in 32 of California's 58 counties do not have
access to ADHC centers.
11)ADHC benefits were available as a Medi-Cal optional benefit,
though eliminated as an initiative intended to help the state
manage California's fiscal crisis in the Budget Act
of 2011.
12)Consumers concerned about imminent institutionalization, sued
to preserve the benefit citing ADHC as the only barrier to
their eventual and undesired institutionalization, a process
that the United State Constitution guarantees protection from,
based upon the Olmstead Vs L.C. Supreme Court Decision.
13)Upon settlement, DHCS extended services to recipients via a
waiver authorized under Section 1115 of the Social Security
Act, through October 31, 2015.
14)Given California's anticipated demographic trends indicate
growth of the 65+ population far more rapid than the growth of
the general population through 2050, the need and demand for
ADHC centers and the CBAS services that they provide is
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critical to a successful strategy to contain and control
costs, and as a strategy to meet families' needs, and as a
strategy to assure success of the Coordinated Care Initiative.
15)Codification of the CBAS program is necessary to provide the
stability required to meet the growing needs of the expanding
aged populations.
16)Adds language to the Welfare and Institutions Code describing
CBAS benefits, eligibility criteria, beneficiary
characteristics, provider characteristics and requirements,
and declares them a permanent Medi-Cal benefit.
EXISTING LAW:
1)Establishes the Medi-Cal program, a free or low-cost health
care service for families, seniors, persons with disabilities,
children in foster care, pregnant women, and childless adults
with incomes below 138 percent of federal poverty level (FPL).
Benefits include ambulatory patient services, emergency
services, hospitalization, maternity and newborn care, and
long term services and supports. Medi-Cal is administered
through federal-state-county partnerships with the federal
Centers for Medicare and Medicaid Services (CMS), the
California Department of Health Care Services (DHCS), and
county welfare departments in each of the 58 counties.
2)Establishes the Coordinated Care Initiative in Alameda, Los
Angeles, Orange, Riverside,
San Bernardino, San Diego, San Mateo, and Santa Clara counties
which begins the process of integrating the delivery of
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medical, behavioral, and long-term services and supports while
attempting to integrate Medicare and Medi-Cal for people in
both programs, known as "dual eligible" beneficiaries.
Consumers at the local delivery points know the program as
"Cal MediConnect," while policy makers in Sacramento know the
program best as "Coordinated Care Initiative."
3)Authorizes DHCS to enter into contracts with managed care
organizations to provide services to Medi-Cal enrollees.
4)Requires specified Medi-Cal recipients to enroll in Medi-Cal
managed care plans in the eight counties participating in the
Coordinated Care Initiative/Cal Medi-Connect.
5)Provides for CBAS benefits under the "California Bridge to
Reform" waiver authorized by Section 1115 of the Social
Security Act which promotes states to test innovative payment
and service delivery models to reduce program expenditures
while preserving or enhancing the quality of care.
FISCAL EFFECT: Unknown.
COMMENTS:
Author's Comment: Over 30,000 frail Californians and their
families depend upon the adult day health care services provided
through the CBAS program. While the current federal waiver
ensures that the program will continue for the next few years,
the waiver did not include language to ensure that providers
will be reimbursed at levels that are not less than current
Medi-Cal fee-for-service rates, and state law has not been
updated to reflect the program requirements under the waiver and
guarantee legislative oversight. AB 1261 preserves access to
the adult day health care services and gives providers a
reliable rate structure to ensure program sustainability.
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Background: For many years, Adult Day Health Care (ADHC) was a
state plan optional benefit of the Medi-Cal program. The
program was eliminated in 2011 as a result of the state budget
crisis. A subsequent 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 Olmstead v. L.C.
The state settled the lawsuit, agreeing to replace ADHC services
with a new program called CBAS effective April 1, 2012, to
provide necessary medical and social services to individuals
with intensive health care needs.
The Department of Health Care Services (DHCS) amended the
"California Bridge to Reform" 1115 Waiver to include the new
CBAS program, which was approved by the Centers for Medicare and
Medicaid Services on March 30, 2012. Today, in counties that
have implemented Medi-Cal managed care, CBAS is available as a
managed care benefit. In counties that have not implemented
Medi-Cal managed care, or for individuals that are exempt from
enrollment in Medi-Cal managed care, CBAS is provided as a
fee-for-service Medi-Cal benefit.
While the waiver covers services, state statutes have not been
updated to reflect the new parameters of the CBAS program under
the waiver. In addition, the transition to managed care
coverage for CBAS has led to rate uncertainty. While the
original settlement and draft waiver language included
provisions to ensure that CBAS services provided through managed
care plans were reimbursed at rates that are not less than
Medi-Cal fee-for-service rates, the final waiver application and
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consequently the approved waiver requirements did not include
the rate language.
Arguments in Support: Disability Rights California writes that
AB 1261 preserves an essential health benefit to over 28,000
Medi-Cal recipients with serious health conditions that place
them at risk of losing their independence and facing life in a
nursing home - a life-style they do not wish to endure, and one
that will ultimately cost the state more. CBAS serves as an
important service that demonstrates the state's commitment to
the principles of the Olmstead decision, and the objectives of
the nascent Coordinated Care Initiative in counties where it is
underway.
The Alzheimer's Association writes that AB 1261 offers important
stabilization of the CBAS service delivery system, an essential
service for people with Alzhiemer's disease, and the families
who care for them. The Alzheimer's Association cites Medicaid
claims data showing that costs are 19 times higher for
individuals with cognitive impairments.
Justice in Aging (formerly National Senior Citizens Law Center)
cites AB 1261 as an important effort to assure that California
implements the Supreme Court's Olmstead decision to ensure frail
California seniors and people with disabilities can live on
their own with dignity and independence, rather than costly
nursing home care.
Arguments in Opposition: None.
Dual Referral:
AB 1261 was heard by the Assembly Health Committee on April 14,
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2015, and passed by a vote of 16-0-3. (Ayes: Bonta,
Maienschein, Burke, Chávez, Chiu, Gomez, Gonzalez, Lackey,
Nazarian, Patterson, Ridley-Thomas, Rodriguez, Santiago,
Thurmond, Waldron, Wood.
Noes: None. No Vote Recorded: Bonilla, Roger Hernández,
Steinorth).
Previous Legislation:
1)AB 1552 (Lowenthal) - vetoed by the Governor in 2014 - would
have codified the CBAS program to reflect the waiver
requirements.
2)AB 518 (Yamada) - held in Senate Health in 2013 - extends the
CBAS program as a Medi-Cal benefit through Medi-Cal managed
care, however, allows only non-profit providers to enroll as
CBAS providers.
3)SB 1008 (Committee on Budget and Fiscal Review), Chapter 33,
Statutes of 2012 and
SB 1036 (Committee on Budget and Fiscal Review), Chapter 45,
Statutes of 2012 authorize the Coordinated Care Initiative
(CCI) as an eight-county pilot project to: i) integrate
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Medi-Cal and Medicare benefits under managed care for dual
eligibles; and, ii) integrate Long Term Services and Supports
(LTSS) under managed care for dual eligibles and Medi-Cal-only
Seniors and People with Disabilities (SPD).
4)AB 96 (Committee on Budget) - vetoed by the Governor in 2011 -
would have established the Keeping Adults Free of Institutions
(KAFI) program, and required Department of Health Care
Services (DHCS) to submit an application to Centers for
Medicare and Medicaid Services (CMS) to implement the program.
5)AB 97 (Committee on Budget), Chapter 3, Statutes of 2011,
among other provisions eliminates Adult Day Health Care (ADHC)
as a Medi-Cal benefit.
6)SB 208 (Steinberg), Chapter 714, Statutes of 2010, contains
the provisions implementing Section 1115(b) Medicaid
Demonstration Waiver from CMS entitled "A Bridge to Reform
Waiver." Among the provisions, this waiver authorized
mandatory enrollment into a Managed Care Plan (MCP) of over
600,000 low-income Seniors and People with Disabilities who
were eligible for Medi-Cal only (not Medicare) in 16 counties.
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7)AB 2073 (Lowenthal) - held in Assembly Appropriations in 2013
- narrowed eligibility for Adult Day Health Care to conform to
the court's decision in Cota (formerly "Brantley") v.
Maxwell-Jolly, 656 F. Supp. 2d 1161 (N.D. Cal. 2009) (Cota v.
Maxwell-Jolly) and achieve the same level of savings.
8)ABX4 - 5 (Evans), Chapter 5, Statutes of 2009-10 Fourth
Extraordinary Session; enacted new, more restrictive
eligibility criteria. The narrowed eligibility was eventually
challenged in court in Cota (formerly "Brantley") v.
Maxwell-Jolly.
9)SB 117 (Corbett), Chapter 165, Statutes of 2009, extended the
deadline by which the Department of Health Care Services was
required to establish a new Medi-Cal rate reimbursement
methodology for Adult Day Health Care, from August 1, 2010 to
August 1, 2012.
10)AB 572 (Berg), Chapter 648, Statutes of 2008 clarified
requirements pertaining to Adult Day Health Care hours of
service, core staff, and staff absences, transportation
services, and meal requirements.
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11)SB 1755 (Chesbro), Chapter 691, Statutes of 2006, established
new eligibility criteria for Adult Day Health Care (ADHC)
services for the purposes of Medi-Cal reimbursement, required
the Department of Health Services, (now DHCS), to establish a
cost-based Medi-Cal reimbursement methodology for AHDC
services, and established daily core services to be provided
by ADHC centers to each participant.
REGISTERED SUPPORT / OPPOSITION:
Support
Adult Day Health Care of Mad River
Alzheimer's Association
Ararat Adult Day Health Care Center
Association of California Healthcare Districts (ACHD)
Avenidas
Bay Area Community Services
California Association for Adult Day Services (CAADS)
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California Association of Public Authorities (CAPA)
California Commission on Aging (CCoA)
California Medical Association (CMA)
Casa Pacifica Adult Day Health Care Center
Congress of California Seniors
Disability Rights California
Justice in Aging
LeadingAge California
Meals-on-Wheels Greater San Diego, Inc.
New Life Adult Day Health Care
Partners in Care Foundation
San Fernando Valley Adult Day Health Care, LLC
San Francisco Department of Aging and Adult Services
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San Ysidro Health Center
Sunny Cal Adult Day Health Care Center, Inc.
Sunny Day Adult Community Based Adult Services
United Domestic Workers of America (UDW)
Two individuals.
Opposition
None on file.
Analysis Prepared by:Robert MacLaughlin / AGING & L.T.C. / (916)
319-3990
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