BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1261 (Burke) - Community-based adult services: adult day
health care centers
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|Version: February 27, 2015 |Policy Vote: HEALTH 9 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: July 6, 2015 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 1261 would require Community-Based Adult Services to be
provided as a Medi-Cal benefit.
Fiscal
Impact:
Ongoing costs of about $330 million per year to continue to
provide Community-Based Adult Services in the counties in
which this program is currently operating (General Fund and
federal funds). Community-Based Adult Services is an optional
benefit that states are not required to offer under federal
law. In the absence of this bill, the state could elect to
discontinue the program after at the conclusion of the state's
next Section 1115 waiver in 2020 (or sooner by an amendment to
that waiver).
Unknown costs (or potentially cost savings) if the bill
results in Medi-Cal managed care plans providing
Community-Based Adult Services in counties where services are
AB 1261 (Burke) Page 1 of
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currently unavailable (General Fund and federal funds). Prior
to March 2012, Community-Based Adult Services were limited by
the availability of providers. At that time, 26 counties had
an Adult Day Health Center provider (the predecessor to
Community-Based Adult Services). The remaining 32 counties are
generally rural counties with small populations. Given the low
population densities of those counties, it is not clear
whether the operation of an Adult Day Health Center could be
financially viable or whether there would be significant
demand for those services, given long travel times to and from
such a center. To the extent that managed care plans do
provide Community-Based Adult Services in those areas where it
is not currently available, reduced reliance on institutional
care could reduce overall costs.
No additional costs are anticipated from the requirement that
Medi-Cal managed care plans pay providers at rates that are
not less than Medi-Cal fee-for service rates. Medi-Cal managed
care plans currently pay providers at or above the
fee-for-service rate for Community-Based Adult Services and
the Department of Health Care Services indicates that this
will continue to be the case.
Potential cost savings due to reduced institutionalization and
improved clinical outcomes for participating Medi-Cal
beneficiaries (General Fund and federal funds). The intent of
offering Community-Based Adult Services is to allow Medi-Cal
beneficiaries who are at risk of being institutionalized (for
example, placement in a skilled nursing facility) due to
physical illness and cognitive impairment to remain in the
community. To the extent that Community-Based Adult Services
actually keeps a Medi-Cal beneficiary out of institutional
care, this benefit will almost certainly reduce state
spending. Whether or not the overall program reduces state
spending will depend, in part, on whether the benefit is
provided to beneficiaries who are likely to be
institutionalized and the clinical success of the benefit in
preventing institutionalization.
Unknown costs to the Department of Public Health for licensing
of additional Adult Day Health Centers (Licensing and
Certification Fund). To the extent that new Adult Day Health
Centers open to provide Community-Based Adult Services, those
facilities would be licensed by the Department. All licensing
AB 1261 (Burke) Page 2 of
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and enforcement costs would be reimbursed by fees.
Ongoing costs of about $3.3 million per year to certify that
Community-Based Adult Services providers are meeting Medi-Cal
program criteria and requirements by the Department of Aging
(General Fund and federal funds). Under an interagency
agreement with the Department of Health Care Service, the
Department of Aging is responsible for certifying that
providers meet all the applicable Medi-Cal program
requirements.
Background: The Medi-Cal program is a health care program for low-income
individuals and families who meet defined eligibility
requirements. Medi-Cal coordinates and directs the delivery of
health care services to approximately 12 million qualified
individuals, including low-income families, seniors and persons
with disabilities, children in families with low-incomes or in
foster care, pregnant women, low-income people with specific
diseases, and, as of January 1, 2014, due to the Affordable Care
Act, childless adults up to 138 percent of the federal poverty
level.
With the exception of certain populations (for example,
individuals eligible for limited scope Medi-Cal benefits or
individuals dually eligible for Medi-Cal and Medicare in most
counties), managed care is the primary system for providing
Medi-Cal benefits. The Department estimates that in 2014-15, 7.5
million Medi-Cal beneficiaries (73 percent of total enrollment)
will receive care through the managed care system.
Prior to March 2011, the state offered Adult Day Health Center
services as an optional Medi-Cal benefit. Adult Day Health
Center services included medical care, nursing care, meals,
social and therapeutic activities, transportation, and other
services designed to avoid institutionalization by medically
frail individuals. In March 2011, the state eliminated Adult Day
Health Center services as a Medi-Cal benefit as part of the
Budget Act. The state was subsequently sued by Adult Day Health
Center participants. Under a settlement agreement, the state
created Community-Based Adult Services as a successor benefit,
with somewhat tighter eligibility criteria. The settlement
agreement was binding on the state until August 2014.
AB 1261 (Burke) Page 3 of
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The Department of Health Care Services has added Community-Based
Adult Services as an optional benefit under the state's
Bridge-to-Reform waiver, which is valid until October 2015. The
Department anticipates that the Bridge-to-Reform waiver will be
extended to October 2020 and that Community-Based Adult Services
will continue be included as an optional benefit.
Proposed Law:
AB 1261 would require Community-Based Adult Services to be
provided as a Medi-Cal benefit.
Specific provisions of the bill would:
Make Community-Based Adult Services a Medi-Cal benefit and
require it to be covered by Medi-Cal managed care plan
contracts;
Require the program standards and eligibility criteria to
be equal to the Special Terms and Conditions (the agreement
between the state and the federal government) that are in
effect on the enactment date of this bill;
Specify the eligibility criteria for participation by
Medi-Cal beneficiaries;
Require providers to be licensed by the Department of
Public Health and meet all applicable Medi-Cal standards;
Require Community-Based Adult Services to be offered as a
managed care benefit and as a fee-for-service benefit for
Medi-Cal enrollees not in managed care;
Require Medi-Cal managed care plans to pay Community-Based
Adult Services providers at rates that are not less than
Medi-Cal fee-for-service rates;
Require implementation of the bill only if federal
financial participation is available.
Related Legislation:
AB 1552 (Lowenthal, 2014) was substantially similar to this
bill. That bill was vetoed by Governor Brown.
AB 518 (Yamada, 2013) would have established
Community-Based Adult Services as a Medi-Cal benefit and
require new Community-Based Adult Services to be non-profit
entities. That bill was heard in the Senate Health Committee
but no vote was taken.
AB 96 (Committee on Budget, 2013) would have created a
different successor program to the terminated Adult Day
Health Center Medi-Cal benefit. That bill was vetoed by
AB 1261 (Burke) Page 4 of
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Governor Brown.
AB 97 (Committee on Budget, Statutes of 2013) eliminated
Adult Day Health Center services as a Medi-Cal benefit.
Staff
Comments: The state is no longer obligated under a court settlement to
provide Community-Based Adult Services. The Department of Health
Care Services has received permission from the federal
government to continue to offer Community-Based Adult Services
at least until October 2015 and is requesting permission to
continue through the next Section 1115 waiver period
(2015-2020). However, the Department is under no legal
obligation to do so. By putting Community-Based Adult Services
in statute as a Medi-Cal benefit, this bill would compel the
Department to continue to provide that benefit (subject to
federal approval).
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