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: August 27, 2015   |Consultant: Brendan McCarthy    |
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          *********** ANALYSIS ADDENDUM - SUSPENSE FILE ***********
             The following information is revised to reflect amendments 
                     adopted by the committee on August 27, 2015


          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).








          AB 1261 (Burke)                                        Page 1 of  
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           Unknown cost savings if the Department authorizes managed care  
            plans to provide Community-Based Adult Services in counties  
            where services are 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. The amendments  
            authorize the Department to allow Community-Based Adult  
            Services in additional counties to the extent that it is cost  
            effective.

           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  








          AB 1261 (Burke)                                        Page 2 of  
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            Centers open to provide Community-Based Adult Services, those  
            facilities would be licensed by the Department. All licensing  
            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.


          Author  
          Amendments:  Limit the requirement to provide Community-Based  
          Adult Services to counties in which it was offered on April 1,  
          2012. The bill authorizes those services to be provided in  
          additional counties if the Department finds that doing so would  
          be cost-effective.





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