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 ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: February 27, 2015 |Policy Vote: HEALTH 9 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 27, 2015 |Consultant: Brendan McCarthy | | | | ----------------------------------------------------------------- *********** 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 ? 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 ? 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. -- END --