BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1518


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          Date of Hearing:  May 13, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          1518 (Committee on Aging and Long-Term Care) - As Amended April  
          27, 2015


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          |Policy       |Health                         |Vote:|19 - 0       |
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          |             |Aging and Long Term Care       |     |6 - 0        |
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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill stipulates new requirements for the state's Medi-Cal  
          Nursing Facility/Acute Hospital Waiver (NF/AH waiver).   
          Specifically, this bill requires Department of Health Care  
          Services (DHCS) to: 







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          1)Increase the allowable number of slots in the NF/AH waiver  
            program by 5,000, and to seek additional slots based on an  
            annual assessment of need.


          2)Expedite eligibility processing for individuals at imminent  
            risk of placement in institutional settings.


          3)Qualify a participating enrollee for the same level of care in  
            a community setting as they would have received in an  
            institution. 


          4)Provide enrollees who age out of eligibility for Early  
            Periodic Screening, Diagnosis, and Treatment (EPSDT) services  
            at age 21, and who enroll in the waiver, the same level of  
            services provided through EPSDT despite their age. Prohibits a  
            reduction in in-home nursing for enrollees in this situation.


          5)Use an aggregate, instead of individual, cost cap to establish  
            budget neutrality, and requires a rebasing of the cost cap to  
            the actual current costs for institutional care on an ongoing  
            basis.


          6)Implement this bill, only to the extent the department can  
            demonstrate budget neutrality on a state level and on a  
            federal level, as well as gain federal approval and financial  
            participation, and requires implementation 6 months after the  
            department receives authorization for necessary resources. 


          FISCAL EFFECT:


          1)One-time administrative costs in the range of $100,000  







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            (GF/federal) DHCS to apply for a waiver amendment and seek  
            federal approval, and to establish new policies and procedures  
            related to the bill's requirements, such as assessment of  
            imminent risk and determinations of level of care.  


          2)Though a comprehensive budget neutrality analysis and  
            assessment of unmet need for waiver services is not available,  
            it is assumed total costs for Medi-Cal benefits will be  
            cost-neutral, as the bill specifies.  The cost neutrality  
            would have to be monitored on a continuous basis. Costs or  
            cost savings as compared to the status quo could vary  
            depending on how robustly the expansion is implemented, how  
            many individuals enroll, and how many are actually able to  
            avoid institutionalization, who would otherwise be  
            institutionalized.   However, using aggregate, instead of  
            individual cost caps, will make it more difficult to prove,  
            and to attain, budget neutrality.  This poses a higher level  
            of fiscal risk to the state than the current waiver design, in  
            which costs for waiver services are capped on an individual  
            basis. Additionally, this bill raises the cost cap per  
            individual for home and community-based services to the level  
            for institutional care.  This could increase costs, as  
            compared to the status quo, by an unknown amount because it  
            would likely result in some individuals receiving a higher  
            level of service in their home than they otherwise would,  
            because individuals who actually would qualify for a nursing  
            level of care but choose to remain in their homes anyway do  
            not currently incur institutional-level costs. 


            Within the overall budget neutrality, it is expected the state  
            will incur unknown annual costs, likely in the hundreds of  
            thousands of dollars (GF/federal), for additional state staff  
            to conduct assessments for waiver eligibility on an expedited  
            basis, as well as significant cost savings to the extent  
            individuals are cared for at home instead of in a facility. 


          COMMENTS: 







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          1)Purpose. The author argues California's NF/AH waiver program  
            does not currently meet the needs of seniors and youth with  
            disabilities who wish to receive services at home, and avoid  
            nursing homes and other institutions.  The author states that  
            home-based services are typically less expensive, more  
            desirable to the clients and their families, and consistent  
            with state and federal priorities; however, current state  
            policies and limited funding and flexibility prevent  
            individuals from being moved from institutions to home-based  
            care.  


          2)Background. The NF/AH waiver is a 1915(c) Home and  
            Community-Based Services Waiver that provides community-based  
            alternatives to Medi-Cal eligible individuals who would  
            otherwise be receiving care in either an acute hospital, adult  
            or pediatric subacute facility, nursing facility, or  
            distinct-part nursing facility.  The Waiver is available to  
            individuals who are currently residing in an institution but  
            wish to transition to his/her home and community, as well as  
            to individuals who reside in the community, but are at-risk  
            for being institutionalized within the next 30 days. The  
            current NH/AF Waiver has an enrollment cap of 3,792 persons in  
            2015 and 3,964 in 2016.  


          3)Cost Structure of NH/AF Waiver.  A state may limit  
            participation in a waiver based on the expected cost of the  
            home and community-based services that would be furnished to a  
            person.  A waiver's design may include reasonable methods to  
            control overall spending, including the specification of an  
            individual cost limit.  California currently imposes a cost  
            limit lower that is generally lower than the institutional  
            level, that applies to each individual enrolled. The state  
            does not provide a waiver slot to any otherwise qualified  
            individual, when the state reasonably expects that the cost of  
            home and community-based services (HCBS) furnished to that  
            individual would exceed an amount specified by the state that  







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            is less than the cost of a level of care specified for the  
            waiver.  The costs for HCBS are set at 51% to 107% of  
            institutional rates, depending on the facility type. 

          4)Related Legislation. AB 664 (Dodd), pending on the Suspense  
            File of this committee, requires an evaluation of a universal  
            assessment tool pilot program, currently being piloted by  
            DHCS.  A UAT is designed to assess an individual's LTC needs  
            in a comprehensive way. 


          Analysis Prepared by:Lisa Murawski / APPR. / (916)  
          319-2081