BILL ANALYSIS Ó AB 1518 Page 1 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 ----------------------------------------------------------------- |Policy |Health |Vote:|19 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | |Aging and Long Term Care | |6 - 0 | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- 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: AB 1518 Page 2 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 AB 1518 Page 3 (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: AB 1518 Page 4 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 AB 1518 Page 5 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