BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 1518
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|AUTHOR: |Committee on Aging and Long-Term Care |
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|VERSION: |June 25, 2015 |
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|HEARING DATE: |July 1, 2015 | | |
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|CONSULTANT: |Scott Bain |
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SUBJECT : Medi-Cal: nursing facilities
SUMMARY : Requires the Department of Health Care Services (DHCS) to apply
for an additional 5,000 slots beyond those currently authorized
for the home- and community-based Nursing Facility/Acute
Hospital Waiver in 2016-17. Requires DHCS to annually calculate
the need for additional slots annually thereafter, and seek
federal approval to add those slots to this waiver, taking into
consideration specified factors. Requires DHCS to adjust the
cost limitation category of this waiver to use an aggregate cost
limit formula, and requires the aggregate cost limit formula to
be based on the actual current rates for the corresponding
institutional levels of care specified in this waiver.
Existing law:
1)Establishes the Medi-Cal program, administered by DHCS, under
which qualified low-income individuals receive health care
services.
2)Establishes a schedule of benefits in the Medi-Cal program,
which include:
a) Early and periodic screening, diagnosis, and
treatment (EPSDT) for any individual under 21 years of
age, consistent with the requirements of federal
Medicaid law; and,
b) Home- and community-based services (HCBS)
approved by the federal Department of Health and Human
Services are covered to the extent that federal
financial participation (FFP) is available for those
services under the state plan or waivers. Permits the
director of DHCS to seek waivers for any or all HCBS
approvable under specified provisions of federal law.
AB 1518 (Committee on Aging and Long-Term Care) Page 2 of ?
Requires coverage for HCBS to be limited by the terms,
conditions, and duration of the federal waivers.
3)Authorizes, under federal Medicaid law, the federal Secretary
of Health and Human Services to allow a state to include as
"medical assistance" under its Medicaid program payment for
part or all of the cost of HCBS (other than room and board)
approved by the Secretary which are provided pursuant to a
written plan of care to individuals who would require the
level of care provided in a hospital or a nursing facility or
intermediate care facility which could be reimbursed under the
state's Medicaid program. This provision of federal law is
referred to as a Medicaid 1915(c) Home and Community-Based
Services Waiver, and it enables the state to received federal
Medicaid matching funds for HCBS.
4)Requires an additional 500 slots beyond those currently
authorized for the home- and community-based Level A/B nursing
facility waiver to be added, and 250 of these slots to be
reserved for residents residing in facilities and
transitioning out of facilities. Defines "facility residents"
as individuals who are currently residing in a nursing
facility and whose care is paid for by Medi-Cal either with or
without a share of cost and individuals who are hospitalized
and who are or will be waiting for transfer to a nursing
facility.
5)Requires DHCS to expedite the processing of waiver
applications for those patients who are in acute care
hospitals and who are pending placement in a nursing facility
in order to divert hospital discharges from nursing facilities
into the community.
6)Requires DHCS to implement the provisions of 3 and 4) above
only to the extent it can demonstrate fiscal neutrality within
the overall DHCS budget, and federal fiscal neutrality as
required under the terms of the federal waiver, and only if
DHCS has obtained the necessary approvals and receives federal
financial participation from the federal Centers for Medicare
and Medicaid Services (CMS).
This bill:
1)Requires DHCS, for the 2016-17 fiscal year, to apply for an
additional 5,000 slots beyond those currently authorized for
AB 1518 (Committee on Aging and Long-Term Care) Page 3 of ?
the home- and community-based Nursing Facility/Acute Hospital
Waiver (NF/AH Waiver), to ensure that eligible individuals
residing in, or at risk of, out-of-home placements, including
nursing facilities, can be considered for and receive services
from the waiver without delay.
2)Requires DHCS, for each fiscal year after 2016-17, to annually
calculate the need for additional slots, and seek federal
approval to add those slots to the NF/AH Waiver, taking into
consideration, at minimum, the following:
a) Any waiting list for NF/AH Waiver services,
including, but not limited to, waiting lists for a
particular level of care; and,
b) The results of surveys of nursing home residents,
including, but not limited to, the Minimum Data Sets
(MDS), which identify residents who want to leave nursing
homes.
3)Requires DHCS, in making the determination in 2) above, to
consult with stakeholders, including, but not limited to,
individuals who use or would like to use waiver services,
programs with state contracts to divert people from or help
people leave nursing homes, the designated protection and
advocacy organization, independent living centers, area
agencies on aging, county staff providing for the delivery of
In-Home Supportive Services (IHSS), individuals providing IHSS
services, and Medi-Cal managed care plans providing Medi-Cal
long-term services and supports.
4)Requires DHCS, prior to submitting the annual request for
additional waiver slots and the waiver renewal request, to
notify the appropriate fiscal and policy committees of the
Legislature of the number of waiver slots included in the
waiver renewal request, along with data supporting that number
of slots.
5)Requires DHCS to expedite the processing of waiver
applications for those individuals who are at imminent risk of
placement in a hospital or nursing facility.
6)Defines "imminent risk" as more likely than not to occur
within 60 days, as determined by a treating professional,
including, but not limited to, a physician, a licensed
clinical social worker, or a nurse.
AB 1518 (Committee on Aging and Long-Term Care) Page 4 of ?
7)Defines "expedite the processing of waiver applications" to
mean that DHCS must make an eligibility and level of care
determination, and inform the individual about available
waiver services, within three business days of receipt of the
application.
8)Requires that an individual residing in an institutional
setting at a level of care included in the NF/AH Waiver to be
determined to qualify for a waiver level of care that is no
lower than the level of care he or she receives in the
institution in which he or she resides. Prohibits DHCS from
using more stringent eligibility criteria for a waiver level
of care than for the corresponding institutional level of
care.
9)Requires that an individual who enrolls in the NF/AH Waiver
upon attaining 21 years of age who is no longer eligible to
receive services under the EPSDT program to be eligible for at
least the same level of services under the NF/AH Waiver that
he or she received through the EPSDT program unless the
individual, and his or her authorized representative, as
applicable, agree that the individual's needs have decreased
and a lower level of service is needed.
10)Requires DHCS to maximize federal financial participation
(FFP) to meet the identified level of need for in-home nursing
to ensure that a consumer does not experience a reduction in
in-home nursing when he or she reaches 21 years of age.
11)Requires DHCS, by July 1, 2016, to adjust the cost limitation
category of the NF/AH Waiver to use an aggregate cost limit
formula. (The waiver currently uses an individual cost cap.)
12)Requires, by July 1, 2016, the aggregate cost limit formula
to be based on the actual current rates for the corresponding
institutional levels of care specified in the NF/AH Waiver.
Requires any cost increase in an institutional level of care
to be matched by an increase in the cost limitation of the
corresponding NF/AH waiver level of care.
13)Requires DHCS to implement the waiver only if it can
demonstrate DHCS' actual total expenditures for HCBS and other
services under the NF/AH Waiver will not, in any year of
waiver period, exceed the amount that would be incurred by the
AB 1518 (Committee on Aging and Long-Term Care) Page 5 of ?
Medi-Cal program for those individuals in institutions for
which the individual qualifies without the waiver. (Current
law requires DHCS to demonstrate fiscal neutrality within the
overall DHCS budget.)
14)Requires implementation of this bill to commence within six
months of DHCS receiving authorization for the necessary
resources to provide the services to additional waiver
participants.
FISCAL
EFFECT : According to the Assembly Appropriations Committee:
1)One-time administrative costs in the range of $100,000
(General Fund (GF)/federal) for 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. 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.
PRIOR
VOTES :
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|Assembly Floor: |80 - 0 |
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|Assembly Appropriations Committee: |17 - 0 |
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|Assembly Health Committee: |19 - 0 |
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AB 1518 (Committee on Aging and Long-Term Care) Page 6 of ?
COMMENTS :
1)Author's statement. According to the author, as the wife and
caregiver of a proud American and proud Californian, bound to
a wheelchair for the remainder of his life, the author wishes
to remind members that 2015 marks the 25th anniversary of the
Americans with Disabilities Act (ADA), which says that people
with disabilities have a right to receive services in the most
integrated setting. The 1999 Supreme Court Olmstead decision
upheld that right. In this bill, the Assembly Committee on
Aging and Long-Term Care is asking the legislature to
modernize the NF/AH waiver to reflect the ADA and the 1999
Olmstead decision, and the wishes of vast numbers of
Californians who want to stay at home to receive services.
Additionally, the state budget savings that will be realized
because home-based services are generally less expensive than
comparable institutional services should offer tremendous
confidence that this is the correct direction to move as the
state faces the unknown implications of 1,000 people a day
turning 65 and aging into a period of their lives when
disability is more common than not. Currently, access to the
NF/AH waiver is restricted to a fixed number of participants,
thus creating an irrational barrier to a community-based
option for care, while encouraging unfettered access to less
desirable, more expensive institutional care. This bill
revises our state policies to assure access to waiver services
for more people. This measure would also moderate the way
young disabled people are treated when they reach age 21, by
preserving their eligibility for the community based care they
receive in the EPTSD program.
2)Nursing Facility/Acute Hospital Waiver. The NF/AH Waiver is a
federal 1915(c) Home and Community-Based Services Waiver in
effect through December 31, 2016. Section 1915(c) waivers
allow states to receive Medicaid funding to provide long-term
care services in home and community settings, rather than in
institutional settings. The goals of the waiver are to:
a) Facilitate a safe and timely transition of Medi-Cal
eligible persons from a medical facility to his/her home or
community setting utilizing NF/AH Waiver services;
b) Offer Medi-Cal eligible persons who reside in the
community but are at risk of being institutionalized within
the next 30 days, the option of utilizing NF/AH Waiver
services to develop a home or community setting program
AB 1518 (Committee on Aging and Long-Term Care) Page 7 of ?
that will safely meet his/her medical care needs; and,
c) Maintain overall cost neutrality so that the costs of
the participant's selected NF/AH Waiver and Medi-Cal state
plan services do not exceed the Medi-Cal institutional cost
at the participant's assessed level of care (LOC) and
necessary facility type.
DHCS' Long-Term Care Division In-Home Operations Branch is
responsible for the implementation and monitoring of the NF/AH
waiver. Waiver participants must have a current Plan of
Treatment (POT) signed by the participant and/or legal
representative/ legally responsible adult, the participant's
primary care physician or designated physician assistant or
nurse practitioner and all HCBS waiver providers. The POT
describes all the participant's care services, and frequency
and providers of the identified services to ensure his/her
health and safety in a home or community setting.
To be eligible for the waiver, an individual must:
a) Have full scope Medi-Cal eligibility;
b) Be physically disabled (of any age);
c) Meet the acute hospital, adult or pediatric subacute,
nursing facility, distinct-part nursing facility, adult, or
pediatric Level B (skilled) nursing facility, or Level A
(intermediate) nursing facility (NF) Level of Care with the
option of returning to and/or remaining in his/her home or
home-like setting in the community in lieu of
institutionalization; and,
d) Meet other criteria and requirements listed in the
waiver
Waiver services are delivered through Medi-Cal HCBS Waiver
providers such as home health agencies, durable medical
equipment companies, individual nurse providers, licensed
clinical social workers, marriage and family therapists,
personal care agencies, non-profit organizations, professional
corporations, individual personal care providers, and certain
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community residential facilities. Services provided under the
waiver include the following:
a) Private Duty Nursing, including Shared Nursing;
b) Home Health Aide Services;
c) Case Management;
d) Transitional Case Management;
e) Environmental Accessibility Adaptations;
f) Personal Emergency Response Systems (PERS);
g) PERS Installation and Training;
h) Medical Equipment Operating Expenses;
i) Waiver Personal Care Services;
j) Community Transition;
aa) Habilitation Services;
bb) Respite Care (home and facility);
cc) Developmentally Disabled/Continuous Nursing Care
Non-Ventilator Dependent Services; and,
dd) Developmentally Disabled/Continuous Nursing Care
Ventilator Dependent Services
Enrollment in the waiver is capped (referred to as "slots" by
calendar year). For 2015, the enrollment cap is 3,792,
increasing to 3,964 in 2016. DHCS indicates current enrollment
waiver enrollment is 3,328 individuals. DHCS indicates there
is not currently a wait list for the NF/AH waiver services,
and there is priority enrollment for persons residing in
hospitals, skilled nursing facilities, and children aging out
of EPSDT. DHCS policy if there is a waitlist is that available
waiver slots are assigned to NF/AH eligible individuals in the
following order: (a) individuals who have been residing in a
health care facility for at least 90 days at the time of
submission of the waiver application; and (b) individuals
residing in the community at the time of submission of the
waiver application.
1)Waiver cost caps. As part of the NF/AH waiver, the state is
required to provide assurances to the federal government,
including assurances on cost neutrality of the waiver. Under
the waiver, DHCS assures that:
a) For any year that the waiver is in effect, the average
per capita expenditures under the waiver will not exceed
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the average per capita expenditures that would have been
made under the Medicaid State plan (under Medi-Cal) for the
level of care specified for the waiver, had the waiver not
been granted; and,
b) The actual total expenditures for home and
community-based waiver and other Medicaid services and its
claim for FFP in expenditures for the services provided to
individuals under the waiver would not, in any year of the
waiver period, exceed the amount that would be incurred in
the absence of the waiver by the State's Medicaid program
for these individuals in the institutional setting
specified for this waiver.
Under the NF/AH Waiver, DHCS refuses entry any otherwise
qualified individual when it reasonably expects that the cost
of home and community-based services furnished to that
individual would exceed the following amount specified by the
state that is less than the cost of a level of care specified
for the waiver, as follows:
Institutional Level of Care Annual
Institutional Rate
Annual NF/AH
2014
Waiver Cost-Cap
Nursing Facility (NF)-A $33,781 $29,548
Nursing Facility (NF)-B $68,178 $48,180
NF-B Pediatric $102,200 $101,882
NF-Distinct Part $149,149 $77,600
Continuous Nursing (non-vent)NA (Adult)
NA (Pediatric)
$140,678
Continuous Nursing (vent) NA $155,461
NF-Subacute, Adult $232,255 $180,219
NF-Subacute, Pediatric $289,591 $240,211
Acute Hospital $388,367 $305,283
AB 1518 (Committee on Aging and Long-Term Care) Page 10 of ?
The dollar limitation amounts in the NF/AH Waiver is referred
to as an individual cost cap. Under an individual cost cap,
services covered by Medi-Cal (such as IHSS) are deducted from
each individual's waiver budget, which reduces the amount of
waiver services that can be purchased. When a waiver
provider's rates are increased, an individual receives
additional hours of IHSS services, or the individual's IHSS
workers receive payment for overtime, these amounts are
deducted from the individual's waiver budget, which erodes the
beneficiary's purchasing power using waiver dollars.
To address these two issues, this bill requires an aggregate
cost cap instead of an individual cost cap. This change makes
the NF/AH waiver function more like an insurance model in that
it would enable individuals who are currently at their dollar
cap for waiver services to receive additional services from
the "savings" resulting from individuals who are enrolled in
the waiver but whose spending on waiver services is below
their individual dollar cost cap.
In addition, this bill requires the aggregate cost limit
formula shown in the chart above to be based on the actual
current rates for the institutional level of care. Further,
this bill would require those waiver amounts to be adjusted to
account for changes in institutional care rates as a result of
rate increases. The waiver cost caps are currently fixed
amounts in the NF/AH waiver, and the dollar amounts are lower
than the institutional level of care. This provision of the
bill would require the waiver cap amounts be at parity with
the institutional dollar amounts, and would require the waiver
cost cap amounts to maintain parity by requiring the waiver
cost caps to increase with any corresponding changes in the
institutional rates.
1)EPSDT. The Medicaid program's benefit for children and
adolescents is known as EPSDT. EPSDT provides a comprehensive
array of prevention, diagnostic, and treatment services for
low-income infants, children and adolescents under age 21. The
EPSDT benefit is more robust than the Medicaid benefit for
adults and is designed to assure that children receive early
detection and care, so that health problems are averted or
diagnosed and treated as early as possible. EPSDT entitles
enrolled infants, children and adolescents to any treatment or
procedure that fits within any of the categories of
Medicaid-covered services if that treatment or service is
AB 1518 (Committee on Aging and Long-Term Care) Page 11 of ?
necessary to "correct or ameliorate" defects and physical and
mental illnesses or conditions.
This bill makes an individual who was receiving services under
EPSDT eligible for at least the same level of services under
the NF/AH Waiver that he or she received through EPSDT unless
the individual agrees that the individual's needs have
decreased and a lower level of service is needed. There are
several reasons for this change. The first is to prevent a
reduction in home nursing as the Medi-Cal rates for adult
facilities are considerably lower than those for pediatric
facilities. For example, the NF-B adult rate is $68,178, as
compared to the NF-B pediatric rate of $102,200. Second, the
NF/AH waiver cost caps are lower for adults as compared to
children. For example, the NF-Subacute cost cap under the
waiver is $180,219 for adults versus $240,211 for children).
Finally, children who meet the pediatric subacute level of
care may not meet the more rigid adult subacute level of care,
which can result in unnecessary placement in developmental
centers or other institutions.
2)Prior legislation.SB 873 (Committee on Budget and Fiscal
Review, Chapter 685, Statues of 2014), the human services
budget trailer bill, among other provisions, required DHCS to
work with and assist recipients receiving services pursuant to
the NF/AH Waiver who are at or near their individual cost cap
to avoid a reduction in the recipient's services that may
result because of increased overtime pay for IHSS providers.
As part of this effort, DHCS is required to consider allowing
the recipient to exceed the individual cost cap, if
appropriate, and DHCS is required to provide timely
information to waiver recipients as to the steps that will be
taken to implement this provision.
3)Support. This bill is sponsored by Disability Rights
California (DRC), which writes that this bill came its clients
who want to stay out of or return home from institutional long
term care settings and are unable to do so because of the
outdated design and implementation of the NF/AH waiver. DRC
states the waiver is supposed to be a key tool in helping
people receive care at home, beyond what they can get through
the IHSS program. However, the problems with the waiver impede
rather than assist people to get what they need, resulting in
unnecessary institutionalization and other human and monetary
costs. DRC states the outdated and unfair waiver and other
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state policies make it easier for somebody to get care in a
more expensive and unneeded institution than to receive
services at home. DRC states this bill makes a number of
changes to address the waiver, including increasing the number
of waiver slots as the current number is inadequate to meet
the need. This bill also increases the cost cap for community
care as DRC argues the amount is unnecessarily low when
compared to the cost of institutionalization. DRC states this
bill changes the cost cap from an individual cost cap to one
based on aggregate costs because the individual cost cap
results in the loss of waiver services when the costs of
Medi-Cal services (such as IHSS, increase) because their
individual waiver cap amounts do not increase. DRC explains
the purpose of the cost neutrality language change in the most
recent set of amendments is that the Administration has
interpreted existing law to mean that the cost of the waiver
cannot be more than the cost of not providing any services.
DRC states that, because not providing services is always
cheaper than providing services, this interpretation has
caused the terrible situation where people in the community
wait for years for waiver services, because the state doesn't
"save money" on them as long as they go without services, and
the state only "saves money" on people in nursing homes on
Medi-Cal who enroll in the waiver. Finally, this bill would
ensure that children leaving EPSDT coverage do not experience
a service "cliff" and lose critically needed home nursing when
they age out of EPSDT.
4) Is three business days sufficient time for waiver application
processing? Under existing law, DHCS is required to expedite
the processing of waiver applications for those patients who
are in acute care hospitals and who are pending placement in a
nursing facility. Existing law does not establish a timeframe
for the expedited processing of waiver applications.
This bill requires DHCS to also expedite the processing of
waiver applications for those individuals who are at imminent
risk of placement in a hospital or nursing facility. This bill
defines expedited processing of waiver applications as DHCS
making an eligibility and level of care determination and
informing the individual about available waiver services
within three business days of receipt of the application.
DHCS indicates intake into the NF/AH waiver typically takes
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between 90-180 days, and intake consists of a DHCS-employed
nurse conducting a complete level of care evaluation by
performing a face-to-face assessment of an applicant. Initial
evaluations include a series of assessments and comprehensive
identification of all necessary medical care, social services
and health care providers necessary to ensure a waiver
participant's health, safety and welfare for waiver
enrollment.
The argument for a quick turnaround on waiver application
processing is individuals in the community are more likely to
end up in an institutional setting as those placements are
easier and faster to make than waiver determinations currently
are. This results in people being placed in institutional
settings when they could be enrolled in the waiver instead, at
greater cost to the state than the additional cost of
requiring faster waiver application processing.
SUPPORT AND OPPOSITION :
Support: Disability Rights California (sponsor)
American Federation of State, County and Municipal
Employees
California Advocates for Nursing Home Reform
California Alliance for Retired Americans
California Association for Health Services at Home
California Association of Public Authorities for IHSS
California Commission on Aging
California Hospital Association
California In-Home Supportive Services Consumer
Alliance
Congress of California Seniors
United Domestic Workers of America (UDW)/AFSCME Local
3930
Westside Center for Independent Living
Three individuals.
Oppose: None received
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