BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1518 (Committee on Aging and Long-Term Care) - Medi-Cal:
nursing facilities
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|Version: June 25, 2015 |Policy Vote: HEALTH 8 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 17, 2015 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 1518 would require the Department of Health Care
Services to apply for federal approval for an additional 5,000
slots under the home- and community-based Nursing Facility/Acute
Hospital Waiver. The bill would also change the cost limitation
requirements currently in use under the existing Waiver.
Fiscal
Impact:
Annual administrative costs of about $5.5 million per year
($2.0 million General Fund) for the Department of Health Care
Services to enroll participants in the waiver program, provide
case management, and program management.
The Department of Health Care Services indicates that the bill
will result in increased annual spending of $35 million per
year ($17 million General Fund). Under current practice, the
state saves about $60,000 by providing waiver services to
individuals who have transitioned from institutional care to
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the community. Adding additional waiver slots should not, in
isolation, increase overall state spending for qualifying
individuals. However, the bill makes a number of other changes
to the required benefits and the procedures for calculation
cost savings and limiting benefits. For example, the bill
requires individuals aging past 21 years of age to continue to
receive the same extended benefits they previously received
through EPSDT. Also, the bill requires the Department to shift
from limiting costs for waiver services from an individual
cost cap, to an overall program cost cap. In combination, the
Department indicates that those changes will increase overall
costs under the bill.
Background: Under state and federal law, the Department of Health Care
Services operates the Medi-Cal program, which provides health
care coverage to low income individuals, families, and children.
Medi-Cal provides coverage to childless adults and parents with
household incomes up to 138% of the federal poverty level and to
children with household incomes up to 266% of the federal
poverty level. The federal government provides matching funds
that vary from 50% to 90% of expenditures depending on the
category of beneficiary.
As part of the Medi-Cal program, the state has negotiated a
home- and community based Nursing Facility/Acute Hospital Waiver
with the federal government. Under this Waiver, the state is
allowed to use state funds and federal matching funds to provide
services that would not normally be covered Medi-Cal benefits
under federal law, in order to allow Medi-Cal beneficiaries that
could require institutional care to remain in the community.
Services that are available under the waiver, that would not
normally be covered by Medi-Cal, include home health aide
services, environmental accessibility adaptations (e.g. upgrades
to an individual's residence to accommodate their condition),
respite care (for caregivers), and other services.
Under the current Waiver, participation is capped at 3,964
participants for the 2016 calendar year. The wavier requires the
state to demonstrate fiscal neutrality at the individual
participant level (e.g. the cost of providing home- and
community based services to each individual participant is less
than the cost of institutional care for that individual) and for
the total Waiver program. Under current practice, the Department
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of Health Care Services determines per capital fiscal neutrality
by comparing the Waiver services authorized for each participant
against an annual Waiver cost cap for the level of institutional
care the participant would otherwise require. Importantly, the
cost caps are lower than the current rates paid for
institutional care by the Department. The cost caps vary by
institutional level of care. In some cases the difference
between the annual cost cap and the annual institution care rate
is only a few hundreds or thousands of dollars, but in some
cases it is in the tens of thousands of dollars per year.
Proposed Law:
AB 1518 would require the Department of Health Care Services
to apply for federal approval for an additional 5,000 slots
under the home- and community-based Nursing Facility/Acute
Hospital Waiver. The bill would also change the cost limitation
requirements currently in use under the existing Waiver.
Specific provisions of the bill would:
Require the Department to apply for an additional 5,000
Waiver slots;
Require the Department to calculate the need for
additional Waiver slots each year and apply for federal
approval to add the needed slots;
Require the Department to expedite the processing of
waiver applications for individuals to who are at imminent
risk of placement in a hospital or nursing facility
(current law requires this for individuals who are in acute
care hospitals);
Require expedited processing of waiver applications to
occur within three business days;
Provide that an individual residing in an institutional
level of care shall qualify for a waive level of care that
is no lower than the institutional level of care;
Prohibit the Department from using more stringent
criteria for a waiver level of care than for an
institutional level of care;
Require that individual enrolled in the waiver who
attain 21 years of age shall be eligible for the same level
of services that was provided under the Early and Periodic
Screening, Diagnosis, and Treatment Program;
Require the Department to shift the cost limitation
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requirement for the Waiver to an aggregate cost limit
formula;
Require the aggregate cost limit formula to be based on
the full actual rates for corresponding institutional
levels of care and require future cost increases for
institutional levels of care to be matched by an increase
in the waiver cost cap;
Make implementation of the bill contingent on
demonstrative overall fiscal neutrality within the
Department's budget and federal fiscal neutrality;
Redefine fiscal neutrality to specify that actual total
expenditures for the Waiver cannot exceed the full amount
that would be incurred by qualifying individuals were
provided care in institutions at the level of care for
which they qualify.
Related
Legislation: SB 873 (Committee on Budget and Fiscal Review,
Statutes of 2014) requires the Department to work with Waiver
participants who are at or near their cost cap to avoid a
reduction in services due to increased costs for IHHS services.
Staff
Comments: As noted above, the state currently saves
significantly, per capita, from providing services under the
Waiver as opposed to the cost of providing institutional care.
Adding additional wavier slots, under the current program rules,
should not increase overall spending. However, many of the
changes in the bill will have the effect of increasing program
expenditures, by limiting current cost limitation requirements
and providing additional benefits.
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