BILL ANALYSIS Ó AB 2079 Page 1 Date of Hearing: April 27, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 2079 (Calderon) - As Amended April 18, 2016 ----------------------------------------------------------------- |Policy |Health |Vote:|12 - 6 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: No SUMMARY: This bill increases the minimum staffing standards in skilled nursing facilities (SNFs) from 3.2 hours to 4.1 hours. Specifically, this bill: 1)Beginning July 1, 2017, mandates minimum staff-to-patient ratios for certified nursing assistants (CNAs). AB 2079 Page 2 2)Beginning January 1, 2018, increases the current minimum ratio of 3.2 nursing hours per patient day to 4.1 direct care hours per patient day, which include separate, specific minimum ratios for licensed nurses and CNAs as part of the overall ratio. The specific ratios for licensed nurses and CNAs would be minimums of 1.3 hours and 2.8 hours per patient day, respectively. 3)Retains the current 3.2 hour per patient day requirement for any skilled nursing facility that is a distinct part of a facility licensed as a general acute care hospital. 4)Expands the definition of direct caregiver services to clarify the activities that qualify as direct caregiver hours. 5)Modifies facility posting requirements regarding staffing and resident census. 6)Requires the California Department of Public Health (CDPH) to adopt regulations consistent with the specified minimum levels. 7)Adds, beginning in the 2017-18 fiscal year, compliance with the direct care service hour requirements for SNFs as a performance measure in a supplemental payment program. FISCAL EFFECT: 1)Under current law, Medi-Cal payment rates to skilled nursing facilities are calculated using a facility-specific cost-based AB 2079 Page 3 system. This rate development process requires the Department of Health Care Services (DHCS) to increase the rates to skilled nursing facilities to offset the projected cost of complying with new state or federal mandates. Based on this requirement, and using their facility-specific model, the California Association of Health Facilities (CAHF) projects annual Medi-Cal costs for increased reimbursement to SNFs, of $106 million in 2017, $391 million in 2018, and increasing annually until 2022 and thereafter when costs are projected at $462 million annually (50% GF/ 50% federal). 2017 costs are relatively lower because of a July 1, 2017, implementation date for CNA shift ratios, while the bill's other mandates are fully implemented January 1, 2018. Costs in 2022 also reflect full implementation of an increased minimum wage to $15 pursuant to SB 3 (Leno, De León, and Leyva), Chapter 4, Statutes of 2016. This estimate assumes the minimum wage increases are implemented as scheduled without a "pause" for budget or economic reasons. Each extra dollar of minimum wage appears to translate to approximately $18 million in increased Medi-Cal costs (GF/federal), so for any year in which the wage increase was delayed, Medi-Cal reimbursement would be lower commensurate with the delay. 2)Unknown potential GF costs to the Department of State Hospitals (DSH) for additional staff. DSH operates three skilled nursing units as part of the state hospital system. Because state hospitals are licensed as psychiatric hospitals, the skilled nursing facilities operated by DSH are not eligible for the exemption granted in the bill for skilled nursing facilities that are a distinct part of a general acute care hospital. The cost for DSH to comply with the mandated AB 2079 Page 4 direct care hours in the bill is unknown, in part because the nature of the patient population in the state hospital system generally requires more staffing than is typical in a normal skilled nursing facility. In addition, DSH uses psychiatric technicians instead of CNAs so the applicability of the ratios specific to CNAs are unclear. 3)One-time costs in the range of $100,000 to adopt regulations and modify internal tracking systems by CDPH (Licensing and Certification Fund). 4)Minor additional ongoing enforcement costs to CDPH (Licensing and Certification Fund). The department already licenses SNFs, including compliance with existing nursing hours requirements, and the increased workload is not expected to be significant. COMMENTS: 1)Purpose. According to the author, the current minimum of 3.2 hours per patient per day staffing requirements for SNFs does not meet the direct care needs of nursing home residents. This chronic understaffing of CNAs in SNFs creates unsafe living conditions for the residents and stressful workplace conditions for staff. 2)Background. SNFs care for individuals who are elderly, recovering from illness or injury, or have special needs such as developmental or mental disabilities. They can be freestanding or operated a part of a hospital (often called distinct-part SNFs). This bill applies to freestanding SNFs AB 2079 Page 5 and excludes distinct-part SNFs from its requirements for higher staffing levels. Medi-Cal pays for about two thirds of all patient days in SNFs, making Medi-Cal reimbursement policy critical to the financial viability of most SNFs. 3)SNF Reimbursement. The current Medi-Cal rate methodology is facility-specific and cost-based. It is a complicated methodology which reimburses facilities based on various cost categories, up to certain caps, and subject to peer grouping provisions. Since a SNF level of care is labor-intensive, labor makes up the largest cost category. Current law also ensures facilities are reimbursed for any additional costs of federal or state mandates, such as the increase in direct care nursing hours proposed by this bill. For example, the recently passed minimum wage increase will be factored into reimbursement. Prior to the availability of cost reports that reflect the increased costs experienced by the facility as a result of a mandate, facilities receive an "add-on" that is reflective of 100% of the projected costs of the mandate. 4)Minimum staffing requirements. Currently facilities are required to staff throughout the day in order to achieve minimum standards, but are also required to employ and schedule additional staff based on patient care needs. The current minimum of 3.2 nursing hours per patient day does not mean that each patient receives 3.2 hours of care each day, but is instead the total number of nursing hours performed by direct caregivers, divided by the average patient census. The current average staffing level across facilities is equivalent to 3.7 nursing hours per day, higher than the 3.2 minimum, though this varies according to facility. This bill requires both minimum staff-to-patient ratios for each shift as well as a minimum level of direct care service hours per patient day. A noteworthy difference between the current minimum and this AB 2079 Page 6 proposal is the separate minimums that are embedded inside the 4.1 direct care service hour requirement. The current minimum is for a combined total of 3.2 hours, while this bill specifies two separate ratios within the single 4.1 hour requirement (1.3 hours for licensed nurses and 2.8 hours for CNAs). Under this bill, for example, hours of care provided an RN, even though they are more highly trained, cannot substitute for hours provided by a CNA. The CNA hours requirement is expected to result in a substantial increase in demand for CNAs. CAHF has provided an estimate indicating this would increase the CNA workforce in SNFs by over 10,000, a 30% increase over current levels. 5)Support. SEIU California, sponsor of this measure, states that providing person-centered care in SNFs requires time and sufficient staff. The California Labor Federation, Congress of California Seniors, and California Long-Term Care Ombudsman Association also support this bill. 6)Opposition. The California Association of Health Facilities (CAHF) writes in opposition that this measure would create artificial staffing patterns that do not necessarily lead to higher quality patient care, that it would be expensive to implement, and that would be a huge challenge for SNFs to find the necessary staff to comply with the staffing mandates of this bill. Leading Age California and the Association of California Healthcare Districts are also opposed. Analysis Prepared by:Lisa Murawski / APPR. / (916) 319-2081 AB 2079 Page 7