BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2079 (Calderon) - Skilled nursing facilities: staffing
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|Version: June 13, 2016 |Policy Vote: HEALTH 6 - 2 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: August 1, 2016 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 2079 would incrementally increases the number of
required nursing hours per patient in a skilled nursing
facility, from 3.2 hours per day to 4.1 hours per day, over
several years.
Fiscal
Impact:
Annual costs of $52 million per year in 2018-19 rising to $310
million per year by 2021-22 for additional Medi-Cal payments
to skilled nursing facilities (General Fund and federal
funds). Under current law, the Department of Health Care
Services pays skilled nursing facilities that care for
Medi-Cal beneficiaries on a cost-based system. Under current
law, the Department is required to increase reimbursement
rates to skilled nursing facilities to offset any additional
costs mandated by the state or federal government. Currently,
while the statutory minimum number of hours per day is 3.2,
the average nursing hours is about 3.6 per patient day. The
Department indicates that because skilled nursing facilities
AB 2079 (Calderon) Page 1 of
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are generally paid based on their costs, current rates already
cover most of the cost of providing 3.6 hours per day, on
average. Therefore, the state would have to pay for the cost
increase caused by increasing the hours provided form the
current average of 3.6 hours per patient per day to 4.1 hours
per patient per day.
Staff notes that the California Association of Health
Facilities (which is in opposition to the bill) projects
annual costs to the Medi-Cal program could be as high as $440
million per year by 2021.
One-time costs, less than $150,000 to adopt regulations and
modify internal tracking systems by the Department of Health
Care Services (General Fund and federal funds).
One-time costs, of about $170,000 over two years to adopt
regulations and modify internal tracking systems by the
Department of Public Health (Licensing and Certification
Fund).
Minor additional ongoing enforcement costs to the Department
of Public Health (Licensing and Certification Fund). Because
the Department already licenses skilled nursing facilities,
including compliance with existing nursing hours requirements,
there is no anticipated additional cost to enforce the
requirements of this bill as part of the ongoing licensing
program.
Background: Under current law, skilled nursing facilities are licensed and
regulated by the Department of Public Health. Current law and
regulation requires skilled nursing facilities to provide 3.2
hours of nursing care per patient per day.
Under current law, skilled nursing facilities that provide
services to Medi-Cal patients are paid on a cost-based system.
Under that system, a skilled nursing facility receives payments
based on the facility's actual costs, with certain caps, based
on similar facilities. For example, a skilled nursing facility's
Medi-Cal payments reflect the actual labor costs of the
facility, capped at the 95th percentile of labor costs for
similar facilities. Under current law (set to sunset in July
2020), the Department of Health Care Services is required to pay
skilled nursing facilities for the projected cost to comply with
AB 2079 (Calderon) Page 2 of
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new state or federal mandates, on top of the calculated payment
rates. The cost-based reimbursement system was adopted at the
same time the state imposed a quality assurance fee on skilled
nursing facilities, in order to use fee revenues to draw down
additional federal funding to pay for skilled nursing facility
services (and generate General Fund savings of about $500
million per year). (A similar system exists for private
hospitals.) In addition, current law authorizes a Quality and
Accountability Supplemental Payment System, which provides
additional payments to skilled nursing facilities based on
performance measures. Since the shift in payments to a
cost-based system and the creation of the incentive payment
system, average nursing hours have increased from the mandated
3.2 hours per patient to an estimated statewide average of about
3.6 hours per patient, in part because the current financing
system rewards skilled nursing facilities for investing in
additional staff to improve patient care. In 2016-17, about $90
million is available to skilled nursing facilities for
supplemental payments based on quality measures, including
staffing ratios.
Proposed Law:
AB 2079 would incrementally increases the number of required
nursing hours per patient per day in a skilled nursing facility,
from 3.2 hours per day to 4.1 hours per day, over several years.
Specific provisions of the bill would:
Rename the term "nursing hours" to "direct care service
hours";
Increase the mandated direct care service hours per patient
incrementally, so that the required hours would be 3.5 hours
per patient day in 2018, 3.8 hours per patient day in 2019,
and 4.1 hours per patient day in 2020;
Specify the ratio of hours provided by certified nursing
assistants (2.8 hours) and licensed nurses (1.3 hours) within
the overall required direct care service hours;
Exclude skilled nursing facilities that are a distinct part of
a licensed general acute care hospital and facilities operated
by the Department of State Hospitals from the new direct care
service hours requirement;
Repeal the existing law requiring the Department of Public
Health to adopt regulations and instead require the Department
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to adopt new regulations that establish the minimum direct
care service hours, pursuant to the requirements of the bill;
Revise existing requirements for operators of skilled nursing
facilities to post information about direct care service hour
requirements;
Require the Department of Health Care Services to adopt
regulations pursuant to the requirements of the bill.
Related
Legislation: SB 779 (Hall, 2015) was substantially similar to
this bill. That bill was held on this committee's Suspense File.
Staff
Comments: Under current law, skilled nursing facilities are
required to provide 3.2 direct care hours per patient day. The
allocation of those hours between registered nurses, licensed
vocational nurses, and certified nursing assistants is not
specified. This bill would specifically require that 2.8 hours
per patient day be provided by certified nursing assistants and
1.3 hours by licensed nurses. The California Association of
Health Facilities has raised the concern that increasing overall
direct care hours per day and specifically requiring that the
majority of those hours be provided by certified nursing
assistants will substantially increase the number of certified
nursing assistants that will be needed, by as much as 10,000
additional certified nursing assistants when the bill is fully
implemented.
The only costs that may be incurred by a local agency relate to
crimes and infractions. Under the California Constitution, such
costs are not reimbursable by the state.
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