BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 779 (Hall) - Skilled nursing facilities: certified nurse
assistant staffing
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|Version: May 4, 2015 |Policy Vote: HEALTH 7 - 2 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: May 18, 2015 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 779 would increase the minimum number of required
direct care hours per patient in skilled nursing facilities from
3.2 hours to 4.1 hours. The bill would require the Department of
Public Health to develop staff to patient ratios that convert
the direct care hours requirement into staffing ratios.
Fiscal
Impact:
Annual costs of $110 million per year to $250 million per year
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, the average nursing
hours is about 3.7 per patient day. It is not clear whether
current law will require the Department to offset the
SB 779 (Hall) Page 1 of
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increased cost to go from 3.7 to 4.1 hours, or whether the
Department will be required to pay for the costs to go from
the currently required 3.2 hours to 4.1 hours. The lower cost
estimate above assumes that the Department will increase
payments to a skilled nursing facility based on the cost to
increase staffing levels from current practice to the newly
mandated hours requirement. The higher cost estimate assumes
that the Department increases payments to facilities to pay
the full costs of increasing staffing levels from the
currently mandated level to the level mandated in this bill.
Unknown costs to the Department of State Hospitals for
additional staff (General Fund). The Department of State
Hospitals 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 the Department of State Hospitals 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 the Department to comply with the mandated 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.
One-time costs, less than $150,000 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.
SB 779 (Hall) Page 2 of
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Under that system, a skilled nursing facility receives payments
are 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
2015), the Department of Health Care Services is required to pay
skilled nursing facilities for the projected cost to comply with
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
3.7 hours per patient, in part because the current financing
system rewards skilled nursing facilities for investing in
additional staff to improve patient care.
Proposed Law:
SB 779 would increase the minimum number of required direct
care hours per patient in skilled nursing facilities from 3.2
hours to 4.1 hours.
Specific provisions of the bill would:
Revise the term "nursing care" which can include care provided
by nurses or unlicensed staff to "direct care hours";
Increase the minimum number of direct care hours in skilled
nursing facilities from 3.2 to 4.1 per patient per day;
Exempt skilled nursing facilities that are a distinct part of
a general acute care hospital from the increased staffing
requirement;
Require the Department of Public Health to develop staff to
patient ratios that convert the direct care hours requirement
into specified staffing ratios. (The specified staffing ratios
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in the bill do not appear to increase the overall staffing
requirements for skilled nursing facilities, beyond what the
bill already requires to increase direct care hours.);
Require skilled nursing facilities to post information about
direct care hours being provided by the facility;
Require skilled nursing facilities to make information
available to the public, upon request, regarding staffing
levels;
Specifically apply the new direct care hours requirement to
skilled nursing facilities providing service under the
Medi-Cal program;
Add compliance with direct care service hours to the quality
performance measures used by the Department of Health Care
Services to determine additional payments.
Staff
Comments: Current law which governs the rate setting for
skilled nursing facilities and implements the skilled nursing
facility quality assurance fee sunsets on July 31, 2015. The
Governor's budget proposal includes trailer bill language to
extend the quality assurance fee and the rate setting
methodology until 2020. The proposed trailer bill language would
extend the current requirement to pay skilled nursing facilities
for the costs to comply with new state or federal mandates.
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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