BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON HEALTH
                          Senator Ed Hernandez, O.D., Chair

          BILL NO:                    SB 1401             
           --------------------------------------------------------------- 
          |AUTHOR:        |McGuire                                        |
          |---------------+-----------------------------------------------|
          |VERSION:       |March 28, 2016                                 |
           --------------------------------------------------------------- 
           --------------------------------------------------------------- 
          |HEARING DATE:  |April 13, 2016 |               |               |
           --------------------------------------------------------------- 
           --------------------------------------------------------------- 
          |CONSULTANT:    |Scott Bain                                     |
           --------------------------------------------------------------- 
          
           SUBJECT  :  Pediatric and Home Care Expansion Act

           SUMMARY  :  Requires the Department of Health Care Services to develop at  
          least 3 regional pilot projects in counties located in the San  
          Francisco Bay Area, the Central Valley and Los Angeles County to  
          increase access for children receiving Medi-Cal or California  
          Children's Services Program benefits who are eligible for  
          in-home, shift nursing care services by increasing private duty  
          nursing reimbursement rates by 20% for participating licensed  
          home health agencies. Sunsets the provisions of this bill on  
          July 1, 2020.

          Existing law:
          1)Establishes the Medi-Cal program, administered by the  
            Department of Health Care Services (DHCS), under which  
            qualified low-income individuals receive health care services.

          2)Establishes a schedule of benefits under the Medi-Cal program,  
            which includes Early and Periodic Diagnosis, Screening and  
            Treatment (EPSDT) for any individual under 21 years of age,  
            consistent with federal Medicaid requirements. Home health  
            care services are covered Medi-Cal benefits, subject to  
            utilization controls.
          
          3)Establishes the California Childrens Services (CCS) Program to  
            provide specified medical care and therapy services to  
            children with CCS-eligible conditions. CCS eligible conditions  
            are generally described in regulation and include severe  
            genetic diseases, chronic medical conditions, infectious  
            diseases producing major sequelae, and traumatic injuries.
          
          This bill:
          1)Requires DHCS, on or before January 1, 2017, to establish at  





          SB 1401 (McGuire)                                  Page 2 of ?
          
          
            least three regional pilot projects, located in counties in  
            the San Francisco Bay area, the Central Valley, and the County  
            of Los Angeles, applicable to home health agencies that treat  
            children who receive skilled nursing services through the  
            Medi-Cal program.

          2)Requires the three regional pilot project areas, at a minimum,  
            to include the following counties:

              a)    San Francisco Bay Area (Alameda, Contra Costa, Marin,  
                Napa, San Francisco, San Mateo, Santa Clara, Solano, and  
                Sonoma Counties);
              b)    Central Valley region (Fresno, Kern, Kings, Madera,  
                Merced, San Joaquin, Stanislaus, and Tulare Counties);  
                and,
              c)    Los Angeles County.

          3)Requires the pilot projects to be targeted to increase access  
            to in-home, private duty nursing care for children receiving  
            Medi-Cal benefits who are eligible for in-home, shift nursing  
            care services and participate in the In-Home Operations Waiver  
            (IHO), CCS, or EPSDT. 

          4)Increases the applicable reimbursement rate for licensed home  
            health agencies that are currently providing private duty  
            nursing care by 20% above the Medi-Cal rate schedule in effect  
            as of July 1, 2015. Requires this increased reimbursement rate  
            to remain in effect for at least three years.

          5)Implements this bill only to the extent that federal financial  
            participation is available. Requires DHCS to submit any  
            necessary application to the federal Centers for Medicare and  
            Medicaid Services for a state plan amendment, waiver, or  
            amendment to a waiver to implement the pilot project.

          6)Permits DHCS, in collaboration with home health agencies, to  
            establish reasonable provider eligibility standards and  
            participation requirements for the pilot projects. Requires  
            collaborating home health agencies to include, but are not  
            limited to, agencies in good standing with the Department of  
            Public Health, agencies that are participating in the Medi-Cal  
            program, and agencies that are accredited by the Accreditation  
            Commission for Health Care.

          7)Requires, no later than April 1, 2020, DHCS, or a qualified  
            academic institution or other entity with which DHCS  
            contracts, to submit a report evaluating the effectiveness of  






          SB 1401 (McGuire)                                  Page 3 of ?
          
          
            the pilot projects to the Senate Committee on Health, the  
            Assembly Committee on Health, the Senate Committee on Budget  
            and Fiscal Review, and the Assembly Committee on Budget.

          8)Permits DHCS, in order to compare access to necessary and  
            approved services before and after the establishment of the  
            pilot projects, to request participating home health agencies  
            to report on key access to care indicators identified by DHCS,  
            the participating agencies, and referring hospitals. Requires  
            the key access to care indicators to include, but need not be  
            limited to:

              a)    The increase or decrease in hospital discharges to  
                home health agencies'
              b)    The number of nursing hours filled, as compared to the  
                number of hours that have been approved; and,
              c)    The number of available licensed home health agencies  
                that accept pediatric patients.

          9)Requires DHCS, in evaluating the effectiveness of the pilot  
            projects, to cooperate with, and consider input from, home  
            health agencies, consumer groups, hospitals, and other  
            provider associations.

          10)Makes legislative findings and declarations regarding home  
            care services, the pediatric patients served by home health  
            agencies, federal Medicaid law regarding reimbursement,  
            barriers to home health services, the reduction in home health  
            services to Medi-Cal patients. 

          11)Sunsets this bill on July 1, 2020, and repeals its provisions  
            January 1, 2021.

           FISCAL  
          EFFECT  :  This bill has not been analyzed by a fiscal committee.

           COMMENTS  :
          1)Author's statement.  According to the author, there are almost  
            5,000 children statewide with severe long term, complex and  
            catastrophic health needs eligible for Medi-Cal in-home  
            nursing care. Most of these children are medically fragile,  
            permanently disabled, are on continuous life support or  
            require life-sustaining equipment such as ventilators and  
            feeding tubes. In-home skilled nursing care allows these  
            children to be safely discharged from expensive ICU-level  
            hospital care back into their homes at a fraction of the cost  
            to the state. In the last decade, Californians have seen  






          SB 1401 (McGuire)                                  Page 4 of ?
          
          
            growing barriers to accessing care. Factors such as  
            out-of-date reimbursement rates and difficulty recruiting  
            nurses with a unique combination of skills have resulted in  
            waiting lists and in some counties, no in-home care options.  
            Typically, medically fragile children are being treated in  
            expensive neonatal or pediatric intensive care units but can  
            come home if the appropriate care is available. Without the  
            access to skilled in-home nursing, the state is unnecessarily  
            spending limited resources and preventing children from being  
            at home with their families. This bill provide a targeted  
            Medi-Cal rate increase paid to eligible licensed home health  
            agencies for private duty nursing services provided to  
            children in three regional pilot areas that are currently  
            facing access to care challenges.

          2)Background on Medi-Cal coverage of home health services.  
            Medi-Cal coverage of home health agency services is outlined  
            in its manual of criteria. In order for a patient to be  
            eligible to receive home health agency services, the patient  
            must have a medical condition requiring skilled care so as to  
            prevent further disability and/or promote improvement, and the  
            patient's medical condition for which services are being  
            prescribed must be reasonably responsive to the prescribed  
            service. Home health services are authorized only after being  
            prescribed by a physician as to the extent and duration of the  
            services and in accordance with a written treatment plan. The  
            treatment plan must be reviewed by a physician every 60 days.  
            The treatment plan must include a need for one or more covered  
            services such as skilled nursing care, physical therapy,  
            occupational therapy, speech therapy, medical social worker,  
            home health aide, and appropriate medical supplies. Medi-Cal  
            covers home health agency services in the following two  
            general situations: 

              a)    During the convalescent phase of post-hospital or  
                institutional discharge or during the convalescent phase  
                following an acute episode or exacerbation of an illness  
                of a homebound patient; and, 
              b)    When a homebound patient can be maintained at home in  
                lieu of institutional placement with skilled nursing or  
                other care. 

            Home health agency rates were reduced by 1% in 2009 but home  
            health agencies were not subject to the 10% rate reduction  
            required by AB 97 (Committee on Budget, Chapter 3, Statutes of  
            2011), because of potential access concerns. Home health  
            agency rates were last increased in 2001.






          SB 1401 (McGuire)                                  Page 5 of ?
          
          

          1)Study on home health access for Medi-Cal patients. A 2015  
            study by Leavitt Partners funded by Maxim Healthcare Services  
            (a home health agency) entitled "Analysis of California Home  
            Health Care: Decreasing Access for Medi-Cal Patients" found  
            that while total capacity of the home health care market is  
            growing, services available for Medi-Cal patients have  
            remained stagnant since 2002. The report states significant  
            growth in new Medi-Cal enrollees and lack of growth in  
            agencies willing to provide services to enrollees suggests a  
            substantial access-to-care gap materializing between Medi-Cal  
            patients and non-Medi-Cal patients for home health services.  
            Key findings from the report are as follows:

              a)    That the Medi-Cal population has grown by 39% in seven  
                years (1.8 million more people), while the number of home  
                health visits provided to Medi-Cal patients has stayed  
                relatively stable during the same time period;
              An increasing percentage of home health agencies are not  
                treating Medi-Cal patients (22% in 2002 to 56% in 2013);
              b)    Home health agencies are significantly more likely to  
                immediately accept new patients if they are privately  
                insured than if they are on Medi-Cal; 
              c)    60% of all the agencies treating Medi-Cal patients are  
                only able to provide 0 to 25% of the approved hours to  
                Medi-Cal patients;
              d)    17% of all agencies have a cap on the number of  
                Medi-Cal patients they will accept; and, 
              e)    By 2018, only four in 10 Medi-Cal certified agencies  
                will actually accept Medi-Cal patients in a given year.

            The report concluded that the movement of home health agencies  
            away from providing services to Medi-Cal suggests three  
            important conclusions: 

              a)    Growth in the home health care market has not  
                increased access to care for Medi-Cal patients as might  
                have been expected; 
              b)    When entering the home health market, new agencies are  
                less likely to provide 
              services to Medi-Cal patients; and,
              c)    Access-to-care problems are exacerbated for certain  
                sub-populations, such as high-needs pediatric patients.

          1)Support. This bill is supported by home health agencies and  
            children's specialty providers. Maxim Healthcare Services  
            (Maxim) writes in support that children throughout the state  






          SB 1401 (McGuire)                                  Page 6 of ?
          
          
            with severe medical conditions are eligible for in-home  
            nursing services through Medi-Cal, but the current fee  
            schedule causes access problems for in-home nursing services  
            as inadequate reimbursement rates to licensed home health  
            agencies restrict their ability to recruit and retain nurses  
            for this medically fragile pediatric population. When in-home  
            nursing services are not readily available, these children are  
            treated in expensive hospital neonatal or pediatric intensive  
            care units longer than necessary or they are being discharged  
            to family members without trained nurses available to assist  
            these families. A likely result of the poor access is longer  
            hospital admissions days or readmissions due to the lack of  
            nursing care available in the community. Maxim states this  
            bill addresses this urgent problem by establishing a pilot  
            project in three geographic areas where home health agency  
            Medi-Cal reimbursement rates are increased by 20%. To provide  
            accountability for the rate increase, this bill requires data  
            to be reported to the Legislature on the effectiveness of the  
            pilot by assessing the number of nursing hours provided and  
            Medi-Cal savings through moving children from hospital stays  
            and to care in their homes. Maxim concludes that, without an  
            increase in reimbursement rates, the access gap to home health  
            agency service will continue to grow, as fewer home health  
            agencies are willing to accept Medi-Cal patients, which will  
            result in increased wait times for those seeking in-home  
            nursing services and higher state costs as these patients  
            remain in acute care hospitals.  
            
           SUPPORT AND OPPOSITION  :
          Support:  American Academy of Pediatrics, California
                    California Association for Health Services at Home 
                    California Children's Hospital Association
                    Children's Specialty Care Coalition
                    Premier Health
                    Maxim Healthcare Services
                    An individual
                    
          Oppose:   None received

                                       -- END