BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1401 (McGuire) - Pediatric and Home Care Expansion Act
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|Version: March 28, 2016 |Policy Vote: HEALTH 9 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 2, 2016 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 1401 would require the Department of Health Care
Services to establish a three-county pilot project, to provide
increased reimbursement rates for pediatric in-home nursing
care.
Fiscal
Impact:
Annual staff costs of about $130,000 per year for three years
for program oversight and monitoring by the Department of
Health Care Services (General Fund and federal funds).
One-time contract costs, likely in the low hundreds of
thousands, to develop data collection requirements, reporting
methodologies, and evaluation methods (General Fund and
federal funds).
One-time contract costs of about $100,000 for the Department
to contract for a final evaluation of the pilot project
(General Fund and federal funds).
SB 1401 (McGuire) Page 1 of
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Increased costs of $23 million per year for Medi-Cal
reimbursement rates for in-home nursing care services
currently being provided to Medi-Cal children in the pilot
project counties (General Fund and federal funds). The cost
above is based on a 20% increase in reimbursement rates and
the most recent utilization data for pediatric in-home nursing
care in the target counties. It is important to note that the
costs above are for increased payments for services already
being provided.
Unknown increase in Medi-Cal payments for additional pediatric
in-home nursing care services, to the extent that increased
provider rates results in additional providers becoming
willing to provide services to Medi-Cal beneficiaries. The
intent of the bill is to incentivize existing Medi-Cal
providers (direct care providers such as registered nurses and
the home care agencies that employ those providers) to
increase their participation in Medi-Cal and incentivize other
providers to begin providing services to Medi-Cal
beneficiaries. To the extent that the bill is successful in
doing so, and there is unmet demand for in-home nursing care,
the bill is likely to result in additional utilization and
spending on those services.
Unknown reduction in Medi-Cal payments for institutional care
to children who would be cared for at home under the bill
(General Fund and federal funds). To the extent that there is
unmet demand for in-home nursing care, there are likely to be
children who are currently receiving care in institutional
settings (such as skilled nursing facilities or hospitals) who
could be cared for at home using in-home nursing care. Given
the very high cost for institutional care for children, the
state is likely to realize savings for any children that shift
from institutional care to in-home care under the bill. The
extent of this effect is unknown, because there is not
sufficient data available to determine the number of children
currently being cared for in institutional settings who could
be cared for at home, but for a lack of in-home nursing
providers.
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.
SB 1401 (McGuire) Page 2 of
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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.
The Medi-Cal program provides coverage for in-home nursing care
either following a patient's discharge from a hospital or other
institution or when a patient can be maintained in the home with
in-home nursing care in lieu of placement in an institutional
setting. There are various requirements on the use of in-home
nursing care in Medi-Cal. In providing in-home nursing care, the
Department contracts with home health agencies, who directly
employ licensed vocational nurses, registered nurses, and home
health aides. Hourly rates paid to home health agencies were
last increased in 2001. Unlike most Medi-Cal providers, home
health agency rates were not subject to the 10% rate reductions
imposed in 2011, due to concerns about access to services.
Supporters of the bill have raised the issue that the Medi-Cal
portion of the home care industry has not seemed to grow inline
either with recent growth in the Medi-Cal population or overall
growth of home care services in the state health care market. In
addition, surveys of providers indicate that home health
agencies are limiting their participation in Medi-Cal due to low
reimbursement rates.
Proposed Law:
SB 1401 would require the Department of Health Care Services
to establish a three-county pilot project, to provide increased
reimbursement rates for pediatric in-home nursing care.
Specific provisions of the bill would:
Require the Department of Health Care Services to
establish at least three regional pilot projects in the San
Francisco Bay Area, the Central Valley, and Los Angeles
County for home health agencies that provide services to
children in the Medi-Cal program;
Require the pilot projects to provide for an increase in
in-home private duty nursing care for children of at least
20% above the current rate for at least three years;
SB 1401 (McGuire) Page 3 of
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Make operation of the pilots contingent on federal
funding;
Authorize the Department to establish provider
eligibility standards;
Require a report evaluating the effectiveness of the
pilot projects;
Authorize the Department to request participating home
health agencies to report specified information;
Include a sunset of January 1, 2021.
Staff
Comments: By mandating an across-the-board reimbursement rate
increase for private duty nursing care to children in the pilot
project counties, the bill will result in increased state costs
for services that are currently being provided. Those costs
would not be offset by reduced institutional care costs, since
those services are already being provided outside of
institutional care.
To the extent that there is a supply limitation on the provision
of private duty nursing care for Medi-Cal children and a that
20% rate increase would be sufficient to incent providers to
provide more services, the bill could result in increased
utilization for those services. If that results in Medi-Cal
children moving from institutional care to a home care setting,
the state would experience cost savings for that population of
children. The extent of that impact is unknown and would depend
on the current unmet demand for private duty nursing care by
children who are receiving institutional care.
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