BILL ANALYSIS
AB 577
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Date of Hearing: April 21, 2009
ASSEMBLY COMMITTEE ON AGING AND LONG-TERM CARE
Bonnie Lowenthal, Chair
AB 577 (Lowenthal) - As Amended: April 13, 2009
SUBJECT : Program of All-Inclusive Care for the Elderly.
SUMMARY : Allows the Department of Health Care Services (DHCS)
to grant exemptions from duplicative requirements to Program of
All-Inclusive Care for the Elderly (PACE) providers.
Specifically, this bill :
1)Allows DHCS, and as applicable the California Department of
Aging, and the State Department of Social Services, to grant
exemptions from duplicative, conflicting, or inconsistent
requirements to a PACE program.
2)Specifies that DHCS may grant exemptions on a statewide basis
as appropriate or to a PACE organization on an
organization-wide basis in instances where an exemption for a
single license is expanded to other locations.
3)Specifies that the requirements of the PACE model, as provided
under federal law, shall not be waived or modified, including
all of the following:
a) The focus on frail elderly qualifying individuals who
require the level of care provided in a nursing facility;
b) The delivery of comprehensive, integrated acute and
long-term care services;
c) The interdisciplinary team approach to care management
and service delivery;
d) Capitated, integrated financing that allows the provider
to pool payments received from public and private programs
and individuals; and,
e) The assumption by the provider of full financial risk.
4)Requires the PACE benefit package for all participants,
regardless of source of payment, to include all of the
following:
a) All Medicare-covered items and services;
b) All Medicaid-covered items and services, as specified in
the state's Medicaid plan; and,
c) Other services determined necessary by the
interdisciplinary team to improve and maintain the
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participant's overall health status.
5)Makes additional, technical changes to existing law.
EXISTING LAW
1)Establishes On Lok Senior Health System as a federal and state
demonstration program in 1973 to test whether comprehensive
community-based services could be provided to the frail
elderly at no greater cost than nursing home care.
2)Creates the PACE program as a provider category regulated by
the Centers for Medicare and Medicaid Services (CMS), and
reimbursed under the Medicare and Medicaid programs.
3)Establishes the federal PACE Provider Act as part of the
Balanced Budget Act of 1997, allowing for the transition of
PACE programs in California from demonstration status to
permanent provider status in November 2003.
4)Authorizes DHCS to establish the California PACE program and
contract with up to 10 demonstration projects to develop
risk-based long-term care pilot programs.
5)Establishes PACE program services as a covered benefit of the
Med-Cal program.
6)Establishes DHCS Office of Long-Term Care as the oversight
entity for PACE programs in California and outlines the
administration and regulation of the programs.
7)Authorizes DHCS, and other state departments as applicable, to
provide exemptions from existing regulations, including the
use of alternate concepts, methods, procedures, techniques,
space, equipment, personnel, personnel qualifications, or the
conducting of pilot projects, provided that the exemptions are
implemented in a manner that does not jeopardize the health
and welfare of participants receiving services under PACE, or
deprive beneficiaries of rights specified in federal or state
laws or regulations.
8)Requires a PACE program seeking an exemption to submit a
request to DHCS that includes the following:
a) A description of how the applicable state requirement
conflicts with, or is inconsistent with state or federal
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requirements related to the PACE model;
b) An analysis demonstrating why the conflict or
inconsistency cannot be resolved without an exemption;
c) A description of how the PACE program plans to comply
with the intent of the requirements; and,
d) A description of how the PACE program will monitor its
compliance with the terms and conditions under which the
exemption is granted.
9)Allows DHCS to immediately suspend or revoke an exemption if
after investigation the department determines that a PACE
program that has been granted an exemption is operating in a
manner contrary to the terms and conditions of the exemption.
FISCAL EFFECT : Unknown.
COMMENTS :
The PACE model was created by On Lok Senior Health Services in
San Francisco in 1973. Following the successful PACE
replication demonstration, Congress established PACE as a
provider category regulated by the CMS and reimbursed under the
Medicare and Medicaid programs. The PACE Provider Act was part
of the Balanced Budget Act (BBA) of 1997. Federal regulations
(42 CFR Part 460) for PACE were published in 1999 and amended in
2002. All PACE demonstration sites, including those in
California, completed the transition from demonstration status
to permanent provider status in November 2003. With this
transition, additional oversight by CMS has begun for PACE
programs, raising questions regarding federal and state roles.
PACE serves seniors in need of nursing home care. On average, a
typical PACE participant is female, is 80 years old, has 7.9
medical conditions and is limited in approximately 3 activities
of daily living. Forty-nine percent of PACE participants have
been diagnosed with dementia. PACE provides comprehensive
medical and long-term care services, fully coordinating these
services by the program's interdisciplinary team. With the
broad range and intense coordination of services, more than 90
percent of PACE participants are able to remain at home and in
their communities. PACE is funded through capitation payments
from Medicare, Medicaid and private individuals depending on the
individual's eligibility for public programs.
PACE is an integrated model of care delivery. Program staff
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provide direct health care to participants as well as arrange
for additional services through other contracted providers.
PACE programs, under the direct oversight by CMS and the
Medi-Cal program, also hold multiple state licenses for clinics,
adult day health care and home health agency services. In some
areas, the integrated nature of PACE services results in
conflicts between federal and state rules.
Under existing state law, PACE programs must operate at least
one PACE center. Each center is licensed as both an adult day
health care program and a community clinic. In addition, PACE
programs directly providing skilled nursing services in the home
must be licensed as a home health agency. On Lok Senior Health
Services, which operates multiple centers, must maintain 17
separate licenses to serve over 900 enrollees.
California's PACE programs must comply with a myriad of
regulatory requirements due to the model's integration of
Medicare and Medicaid financing and services, its categorization
as both a health plan and provider, and oversight from four
different state departments. Some requirements result in
duplication that is unduly burdensome and costly for PACE
providers, inefficient for state and federal regulators and adds
no benefit or special protection to the consumer. Other
requirements are conflicting and inappropriate for PACE
organizations or are inconsistent with federal or other state
rules that are specially adapted to the PACE model.
In 2005, AB 847 (Berg), Chapter 315, Statutes of 2005, provided
DHCS and other state departments to grant exemptions to existing
regulations for PACE programs in instances where DHCS finds that
the licensing requirements do not fit the PACE model and that
granting the exemption does not jeopardize the health and
welfare of participants in the PACE Program. This bill provides
additional clarification to the exemption process and allows
DCHS to grant exemptions on a statewide or organization-wide
basis in addition to the individual program exemptions allowed
under current law.
REGISTERED SUPPORT / OPPOSITION :
Support
Cal PACE (Sponsor)
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Aging Services of California
AltaMed Health Services Corporation
Center For Elders Independence
OnLok, Inc.
St. Paul's Senior Homes & Services
Sutter SeniorCare PACE
Opposition
None on file.
Analysis Prepared by : Allison Ruff / AGING & L.T.C. / (916)
319-3990