BILL ANALYSIS
AB 577
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Date of Hearing: April 28, 2009
ASSEMBLY COMMITTEE ON HEALTH
Dave Jones, Chair
AB 577 (Bonnie Lowenthal) - As Amended: April 13, 2009
SUBJECT : Program for 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 PACE.
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 (Medi-Cal in California); 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.
EXISTING LAW :
1)Creates PACE as a provider category regulated by the Centers
for Medicare and Medicaid Services (CMS), and reimbursed under
the Medicare and Medicaid programs.
2)Establishes the federal PACE Provider Act as part of the
Balanced Budget Act of 1997 (BBA), allowing for the transition
of PACE programs in California from demonstration status to
permanent provider status in November 2003.
3)Authorizes DHCS to establish the California PACE program and
contract with up to ten demonstration projects to develop
risk-based long-term care pilot programs.
4)Establishes PACE services as a covered benefit of the Medi-Cal
Program.
5)Establishes the DHCS Office of Long-Term Care as the oversight
entity for PACE programs in California and outlines the
administration and regulation of the programs.
6)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.
7)Requires a PACE program seeking an exemption under 6) above 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 other state or
federal 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 PACE plans to comply with the
intent of the requirements; and,
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d) A description of how PACE will monitor its compliance
with the terms and conditions under which the exemption is
granted.
8)Allows DHCS to immediately suspend or revoke an exemption if
DHCS determines that a PACE program granted an exemption is
operating in a manner contrary to the terms and conditions of
the exemption.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill is
necessary because existing law does not currently allow for
statewide or organization-wide exemptions from existing
regulations that may be duplicative, conflicting, or
inconsistent with the goals of the PACE programs. The author
points out that 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. In some
areas, the integrated nature of PACE services results in
conflicts between federal and state rules. The author
contends that some requirements result in duplication that is
unduly burdensome and costly for PACE providers, inefficient
for state and federal regulators and add 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. The author points out
that AB 847 (Berg), Chapter 315, Statutes of 2005, provided
DHCS and other state departments authority 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 PACE. According to the
author, 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.
2)BACKGROUND . PACE serves seniors in need of nursing home care.
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On average, a typical PACE participant is female, 80 years
old, has 7.9 medical conditions and is limited in
approximately three 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 through
PACE's interdisciplinary team. With the broad range and
intense coordination of services, more than 90% of PACE
participants are able to remain at home and in their
communities. PACE is an integrated model of care delivery.
PACE program staff provide direct health care to participants
as well as arrange for additional services through other
contracted providers.
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 CMS and reimbursed under the
Medicare and Medicaid Programs. The PACE Provider Act was
part of the BBA. Federal regulations 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.
PACE is funded through per person, per month capitation payments
from Medicare, Medicaid and private individuals, depending on
the individual's eligibility for public programs. PACE
programs, under the direct oversight of CMS and the Medi-Cal
Program, also hold multiple state licenses for primary care
clinic, adult day health care, and home health agency
services. 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, a PACE program directly providing skilled nursing
services in the home must be licensed as a home health agency.
3)SUPPORT . PACE providers write in support that this bill is
necessary to clean-up AB 847 which provided the original
authority for state agencies to grant exemptions to state
licensing requirements where the requirements do not fit with
the PACE model. The PACE programs state that this bill will
provide the authority for state departments to resolve
conflicts in regulatory requirements and oversight. On Lok
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Senior Health Services in San Francisco points out that in
order to operate the program and all of its services, On Lok
must maintain 19 separate licenses to serve 1,020 enrollees.
On Lok contends that the multiple licenses and multiple
agencies can be burdensome and in some cases, completely
duplicative. PACE providers state that this bill will allow
DHCS to determine that a particular flexibility is needed for
PACE and to apply a specific exemption to all PACE programs.
4)PREVIOUS LEGISLATION . AB 847 (Berg) provides DHCS and other
state departments authority to grant exemptions to existing
regulations for PACE 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 PACE.
5)DOUBLE REFERRAL . This bill is double-referred; it was heard
in the Assembly Aging and Long-Term Care Committee on April
21, 2009 and passed on a vote of 6-0.
REGISTERED SUPPORT / OPPOSITION :
Support
CalPACE (sponsor)
Aging Services of California
AltaMed Health Services Corporation
Center For Elders Independence
On Lok Senior Health Services
St. Paul's Senior Homes & Services
Sutter SeniorCare PACE
Opposition
None on file.
Analysis Prepared by : Deborah Kelch / HEALTH / (916) 319-2097