BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 577
                                                                  Page  1

          Date of Hearing:   May 6, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                  AB 577 (Lowenthal) - As Amended:  April 13, 2009 

          Policy Committee:                              Aging & LTC  
          Vote:6-0
                        Health                                18-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill authorizes the Department of Health Care Services  
          (DHCS) to grant licensing exemptions to certain Program of  
          All-Inclusive Care for the Elderly (PACE) sites. This bill  
          clarifies provisions of AB 847 (Berg), Chapter 315, Statutes of  
          2005 and prohibits the waiving of specified PACE requirements,  
          including patient care features, interdisciplinary approaches,  
          and captivated financial risk for providers. 

           FISCAL EFFECT  

          Absorbable workload to DHCS to approve PACE licensing  
          exemptions, as appropriate. Under current law, four PACE  
          programs serve 1,600 clients in 14 locations statewide,  
          including San Francisco, Sacramento, Los Angeles, and Oakland.  
          This bill pertains to specific PACE programs that may have  
          several sites under one license, and requests exemptions for  
          several program sites.  

           COMMENTS  

           1)Rationale  . This bill authorizes DHCS to grant licensing  
            exemptions to PACE programs in order to reduce duplication and  
            conflicts between various programmatic and licensure  
            requirements under current law. PACE programs must submit to a  
            variety of licensure requirements by different agencies  
            because of services that involve the elderly, social services,  
            Medi-Cal, and Medicare programs.  

           2)Background  . The PACE program serves 1,600 frail elderly at  








                                                                  AB 577
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            four different sites throughout California. The program is  
            modeled on the system of acute and long-term care services  
            developed by On Lok Senior Health Services in San Francisco.  
            The program has been evaluated and shown to be cost-effective  
            in the delivery of services and prevention of  
            institutionalization. 

          The program enables clients to live at home while receiving  
            services rather than entering a nursing home or hospital. The  
            capitated financing of approximately $40,000 per client per  
            year allows providers to deliver all services, not just those  
            reimbursable under the Medicare and Medi-Cal. The annual  
            capitated rate, established by an actuary, is generally set  
            between 80 and 90 % of the annual cost for a nursing home.

           Analysis Prepared by  :    Mary Ader / APPR. / (916) 319-2081