BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K Alquist, Chair
BILL NO: AB 577
A
AUTHOR: Lowenthal
B
AMENDED: June 11, 2009
HEARING DATE: June 17, 2009
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CONSULTANT:
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Bain/
7
SUBJECT
Program of All-Inclusive Care for the Elderly
SUMMARY
Authorizes specified state departments to apply approved
exemption requests of a Program of All-Inclusive Care for
the Elderly (PACE) to all locations of a PACE organization,
modifies the exemption for PACE that may be granted under
existing law to require the exemption to be from
duplicative, conflicting or inconsistent requirements, and
prohibits specific federal requirements of the PACE model
from being waived.
CHANGES TO EXISTING LAW
Existing law
Existing law permits the Director of the Department of
Health Care Services (DHCS) to establish PACE to promote
the development of community-based, risk-based capitated,
long-term care programs. The director is allowed to
contract with up to ten demonstration projects to develop
risk-based long-term care pilot programs modeled upon On
Lok Senior Health Services in San Francisco. PACE program
Continued---
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benefits are a Medi-Cal benefit under existing law, subject
to utilization controls and eligibility criteria that
require that the beneficiary be certified as eligible for
nursing facility services based on Medi-Cal criteria.
Existing law permits DHCS, and as applicable, the
California Department of Aging (CDA) and the Department of
Social Services (DSS), to grant to a PACE program
exemptions from the provisions contained in the clinic
licensing law, the community care facilities law, the
residential care facilities for the elderly law, the adult
day health centers (ADHC) law, the home health agencies
law, and regulations governing Medi-Cal and health
facilities, including home health agencies, clinics, and
adult day health care centers. These exemptions can
include the use of alternate concepts, methods, procedures,
techniques, space, equipment, personnel, personnel
qualifications, or the conducting of pilot projects,
provided 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 in federal or state laws or regulations.
Existing law permits a PACE program to submit a single
request for an exemption from licensing requirements that
is applicable to two or more licenses held by that
organization, so long as the request lists the locations
and license numbers held by that organization, and the
requested exemption is the same and appropriate for all
licensed locations.
This bill:
Modifies the exemption authority allowed under existing law
for PACE programs from specified state statutory and
regulatory requirements to require the exemption to be from
duplicative, conflicting or inconsistent requirements.
Authorizes the Department of Health Care Services (DHCS),
after consultation with the California Department of Aging
(CDA), the California Department of Public Health (DPH),
and the Department of Social Services (DSS), as
appropriate, to apply approved exemption requests to all
locations of a PACE organization, or to all PACE
organizations on a statewide basis.
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Prohibits specified federal requirements of the PACE model
from being waived or modified, including all of the
following:
The focus on frail elderly qualifying individuals who
require the level of care provided in a nursing facility.
The delivery of comprehensive, integrated acute and
long-term care services.
The interdisciplinary team approach to care management
and service delivery.
Capitated, integrated financing that allows the provider
to pool payments received from public and private
programs and individuals.
The assumption by the provider of full financial risk.
The provision of a PACE benefit package for all
participants, regardless of source of payment, that
includes all Medicare-covered items and services, all
Medicaid-covered items and services, as specified in the
state's Medicaid plan, and other services determined
necessary by the interdisciplinary team to improve and
maintain the participant's overall health status.
Permits a written request that is required to be submitted
by a PACE organization as part of an exemption request to
include a description of how the applicable state
requirement duplicates state or federal requirements
related to the PACE model. Under current law, the required
description must include how the applicable state
requirement conflicts with, or is inconsistent with, state
or federal requirements related to the PACE model.
FISCAL IMPACT
According to the Assembly Appropriations Committee
analysis, this bill would impose an absorbable workload to
DHCS to approve PACE licensing exemptions, as appropriate.
BACKGROUND AND DISCUSSION
According to the author, 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. The author states that some requirements
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result in duplication which is unduly burdensome and costly
for PACE providers, inefficient for state and federal
regulators and adds no benefit or special protection to the
consumer. The author also states that other requirements
conflict with, and are inappropriate for, PACE
organizations, or are inconsistent with federal or other
state rules that are specially adapted to the PACE model.
The author cites previous legislation, AB 847 (Berg),
Chapter 315, Statutes of 2005, which provided authority to
DHCS, and other state departments, to grant exemptions from
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. The author states that this bill would
provide additional clarification to the exemption process
by allowing DHCS to grant exemptions on a statewide or
organization-wide basis in addition to the individual
program exemptions allowed under current law.
PACE
PACE is a capitated benefit provided primarily to certain
Medi-Cal and Medicare beneficiaries that offers a
comprehensive service delivery system and integrates
Medicare and Medicaid financing. The program was modeled
after the acute and long-term care services of On Lok
Senior Health Services in San Francisco.
Participants must be at least 55 years old, live in the
PACE service area, and be certified as eligible for nursing
home care. Enrollment in PACE is voluntary. An
interdisciplinary team, consisting of professional and
paraprofessional staff, assesses participants' needs,
develops care plans, and delivers all services (including
acute care services and when necessary, nursing facility
services). The PACE service package must include all
Medicare and Medicaid covered services, and other services
determined necessary by the interdisciplinary team for the
care of the PACE participant. PACE providers assume full
financial risk for participants' care without limits on
amount, duration, or scope of services.
Existing state law allows up to 10 approved PACE providers.
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There are currently five approved PACE organizations in
parts of eight counties in California. The governor's
2009-10 budget estimates average monthly enrollment in PACE
statewide to be 35,043, and projects total capitation
payments to PACE plans of $152.8 million ($76 million GF).
Current exemption process
Existing law requires a PACE program seeking an exemption
from a licensing requirement to submit a written request
and substantiating evidence supporting the request to DHCS.
The request must include:
A description of how the applicable state requirement
conflicts with or is inconsistent with state or federal
requirements related to the PACE model;
An analysis demonstrating why the conflict or
inconsistency cannot be resolved without an exemption;
A description of how the PACE program plans to comply
with the intent of the requirements in existing law or
regulation; and,
A description of how the PACE program will monitor its
compliance with the terms and conditions under which the
exemption is granted.
PACE exemptions must be implemented in a manner that does
not jeopardize the health and welfare of participants
receiving services under PACE, or deprive beneficiaries of
rights under federal or state laws or regulations.
Current law permits a PACE program to submit a single
request for an exemption from licensing requirements
applicable to two or more licenses held by that
organization, so long as the request lists the locations
and license numbers held and the requested exemption is the
same and appropriate for all licensed locations. This bill
would permit approved exemption requests to all locations
of a PACE organization, or to all PACE organizations on a
statewide basis. DHCS indicates the current exemption
process has each of the PACE sites submit an exemption
request.
DHCS indicates it has approved at least 30 exemptions for
PACE, and that all five PACE organizations have submitted
exemption requests. An example of an exemption request
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granted by DHCS to a particular PACE program is an
exemption from the ADHC requirement that an individual's
plan of care include discharge planning. A PACE provider
sought an exemption from this requirement because, while
all PACE providers hold an ADHC license, the PACE
interdisciplinary team (IDT) is responsible for care
planning and PACE does not "discharge" a patient when he or
she stops attending the ADHC. The PACE program argued that
the discharge planning process was appropriate for a
stand-alone ADHC, but it was not consistent with the PACE
model of care where the PACE IDT is responsible for care
planning across a continuum of acute and long-term care
services, and the IDT addresses discharge planning on a
case-by-case basis.
PACE exemptions remain in effect until suspended or
revoked, and approvals are based on terms and conditions.
DHCS indicates it and DPH have policies and procedures for
tracking, processing, and granting approvals of exemption
requests involving program requirements. As part of its
oversight, DHCS indicates it maintains records and conducts
follow-up during regular audits involving compliance with
program requirements. DHCS indicates approved exemption
requests are posted in centers and clinics and are
available upon request.
Under existing law, if DHCS determines after an
investigation that a PACE program that has been granted an
exemption is operating in a manner contrary to the terms
and conditions of the exemption, DHCS must immediately
suspend or revoke the exemption. If the exemption is
applicable to more than one location or more than one
category of licensure, DHCS is authorized to suspend or
revoke an exemption for one or more license categories or
locations as it deems appropriate.
Arguments in Support
PACE programs write in support that this bill is a
technical clean-up bill in response to AB 847 (Berg) of
2005 that would give state departments the authority to
resolve regulatory conflicts and decrease inefficiency in
the oversight of PACE by allowing exemption requests to
apply statewide and program-wide.
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Previous legislation
AB 847 (Berg), Chapter 315, Statutes of 2005, allows 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.
PRIOR ACTIONS
Assembly Floor: 73-0
Assembly Appropriations: 16-0
Assembly Health: 18-0
Assembly Aging and Long Term Care: 6-0
POSITIONS
Support: Aging Services of California
Support (prior version):
AltaMed Health Services
CalPACE
Centers for Elder Independence
On Lok
Sutter SeniorCare PACE
St. Paul's Senior Homes & Services
Oppose: None received.
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