BILL ANALYSIS
AB 1593
Page 1
ASSEMBLY THIRD READING
AB 1593 (Yamada and Knight)
As Amended May 28, 2010
Majority vote
HEALTH 18-0 APPROPRIATIONS 17-0
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|Ayes:|Monning, Adams, Ammiano, |Ayes:|Fuentes, Conway, Ammiano, |
| |Carter, Conway, De La | | |
| |Torre, De Leon, Emmerson, | |Bradford, Charles |
| |Eng, Gaines, Hayashi, | |Calderon, Coto, |
| |Hernandez, Jones, Bonnie | |Davis, Monning, Ruskin, |
| |Lowenthal, Nava, V. | |Harkey, |
| |Manuel Perez, Salas, | |Miller, Nielsen, Norby, |
| |Audra Strickland | |Skinner, |
| | | |Solorio, Torlakson, |
| | | |Torrico |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Creates an exemption to the existing Medi-Cal
certification moratorium which will allow the opening of two
new, publicly financed, Adult Day Health Centers (ADHCs) at the
William J. "Pete" Knight Veterans Home and the Veterans Home of
California, Ventura, contingent on the availability of funds
appropriated in the annual Budget Act
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)According to published analysis by the Department of Finance
(DOF), annual increased Medi-Cal costs of $50,000 (50% General
Fund (GF)) would result from this bill. The DOF estimate
appears to underestimate the number of potential Medi-Cal
eligible individuals who may enroll in ADHC pursuant to this
bill and appears to underestimate annual per capita costs.
Actual costs in the range of $450,000 (50% GF) may result to
provide ADHC services to 40 Medi- Cal eligible individuals
eventually enrolled in the two veterans homes addressed in
this bill. Annual costs per ADHC participant are $11,000.
2)This bill contains language to make it contingent on the
annual Budget Act.
AB 1593
Page 2
COMMENTS : This bill creates an exemption to the ADHC moratorium
on Medi-Cal certification to permit two ADHCs operated by the
California Department of Veterans Affairs (CDVA) to become
eligible for Medi-Cal reimbursement. CDVA has constructed two
large veteran's campuses, one in Ventura County and another in
Lancaster, which will include multi-level housing and medical
services and intended to incorporate ADHC within their planned
care continuum. The availability of ADHC has been on hold due
to the budget situation.
ADHC is an organized day program of therapeutic, social, and
health activities and services provided to elderly persons with
functional impairments, either physical or mental, at risk of
institutional placement. These services include skilled nursing
care, physical therapy, social services, meals, speech therapy,
and socialization in order to reduce the risk factors which
could lead to placement into more expensive care settings.
California offers ADHC as an optional Medi-Cal benefit to reduce
utilization of nursing homes, emergency rooms, and hospitals.
Approximately 37,000 Medi-Cal beneficiaries are now served by
321 ADHCs in this state.
In 2003, the Centers for Medicare and Medicaid Services notified
DHCS that the ADHC program had to be approved under a waiver or
State Plan Amendment with specified changes. The 2004-05 Health
Budget Trailer Bill, SB 1103 (Committee on Budget and Fiscal
Review), Chapter 228, Statutes of 2004, authorized DHCS to
impose a 12-month moratorium on the certification of new ADHCs
after August 2004. DHCS has interpreted this authority to be
renewable annually at the discretion of the Director. This
authority has been exercised every year and has been extended
through fiscal year 2010-11. The Health Budget Trailer Bill of
2005 (AB 131 (Committee on Budget), Chapter 80, Statutes of
2005) added additional exceptions... According to DHCS, the
moratorium was implemented to capture the enrollment of ADHCs at
that time and to limit any increases in licensed capacity until
ADHC reform was accomplished. The moratorium was established to
be moderate in nature, and allow for increases in capacity,
change of ownership and relocation. It has exceptions for new
ADHCs in unserved areas and for increases in underserved areas.
The 2009-10 Health Budget Trailer Bill, (AB 5 X4 (Evans),
AB 1593
Page 3
Chapter 5, Statutes of 2009-10 Fourth Extraordinary Session)
enacted a rate freeze for 2009-10 and every year thereafter at
the 2008-09 levels. The budget reductions also included new
limits on the criteria for eligibility, effective, March 1,
2010. It is estimated that the new criteria could reduce the
number of eligible persons by 2-%. An order granting an
injunction of these reductions was granted by the federal court
on February 24, 2010.
In 2002, according to the CDVA Web site, planning for three
large veteran's facilities, one in Ventura County, one in
Lancaster, and one in West Los Angeles, was initiated following
passage of the Veterans Home Bond Act of 2000 (AB 2559
(Wesson), Chapter 216, Statutes of 2002). The construction of
the three facilities are financed with federal veteran's home
grants and state bond funding totaling $229 million, of which
60% is from federal sources. All three sites are intended to
provide multilevel housing and medical services for eligible
veterans. Ventura and Lancaster incorporate ADHC services as
well as assisted living and nursing care units within their
continuum of care design. Both projects had sought approval for
up to 100 licensed ADHC slots, but anticipate only 20 enrollees
at each facility for the first few years of operation. Absent
this legislation, residents of the two facilities may be placed
in the campus Medi-Cal nursing home with higher state costs and
less personal independence for the beneficiary.
The Governor is proposing to completely eliminate ADHC as a
covered Medi-Cal benefit, effective October 1, 2010.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097
FN: 0004625