BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1593 (Yamada)
Hearing Date: 7/15/2010 Amended: 5/28/2010
Consultant: Katie Johnson Policy Vote: Health 8-0 V.A. 4-0
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BILL SUMMARY: AB 1593 would exempt two specified state-owned
veterans' homes from a moratorium prohibiting the enrollment of
adult day health care centers as providers of adult day health
services into the Medi-Cal program.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
ADHC services Annual costs of approximately Federal
reimbursed by Medi-Cal $200 - $800 commencing in
the fiscal year that the ADHC
centers open; likely FY 2014-2015
*Same amount in General Fund offsets
*Medi-Cal costs would be shared 50 percent General Fund, 50
percent federal funds.
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Since 2004, the Department of Health Care Services (DHCS) has
maintained a moratorium on the certification and enrollment of
new adult day health care (ADHC) centers into the Medi-Cal
program. Existing law exempts certain applicants from this
moratorium. This bill would exempt the William J. "Pete" Knight
Veterans Home of California, Lancaster and the Veterans Home of
California, Ventura, from the moratorium.
The state currently operates 6 veterans' homes in Barstow, Chula
Vista, Lancaster, Ventura, West Los Angeles, and Yountville and
has broken ground on two more in Fresno and Redding. The
California Department of Veterans Affairs (CDVA) plans to
provide ADHC services at only the Lancaster and Ventura sites.
In FY 2009-2010, the Budget Conference Committee suspended the
opening of both of these ADHC centers for one year for a General
Fund savings of $1.8 million. Their opening has been suspended
until FY 2014-2015, the last phase of the opening of the homes.
CDVA plans to provide for 49 ADHC participants at each of the
Lancaster and Ventura homes. CDVA would receive federal funds of
approximately $70 per participant in the ADHC programs and
enrollees would pay a fee of $85, or a percentage of $85
depending on an individual's income. To the extent that federal
reimbursements, other insurance, including Medicare and
Medi-Cal, and any patient contributions do not cover the cost of
operating the ADHCs, CDVA would make up the difference with
state General Fund. Medi-Cal expenditures would offset General
Funds.
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AB 1593 (Yamada)
If CDVA were to certify and enroll its ADHCs in the Medi-Cal
program, Medi-Cal would pay $76 per day per person for up to 5
days each week. If all 98 places were filled by
Medi-Cal enrollees, costs would be $1.9 million total funds
annually. However, if only 20 percent of the places were
Medi-Cal enrollees, costs would be approximately $400,000 total
funds annually. Medi-Cal costs are generally shared equally
between the federal government and state General Fund.
As described above, the federal funds portion would offset
General Fund that would have been spent otherwise. For example,
without this bill, a Medi-Cal eligible person would still have
received ADHC services, but the $76 dollars that Medi-Cal would
pay would be 100 percent General Funds. With this bill, CDVA
would be able to bill Medi-Cal. That same $76 would now be 50
percent General Fund and 50 percent federal funds. Thus, there
would be a federal fund expenditure of $38 per place per day,
but there would also be a General Fund offset of $38 per place
per day.
Expenses would commence in the fiscal year in which CDVA
received approval to operationalize the ADHC centers at the two
veterans' home locations. According to a FY 2010-2011 CDVA
budget change proposal that summarizes the timeline for the
phased-in opening of the West Los Angeles, Lancaster, and
Ventura homes, the department expects to open the ADHCs in the
last phase in FY 2014-2015.
AB 369 (Yamada, 2009) was nearly identical to this bill and was
vetoed by the Governor, who said, "This measure is premature and
would add new General Fund costs to the Medi-Cal program when
significant reductions are currently being implemented.
Furthermore, the new facilities are still under construction and
not scheduled to provide services until at least July 2011."