BILL ANALYSIS
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THIRD READING
Bill No: AB 1593
Author: Yamada (D) and Knight (R), et al
Amended: 8/4/10 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 8-0, 6/16/10
AYES: Alquist, Strickland, Aanestad, Cedillo, Leno,
Negrete McLeod, Pavley, Romero
NO VOTE RECORDED: Cox
SENATE VETERANS AFFAIRS COMMITTEE : 4-0, 6/22/10
AYES: Denham, Correa, Negrete McLeod, Cedillo
NO VOTE RECORDED: Wyland, Vacancy, Vacancy
SENATE APPROPRIATIONS COMMITTEE : 11-0, 8/12/10
AYES: Kehoe, Ashburn, Alquist, Corbett, Emmerson, Leno,
Price, Walters, Wolk, Wyland, Yee
ASSEMBLY FLOOR : 75-0, 6/2/10 - See last page for vote
SUBJECT : Adult day health care centers
SOURCE : California Association of Adult Day Services
DIGEST : This bill creates an exemption to the exiting
Medi-Cal certification moratorium which will allow the
opening of two new, publicly-financed, adult day health
centers 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
CONTINUED
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Act.
ANALYSIS :
Existing law:
1. Establishes the California Adult Day Health Care (ADHC)
Act which requires licensure and regulation of ADHCs
with administrative responsibility shared between the
Department of Public Health (DPH), the Department of
Aging (CDA), and the Department of Health Care Services
(DHCS) pursuant to an interagency agreement.
2. Requires ADHCs to be licensed by DPH as health care
facilities and permits certification for Medi-Cal
payments by CDA.
3. Establishes DHCS as the principal agency to oversee
Medi-Cal policy, rates, audits, investigations,
eligibility, and utilization.
4. Authorizes DPH to implement one year moratoriums on
certification and enrollment in the Medi-Cal Program of
new adult day health care centers on a statewide or
regional basis with certain statutory exceptions. These
exceptions include:
A. Applicants for Programs of All-Inclusive Care for
the Elderly.
B. Applicants for organizations currently designated
as federally qualified health centers.
C. Applicants centrally located in counties with no
other certified ADHCs.
D. Applicants serving discharged nursing home
patients in San Francisco.
E. Applicants requesting expansion or relocation
within a county with a specified ratio of persons
over the age of 65 receiving Medi-Cal.
F. Applicants currently licensed and located in a
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county whose population exceeds 9,000,000 serving a
specified population from a regional center.
This bill:
1. Creates an exemption to the exiting Medi-Cal
certification moratorium which will allow the opening of
two new, publicly-financed, ADHCs at the William J.
"Pete" Knight Veterans Home and the Veterans Home of
California, Ventura.
2. Clarifies, for purposes of the bill, that an
"underserved area" is a county having two percent or
fewer Medi-Cal beneficiaries over 65 years of age using
ADHC services, based on 2002 calendar year Medi-Cal
utilization data.
3. States that construction is contingent on the
availability of funds appropriated in the annual Budget
Act.
Background
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. The sponsor
notes that ADHCs employ a multidisciplinary team approach
providing multiple services under one roof. 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. According
to the bill's sponsor, the California Association of Adult
Day Services (CAADS) roughly 37,000 Medi-Cal beneficiaries
are now served by 321 ADHCs in this state.
ADHC Moratorium . The 2004-05 Health Budget Trailer Bill,
SB 1103 (Senate Budget and Fiscal Review Committee),
Chapter 228, Statutes of 2004, authorizes DHCS to impose a
12-month moratorium on the certification of new ADHCs after
August 2004. DHCS has interpreted this authority to be
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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 [Assembly Budget Committee],
Chapter 80, Statutes of 2005) added additional exceptions.
ADHCs were initially required to be nonprofit, charitable
facilities until 1994 when legislation (SB 1492 [Mello],
Chapter 1121, Statutes of 1994) authorized for-profit
companies to develop ADHCs. Since 1994, the number of
centers has grown from 90 to approximately 322 stand-alone
operations and an estimated 37,000 monthly users.
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. It was in response to the very rapid
growth in ADHCs. For example, the growth rate jumped from
seven percent in 1997-98 to 25 percent in 1998-99, and
continued in the double digits until the moratorium.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
ADHC services Annual costs of approximately
$200-$800 Federal
reimbursed by Medi-Cal commencing in the fiscal
year that the
ADHC centers open; likely FY 2014-15
* Same amount in General Fund offsets
* Medi-Cal costs would be shared 50 percent General Fund,
50 percent federal funds
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SUPPORT : (Verified 8/16/10)
California Association of Adult Day Services (source)
Aging Services of California
California Association of County Veterans Service Officers
National Association of Social Workers, California Chapter
OPPOSITION : (Verified 8/16/10)
Department of Finance
ARGUMENTS IN SUPPORT : This bill is sponsored by the
California Association for Adult Day Services (CAADS) to
create an exemption to the current ADHC moratorium on
Medi-Cal certification to permit two ADHCs operated by the
CDVA to become eligible for Medi-Cal reimbursement. CAADS
argues the inability to certify the Department of Veterans
Affairs (DVA) ADHCs is an unintended consequence of the
ADHC moratorium. The California Chapter of the National
Association of Social Workers writes that the ADHC
moratorium will force DVA to pay for ADHC services out of
its operating budget, which is a GF allocation. If the
ADHC were able to receive Medi-Cal certification, federal
matching funds could be used to fund the ADHCs, which would
offset state costs.
ARGUMENTS IN OPPOSITION : The Department of Finance (DOF)
writes in opposition that this bill is similar to AB 369
(Yamada), which was vetoed by the Governor. DOF states the
concerns in the Governor's veto message were timing (the
facilities were not operational), competing demands for
available General Fund, and process (the budget process is
a more appropriate venue for this proposal to be considered
rather than legislation). DOF states these concerns
remain, and states this bill expands ADHC, which is
contrary to the Governor's budget proposal to eliminate
ADHC as an optional Medi-Cal benefit in 2010-11.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall,
Bill Berryhill, Blakeslee, Block, Blumenfield, Bradford,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
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Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,
Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick,
Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Jones, Knight, Logue, Bonnie
Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande,
Niello, Nielsen, V. Manuel Perez, Portantino, Ruskin,
Salas, Saldana, Silva, Skinner, Smyth, Solorio, Swanson,
Torlakson, Torres, Torrico, Tran, Villines, Yamada, John
A. Perez
NO VOTE RECORDED: Tom Berryhill, Lieu, Norby, Audra
Strickland, Vacancy
CTW:mw 8/17/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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