BILL ANALYSIS
AB 1593
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1593 (Yamada and Knight)
As Amended August 4, 2010
Majority vote
-----------------------------------------------------------------
|ASSEMBLY: |75-0 |(June 2, 2010) |SENATE: |35-0 |(August 19, |
| | | | | |2010) |
-----------------------------------------------------------------
Original Committee Reference: HEALTH
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.
The Senate amendments are technical and clarifying.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the bill as passed by the Senate.
FISCAL EFFECT : 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 Federal
$200 - $800 reimbursed by Medi-Cal
commencing in the fiscal year (FY) that the
ADHC
centers open; likely FY 2014-2015
*Same amount in General Fund (GF) offsets
*Medi-Cal costs would be shared 50% GF, 50% federal funds.
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
AB 1593
Page 2
new veterans' campuses, one in Ventura County and another in
Lancaster, which includes multi-level housing and medical
services and is 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.
The 2004-05 Health Budget Trailer Bill, SB 1103 (Committee on
Budget and Fiscal Review), Chapter 228, Statutes of 2004,
authorized the Department of Health Care Services (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 FY 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 limit any increases in licensed capacity until
ADHC rate reform was accomplished. The moratorium allowed for
increases in capacity, change of ownership and relocation. It
also has exceptions for new ADHCs in unserved areas and for
increases in underserved areas.
AB 5 X4 (Evans), 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. This budget
reduction 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.
According to CDVA, planning for three new veteran's facilities,
one in Ventura County, one in Lancaster, and one in West Los
AB 1593
Page 3
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,
By allowing these to participate in Medi-Cal, the federal funds
portion would offset GF 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% GF. With this bill, CDVA would
be able to bill Medi-Cal. That same $76 would now be 50% GF and
50% federal funds. Thus, there would be a federal fund
expenditure of $38 per place per day, but there would also be a
GF offset of $38 per place per day.
Expenses would commence in the FY in which CDVA received
approval to operate 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 CDVA
expects to open the ADHCs in the last phase in FY 2014-2015
The Governor's 2010-11 budget proposed to completely eliminate
ADHC as a covered Medi-Cal benefit, effective October 1, 2010.
The budget adopted by the Budget Conference Committee on August
3, 2010 rejected this proposal.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097
FN: 0006007