BILL ANALYSIS
AB 2073
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Date of Hearing: March 23, 2010
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
AB 2073 (Bonnie Lowenthal) - As Introduced: February 18, 2010
SUBJECT : Medi-Cal: adult day health care services.
SUMMARY : Revises the Medi-Cal eligibility criteria in the adult
day health care (ADHC) program. Specifically, this bill :
1)Deletes the criteria that a person requires substantial human
assistance in performing two or more activities of daily
living and replaces it with the criteria that the person
requires assistance.
2)Revises the definition of needing assistance to perform
essential elements of Activities of Daily Living (ADL) or
Instrumental Activities of Daily Living (IADL).
3)Deletes the ADHC eligibility category of a person having
chronic mental illness or moderate to severe Alzheimer's
disease or other cognitive impairment.
EXISTING LAW :
1)Establishes the Medi-Cal Program administered by the
Department of Health Care Services (DHCS), to provide
comprehensive health care coverage to certain categories of
low-income eligible individuals and families, including
children, the aged, blind, disabled, nursing home residents,
refugees, and pregnant women.
2)Establishes adult day health care as a Medi-Cal benefit for
eligible persons for the purpose of providing medical, social,
rehabilitative, dietary and nutritional services to ensure
that elderly persons and adults with disabilities will not be
institutionalized prematurely and inappropriately.
3)Requires DHCS to establish a revised Medi-Cal reimbursement
methodology by August 1, 2011.
4)Establishes criteria for eligibility for Medi-Cal ADHC.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
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committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill
would make changes in the ADHC program eligibility standards
that will conform to the court's decision in Cota (formerly
"Brantley") v. Maxwell-Jolly , 656 F. Supp. 2d 1161 (N.D. Cal.
2009) ( Cota v. Maxwell-Jolly ) and achieve the same level of
savings. This bill in intended to revise the criteria to
meet the federal standards of the Americans with Disabilities
Act (ADA) and federal Medicaid law.
2)BACKGROUND . In 2009, the Governor proposed the elimination of
ADHC benefits to Medi-Cal enrollees. The Budget Conference
Committee rejected the proposal and adopted a conference
compromise to impose a temporary 3-day cap until a
redefinition of eligibility criteria would be implemented.
The 2009-10 Health Budget Trailer Bill, (AB 5 X4 (Evans),
Chapter 5, Statutes of 2009-10 Fourth Extraordinary Session)
enacted new more restrictive eligibility criteria. Prior to
AB 5 X4, the criteria required a participant to show a need
for assistance or supervision with at least two of fifteen
qualifying daily activities, referred to as ADLs or IADLs. AB
5 X4 retained the requirement of two deficits, but reduced the
number of qualifying daily activities. AB 5 X4 also
effectively created two categories of beneficiaries, depending
on whether the individual has: a) chronic mental illness; b)
moderate to severe Alzheimer's disease; or, c) other cognitive
impairments. Only one category must demonstrate that they
require "substantial human assistance" which is defined as
including the performance of the entire ADL or IADL for
participants who are totally dependent on human assistance.
According to the sponsor, this criterion is more stringent
than for nursing home admission.
3)COURT INJUNCTION . On February 24, 2010 the U.S. District
Court for the Northern District of California issued an order
granting a motion for preliminary injunction on the case of
Cota vs. Maxwell-Jolly stopping implementation of these new
criteria. The court had previously entered a preliminary
injunction preventing the reduction in the maximum number of
days from three to five. The court found:
a) The criteria violated Federal Medicaid rules that
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require reasonable standards comparable for all groups;
b) The arbitrary elimination of half of the qualifying ADLs
and IADLs will result in the denial of access to
individuals who are still at the same risk of
institutionalization;
c) The new eligibility requirements impose a
disproportionate burden on a particular class of disabled
individuals, namely those with mental or cognitive
impairments as the remaining assessment criteria relate
primarily to physical care needs; and,
d) A substantial likelihood that the new eligibility
criteria violated the ADA and the courts interpretation in
Olmstead v L.C. by Zimring , 119 S. Ct. 2176 (1999) (known
as the Olmstead Decision) requiring community based
treatments and reasonable accommodation.
4)REIMBURSEMENT RATE REFORMS . In December 2003, the federal
Centers for Medicare and Medicaid Services notified California
to shift ADHC from an optional Medi-Cal benefit to either a
home and community based waiver program or apply for a State
Plan Amendment (SPA) with specified changes to the program.
DHCS and the providers opted to apply for a SPA and implement
ADHC as a Medi-Cal optional benefit rather than a waiver. SB
1755 (Chesbro), Chapter 691, Statutes of 2006, enacts these
modifications including a revision of the reimbursement rate
methodology and the eligibility criteria. The reimbursement
methodology is expected to be implemented in 2011.
According to the California Association for Adult Day Services
(CAADS), sponsor of this bill, the dates for implementation of
the new ADHC reimbursement methodology were overly ambitious
for such a complex endeavor, and that DHCS has not met the
timeframes set forth by SB 1755. Specifically, CAADS states
DHCS published the required cost report in 2008, one year
beyond the statutory deadline, that DHCS has not established a
methodology to determine rate caps, has not established peer
groups and has not conducted the mandated transportation. In
anticipation of the delay, SB 117 (Corbett), Chapter 165,
Statutes of 2009, extends the deadline from August 1, 2010 to
August 1, 2011.
As a result of the court injunction, the SB 1755 rate reforms
and eligibility criteria are still in effect, although the
SB1755 rate reform modifications have not been completed.
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5)COST CONTAINMENT MEASURES .
a) Rate Freeze . AB 5 X4 of 2009 also enacted a rate freeze
for 2009-10 and every year thereafter at the 2008-09
levels.
b) Treatment Authorization Requests . ADHC services must be
approved by a DHCS field office and re-approved every six
months through a Treatment Authorization Requests (TAR).
On site TAR reviews was scheduled to be implemented in
November 2009 and result in savings beginning December 2009
by reducing eligibility by 20%. This has been delayed and
will be revised in May 2010.
6)ELIMINATION OF ADHC SERVICES . The Governor's 2010-11 is
proposing to completely eliminate ADHC as a covered Medi-Cal
benefit, effective June 1, 2010
7)POLICY QUESTIONS . The author's intent is to correct the legal
issues raised in Cota v. Maxwll-Jolly . However, it is unclear
what impact this bill would have on the law suit or on the
proposal to eliminate the program entirely. The trial is
scheduled for September 2011. The state has until March 24,
2010 to appeal the injunction.
8)PRIOR LEGISLATION .
a) AB 5 X4 (Evans) of 2009 limits the maximum participation
rate for enrollees to three days per week as of August 1,
2009 and until a higher threshold for medical
necessity/medical acuity is established by DHCS;
establishes definitions of medical acuity for enrollment
into an ADHC and provided a comprehensive framework for
implementation of this change, including a work group with
constituency groups for implementation of the new
standards; provides for enhanced review of TARs by enabling
DHCS to conduct on-site reviews of ADHCs and related
functions.
b) SB 1755 (Chesbro) of 2006, requires the Department of
Health Services, (now DHCS), to establish a cost-based
Medi-Cal reimbursement methodology for ADHC services,
establish new eligibility criteria for ADHC services for
the purposes of Medi-Cal reimbursement, and establish daily
core services to be provided by ADHCs to each participant.
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c) SB 117 (Corbett) of 2009 extends the deadline by which
the DHCS is required to establish a new Medi-Cal rate
reimbursement methodology for ADHC services, from August
1, 2010 to August 1, 2011 and makes conforming changes to
other timeframes associated with the establishment and
implementation of the reimbursement methodology.
9)SUPPORT . AltaMed Health Services Corporation writes in
support that this bill is a "clean-up" to the medical
necessity criterion that was part of the 2009-2010 budget.
This modification will tighten the medical necessity criteria,
still achieve savings and bring the standards into compliance
with the ADA and the court's decision. The supporters further
state that this bill reduces the number of beneficiaries by
targeting services to the most in need, to achieve projected
budget savings, while maintaining the viability of the ADHC
program model. Eskaton Adult Day Health Center, writes in
support that the significant changes made last year were
extremely restrictive and would have resulted in it being
harder for participants to quality for ADHC than for placement
in a nursing home. The Robertson Adult Day Health Care Center
also writes in support that passage of this bill is needed to
prevent vulnerable and medically fragile members of the
community from being discriminated against due to terminology
that ignores a significant amount of people who do require the
ADHC services.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association for Adult Day Services (sponsor)
Aging Services of California
AltaMed Health Services Corporation
Alzheimer's Association
California Communities United Institute
California Hospital Association
Eskaton Adult Day Health Center
Robertson Adult Day Health Care Center
Sultan ADHC
Opposition
None on file.
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Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097