BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: SB 117
S
AUTHOR: Corbett
B
AMENDED: March 9, 2009
HEARING DATE: April 1, 2009
1
CONSULTANT:
1
Green/
7
SUBJECT
Adult day health care
SUMMARY
Extends the deadline by which the Department of Health Care
Services (DHCS) is required to establish a new Medi-Cal
rate reimbursement methodology for adult day health care
(ADHC) services, from August 1, 2010 to August 1, 2013.
CHANGES TO EXISTING LAW
Existing law:
Existing law defines ADHC as an organized day program of
therapeutic, social, and health activities and services
provided to elderly persons with either physical or mental
impairments, for the purpose of restoring an individual's
ability to provide self-care, maintain independence, and
avoid institutionalization in a long-term health care
facility. ADHC is provided at ADHC centers, which are
licensed by the Department of Public Health (DPH), and
certified for the Medi-Cal program by the California
Department of Aging (CDA).
Existing law establishes the Medi-Cal program administered
by DHCS, to provide comprehensive health care coverage to
certain categories of low-income eligible individuals and
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STAFF ANALYSIS OF SENATE BILL SB 117 (Corbett)Page 2
families, including children, the aged, the blind, the
disabled, nursing home residents, refugees, and pregnant
women. ADHC centers may qualify for Medi-Cal reimbursement
for specified services provided to certain persons who are
eligible for Medi-Cal.
Existing law requires DHCS, by August 1, 2010, and in
consultation with specified stakeholders, to establish a
Medi-Cal reimbursement methodology for ADHC services that
is based on the cost of services provided to an ADHC
client. Existing law sets forth various timeframes
associated with the establishment and implementation of the
new reimbursement system, including timeframes for DHCS to
establish new ADHC cost reports, train ADHC providers on
the new methodology, and adopt regulations to implement the
new methodology.
This bill:
This bill would extend the timeframe by which DHCS must
establish the new Medi-Cal reimbursement methodology from
August 1, 2010 to August 1, 2013, and would make conforming
changes to other timeframes associated with the
establishment and implementation of the reimbursement
methodology.
FISCAL IMPACT
Unknown.
BACKGROUND AND DISCUSSION
According to the author, DHCS has been unable to meet the
current timeframes required by existing law for developing
a new ADHC rate methodology. The author states that this
bill will provide an additional three years for the
establishment and implementation of the new rate
methodology, thereby providing the additional time
necessary to ensure that the methodology is established
through a collaborative process between DHCS and ADHC
stakeholders that preserves the integrity of the program
model.
ADHC
ADHC is a licensed community-based day care program
providing a variety of health, therapeutic, and social
STAFF ANALYSIS OF SENATE BILL SB 117 (Corbett)Page 3
services to those at risk of being placed in a nursing
home. Each ADHC center has a multidisciplinary team of
health professionals who conduct a comprehensive assessment
of each participant in order to determine and plan the ADHC
services needed to meet an individual's specific health and
social needs, pursuant to an individual plan of care.
ADHC centers must provide a set of "core services" to each
participant which includes professional nursing services,
personal care and/or social services, therapeutic
activities, and at least one meal per day. In addition to
core services, ADHC centers often provide other specialty
services such as physical therapy, occupational therapy,
speech and language pathology, dietetics, and mental health
services.
ADHC centers also must provide transportation for
participants to and from the center.
ADHC Medi-Cal reimbursement methodology
According to DHCS, more than 93 percent of ADHC
participants have their ADHC services reimbursed by
Medi-Cal. ADHC centers must provide at least four hours of
service per day to a participant in order to qualify for
Medi-Cal reimbursement. The current reimbursement system
does not allow ADHC centers to separately bill for any
services. Instead, ADHC centers bill the Medi-Cal program
for a four-hour minimum day of service, with the core,
transportation, and specialty services bundled together,
and are reimbursed for these services at a flat rate of
$68.57 per day, per participant.
SB 1755 (Chesbro), signed into law in 2006, required DHCS,
by August 1, 2010, to establish a cost-based reimbursement
methodology to replace flat rate reimbursement. Under the
new methodology, ADHC centers would separately bill for
core services, transportation, and specialty services,
referred to under the methodology as "separately billable
services," including, but not limited to, physical therapy,
occupational therapy, speech and language pathology,
dietetics, and mental health services, via new cost reports
STAFF ANALYSIS OF SENATE BILL SB 117 (Corbett)Page 4
devised by the department.
SB 1755 set forth various milestones for the department to
meet in order to develop the reimbursement system by the
2010 deadline. For example, SB 1755 required DHCS, by July
1, 2007, to devise a new cost report by which by ADHC
providers would report their core, transportation, and
separately billable services to the department for use in
rate setting. SB 1755 required DHCS, by January 1, 2008,
to facilitate training of ADHC providers on the new cost
reporting system, establish a methodology to calculate
reimbursement caps, and establish ADHC peer groupings, for
the purpose of developing reimbursement amounts and caps.
SB 1755 required DHCS, by March 30, 2010, to provide
preliminary estimates of the reimbursement rates and caps
to the California Association of Adult Day Services
(CAADS), and other ADHC stakeholders, and by July 1, 2010,
after stakeholder review, establish the final reimbursement
rates for core, separately billable, and transportation
services, as specified. In order to determine the
transportation service rate, SB 1755 required DHCS to
conduct a survey of ADHC transportation systems in other
states, as well as a review of California nonemergency
transportation services currently available.
This bill would extend each of these timeframes by three
years, requiring the new reimbursement system to be
established and in place by August 1, 2013.
SB 1755 also required DHCS to adopt regulations to
implement the new reimbursement system by August 1, 2013.
This bill would extend this timeframe by two years, to
August 1, 2015.
Prior legislation
SB 1755 (Chesbro), Chapter 691, Statutes of 2006, required
the Department of Health Services, now referred to as DHCS,
to establish a cost-based Medi-Cal reimbursement
methodology for ADHC services, established new eligibility
criteria for ADHC services for the purposes of Medi-Cal
reimbursement, and established daily core services to be
provided by ADHC centers to each participant.
Arguments in support
According CAADS, the bill's sponsor, the dates for
STAFF ANALYSIS OF SENATE BILL SB 117 (Corbett)Page 5
implementation of the new ADHC reimbursement methodology
were overly ambitious for such a complex endeavor, and that
the department has not met the timeframes set forth by SB
1755. Specifically, CAADS states that the department
published the required cost report in 2008, one year beyond
the statutory deadline, that the department has not
established a methodology to determine rate caps, peer
groups have not yet been established, and the mandated
transportation study has not yet been conducted. CAADS
states that the rates developed under this new
reimbursement system will determine the ongoing survival of
ADHC providers, and that this bill will protect providers
by providing a more realistic timeline for implementation
of the new reimbursement system.
The California Association of Health Facilities (CAHF)
states that the development of the new reimbursement system
has been complex and relies on the collection of valid
data. CAHF states that it is critical that reliable and
comparable data be collected from all ADHCs in order to
calculate new reimbursement rates, which is why the revised
implementation dates set forth in this bill are necessary.
POSITIONS
Support: California Association for Adult Day Services
(sponsor)
Aging Services of California
American Federation of State, County, and
Municipal Employees
California Association of Health Facilities
Commonwealth Adult Day Health Care
Graceful Senescence Adult Day Health Care, Inc.
Hope Adult Day Care Center
SunnyDay Adult Health Care
Yolo Adult Day Health Center
Oppose: None received
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