BILL ANALYSIS
SB 117
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Date of Hearing: June 30, 2009
ASSEMBLY COMMITTEE ON HEALTH
Dave Jones, Chair
SB 117 (Corbett) - As Amended: June 1, 2009
SENATE VOTE : 33-6
SUBJECT : Adult day health care services: Medi-Cal
reimbursement methodology and limit.
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, 2011 and
makes conforming changes to other timeframes associated with the
establishment and implementation of the reimbursement
methodology. Specifically, this bill:
1)Requires DHCS to produce a cost report for a core rate, a
methodology and documentation necessary to estimate the rates
for separately billed services and for transportation services
by 2010 (was 2007).
2)Requires DHCS to establish facility peer groupings in
consultation with the California Association of Adult Day
Services (CAADS), by 2011 (was 2008).
3)Requires DHCS to facilitate training of providers in
collaboration with CAADS on the use of the new methodologies
and documentation by 2011 (was 2008).
4)Requires DHCS to establish a preliminary estimate of a
reimbursement limit, the rates for individual services and the
rates for separately billed services by 2011 (was 2010).
5)Requires DHCS to adopt regulations by 2014 (was 2013).
6)Changes social worker to social services director in the list
of ADHC core staff.
EXISTING LAW :
1)Provides for the licensure and regulation of ADHC as an
organized day program of therapeutic, social, and health
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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, and certified for the Medi-Cal program by the
California Department of Aging.
2)Establishes the Medi-Cal program administered by 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. ADHC centers may
qualify for Medi-Cal reimbursement for specified services
provided to certain persons who are eligible for Medi-Cal.
3)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.
FISCAL EFFECT : According to the Senate Appropriations
Committee analysis, this bill would have no fiscal impact in
fiscal year (FY) 2009-10. In 2010-1011 the costs would be in
the range of $144,000 - $393,000 General Fund and in $144,000 -
$393,000 in federal funds for the staff to continue to collect
the data and develop the rates required by this bill. In
2011-2012 the costs are estimated to be $287,000 - $785,000
General Fund and federal funds. There is potential savings
after implementation of a rate cap in the tens of millions.
COMMENTS :
1)PURPOSE OF THIS BILL . 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 additional time for the
establishment and implementation of the new rate methodology
to ensure that the methodology is established through a
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collaborative process between DHCS and ADHC stakeholders that
preserves the integrity of the program model.
2)ADHC . ADHC is a licensed community-based day care program
providing participants with daily registered nursing care,
physical, occupational and speech language pathology
therapies, therapeutic activities and social services in one
setting. ADHC helps adults manage chronic disabling health
conditions while living in their home and community. 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. A set of "core
services" must be provided to each participant including
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 offer 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.
3)ADHC MEDI-CAL REIMBURSEMENT METHODOLOGY . According to DHCS,
more than 93% 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), Chapter 691, Statutes of 2006, requires
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,
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dietetics, and mental health services, via new cost reports
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 ADHC providers
would report their core, transportation, and separately
billable services to the department for use in rate setting.
SB 1755 requires 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. According to the sponsors of
this bill, CAADS, none of these timelines were met.
SB 1755 requires DHCS, by March 30, 2010, to provide
preliminary estimates of the reimbursement rates and caps to
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 non-emergency transportation services currently
available.
SB 1755 also requires 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.
4)PRIOR LEGISLATION . 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 ADHC centers to each
participant.
5)SUPPORT . According to CAADS, sponsor of the 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
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DHCS has not established a methodology to determine rate caps,
has not established peer groups and has not conducted the
mandated transportation. 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.
6)GOVERNOR'S PROPOSAL . 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, a rate freeze,
require a redefinition of eligibility and new medical
necessity criteria, in conjunction with a workgroup on medical
acuity, and on-site treatment authorization requests for a $25
million savings. The data required by this bill would
continue to be necessary.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association for Adult Day Service (sponsor)
Aging Services of California
American Federation of State, County and Municipal Employees,
AFL-CIO
California Association of Health Facilities
California Society for Clinical Social Work
San Joaquin County Commission on Aging
Opposition
None on file.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097
SB 117
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