BILL ANALYSIS
SB 117
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Date of Hearing: July 7, 2009
ASSEMBLY COMMITTEE ON AGING AND LONG-TERM CARE
Bonnie Lowenthal, 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 for the Department of Health
Care Services (DHCS) to establish a new Medi-Cal rate
reimbursement methodology for adult day health care (ADHC)
services by one year to August 1, 2011 and makes conforming
changes to other schedules associated with the development and
implementation of the reimbursement methodology. Specifically,
this bill :
1)Requires DHCS to establish a reimbursement methodology and
reimbursement limit for ADHC services on a prospective cost
basis for services provided to each participant pursuant to
his or her plan of care by August 1, 2011.
2)Requires DHCS to do all of the following:
a) Produce a cost report for a core rate, the methodology
and documentation necessary to establish the reimbursement
rate for the separately billable services, and the
reimbursement rates for transportation services by July 1,
2010;
b) Facilitate training of providers in collaboration with
the California Association of Adult Day Services (CAADS) by
January 1, 2011;
c) Establish facility peer groupings in coordination with
CAADS by January 1, 2011;
d) Establish a methodology for calculating the
reimbursement limit, rates for daily core services, and
applicable percentiles limiting specific cost categories
within the core rate after consultation with CAADS by July
1, 2011;
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e) Develop a preliminary estimate of the reimbursement
limit, the reimbursement rate for individual ADHC services,
and separately billable services and provide the estimates
and rates to CAADS and other stakeholders by March 30,
2011: and,
f) Compare the information supplied to all interested
stakeholders to what would have been paid under the rate
methodology in effect for the 2010-11 Fiscal Year (FY).
3)Changes the term "social worker" to "social services
director".
4)Requires DHCS to adopt regulations by 2014.
EXISTING LAW
1)Establishes the California Adult Day Health Care Act which
requires licensure and regulation of ADHC centers with
administrative responsibility for this program shared between
DHCS, the Department of Public Health, and the California
Department of Aging (CDA), pursuant
to an interagency agreement.
2)Requires ADHC centers to meet specific requirements related to
services, physical plant, staffing, administration, and
recordkeeping.
3)Defines key terms related to ADHC including:
a) Activities of daily living (ADLs), as essential living
activities including bathing, dressing, self-feeding,
toileting, ambulation, and transferring;
b) Instrumental Activities of Daily Living (IADLs), as
activities for the purpose of functioning in one's home and
community environment;
c) Personal health care provider, as the participant's
personal care physician, physician's assistant, or nurse
practitioner, operating within his or her scope of
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practice;
d) Care coordination, as the process of obtaining
information from, or providing information to, family
members, the primary care provider (PCP) or social services
agencies to facilitate the delivery of services to meet
participant needs;
e) Professional nursing, as services provided by a
registered nurse or licensed vocational nurse functioning
within his or her scope of practice; and,
f) Psychosocial, as a participant's psychological status in
relation to the participant's social and physical
environment.
4)Establishes eligibility criteria for ADHC services, thereby
limiting participation in ADHC, for purposes of Medi-Cal
reimbursement, to Medi-Cal recipients who meet all of the
following criteria:
a) The person is 18 years of age or older with one or more
chronic, or post-acute medical, cognitive, or mental health
conditions, and a physician, nurse practitioner or other
health care provider requested ADHC for that person;
b) The person has functional impairments in two or more
ADLs, IADLs, or a combination of both, and requires
assistance or supervision in performing these activities;
c) The person requires ongoing or intermittent protective
supervision, skilled observation, assessment, or
intervention by a skilled health or mental health
professional to improve, stabilize, maintain or minimize
deterioration of the medical, cognitive, or mental health
condition; and,
d) The person requires ADHC services that are
individualized and planned, including when necessary the
coordination of formal and informal services outside of
ADHC, to support the individual and his or her family or
caregiver in the living arrangement of his or her choice
and to avoid or delay the use of institutional services,
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including, but not limited to hospital emergency department
services, inpatient acute care hospital services, inpatient
mental health services, or placement in a nursing facility
or an intermediate care facility for the developmentally
disabled.
5)Requires that the authorization or reauthorization of an ADHC
treatment authorization request only be granted if the
participant meets all of the following medical necessity
criteria:
a) The participant has one or more chronic or post acute
medical, cognitive, or mental health conditions that are
identified by the participant's personal health care
provider as requiring monitoring, treatment, or
intervention; without which the participant's condition
would likely deteriorate and require emergency department
visits, hospitalization, or other institutionalization;
b) The participant has a condition or conditions resulting
in limitations in the performance of two or more ADLs or
IADLs, or a combination of one or more from each category;
c) A need for assistance or supervision in performing the
ADLs or IADLs. The assistance shall be in addition to any
other non-ADHC support the participant is currently
receiving in his or her own residence;
d) The participant's network of non-ADHC supports is
insufficient to maintain the individual in the community as
demonstrated by at least one of the following:
i) The participant lives alone and has no family or
caregivers available to provide sufficient and necessary
care or supervision;
ii) The participant resides with one or more related or
unrelated individuals, but they are unwilling or unable
to provide sufficient and necessary care or supervision
to the participant; and,
iii) The participant has family or caregivers available,
but those individuals require respite in order to
continue to provide sufficient and necessary care or
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supervision.
e) A high potential exists for the deterioration of the
participant's medical, cognitive, or mental health
condition or conditions in a manner likely to result in
emergency department visits, hospitalization, or other
institutionalization if ADHC services are not provided;
and,
f) The participant's condition or conditions require ADHC
services on each day of attendance that are individualized
and designed to maintain the ability of the participant to
remain in the community and avoid emergency department
visits, hospitalization, or other institutionalization.
6)Requires ADHC centers to offer and provide directly on
premises, in accordance with each participant's plan of care,
and subject to prior authorization by the Medi-Cal program,
the following core services to each participant during each
day of the participant's attendance at the center:
a) One or more core nursing services , as specified,
including the following:
i) Observation, assessment, and monitoring of
participant's health status and changes in condition and
risk factors;
ii) Management of chronic conditions using standard
monitoring procedures at defined intervals as necessary
due to any change in the participant's condition;
iii) Monitoring and administration of medications, and
the administration and recording of the participant's
prescribed medications;
iv) Oral or written communication with the participant's
PCP, family, or other caregiver, regarding changes in the
participant's condition, signs, or symptoms; and,
v) Supervision of personal care services provided.
b) One or both of the core personal care services ,
including supervision of, standby assistance with ADLs or
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IADLs, or protective group supervision and interventions
for safety and to minimize the risk of injury, accident,
inappropriate behavior or wandering;
c) One or more core social services , including the
following:
i) Observation, assessment and monitoring of
participant psychosocial status;
ii) Group psychosocial work; and,
iii) Care coordination.
d) At least one therapeutic activity , including, group or
individual activities to enhance social, physical or
cognitive functioning of participant, and facilitated
participation in scheduled group activities for those
participants whose frailty or cognitive functioning level
precludes them from active participation; and,
e) One meal per day of attendance, with the provision of a
special or therapeutic diet as needed.
7)Requires DHCS, in consultation with the CAADS to develop a
rate methodology for ADHC which takes into consideration all
allowable costs associated with providing ADHC services. The
rate methodology shall be established by August 1, 2010 and
will include daily core services as well as separately
billable services, and a reimbursement limit for ADHC services
on a prospective cost basis provided to each participant.
8)Includes a moratorium on the certification of, and enrollment
into, the Medi-Cal program of new ADHC centers on a statewide
or regional basis. The director of DHCS is allowed to extend
the moratorium beyond the initial one-year period.
9)Requires DHCS to report to the relevant policy and fiscal
committees of the Legislature annually on the implementation
of changes made to the ADHC program subsequent to the program
reforms of 2006, including the impact of those changes on the
number of centers and participants.
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10)Requires DHCS to issue guidance to ADHC providers through
provider bulletins to clarify program requirements where a
conflict exists between existing regulations and ADHC laws in
effect on or after January 1, 2007.
FISCAL EFFECT : According to the Senate Appropriations
Committee analysis, this bill would have no fiscal impact in FY
2009-10. In FY 2010-2011, the costs would be in the range of
$144,000 to $393,000 General Fund (GF), with matching federal
funds for the staff to continue to collect the data and develop
the rates. In FY 2011-2012, the costs are estimated to be
between $287,000 and $785,000 GF and federal funds. The
analysis also noted the potential for savings after the
implementation of a rate cap in the tens of millions.
COMMENTS : ADHC services are provided to individuals, mostly
older adults, at risk of placement in skilled nursing
facilities. Generally, these services include assistance with
activities of daily living, physical, occupational and speech
therapies, nutrition counseling, social work services, and some
mental health services. These services are provided on an
outpatient basis by an ADHC center, which is either a non-profit
or for-profit organization.
Each ADHC center has a multidisciplinary team of professionals
in order to determine and plan the services needed to meet an
individual's plan of care. A set of "core services" must be
provided to each participant, and at least one meal per day.
ADHC centers also offer other services, including physical
therapy, speech and language pathology, and mental health
services.
According to DHCS, more than 93 percent of ADHC participants
have their services reimbursed by Medi-Cal. The current
reimbursement system, ADHC centers bill Medi-Cal for the
required four-hour minimum day of service, with all services
(core, meals, specialty services, and transportation) bundled
into one flat rate of $68.57 per day, per participant. The
bundled rate is set at 90 percent of the reimbursement rate for
nursing facilities. The flat rate for each participant allows
ADHC centers to provide services to a range of clients, some who
require basic services, and some who require more intensive
therapies.
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Since 1978, DHCS has covered ADHC services in the Medi-Cal
program under its Medicaid State Plan. DHCS administers the
ADHC program through an interagency agreement with CDA.
However, in 2004, the Centers for Medicare and Medicaid Services
(CMS) determined that the State Plan is not in compliance with
federal laws and regulations, and that federal matching funds
may not be available unless California changes its ADHC program
from an optional Medicaid benefit to a home and community-based
service provided, as a single service, through a 1915(c)
Medicaid waiver.
To resolve the conflict with CMS, the Legislature passed SB 1755
(Chesbro), Chapter 691, Statutes of 2006, to tighten eligibility
for the program and establish a cost-based reimbursement
methodology to replace the flat-rate reimbursement. Under the
new methodology, ADHC centers will separately bill for core
services, transportation, and specialty services. SB 1755 also
set the timelines for completion of various tasks necessary to
establish the cost-based reimbursement methodology, including
feedback from CAADS and other stakeholders. This bill would
change the timelines and delay the completion of the
reimbursement methodology by one year.
According to CAADS, implementation of SB 1755 has been a complex
process and several of the deadlines included in the bill have
been missed. For example, the ADHC revised cost report was
published in 2008, a year later than originally scheduled which
delayed the cost data collection. In addition, the peer groups
which were due in January of 2008 and the mandated
transportation study have not been completed.
The development of the cost-based reimbursement relies on
collecting valid data for developing fair reimbursement rates
for ADHC providers. In 2008, CAADS took the initiative to
define separately billable services and developed a guidance
paper and forms to instruct providers on how to define and count
the number of separately billable services provided in an ADHC
center to allow for the collection of cost report data and rate
setting. CAADS argues that this bill is necessary to provide a
more realistic timeline for the implementation of the unbundled
rate methodology. The additional time provided in this bill
will ensure that California has valid, consistent, and reliable
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data to establish the new ADHC rates.
As part of the 2009-10 May Revision, the Governor proposed the
elimination of ADHC benefits to Medi-Cal enrollees. However,
the Budget Conference Committee rejected the proposed
elimination and instead adopted a compromise to impose a
temporary 3-day cap on the number of allowable days for
participants, a rate freeze, additional redefinition of
eligibility and medical necessity criteria and changes to the
treatment authorization request process. If the final adopted
budget revision remains consistent with the Conference Committee
language, the data required under existing law for the
development of the new rate methodology and extended timelines
included in this bill would continue to be necessary.
Prior Legislation:
SB 1755 (Chesbro), Chapter 691, Statutes of 2006, established
new eligibility criteria for ADHC services and data requirements
and timelines for DHCS to establish a new rate methodology.
AB 572 (Berg), Chapter 648, Statutes of 2008, clarified existing
law and regulations governing ADHC pertaining to hours of
service, core staff, staff absences, and policies and procedures
for dealing with natural disasters and emergencies, and provides
greater flexibility to ADHC providers in transportation and
nutrition requirements.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association for Adult Day Services - Sponsor
Aging Services of California
American Federation of State, County and Municipal Employees
(AFSCME), AFL-CIO
California Association of Health Facilities
California Society for Clinical Social Work
San Joaquin County Commission on Aging
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Opposition
None on file.
Analysis Prepared by : Allison Ruff / AGING & L.T.C. / (916)
319-3990