BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
303 (Alquist)
Hearing Date: 5/28/2009 Amended: 4/27/2009
Consultant: Katie Johnson Policy Vote: Health 8-3
Judiciary 3-2
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BILL SUMMARY: SB 303 would codify existing regulations that
establish a skilled nursing facility (SNF) resident's right to
informed consent concerning the use of psychotherapeutic drugs.
The bill would specify the type of information that the resident
would be entitled to receive and would also require facility
staff to verify that a physician obtained informed consent from
the resident prior to administering the treatment.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Medi-Cal SNF nurse $40- 80 General/
training reimbursement $61 - 126 Federal
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STAFF COMMENTS: SUSPENSE FILE.
Existing law provides for the licensure and regulation of SNFs
by the California Department of Public Health (CDPH). Existing
law establishes the Medi-Cal program, the state's Medicaid
program, which provides comprehensive coverage to low-income
individuals, including the aged, blind, and disabled.
Existing law, the Long-Term Care, Health, Safety, and Security
Act of 1973, requires an attending physician or surgeon that
seeks to prescribe an antipsychotic medication for a resident of
a SNF to obtain the informed consent of the resident prior to
administering the treatment.
This bill would codify existing regulation relating to patient
informed consent in a SNF.
This bill would state that a SNF resident has the right to
receive all information that is material to his or her decision
concerning whether to accept or refuse any treatment or
procedure that involves psychotherapeutic drugs, as specified.
This bill would make a resident's physician responsible for
disclosing material information and for obtaining the resident's
informed consent to proceed with the proposed treatment. This
bill would require SNF staff, prior to administering
psychotherapeutic drugs, to verify that a resident's health
record contained a notation by the attending physician that he
or she obtained the resident's informed consent to the proposed
treatment.
This bill would require that informed consent be obtained with
respect to a resident of a SNF's decision to accept or reject
the administration of a psychotherapeutic drug and would require
the CDPH to inspect for compliance of these provisions during
prescribed inspections. This bill would not result in increased
oversight duties and workload to the
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CDPH, as the department currently inspects these facilities for
compliance with the regulations that this bill would codify.
In addition to codifying existing regulations, this bill would
also require SNF staff to verify with the resident that he or
she voluntarily agreed to accept the proposed treatment after
receiving pertinent information from the physician and to
document this interaction in the resident's health record. If
all approximately 1300 facilities would need 30 minutes to train
all licensed nurses on this new policy, it would cost about
$550,000 one-time systemwide. Assuming that approximately 65
percent of SNF stays are paid by Medi-Cal, the cost pressure to
Medi-Cal would be about $360,000 in total funds. Staff notes
that new information indicates that approximately 20 - 50% of
all facilities would need to train their nursing staff on these
new policies because they would be a change from their current
policies. Many nursing homes currently have robust informed
consent policies that either meet or exceed the criteria set
forth in this bill. Thus, cost pressures would likely be about
$75,000 - $180,000 total funds, or $30,000 - $70,000 General
Fund and $45,000 - 110,000 federal funds in FY 2009-2010.
Medi-Cal costs are generally shared 50 percent General Fund and
50 percent federal funds. However, in February of 2009,
President Obama signed the American Reinvestment and Recovery
Act (ARRA) into law. As a result, the Federal Medical Assistance
Percentage (FMAP) increased from 50 percent to 61.59 percent.
Thus, retroactively from October 1, 2008, through December 31,
2010, the federal government would pay for approximately 62
percent and the state General Fund would pay for 38 percent of
benefit-related Medi-Cal expenditures.
This bill would result in Medi-Cal cost pressure to reimburse
SNF expenses. AB 1629 of 2004 created a cost-based,
facility-specific Medi-Cal rate reimbursement system for
reimbursing free-standing SNFs for services provided to Medi-Cal
recipients. There are approximately 1200 free-standing SNFs
throughout the state. Existing law imposes an annual cap on
increases in SNF reimbursement rates. Last year, reimbursement
rates exceeded the cap by over 1 percent, meaning SNF costs were
higher than their reimbursement rates. Reimbursement rates are
expected to exceed the statutory caps each year through FY
2010-2011, when the reimbursement methodology sunsets. Thus,
although there could be increased costs to free-standing SNFs,
they are already expected to be reimbursed at under cost and
this bill would not change that. However, this bill would put
cost pressure on the cap in the amount described above.
Additionally, distinct part nursing facilities within hospitals
are not reimbursed through the AB 1629 rate methodology, as
described above, because they are not considered free-standing
SNFs. The DHCS similarly calculates a cost-based,
facility-specific rate, but then determines the median
reimbursement rate, which becomes the maximum reimbursement rate
for facilities with rates above the median. If a facility's
reimbursement rate is below the median, or cap, the facility
receives that rate. There are approximately 60 distinct part
nursing facilities with rates below this median, out of about
120 facilities. These would be the only facilities whose
Medi-Cal reimbursement rate could increase as a result of this
bill. If there were an average of 22 nurses per
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facility who would be paid an average rate of $40 per hour who
would require 30 minutes of training as a result of this bill,
the total costs to Medi-Cal could be up to $26,400, or $10,000
General Fund and $16,400 depending on the number of facilities
whose staff would require training on these new policies and on
the percentage of individuals served by Medi-Cal in each
facility. This amount would be minor and absorbable.