BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 732|
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THIRD READING
Bill No: SB 732
Author: Alquist (D)
Amended: 1/20/10
Vote: 27 - Urgency
PRIOR SENATE VOTE NOT RELEVANT
SENATE HEALTH COMMITTEE : 7-0, 1/13/10
AYES: Strickland, Cedillo, Cox, Leno, Negrete McLeod,
Pavley, Romero
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Medi-Cal: skilled nursing facilities:
continued use of
provider bulletins
SOURCE : Author
DIGEST : This bill allows the Department of Health Care
Services to continue use of provider bulletins related to
exemptions from the quality assurance fee for continuing
care retirement communities or multilevel retirement
facilities in implementing a provision imposing a quality
assurance fee on specified freestanding skilled nursing
facilities.
ANALYSIS :
Existing Law
CONTINUED
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1.Requires the Department of Health Care Services (DHCS) to
implement a facility-specific reimbursement ratesetting
system for certain freestanding skilled nursing
facilities (SNFs). Reimbursement rates for SNFs are
funded by a combination of federal funds, General Fund,
and monies collected through a quality assurance fee
imposed on SNFs.
2.Sunsets the quality assurance fee and rate methodology on
July 31, 2011. These provisions were initially
established by AB 1629 (Frommer), Chapter 875, Statutes
of 2004.
3.Authorizes the Director of DHCS to adopt regulations as
are necessary to implement the above-described
provisions. These regulations can be adopted as
emergency regulations.
4.States legislative intent that regulations be adopted on
or before July 31, 2010.
5.Authorizes the Director of DHCS, as an alternative to
adopting regulations, to implement the Medi-Cal Long-Term
Care Reimbursement Act (Act) and the quality assurance
fee-related provisions by means of a provider bulletin,
or other similar instructions. DHCS can use provider
bulletins or other similar instructions without taking
regulatory action, provided that the bulletins or the
other similar instructions do not remain in effect after
July 31, 2010.
6.Prohibits any state agency from issuing, utilizing,
enforcing or attempting to enforce any guideline,
criterion, bulletin, manual, instruction, order, standard
of general application, or other rule, which is a
regulation unless it has been adopted as a regulation and
filed with the Secretary of State.
This bill:
1.Allows DHCS to continue to use provider bulletins related
to exemptions from the quality assurance fee for
continuing care retirement communities or multilevel
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retirement facilities issued prior to July 31, 2010.
2.Permits DHCS, after July 31, 2010, to issue new provider
bulletins or similar instructions related to exemptions
from the quality assurance fee for continuing care
retirement communities or multilevel retirement
facilities.
Background
AB 1629 (Frommer), Chapter 875, Statutes of 2004,
established the quality assurance fee and the Act. The
revenue generated from the quality assurance fee (which is
estimated to raise $333 million on an accrual basis in
2010-11) is made available to draw down a federal match in
the Medi-Cal program and is used to provide additional
reimbursement to, and support, SNF quality improvement
efforts. SNFs that are defined in existing law as an
"exempt facility" do not pay the quality assurance fee. An
"exempt facility" includes a SNF that is part of a
continuing care retirement community (CCRC) that provides
independent living services, assisted living services, and
skilled nursing services on a single campus.
AB 1629 also changed the Medi-Cal reimbursement rates for
SNFs from a flat rate amount to a cost-based
facility-specific rate. Prior to the enactment of AB 1629
SNF rates were based on the location (one of three regions
in the state) and the size of the facility (whether the
facility had 60 or more beds). AB 1629 requires DHCS to
develop a facility-specific rate methodology that reflects
the sum of its projected cost in five cost categories and
as well as several pass-through costs, and is subject to a
maximum annual cap.
The goal of the Act, as contained in legislative intent
language in AB 1629, is to devise a Medi-Cal long-term care
reimbursement methodology that more effectively:
1.Ensures individual access to appropriate long-term care
services.
2.Promotes quality resident care.
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3.Advances decent wages and benefits for nursing home
workers.
4.Supports provider compliance with all applicable state
and federal requirements.
5.Encourages administrative efficiency.
As part of last year's budget, the health budget trailer
bill (AB 5XXXX (Evans), Chapter 5, Statues of 2009, Fourth
Extraordinary Session, increased the amount of revenue
subject to the quality assurance fee, for the 2009-10 and
2010-11 rate years, to include Medicare revenue for routine
and ancillary services and Medicare revenue for services
provided to residents covered under a Medicare managed care
plan. In addition, AB 5XXXX repealed the provision that
provided a maximum annual increase in the weighted average
Medi-Cal reimbursement rate of not more than five percent
of the weighted average Medi-Cal reimbursement rate for the
prior fiscal year in 2009-10 and 2010-11. Under current
law (as changed by AB 5XXXX, the weighted average Medi-Cal
reimbursement rates for 2009-10 and 2010-11 rate years will
instead not be increased over the weighted average Medi-Cal
reimbursement rate in effect for the 2008-09 rate year.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
ARGUMENTS IN SUPPORT : According to the author's office,
"This urgency measure is necessary because DHCS; ability to
use provider bulletins ends mid-year (July 31, 2010), the
regulation adoption process can be lengthy, DHCS has not
filed emergency regulations to implement the provisions of
AB 1629, and DHCS uses provider bulletins to limit
exemptions from the quality assurance fee nursing homes pay
that is used to draw down federal funds. Absent action,
existing provider bulletins to establish criteria that
nursing facilities that are part of a CCRC or MLF must meet
in order to qualify for such an exemption. DHCS is able to
limit the number of nursing facilities able to claim an
exemption through the policy contained in the provider
bulletin. Without the ability to continue to use provider
bulletins to establish policy for CCRC and MLF exemptions,
the revenue generated from the quality assurance fee that
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is used to fund SNF Medi-Cal reimbursement rates could be
adversely affected because additional facilities could seek
an exemption from paying the quality assurance fee. This
could create pressure on the General Fund."
CTW:cm 1/25/10 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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