BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 641 (Feuer)
Hearing Date: 8/31/2011 Amended: 8/23/2011
Consultant: Katie Johnson Policy Vote: Health 6-3
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BILL SUMMARY: AB 641 would:
1) Eliminate the citation review conference process as an
option available to a long term care (LTC) facility when
appealing a citation assessed by the California Department
of Public Health (CDPH). The bill would also permit CDPH to
recommend the federal government assess a federal civil
monetary penalty for a violation at a California LTC
facility.
2) Require the Department of Health Care Services (DHCS) to
consider whether an undue hardship exists at application
for or renewal of Medi-Cal benefits for home and facility
care services and would permit same-sex couples and
registered domestic partners to access similar asset
transfer benefits as opposite-sex couples.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Reduction in CDPH redirect $470 annually to other
assignments Special*
workload
Increase in penalty potentially significant
Special**
revenue
Lost Medi-Cal potentially significant, likely in
theGeneral/***
share-of-cost revenue high hundreds of thousands to Federal
millions of dollars
* State Department of Public Health Licensing and Certification
Program Fund
**State and Federal Health Facilities Citation Penalty Account
***50 percent federal, 50 percent General Fund
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AB 641 (Feuer)
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Staff notes that a previous version of this bill, which only
contained part of the provisions affecting long-term care, was
sent to the Senate Floor pursuant to Senate Rule 28.8. The bill
was subsequently amended on the Senate Floor, and re-referred to
the Senate Health Committee pursuant to Senate Rule 29.10(b),
where it was approved 6-3 on August 29 and referred to this
Committee pursuant to Joint Rule 10.5. Therefore, although this
bill meets the criteria for referral to the Suspense File, this
Committee may only: 1) hold the bill in Committee, or 2) return
the bill as approved by the Committee to the Senate Floor. The
bill may not be referred to the Suspense File or amended at this
time.
CRC Process Elimination
Existing law permits a LTC facility to contest a citation as
follows: for class "A" or "AA" citations 1) request a citation
review conference (CRC), 2) further contest CDPH's decision made
through the citation review process in superior court, 3) only
contest the citation in superior court, bypassing the CRC
process. For class "B" citations 1) request a CRC, 2) further
contest CDPH's decision made through the CRC process through an
adjudicative hearing with an administrative law judge (ALJ) or
through a binding arbitration process, 3) only through either an
ALJ or binding arbitration without having first appealed the
decision to a CRC.
This bill would eliminate the CRC process. CDPH currently spends
approximately $470,000 on CRCs. However, the department
indicates that staff is redirected from other priority
assignments in order to complete CRC workload. This bill would
therefore reduce department workload and permit CRC staff to
focus on other licensing and certification activities. It is not
expected that there would be an increase in ALJ or superior
court hearings.
On June 17, 2010, the California State Auditor released a report
entitled: Department of Public Health: It Reported Inaccurate
Financial Information and Can Likely Increase Revenues for the
State and Federal Health Facilities Citation Penalties Account.
The audit investigated the department's processes for issuing
citations to LTC facilities, collecting monetary penalties, and
tracking related financial information. It concluded the
AB 641 (Feuer)
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following: as of February 2010, more than 600 citations were
backlogged awaiting CRCs. The department may have incentivized
facilities to appeal citations due to delays in processing
appeals and its history in reducing monetary penalties.
Thus, this bill would substantially decrease department workload
and could result in increased penalty revenue for both the State
and Federal Health Facilities Citation Penalties Accounts.
Additionally, this bill would permit CDPH to recommend that the
federal government take action against a facility that violated
federal law. To the extent that CDPH recommends to the federal
government that it is appropriate to assess federal penalties in
addition to state citations, and the federal government chooses
to do so, there could be increased revenue for the federal
government.
Medi-Cal Benefits
In June 2011, the Centers for Medicare and Medicaid Services
(CMS) issued guidance to advise states of choices and options
regarding spousal and domestic partner protections related to
liens, transfer of assets, and estate recovery. The guidance
stated, "because of the flexibility afforded to States in
determining undue hardship, we believe that States may adopt
criteria, or even presumptions, that recognize that imposing
transfer of assets penalties on the basis of the transfer of
ownership interests in a shared home to a same-sex spouse or
domestic partner would constitute an undue hardship."
This bill would require the Department of Health Care Services
(DHCS) to consider, at initial application or redetermination,
whether an undue hardship exists prior to finding that an
applicant or recipient is subject to a period of ineligibility
for medical assistance for home and facility care. It would
specify that no person would be subject to a period of
ineligibility for medical assistance if the department finds
that an undue hardship exists. This bill would require DHCS to
seek federal approval, with an effective date of January 1,
2012, for these provisions and would specify that they would
only be implemented upon federal approval and if federal
financial participation is available.
This bill would define the circumstances in which an undue
hardship would exist as:
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1) Any or all ownership interest in the shared principal
residence to his or her same-sex or registered domestic
partner.
2) Other interest in resources other than a principal
residence are transferred to his or her same-sex or
registered domestic partner, within the allowable amounts.
3) Income or the right to receive income is transferred to
the same-sex spouse or registered domestic partner, within
the allowable amounts.
These provisions are consistent with those currently available
for opposite-sex couples. However, #2 and #3 appear to go beyond
federal guidance. It is unknown whether or not CMS would approve
#2 and #3.
There would likely be minimal fiscal effect with both #1 and #2
since the principal residence is already an exempt asset in most
cases and individuals currently spend down their resources.
There could be a fiscal effect in the hundreds of thousands to
millions of dollars in General Fund and federal funds due to a
loss in Medi-Cal share-of-cost revenue for #3 if it were
approved by CMS and if federal funds were available. Since 2000,
over 63,000 couples have registered with the Secretary of
State's Office as domestic partners. Further, when same-sex
marriage was legal in California, approximately 18,000 couples
were married. Approximately 15 percent of the California
population is aged, blind, or disabled.
Currently, many of the 66,000 individuals receiving Medi-Cal
long term care services pay a "share-of-cost" in order to
receive long term care services at an average cost of about $800
per month, or $9,600 annually. Although it is unknown how many
of Medi-Cal's long-term care services recipients pay a
share-of-cost versus those who do not pay a share-of-cost and
how many are in registered domestic partnerships or have
same-sex spouses, if, upon the implementation of this bill,
approximately 100 - 150 individuals were to cease paying their
share-of-cost over a year, Medi-Cal would then pay about
$960,000 - $1.4 million more annually. These increased Medi-Cal
costs would be shared 50 percent General Fund and 50 percent
federal funds. Actual costs would depend on the number of
registered domestic partners and same-sex married couples with
one individual receiving Medi-Cal long term care in an
institution and the amount of share-of-cost revenue that would
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be lost.
To the extent that more individuals would achieve eligibility or
become eligible faster, there could be unknown increased costs
to Medi-Cal. However, since the Medi-Cal long term care
population has remained virtually stagnant since the 1980s, it
is unlikely that there would be a significant impact.
In order to significantly reduce the potential fiscal impact
associated with these provisions, staff recommends removing #3.