BILL ANALYSIS �
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 667
A
AUTHOR: Mitchell
B
AMENDED: June 9, 2011
HEARING DATE: June 22, 2011
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CONSULTANT:
6
Trueworthy
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SUBJECT
Medi-Cal: subacute care program
SUMMARY
Establishes medical necessity standards for the Medi-Cal
subacute care program.
CHANGES TO EXISTING LAW
Existing law:
Establishes the Medi-Cal program, under the Department of
Health Care Services (DHCS), to provide comprehensive
health benefits to low-income children, their parents or
caretaker relatives, pregnant women, elderly, blind or
disabled persons, nursing home residents, and refugees who
meet specified eligibility criteria.
Establishes the Medi-Cal subacute care program in order to
more effectively use Medi-Cal dollars while ensuring needed
services for patients who meet subacute care criteria.
Establishes level of care, reimbursement, scope and
duration of benefits, staff-to-patient ratios, and
standards for participation in the Medi-Cal subacute care
Continued---
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program.
This bill:
Makes various legislative findings and declarations
relating to subacute care hospitals, including, that
California has 400 children under the age of 21 who rely on
life-sustaining technology in 10 pediatric subacute care
hospitals. Also declares that the regulatory criteria
related to the subacute care program have not been updated
since the program's inception 16 years ago.
Defines "pediatric subacute services" in the Medi-Cal
program as health care services needed by a person under
the age of 21 who uses medical technology that compensates
for the loss of vital bodily functions.
Requires that medical necessity for pediatric subacute care
must be substantiated by one of the following:
a) Tracheostomy with dependence on mechanical
ventilation for a minimum of six hours each day;
b) Dependence on tracheostomy care requiring
suctioning at least every six hours, and room air mist
or oxygen as needed and dependence on one of the
following six treatment procedures:
i) Dependence on tracheostomy care requiring
suctioning at least every six hours and room air
mist or oxygen;
ii) Continuous intravenous therapy, as specified;
iii) Peritoneal dialysis;
iv) Tube feeding;
v) Other medical technologies that require the
services of a professional nurse; or
vi) Biphasic Positive Airway Pressure (BiPAP) as
specified and lacking cognitive or physical ability
to protect the airway.
c) Dependence on tracheostomy care requiring
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suctioning at least every six hours and room air mist
or oxygen and one of the conditions in b) ii) through
vi) above;
d) Dependence on skilled-nursing care in the
administration of any three of (b) above; or,
e) Dependence on BiPAP and Continuous Positive Airway
Pressure (CPAP), as specified, and one of the
conditions in b) i) through vi) above.
Establishes that the medical necessity in this bill is
intended solely for the evaluation of a potential eligible
patient for pediatric subacute care who would otherwise be
receiving an acute level of care.
Deletes the requirement that subacute patient care be
defined by DHCS based on a study established in 1980, and
makes other technical and clarifying changes.
FISCAL IMPACT
The Assembly Appropriations Committee analysis states that
AB 667 would provide potential state cost savings of up to
$9 million ($4.5 million General Fund) to the extent
additional children are transferred from an acute level of
care to a subacute level of care.
BACKGROUND AND DISCUSSION
According to the author, AB 667 would codify current
regulations and clarify the specific conditions that
qualify a child for pediatric subacute admission to include
newer technology and assistive devices for pediatric
patients. The author states that the criteria used to
evaluate and authorize admissions into a Medi-Cal subacute
program have not been adjusted since the program's
inception. Children whose needs could be adequately
provided for in a pediatric subacute facility are often not
transferred because they do not meet the criteria specified
in regulations. The author states that these children then
remain in an acute hospital, at a substantially higher cost
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to Medi-Cal.
The author states California has 10 pediatric subacute care
hospitals providing cost-effective health care services to
approximately 400 children under the age of 21 who require
medical technology due to loss of vital bodily functions.
The author further states that all pediatric subacute
patients need 24-hour nursing and special services such as
inhalation therapy, tracheostomy care, intravenous feeding
tubes, and, complex wound care. The author points out that
subacute facilities are unique because they provide a
child-friendly environment that enables increased
interaction among the children.
Medi-Cal subacute care program
Established in July of 1983, the Medi-Cal subacute care
program serves patients in licensed health facilities who
meet subacute care criteria. Pediatric subacute care is a
level of care needed by a person under the age of 21 who
uses a medical technology that compensates for the loss of
a vital bodily function. Specific reimbursement rates have
been developed for providers of subacute care, and daily
reimbursement rates for subacute facilities vary depending
on the type of the facility and whether the patient is
ventilator dependent or non-ventilator dependent.
Related bills
SB 804 (Corbett) would require DHCS to allow congregate
living health facilities, as defined, that solely provide
pediatric subacute care services and do not provide
Medicare services, to participate in the subacute care
program. SB 804 was referred to the Senate Health
committee, and the hearing was canceled at the request of
the author.
AB X1 19 (Blumenfield) would extend the current quality
assurance fee imposed on nursing homes to freestanding
pediatric subacute care facilities beginning August 1,
2011. AB X1 19 is pending before the Assembly Floor.
Prior legislation
AB 36 (Quakenbush), Chapter 1030, Statutes of 1993,
establishes a program to provide medically appropriate care
for technology dependent children on a cost basis, if the
overall cost to the state would decrease. AB 36
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establishes cost-based reimbursement for this program and
the services required to be provided at the facility, and
authorizes adoption of the regulations that this bill seeks
to codify.
Arguments in support
The Subacute Saratoga Hospital and the Children's Recovery
Center, the sponsor of this bill, writes that pediatric
subacute patients are medically fragile; these patients
require 24-hour nursing and special services such as
inhalation therapy, tracheostomy care, intravenous feeding
tubes, and complex wound care. Prior to the creation of
the subacute program, patients were treated in high-cost
intensive care units of children's hospitals or state
developmental centers. According to the sponsor, current
admission criteria are contained in regulations and include
a limited number of qualifying conditions. These
regulations have not been updated to reflect enhanced and
improved technology such as BiPAP or CPAP, which did not
exist at the time regulations were developed. The sponsor
argues these devices are now commonly used as an
alternative to a tracheostomy.
The California Hospital Association (CHA) writes that
pediatric subacute care is a cost-effective alternative to
hospital-based care for critically ill children. CHA
argues the clarification to medical necessity criteria in
AB 667 will support the appropriate and timely discharge of
children from the hospital setting to subacute care.
Supporters contend that since pediatric subacute rates are
approximately one-fifth of those paid for care in a
pediatric intensive care unit of an acute hospital or a
state developmental center, substantial Medi-Cal savings
will also accrue every time a child is successfully placed
in one of these facilities. Children would also benefit
greatly from the specialty care, the
rehabilitation/developmental services, and the more
family-friendly environment offered in this setting.
PRIOR ACTIONS
Assembly Health: 18- 0
Assembly Appropriations:17- 0
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Assembly Floor: 70- 0
POSITIONS
Support: Subacute Saratoga Hospital and the Children's
Recovery Center (sponsor)
California Hospital Association
Oppose: None on file.
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