BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 177 (Strickland)
Hearing Date: 5/23/2011 Amended: As Introduced
Consultant: Katie Johnson Policy Vote: Health 7-0
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BILL SUMMARY: SB 177 would increase the maximum number of beds
allowable per congregate living health facility (CLHF) from 12
to 25 in counties that have populations of more than 400,000,
but less than 500,000, individuals.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Increased CLHF-B potentially minor to significant
costs General/*
capacity Federal
Cost avoidancepotentially minor to significant cost
avoidance**General/*
Federal
*Medi-Cal costs shared 50 percent General Fund, 50 percent
federal funds.
**See Staff Comments
STAFF COMMENTS: This bill may meet the criteria for referral to
the Suspense File.
CLHFs are residential homes that provide inpatient care, medical
supervision, 24-hour skilled nursing and supportive care, and
other services to individuals who A) are mentally alert, but
have a disability, and may be ventilator dependent, B) have a
terminal or life-threatening illness, or, C) are
catastrophically and severely disabled.
Existing law provides that congregate living health facilities
(CLHFs) may have a capacity of no more than 12 beds, except as
follows: 1) a CLHF operated by a city or county may have 59
beds, as specified; 2) in counties with a population of 500,000
or more individuals, a non-city or county owned CLHF that serves
persons with a diagnosis of a terminal and/or a life-threatening
illness may have a capacity of up to 25 beds. These CLHFs are
known as CLHF-Bs, as denoted by their specific subdivision in
statute.
SB 177 (Strickland)
Page 3
This bill would permit a CLHF not operated by a city or county
that serves individuals with a terminal and/or life-threatening
illness diagnosis in counties with populations of 400,000 or
more to have a capacity of up to 25 beds. Thus, it would
increase the bed limit from 12 beds to 25 beds within 5
counties: Monterey, Santa Barbara, Solano, Sonoma, and Tulare.
Serenity House is the only CLHF-B currently licensed in Santa
Barbara County, and thus, the only facility able to take
advantage of this increased bed limit. Serenity House
is a 6 bed facility; in 2009, its affiliated home health agency,
Visiting Nurse and Hospice Care (VNHC), began construction on an
18 bed facility with plans to open the new facility and close
the existing Serenity House. There would be a net increase of 6
beds available for Routine and General Inpatient Care in Santa
Barbara County. Without this bill, VNHC would only be able to
operate 12 of the 18 beds and there would be no net increase in
bed capacity. Additionally, it is possible that a new CLHF-B
could seek licensure with up to a 25 bed capacity. There are 11
CLHF-Bs in the state.
Potential Costs and Cost Avoidance
It is unclear whether this bill would increase or decrease the
dollar amount of Medi-Cal claims for hospice services. By
creating more bed capacity in Santa Barbara County, individuals
receiving hospice Medi-Cal benefits would have the option to
select Serenity House services versus receiving similar services
in a skilled nursing facility (SNF). If providing Routine Home
Care in a SNF is less costly than in a CLHF-B, then there would
be a potential cost to Medi-Cal. However, if the rates were the
same or the CLHF-B was less expensive than the appropriate
hospice SNF rate, there would be either no cost differential or
potential cost avoidance. The actual costs would be dependent on
which placement hospice patients choose and which SNFs and
CLHF-Bs a hospice provider contracts with for inpatient care.
For Routine Home Care, regulations provide that SNFs are
reimbursed at 95 percent of their facility-specific rate, as
determined by AB 1629 (Frommer), Chapter 875, Statutes of 2004.
SNFs and CLHF-Bs are generally paid the same for providing
Inpatient Respite and General Inpatient Care (GIP), so there
would likely be no or minor cost differential.
SB 177 (Strickland)
Page 4
For GIP, a hospice beneficiary may be placed in a capable SNF or
CLHF-B; each facility would receive the same GIP rate. If a SNF
or CLHF-B is unavailable, a patient would be placed in a
hospital which would also be paid at the GIP rate, or at a
potentially higher rate. If this bill results in increased
capacity to treat patients receiving hospice services in a
CLHF-B rather than in a general acute care hospital, there would
be either no cost differential or minor cost avoidance.
Hospice providers that contract with SNFs, CLHF-Bs, and
hospitals to provide inpatient care receive, the following
Medi-Cal reimbursement rates for hospice services in Santa
Barbara County:
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|SERVICE DESCRIPTION |DAILY RATE |
|--------------------------------+--------------------------------|
|Routine Home Care |$174.74 |
|--------------------------------+--------------------------------|
|Continuous Home Care |$42.45 per hour |
|--------------------------------+--------------------------------|
|Inpatient Respite Care |$183.57 |
|--------------------------------+--------------------------------|
|General Inpatient Care |$767.84 |
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Since this bill would increase the number of beds available to
hospice patients, there could be minor savings or potentially
significant costs to Medi-Cal to the extent that a patient
chooses to utilize these beds and that these beds are either
more or less expensive than another appropriate setting such as
a hospital or SNF. According to the May 2011 Medi-Cal estimate,
the average cost per SNF day statewide is $174, of which 95
percent would be $165, a cost differential of about $10.
However, actual costs would depend on the AB 1629 rate of the
particular SNF and the geographic hospice rates and could be
higher if more facilities choose to take advantage of this
increased bed limit in the 5 eligible counties. Any costs to the
California Department of Public Health to continue to license
and inspect CLHFs would be minor and absorbable.
SB 177 (Strickland)
Page 5