BILL ANALYSIS �
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THIRD READING
Bill No: AB 557
Author: Yamada (D)
Amended: 6/20/13 in Senate
Vote: 21
SENATE VETERANS AFFAIRS COMMITTEE : 7-0, 6/11/13
AYES: Hueso, Knight, Block, Correa, Lieu, Nielsen, Roth
NO VOTE RECORDED: Vacancy
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 75-0, 5/13/13 - See last page for vote
SUBJECT : Veterans homes: accounting of charges
SOURCE : Author
DIGEST : This bill requires a veterans homes residents
quarterly statement or accounting to specify that the home may
use the deceased veterans money or personal property that is
outside the home for payment of unreimbursed costs of care.
This bill also requires the quarterly statement or accounting
and any notice relating to quarterly statements posted in any
veterans' home to be in 14-point font or larger.
ANALYSIS :
Existing law:
1. A member (resident) of a state veterans home is required to
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pay fees and charges as determined by the Department of
Veterans Affairs (CalVet).
2. Requires the administrator of a state veterans home to
provide each member of the home with a quarterly statement or
accounting of all charges for the costs of care rendered to
the member in excess of the member fee. The quarterly
statement or accounting of charges must clearly indicate:
A. That the costs of care that may be incurred in excess
of the member contribution fee.
B. That if the veteran is a resident of the home at the
time of death, the home may disburse the veteran's moneys
or personal property for payment of unreimbursed excess
costs of care.
This bill:
1. Requires that the quarterly statements of all charges for the
costs of care rendered to the member in excess of the member
fee include language that if the veteran is a resident of the
home at the time of death, the home may use his/her money or
personal property that is in possession of the home or
outside the home for payment of unreimbursed costs of care.
2. Requires that the statements and notices relating to the
statements shall be in 14-point font or larger.
Background
CalVet's Veterans Homes Division provides rehabilitative,
residential medical care and services in a homelike environment
for all veterans (and eligible veteran spouses) residing in the
state's six active veterans homes, which are located in
Yountville, Barstow, Chula Vista, Ventura, Lancaster, and West
Los Angeles. As of early 2013, more than 1,700 members resided
in these veterans homes. CalVet is scheduled to begin admitting
veterans in October 2013 at two new veterans homes located in
Fresno and Redding.
Funding for the annual operating expenses of the veterans homes
comes from the state's General Fund (GF), and any revenues that
the Veterans Homes Division receives are subsequently remitted
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to the GF. These sources of revenue include payments from the
United States Department of Veterans Affairs; reimbursements
from federal, state, or private insurance plans-including the
Medicare and Medi-Cal programs; and the fees that existing law
requires state home residents to pay fees in accordance with the
care they receive. The fees are determined by CalVet. There
are times when the residents' care exceeds the basic fee (e.g.
dental care, acute medical care, etc.).
CalVet may recover costs from the veteran's estate for payment
of funeral expenses or any obligation owed to the home,
including the cost of any care rendered by the home in excess of
the fees paid by the veteran to the home. Any funds of the
deceased veteran representing the cost of care rendered by the
home in excess of the fees paid by the veteran to the home are
paid into the Morale, Welfare, and Recreation Fund. These
provisions apply only to veterans who became members of the home
on or after January 1, 1984.
Audit report . In May 2013 the State Auditor released Audit
Report 2012-119, which examined CalVet's management of the
veterans homes. The Report offered the following conclusions:
1. CalVet has not maximized its ability to generate revenue for
the care provided to its members. Between fiscal years
2009-10 and 2011-12, CalVet generated revenues to offset less
than half of the cost to operate its veterans homes.
According to the chief financial officer, before 2012 it did
not have policies and procedures for consistently monitoring
and increasing the amount of revenue generated at the
veterans homes. For example:
A. CalVet headquarters did not have adequate controls in
place to ensure that the veterans homes were consistently
enrolling and monitoring the status of their members in
maintaining coverage in all medical insurance and federal
government-funded income programs for which the members
were eligible.
B. CalVet headquarters did not have a process to monitor
whether eligible members were enrolled in private medical
insurance plans or in the Medicare and Medi-Cal programs.
2. State laws and CalVet policies also limit CalVet's ability to
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recover the full cost of providing care to members of
veterans homes while they are living at a home and from using
funds collected from members' estates after they pass away to
offset the costs of their care.
A. Under state law, CalVet can use only a member's annual
income in determining the member's fee that CalVet may
charge; it is not allowed to consider a member's assets
other than income-which may include personal or real
property, stocks and bonds, and automobiles-in the
calculation.
B. In addition, state law limits the total fees members
pay to a certain percentage of their annual income,
depending on the level of care he/she receives. For
example, according to state law, members at the
domiciliary level of care may be charged no more than
47.5% of their annual income for member fees, while
members in skilled nursing care may be charged no more
than 70% of their annual income. Therefore, most members
pay only a portion of their actual costs of care while
living at the veterans home. Because CalVet offsets less
than half of its annual operating expenditures for the
veterans homes with funds from existing revenue sources,
it should analyze its cost-recovery models, including an
evaluation of the state laws that limit the amount of
revenue CalVet can collect for the care it provides to its
members at the homes. The State Auditor believes such an
analysis would provide CalVet with useful information that
could help it determine how best to offset the costs
charged to the GF for providing care to members.
Prior Legislation
AB 1823 (Yamada, Chapter 158, Statutes of 2012) required that
routine quarterly financial statements provided to residents of
California's six Veteran Homes also include clearly written
information about any prospective charges that would be due at
the time of the veteran's death, consistent with the terms
agreed to upon admission to the Veterans Home.
SB 950 (Wiggins, Chapter 509, Stattutes of 2010) required (1)
the written notice to veterans to also include the terms and
conditions upon which the member fees and costs can be changed,
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and (2) a signature from the veteran to acknowledge that he or
she has read and understands the notice.
SB 1281 (Haynes, Chapter 466, Statutes of 2002) required a
Veteran's Home administrator to provide a quarterly statement
showing the costs of care, as well as written notice, upon
admission to a California veterans' home, of costs that may be
incurred by the veteran.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
ASSEMBLY FLOOR : 75-0, 5/13/13
AYES: Achadjian, Alejo, Atkins, Bigelow, Bloom, Blumenfield,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell, Gray,
Grove, Hagman, Hall, Harkey, Roger Hern�ndez, Jones,
Jones-Sawyer, Levine, Linder, Logue, Maienschein, Mansoor,
Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi,
Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel
P�rez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone,
Ting, Torres, Wagner, Waldron, Weber, Wieckowski, Wilk,
Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Allen, Ammiano, Holden, Lowenthal, Vacancy
AL:k 7/1/13 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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