BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 1552
AUTHOR: Lowenthal
AMENDED: May 23, 2014
HEARING DATE: June 18, 2014
CONSULTANT: Bain
SUBJECT : Community-based adult services: adult day health care
centers.
SUMMARY : Requires Community-Based Adult Services to be a
Medi-Cal benefit, and to be included as a covered service in
contracts with all Medi-Cal managed health care plans, with
standards, eligibility criteria, and provisions that are at
least equal to those contained in the Special Terms and
Conditions of the state's "Bridge to Reform" Section 1115
Medicaid Demonstration Waiver.
Existing law:
1.Establishes the Medi-Cal program, administered by the
Department of Health Care Services (DHCS), under which health
care services are provided to qualified, low-income persons.
2.Excludes, to the extent permitted by federal law, adult day
health care (ADHC) from coverage under the Medi-Cal program.
3.Authorizes DHCS to implement a one-year moratorium on the
certification and enrollment into the Medi-Cal program of new
ADHC centers on a statewide basis, or within a geographic
area, with specified exemptions from the moratorium. Permits
the director of DHCS to extend this moratorium, if necessary,
to coincide with the implementation date of the ADHC centers
waiver.
4.Requires DHCS, to the extent that federal financial
participation is available, and pursuant to a demonstration
project or waiver of federal law, to establish specified
Medi-Cal pilot projects in up to eight counties, and requires
long-term services and supports (LTSS) to be available to
beneficiaries residing in counties participating in those
pilot projects. Includes Community Based Adult Services (CBAS)
within the definition of LTSS. This demonstration project is
known as the Coordinated Care Initiative (CCI).
Continued---
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5.Requires, as part of the CCI, all Medi-Cal LTSS to be services
covered under Medi-Cal managed care health plan contracts and
available only through plans to beneficiaries residing in
counties participating in the demonstration, with specified
exemptions.
This bill:
1.Requires, notwithstanding the operational period of CBAS as
specified in the Special Terms and Conditions (STCs) of
California's Bridge to Reform Section 1115 Medicaid Waiver,
and notwithstanding the duration of the CBAS settlement
agreement, CBAS to be a Medi-Cal benefit, and to be included
as a covered service in contracts with all managed health care
plans, with standards, eligibility criteria, and provisions
that are at least equal to those contained in the STCs of the
demonstration waiver on the date this bill is signed into law.
2.Defines "CBAS" as an outpatient, facility-based program,
provided pursuant to a participant's individualized plan of
care, as developed by the center's multidisciplinary team,
that delivers nutrition services professional nursing care,
therapeutic activities, facilitated participation in group or
individual activities, social services, personal care
services, and, when specified in the individual plan of care,
physical therapy, occupational therapy, speech therapy,
behavioral health services, registered dietician services, and
transportation.
3.Prohibits any modifications to the CBAS program that differ
from the STCs only if they offer more protections or permit
greater access to CBAS.
4.Requires CBAS providers to be licensed as ADHCs and certified
by the California Department of Aging (CDA) as CBAS providers,
and to meet the standards specified in existing law and
regulation.
5.Requires CBAS providers to meet all applicable licensing and
Medi-Cal standards, and to provide services in accordance with
existing regulations.
6.Requires CBAS providers to comply with the provisions of
California's Bridge to Reform Section 1115 Medicaid Waiver and
any successor demonstration.
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7.Requires, in counties where DHCS has implemented Medi-Cal
managed care, CBAS to be available as a Medi-Cal managed care
benefit, except for individuals who are not qualified for, or
who are exempt from, enrollment in Medi-Cal managed care. For
these individuals, CBAS is required to be provided as a
fee-for-service benefit.
8.Requires CBS to be provided as a fee-for-service Medi-Cal
benefit to all eligible Medi-Cal beneficiaries who qualify for
CBAS in counties that have not implemented Medi-Cal managed
care.
9.Implements this bill only to the extent that federal financial
participation is available.
10.Makes legislative findings regarding Californians support for
living in their home or a community-based setting free from
unnecessary institutionalization, the aging American
population, the history and services provided by ADHC centers,
the cost of ADHC services as compared to nursing home costs,
the creation of CBAS, the need to continue CBAS and to codify
CBAS so that disabled and frail Californians who rely on adult
day health programs are able to remain independent and free of
institutionalization as long as possible.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1.Assuming federal approval is granted, annual costs to DHCS for
continuation of CBAS as a Medi-Cal benefit of approximately
$300 million total annually, and growing in future years (50
percent General Fund/50 percent federal). Since the STCs of a
related federal waiver specifies CBAS must be operational
through August 31, 2014, 2014-15 costs for 10 additional
months of service are expected to be approximately $250
million (50 percent General Fund/50 percent federal).
2.Minor administrative costs (50 percent General Fund/50 percent
federal) to DHCS to secure federal approval.
3.Currently incurred costs to the Department of Public Health
(DPH) associated with the licensure of ADHCs, and CDA
associated with certifying facilities, would continue to be
incurred. If not for the continuation of CBAS through this
bill or another mechanism, there would likely be a reduction
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in the number of ADHC providers, reducing licensure workload
for DPH and certification workload for CDA.
PRIOR VOTES :
Assembly Health: 18- 0
Assembly Aging and Long Term Care: 6- 0
Assembly Appropriations: 16- 0
Assembly Floor: 77- 0
COMMENTS :
1.Author's statement. According to the author, this bill ensures
that thousands of frail Californians who rely upon adult day
health programs today, and those who will need this service in
the future, will be able to remain independent and free of
institutionalization for as long as possible. This bill paves
the way for the program to continue past the existing waiver's
expiration, while providing a level of legislative oversight.
2.Background on ADHC and CBAS. All state Medicaid programs have
the option to provide and receive federal financial
participation for optional services, in addition to those
services required by federal law. ADHC was an optional
community-based day program in fee-for-service Medi-Cal for
low-income elders and younger disabled adults who are at risk
for being placed in a nursing home. ADHC services included
physical therapy, occupational therapy, speech therapy and
recipient transportation to and from the ADHC facility.
Eligibility was based on an individual's functional
limitations, severity of chronic or post-acute health
conditions, and risk for nursing home placement. ADHC services
were provided at licensed ADHC centers, and included medical
services, nursing care, meals, social and therapeutic
activities, and transportation. ADHC centers could be both
for-profit and not-for-profit.
Governors Schwarzenegger and Brown both proposed the
elimination of ADHC as an optional Medi-Cal benefit. In March
2011, Governor Brown signed AB 97 (Committee on Budget),
Chapter 3, Statutes of 2011 into law to eliminate ADHC as a
benefit in Medi-Cal, subject to approval by the federal Center
for Medicare and Medicaid Services (CMS), in order to achieve
General Fund savings and because of concerns over fraud in the
program. In June 2011, the Legislature passed AB 96 (Committee
on Budget), which authorized the creation of the Keeping
Adults Free from Institutions (KAFI) program to replace ADHC.
In July of 2011, the Governor vetoed AB 96, and instead
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proposed that his Administration would develop an alternate
plan to transition ADHC participants to other services. In
August 2011, DHCS presented its plan for transitioning ADHC
participants to other services, which included the enrollment
of ADHC participants in Medi-Cal managed care. From mid-August
through October of 2011, DHCS began implementing the managed
care portion of its transition plan.
In June 2011, seven plaintiffs filed a class action lawsuit in
the U.S. District Court on behalf of ADHC participants. The
lawsuit, Esther Darling, et al. v. Toby Douglas, et al., was
brought against DHCS to block the elimination of ADHC as an
optional Medi-Cal benefit, as the plaintiffs argued the
changes would place them at risk of unnecessary
institutionalization, violated their due process rights, and
that the restrictive eligibility criteria in a previous ADHC
bill violated Medicaid requirements.
In November 2011, DHCS announced that it had reached a
settlement with plaintiffs to resolve the lawsuit. Under the
terms of the settlement, ADHC will be eliminated and replaced
by a new program called CBAS, which would be included under
the state's Medicaid Demonstration waiver known as
California's Bridge to Reform. CBAS was defined in the
settlement as an outpatient facility based program that
delivers skilled nursing care, social services, therapies,
personal care, family/caregiver training and support, meals
and transportation to eligible beneficiaries. In January 2012,
the Court granted final approval of the settlement, which
lasts for 30 months or until August 2014. Medi-Cal managed
care plans began covering CBAS in mid- to late 2012.
The Governor's May 2013 Budget estimated CBAS expenditures in
2013-14 of $282 million ($141 million General Fund).
Expenditures in CBAS have declined significantly from the
prior ADHC program, which had expenditures of $424 million
($212 million GF) in 2009-10. CBAS providers are subject to
the 10 percent Medi-Cal rate reduction, which was implemented
for CBAS providers in December 2011, retroactive to June 2011.
According to data from the Department of Aging, the number of
ADHC centers and ADHC/CBAS program Medi-Cal participants have
declined since 2009-10. In 2009-10, there were 313 centers and
37,277 Medi-Cal participants. In 2012-13, the number of ADHC
centers was estimated to be 242, with an estimated 26,461
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Medi-Cal participants. In 2014, 32 California counties do not
have an ADHC center. Because the STCs for CBAS were negotiated
as part of the Darling v. Douglas settlement, the STCs have
the same date as the end of the settlement (August 31, 2014)
and have a different date than the rest of the waiver (which
ends October 31, 2015). DHCS indicates an amendment for
continuing CBAS beyond the current August 31, 2014 date was
submitted to CMS on June 13, 2014 along with new STCs, and the
budget assumes continuation of the CBAS program beyond August
31, 2014.
3.Medicaid Waiver and eligibility for CBAS services.
California's Bridge to Reform waiver established the
operational duration of CBAS (April 1, 2012 through August 31,
2014), program eligibility criteria, CBAS benefits, provider
reimbursement rates, and delivery system. The CBAS benefit is
available to all CBAS beneficiaries who meet medical necessity
criteria as established by the State and who qualify based on
the medical criteria below:
a. Meet "Nursing Facility Level of Care A" (NF-A)
criteria as set forth in regulation, or above NF-A Level
of Care;
b. Have a moderate to severe cognitive disorder such as
Dementia, including Dementia characterized by the
descriptors of, or equivalent to, Stages 5, 6, or 7 of
the Alzheimer's Type;
c. Have a mild cognitive disorder such as Dementia,
including Dementia of the Alzheimer's Type, and needs
assistance or supervision with two of the following:
bathing, dressing, self-feeding, toileting, ambulation,
transferring, medication management, or hygiene; or,
d. Have a developmental disability, a chronic mental
disorder, or acquired, organic, or traumatic brain
injury. In addition to the presence of a chronic mental
disorder or acquired, organic, or traumatic brain injury,
the enrollee must need assistance or supervision with
either:
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i. Two of the following: bathing,
dressing, self-feeding, toileting, ambulation,
transferring, medication management, or hygiene;
or,
ii. One need from the above list and one of
the following: money management, accessing
community and health resources, meal preparation,
or transportation.
4.Stakeholder process. In October 2013, DHCS and CDA began a
series of stakeholder meetings on CBAS to develop future
direction for CBAS after the settlement agreement, and to
prepare for amending the CBAS portion of the federal Section
1115 waiver set to expire in August 2014. Stakeholders include
Medi-Cal managed care plans, ADHC providers, consumer
advocates, and legislative and department staff. In April
2014, DHCS and CDA provided an overview of draft STCs and
Standards of Participation.
5.Related legislation. AB 518 (Yamada) was similar to this
measure except it also included a requirement that DHCS
certify and enroll as new CBAS providers only those providers
that are exempt from taxation under Section 501(c)(3) of the
federal Internal Revenue Code, commencing July 1, 2015. AB 518
was heard on June 12, 2013 in Senate Health Committee, but no
vote was taken on the measure.
6.Prior legislation. SB 1008 (Committee on Budget and Fiscal
Review), Chapter 33, Statutes of 2012 and SB 1036 (Committee
on Budget and Fiscal Review), Chapter 45, Statutes of 2012
authorize the CCI as an eight-county pilot project to
integrate Medi-Cal and Medicare benefits under managed care
for dual eligibles, and to integrate LTSS under managed care
for dual eligibles and Medi-Cal-only seniors and persons with
disabilities (SPDs).
a. AB 96 (Committee on Budget), of 2011 would have
established the KAFI program, and required DHCS to submit
an application to CMS to implement the program. AB 96 was
vetoed by Governor Brown.
b. AB 97 (Committee on Budget), Chapter 3, Statutes of
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2011, health budget trailer bill, among other provisions,
eliminated ADHC as a Medi-Cal benefit.
c. SB 208 (Steinberg), Chapter 714, Statutes of 2010,
contains the provisions implementing Medicaid
Demonstration.
7.Support. The California Association for Adult Day Services
(CAADS) writes in support of this bill to extend the CBAS
program beyond the expiration of its current waiver coverage,
thus ensuring continuity of care to this vulnerable
population. CAADS argues this bill will ensure that 26,461
California seniors and persons with disabilities continue to
have access to high-quality clinical, therapeutic, and support
services that enable them to live in their own homes with
dignity and independence despite having multiple chronic
health conditions that put them at risk of high-cost
institutional placement. CAADS concludes that, as California
implements health care reform and moves to managed,
outcome-driven care, it is essential that integrated
community-based programs such as CBAS are key partners in the
changing systems, and that they expand to meet the growing
needs of California's aging population and the goals of
offering alternatives to institutional care.
8.Should CBAS eligibility criteria be codified? This bill
requires CBAS to be a Medi-Cal benefit with standards,
eligibility criteria, and provisions that are at least
equal to those contained in the STCs of the demonstration
on the date this bill is signed into law. This bill is an
urgency statute and would take effect upon signature by
the Governor. The current STCs define CBAS eligibility
criteria and the scope of benefits. However, the new STCs
have not yet been released (as of June 11, 2014), but
DHCS indicated in its webinar to stakeholders that they
are proposing changes to allow Medi-Cal managed care
plans to selectively contract with CBAS centers (rather
than requiring contracting with each center, as required
by the settlement agreement), and allow plans to
negotiate rates with CBAS centers (rather than having the
rates established in the STCs). Because the STCs are
negotiated between the Administration and the federal
Centers for Medicare and Medicaid Services, decisions on
CBS eligibility, payment rates and benefits for this
program are deferred to the state and federal executive
branches. Given that CBAS is a $280 million program that
serves over 23,000 Medi-Cal beneficiaries, should program
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eligibility be contained in state law, instead of only in
the STCs?
SUPPORT AND OPPOSITION :
Support: California Association of Adult Day Services (sponsor)
Adult Day Services Network of Contra Costa
Alzheimer's Association
AARP
American Federation of State, County and Municipal
Employees, AFL-CIO
Association of Regional Center Agencies
California Alliance for Retire Americans
California Association for Adult Day Services
California Commission on Aging
California Communities United Institute
California Hospital Association
California Medical Association
California Primary Care Association
Camelot Adult Day Health Care Center
Congress of California Seniors
County Welfare Directors Association of California
ESKATON Adult Day Health Center Carmichael
Evermost Health Management, Inc.
Family Bridges, Inc.
GetTogether Adult Day Health Care Center
Humboldt Senior Resource Center
LMS Health Partners
Los Angeles Aging Advocacy Coalition
MountainView ADHC, Inc.
Multipurpose Senior Services Program Site Association
National Association of Social Workers-California
Chapter
National Health Law Program
Poway Adult Day Health Care Center
St. Barnabas Senior Services
San Ysidro Health Center
Senior Services Coalition
State Independent Living Council (SILC)
Sunny Cal Adult Day Health Care Center, Inc.
United Domestic Workers of America (UDW)-AFSCME Local
3930/AFL-CIO
Numerous individuals
Oppose: None received.
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