Existing law provides for the Medi-Cal program, administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing federal law authorizes the state to obtain waivers for home- and community-based services. Existing law authorizes the department to seek an increase in the scope of these waivers, in order to enable additional nursing facility residents to transition into the community, subject to implementation of these amended waivers upon obtaining federal financial participation, and to the extent it can demonstrate fiscal neutrality within the overall department budget.

This bill would authorize the department to seek additional increases in the scope of the home- and community-based Nursing Facility/Acute Hospital Waiver. The bill would require the department to, by February 1, 2016, apply for an additional 5,000 slots, to be added in the 201617 fiscal year, beyond those currently authorized for the waiver. The bill would, for each fiscal year after the 201617 fiscal year, require that the department consider specified factors, consult with stakeholders, calculate the need for additional slots, and seek federal approval to add those slots to the waiver. Prior to submitting the annual request for additional waiver slots and the waiver renewal request, the bill would require the department to notify the appropriate fiscal and policy committees of the Legislature of the number of waiver slots included in the waiver renewal request along with data supporting that number of slots.

Existing law provides for the Medi-Cal program, administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing federal law authorizes the state to obtain waivers for home- and community-based services. Existing law authorizes the department to seek an increase in the scope of these waivers, in order to enable additional nursing facility residents to transition into the community, subject to implementation of these amended waivers upon obtaining federal financial participation, and to the extent it can demonstrate fiscal neutrality within the overall department budget.

This bill would authorize the department to seek additional increases in the scope of the home- and community-based Nursing Facility/Acute Hospital Waiver. The bill would require the department to, by February 1, 2016, apply for an additional 5,000 slots slots, to be added in the 201617 fiscal year, beyond those currently authorized for the waiver. The bill would, for each fiscal year after the 201617 fiscal year, require that the department consider specified factors, consult with stakeholders, calculate the need for additional slots, and seek federal approval to add those slots to the waiver each year beginning January 1, 2016. waiver. Prior to submitting the annual request for additional waiver slots and the waiver renewal request, the bill would require the department to notify the appropriate fiscal and policy committees of the Legislature of the number of waiver slots included in the waiver renewal request along with data supporting that number of slots.

The bill would require the department to make an eligibility and level of care determination, and inform the individual about available waiver services, within three business days of receipt of the individuals application for those patients who are in acute care hospitals and who are pending placement in a nursing facility and for those individuals who are more likely than not to be placed in a hospital or nursing facility within 30 days. The bill would require an individual residing in an institutional setting at a level of care included in the waiver to be determined to qualify for a waiver level of care that is no lower than the level of care he or she receives in the institution in which he or she resides, and would prohibit the department from using more stringent eligibility criteria for a waiver level of care than for the corresponding institutional level of care.

The bill would provide that an individual who enrolls in the waiver upon attaining 21 years of age who is no longer eligible to receive services through the Early and Periodic Screening, Diagnosis, and Treatment Program (EPSDT) shall receive the same level of services under the waiver that he or she received through the EPSDT program.

The bill would require the department to adjust the cost limitation category of the waiver to use an aggregate cost limit formula, as specified. The bill would require the department to implement its provisions only if the department has obtained the necessary approvals and receives federal financial participation. participation, and only to the extent that it can demonstrate that its actual total expenditures for services provided under the waiver will not exceed a specified threshold.

Existing law provides for the Medi-Cal program, administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing federal law authorizes the state to obtain waivers for home- and community-based services. Existing law authorizes the department to seek an increase in the scope of these waivers, in order to enable additional nursing facility residents to transition into the community, subject to implementation of these amended waivers upon obtaining federal financial participation, and to the extent it can demonstrate fiscal neutrality within the overall department budget.

This bill would authorize the department to seek additional increases in the scope of the home- and community-based Nursing Facility/Acute Hospital Waiver. The bill would require, require the department to, by July 1, February 1, 2016, apply for an additional 5,000 slots beyond those currently authorized for the waiver to be added . waiver. The bill would require that the department consider specified factors, consult with stakeholders, calculate the need for additional slots, and seek federal approval to add those slots to the waiver each year beginning January 1, 2016. Prior to submitting the annual request for additional waiver slots and the waiver renewal request, the bill would require the department to notify the appropriate fiscal and policy committees of the Legislature of the number of waiver slots included in the waiver renewal request along with data supporting that number of slots.

The bill would require the department to make an eligibility and level of care determination, and inform the individual about available waiver services, within three business days of receipt of the individuals application for those patients who are in acute care hospitals and who are pending placement in a nursing facility and for those individuals who are more likely than not to be placed in a hospital or nursing facility within 30 days. The bill would require an individual residing in an institutional setting at a level of care included in the waiver to be determined to qualify for a waiver level of care that is no lower than the level of care he or she receives in the institution in which he or she resides, and would prohibit the department from using more stringent eligibility criteria for a waiver level of care than for the corresponding institutional level of care.

The bill would require the department, by July 1, 2016, to take all necessary steps so that individuals who are clients of a regional center for individuals with developmental disabilities and who receive private duty nursing through the Early Periodic Screening, Diagnosis, and Treatment Program (EPSDT) seamlessly transition from receipt of private duty in-home nursing provided through EPSDT to medically necessary in-home nursing provided through adult Medi-Cal or a regional center when the individual reaches 21 years of age. provide that an individual who enrolls in the waiver upon attaining 21 years of age who is no longer eligible to receive services through the Early and Periodic Screening, Diagnosis, and Treatment Program (EPSDT) shall receive the same level of services under the waiver that he or she received through the EPSDT program.

The bill would require the department to adjust the cost limitation category of the waiver to use an aggregate cost limit formula, as specified. The bill would require the department to implement its provisions only if the department has obtained the necessary approvals and receives federal financial participation.

Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing federal law authorizes the state to obtain waivers for home home- and community-based services. Existing law authorizes the department to seek an increase in the scope of these waivers, in order to enable additional nursing facility residents to transition into the community, subject to implementation of these amended waivers upon obtaining federal financial participation, and to the extent it can demonstrate fiscal neutrality within the overall department budget.

This bill would make a technical, nonsubstantive change to those provisions. authorize the department to seek additional increases in the scope of the home- and community-based Nursing Facility/Acute Hospital Waiver. The bill would require, by July 1, 2016, an additional 5,000 slots beyond those currently authorized for the waiver to be added . The bill would require that the department consider specified factors, consult with stakeholders, calculate the need for additional slots, and seek federal approval to add those slots to the waiver each year beginning January 1, 2016. Prior to submitting the annual request for additional waiver slots and the waiver renewal request, the bill would require the department to notify the appropriate fiscal and policy committees of the Legislature of the number of waiver slots included in the waiver renewal request along with data supporting that number of slots.

Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing federal law authorizes the state to obtain waivers for home and community-based services. Existing law authorizes the department to seek an increase in the scope of these waivers, in order to enable additional nursing facility residents to transition into the community, subject to implementation of these amended waivers upon obtaining federal financial participation, and to the extent it can demonstrate fiscal neutrality within the overall department budget.

This bill would make a technical, nonsubstantive change to those provisions.

 THIRD READING  

Bill No: AB 1518

Author: Committee on Aging and Long-Term Care

Version: 9/1/15 in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 8-0, 7/1/15

AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen, Pan, Roth

NO VOTE RECORDED: Wolk

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/27/15

AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen

ASSEMBLY FLOOR: 80-0, 6/1/15 - See last page for vote

SUBJECT: Medi-Cal: nursing facilities

SOURCE: Disability Rights California

DIGEST: This bill requires the Department of Health Care Services (DHCS), by February 1, 2016, to apply for an additional 5,000 slots beyond those currently authorized for the home- and community-based Nursing Facility/Acute Hospital Waiver in 2016-17.

ANALYSIS:

Existing law:

1. Establishes the Medi-Cal program, administered by DHCS, under which qualified low-income individuals receive health care services.

2. Authorizes, under federal Medicaid law, the federal Secretary of Health and Human Services to allow a state to include as “medical assistance” under its Medicaid program payment for part or all of the cost of HCBS (other than room and board) approved by the Secretary which are provided pursuant to a written plan of care to individuals who would require the level of care provided in a hospital or a nursing facility or intermediate care facility which could be reimbursed under the state’s Medicaid program. This provision of federal law is referred to as a Medicaid 1915(c) Home and Community-Based Services Waiver, and it enables the state to received federal Medicaid matching funds for HCBS.

3. Requires an additional 500 slots beyond those currently authorized for the home- and community-based Level A/B nursing facility waiver to be added, and 250 of these slots to be reserved for residents residing in facilities and transitioning out of facilities. Defines “facility residents” as individuals who are currently residing in a nursing facility and whose care is paid for by Medi-Cal either with or without a share of cost and individuals who are hospitalized and who are or will be waiting for transfer to a nursing facility.

4. Requires DHCS to implement the provisions of 3 and 4) above only to the extent it can demonstrate fiscal neutrality within the overall DHCS budget, and federal fiscal neutrality as required under the terms of the federal waiver, and only if DHCS has obtained the necessary approvals and receives federal financial participation from the federal Centers for Medicare and Medicaid Services (CMS).

This bill:

1. Requires DHCS, for the 2016-17 fiscal year, to apply for an additional 5,000 slots beyond those currently authorized for the home- and community-based Nursing Facility/Acute Hospital Waiver (NF/AH Waiver), to ensure that individuals residing in, or at risk of, out-of-home placements, including nursing facilities, can be considered for and receive services from the waiver without delay. 

2. Repeals an existing law provision requiring an additional 500 slots beyond those currently authorized for the home-and community-based Level A/B nursing facility waiver to be added and 250 of these slots to be reserved for residents residing in facilities and transitioning out of faciliites.
   
   

Comments

1. Author’s statement. According to the author, as the wife and caregiver of a proud American and proud Californian, bound to a wheelchair for the remainder of his life, the author wishes to remind members that 2015 marks the 25th anniversary of the Americans with Disabilities Act (ADA), which says that people with disabilities have a right to receive services in the most integrated setting. The 1999 Supreme Court Olmstead decision upheld that right. In this bill, the Assembly Committee on Aging and Long-Term Care is asking the legislature to modernize the NF/AH waiver to reflect the ADA and the 1999 Olmstead decision, and the wishes of vast numbers of Californians who want to stay at home to receive services. Additionally, the state budget savings that will be realized because home-based services are generally less expensive than comparable institutional services should offer tremendous confidence that this is the correct direction to move as the state faces the unknown implications of 1,000 people a day turning 65 and aging into a period of their lives when disability is more common than not. Currently, access to the NF/AH waiver is restricted to a fixed number of participants, thus creating an irrational barrier to a community-based option for care, while encouraging unfettered access to less desirable, more expensive institutional care. This bill revises our state policies to assure access to waiver services for more people.

2. Nursing Facility/Acute Hospital Waiver. The NF/AH Waiver is a federal 1915(c) Home and Community-Based Services Waiver in effect through December 31, 2016. Section 1915(c) waivers allow states to receive Medicaid funding to provide long-term care services in home and community settings, rather than in institutional settings. The goals of the waiver are to:

1. Facilitate a safe and timely transition of Medi-Cal eligible persons from a medical facility to his/her home or community setting utilizing NF/AH Waiver services;

2. Offer Medi-Cal eligible persons who reside in the community but are at risk of being institutionalized within the next 30 days, the option of utilizing NF/AH Waiver services to develop a home or community setting program that will safely meet his/her medical care needs; and,

3. Maintain overall cost neutrality so that the costs of the participant’s selected NF/AH Waiver and Medi-Cal state plan services do not exceed the Medi-Cal institutional cost at the participant’s assessed level of care (LOC) and necessary facility type.

DHCS’ Long-Term Care Division In-Home Operations Branch is responsible for the implementation and monitoring of the NF/AH waiver. To be eligible for the waiver, an individual must:

1. Have full scope Medi-Cal eligibility;

2. Be physically disabled (of any age);

3. Meet the acute hospital, adult or pediatric subacute, nursing facility, distinct-part nursing facility, adult, or pediatric Level B (skilled) nursing facility, or Level A (intermediate) nursing facility (NF) Level of Care with the option of returning to and/or remaining in his/her home or home-like setting in the community in lieu of institutionalization; and,

4. Meet other criteria and requirements listed in the waiver

Waiver services are delivered through Medi-Cal HCBS Waiver providers such as home health agencies, durable medical equipment companies, individual nurse providers, licensed clinical social workers, marriage and family therapists, personal care agencies, non-profit organizations, professional corporations, individual personal care providers, and certain community residential facilities. Examples of the service provided under the waiver include private duty nursing, home health aide services, case management, environmental accessibility adaptations, medical equipment operating expenses, waiver personal care services and respite care.

Enrollment in the waiver is capped (referred to as “slots” by calendar year). For 2015, the enrollment cap is 3,792, increasing to 3,964 in 2016. DHCS indicates current enrollment waiver enrollment is 3,328 individuals. As of March 2015, DHCS indicates there are 1,473 people on the NF/AH nursing facility A/B levels of care wait list, and over 99 percent of these individuals reside in their homes and less than 1 percent reside in an institutional setting.  DHCS indicates there is priority enrollment for persons residing in hospitals, skilled nursing facilities, and children aging out of EPSDT. DHCS policy if there is a waitlist is that available waiver slots are assigned to NF/AH eligible individuals in the following order: (a) individuals who have been residing in a health care facility for at least 90 days at the time of submission of the waiver application; and (b) individuals residing in the community at the time of submission of the waiver application.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, annual administrative costs of about $5.5 million per year ($2.0 million General Fund) for DHCS to enroll participants in the waiver program, provide case management, and program management.

SUPPORT: (Verified 8/31/15)

American Federation of State, County and Municipal Employees

California Advocates for Nursing Home Reform

California Alliance for Retired Americans

California Association for Health Services at Home

California Association of Public Authorities for IHSS

California Commission on Aging

California Hospital Association

California In-Home Supportive Services Consumer Alliance

Congress of California Seniors

United Domestic Workers of America (UDW)/AFSCME Local 3930

Westside Center for Independent Living

OPPOSITION: (Verified 8/31/15)

Department of Finance

ARGUMENTS IN SUPPORT: This bill is sponsored by Disability Rights California (DRC), which writes that this bill came its clients who want to stay out of or return home from institutional long term care settings and are unable to do so because of the outdated design and implementation of the NF/AH waiver. DRC states this bill increases the number of waiver slots as the current number is inadequate to meet the need.

ARGUMENTS IN OPPOSITION: The Department of Finance writes in opposition to the prior version that this bill it imposes significant additional costs on the state's General Fund that are not included in the 2015 Budget Act.

ASSEMBLY FLOOR: 80-0, 6/1/15

AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins

Prepared by: Scott Bain / HEALTH /

9/1/15 9:39:40

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 1518 (Committee on Aging and Long-Term Care) - Medi-Cal: nursing facilities

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 27, 2015

Bill Summary:

AB 1518 would require the Department of Health Care Services to apply for federal approval for an additional 5,000 slots under the home- and community-based Nursing Facility/Acute Hospital Waiver.

Fiscal Impact:

Annual administrative costs of about $5.5 million per year ($2.0 million General Fund) for the Department of Health Care Services to enroll participants in the waiver program, provide case management, and program management.

Committee Amendments:

Delete all the changes to current law in the bill except the requirement that the Department apply for an additional 5,000 slots.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 1518 (Committee on Aging and Long-Term Care) - Medi-Cal: nursing facilities

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

AB 1518 would require the Department of Health Care Services to apply for federal approval for an additional 5,000 slots under the home- and community-based Nursing Facility/Acute Hospital Waiver. The bill would also change the cost limitation requirements currently in use under the existing Waiver.

Fiscal Impact:

• Annual administrative costs of about $5.5 million per year ($2.0 million General Fund) for the Department of Health Care Services to enroll participants in the waiver program, provide case management, and program management.

• The Department of Health Care Services indicates that the bill will result in increased annual spending of $35 million per year ($17 million General Fund). Under current practice, the state saves about $60,000 by providing waiver services to individuals who have transitioned from institutional care to the community. Adding additional waiver slots should not, in isolation, increase overall state spending for qualifying individuals. However, the bill makes a number of other changes to the required benefits and the procedures for calculation cost savings and limiting benefits. For example, the bill requires individuals aging past 21 years of age to continue to receive the same extended benefits they previously received through EPSDT. Also, the bill requires the Department to shift from limiting costs for waiver services from an individual cost cap, to an overall program cost cap. In combination, the Department indicates that those changes will increase overall costs under the bill.

Background:

Under state and federal law, the Department of Health Care Services operates the Medi-Cal program, which provides health care coverage to low income individuals, families, and children. Medi-Cal provides coverage to childless adults and parents with household incomes up to 138% of the federal poverty level and to children with household incomes up to 266% of the federal poverty level. The federal government provides matching funds that vary from 50% to 90% of expenditures depending on the category of beneficiary.

As part of the Medi-Cal program, the state has negotiated a home- and community based Nursing Facility/Acute Hospital Waiver with the federal government. Under this Waiver, the state is allowed to use state funds and federal matching funds to provide services that would not normally be covered Medi-Cal benefits under federal law, in order to allow Medi-Cal beneficiaries that could require institutional care to remain in the community. Services that are available under the waiver, that would not normally be covered by Medi-Cal, include home health aide services, environmental accessibility adaptations (e.g. upgrades to an individual’s residence to accommodate their condition), respite care (for caregivers), and other services.

Under the current Waiver, participation is capped at 3,964 participants for the 2016 calendar year. The wavier requires the state to demonstrate fiscal neutrality at the individual participant level (e.g. the cost of providing home- and community based services to each individual participant is less than the cost of institutional care for that individual) and for the total Waiver program. Under current practice, the Department of Health Care Services determines per capital fiscal neutrality by comparing the Waiver services authorized for each participant against an annual Waiver cost cap for the level of institutional care the participant would otherwise require. Importantly, the cost caps are lower than the current rates paid for institutional care by the Department. The cost caps vary by institutional level of care. In some cases the difference between the annual cost cap and the annual institution care rate is only a few hundreds or thousands of dollars, but in some cases it is in the tens of thousands of dollars per year.

Proposed Law:

AB 1518 would require the Department of Health Care Services to apply for federal approval for an additional 5,000 slots under the home- and community-based Nursing Facility/Acute Hospital Waiver. The bill would also change the cost limitation requirements currently in use under the existing Waiver.

Specific provisions of the bill would:

• Require the Department to apply for an additional 5,000 Waiver slots;

• Require the Department to calculate the need for additional Waiver slots each year and apply for federal approval to add the needed slots;

• Require the Department to expedite the processing of waiver applications for individuals to who are at imminent risk of placement in a hospital or nursing facility (current law requires this for individuals who are in acute care hospitals);

• Require expedited processing of waiver applications to occur within three business days;

• Provide that an individual residing in an institutional level of care shall qualify for a waive level of care that is no lower than the institutional level of care;

• Prohibit the Department from using more stringent criteria for a waiver level of care than for an institutional level of care;

• Require that individual enrolled in the waiver who attain 21 years of age shall be eligible for the same level of services that was provided under the Early and Periodic Screening, Diagnosis, and Treatment Program;

• Require the Department to shift the cost limitation requirement for the Waiver to an aggregate cost limit formula;

• Require the aggregate cost limit formula to be based on the full actual rates for corresponding institutional levels of care and require future cost increases for institutional levels of care to be matched by an increase in the waiver cost cap;

• Make implementation of the bill contingent on demonstrative overall fiscal neutrality within the Department’s budget and federal fiscal neutrality;

• Redefine fiscal neutrality to specify that actual total expenditures for the Waiver cannot exceed the full amount that would be incurred by qualifying individuals were provided care in institutions at the level of care for which they qualify.

Related Legislation:

SB 873 (Committee on Budget and Fiscal Review, Statutes of 2014) requires the Department to work with Waiver participants who are at or near their cost cap to avoid a reduction in services due to increased costs for IHHS services.

Staff Comments:

As noted above, the state currently saves significantly, per capita, from providing services under the Waiver as opposed to the cost of providing institutional care. Adding additional wavier slots, under the current program rules, should not increase overall spending. However, many of the changes in the bill will have the effect of increasing program expenditures, by limiting current cost limitation requirements and providing additional benefits.

-- END --

SENATE COMMITTEE ON HEALTH

Senator Ed Hernandez, O.D., Chair

BILL NO: AB 1518

SUBJECT: Medi-Cal: nursing facilities

SUMMARY:

Requires the Department of Health Care Services (DHCS) to apply for an additional 5,000 slots beyond those currently authorized for the home- and community-based Nursing Facility/Acute Hospital Waiver in 2016-17. Requires DHCS to annually calculate the need for additional slots annually thereafter, and seek federal approval to add those slots to this waiver, taking into consideration specified factors. Requires DHCS to adjust the cost limitation category of this waiver to use an aggregate cost limit formula, and requires the aggregate cost limit formula to be based on the actual current rates for the corresponding institutional levels of care specified in this waiver.

Existing law:

1. Establishes the Medi-Cal program, administered by DHCS, under which qualified low-income individuals receive health care services.
   
   

2. Establishes a schedule of benefits in the Medi-Cal program, which include:
   
   

   1. Early and periodic screening, diagnosis, and treatment (EPSDT) for any individual under 21 years of age, consistent with the requirements of federal Medicaid law; and,

   2. Home- and community-based services (HCBS) approved by the federal Department of Health and Human Services are covered to the extent that federal financial participation (FFP) is available for those services under the state plan or waivers. Permits the director of DHCS to seek waivers for any or all HCBS approvable under specified provisions of federal law. Requires coverage for HCBS to be limited by the terms, conditions, and duration of the federal waivers.

3. Authorizes, under federal Medicaid law, the federal Secretary of Health and Human Services to allow a state to include as “medical assistance” under its Medicaid program payment for part or all of the cost of HCBS (other than room and board) approved by the Secretary which are provided pursuant to a written plan of care to individuals who would require the level of care provided in a hospital or a nursing facility or intermediate care facility which could be reimbursed under the state’s Medicaid program. This provision of federal law is referred to as a Medicaid 1915(c) Home and Community-Based Services Waiver, and it enables the state to received federal Medicaid matching funds for HCBS.

4. Requires an additional 500 slots beyond those currently authorized for the home- and community-based Level A/B nursing facility waiver to be added, and 250 of these slots to be reserved for residents residing in facilities and transitioning out of facilities. Defines “facility residents” as individuals who are currently residing in a nursing facility and whose care is paid for by Medi-Cal either with or without a share of cost and individuals who are hospitalized and who are or will be waiting for transfer to a nursing facility.

5. Requires DHCS to expedite the processing of waiver applications for those patients who are in acute care hospitals and who are pending placement in a nursing facility in order to divert hospital discharges from nursing facilities into the community.

6. Requires DHCS to implement the provisions of 3 and 4) above only to the extent it can demonstrate fiscal neutrality within the overall DHCS budget, and federal fiscal neutrality as required under the terms of the federal waiver, and only if DHCS has obtained the necessary approvals and receives federal financial participation from the federal Centers for Medicare and Medicaid Services (CMS).

This bill:

1. Requires DHCS, for the 2016-17 fiscal year, to apply for an additional 5,000 slots beyond those currently authorized for the home- and community-based Nursing Facility/Acute Hospital Waiver (NF/AH Waiver), to ensure that eligible individuals residing in, or at risk of, out-of-home placements, including nursing facilities, can be considered for and receive services from the waiver without delay. 
   
   

2. Requires DHCS, for each fiscal year after 2016-17, to annually calculate the need for additional slots, and seek federal approval to add those slots to the NF/AH Waiver, taking into consideration, at minimum, the following:
   
   

   1. Any waiting list for NF/AH Waiver services, including, but not limited to, waiting lists for a particular level of care; and,

   2. The results of surveys of nursing home residents, including, but not limited to, the Minimum Data Sets (MDS), which identify residents who want to leave nursing homes.
      
      

3. Requires DHCS, in making the determination in 2) above, to consult with stakeholders, including, but not limited to, individuals who use or would like to use waiver services, programs with state contracts to divert people from or help people leave nursing homes, the designated protection and advocacy organization, independent living centers, area agencies on aging, county staff providing for the delivery of In-Home Supportive Services (IHSS), individuals providing IHSS services, and Medi-Cal managed care plans providing Medi-Cal long-term services and supports.

4. Requires DHCS, prior to submitting the annual request for additional waiver slots and the waiver renewal request, to notify the appropriate fiscal and policy committees of the Legislature of the number of waiver slots included in the waiver renewal request, along with data supporting that number of slots.

5. Requires DHCS to expedite the processing of waiver applications for those individuals who are at imminent risk of placement in a hospital or nursing facility.

6. Defines “imminent risk” as more likely than not to occur within 60 days, as determined by a treating professional, including, but not limited to, a physician, a licensed clinical social worker, or a nurse.

7. Defines “expedite the processing of waiver applications” to mean that DHCS must make an eligibility and level of care determination, and inform the individual about available waiver services, within three business days of receipt of the application.

8. Requires that an individual residing in an institutional setting at a level of care included in the NF/AH Waiver to be determined to qualify for a waiver level of care that is no lower than the level of care he or she receives in the institution in which he or she resides. Prohibits DHCS from using more stringent eligibility criteria for a waiver level of care than for the corresponding institutional level of care.

9. Requires that an individual who enrolls in the NF/AH Waiver upon attaining 21 years of age who is no longer eligible to receive services under the EPSDT program to be eligible for at least the same level of services under the NF/AH Waiver that he or she received through the EPSDT program unless the individual, and his or her authorized representative, as applicable, agree that the individual’s needs have decreased and a lower level of service is needed.

10. Requires DHCS to maximize federal financial participation (FFP) to meet the identified level of need for in-home nursing to ensure that a consumer does not experience a reduction in in-home nursing when he or she reaches 21 years of age.

11. Requires DHCS, by July 1, 2016, to adjust the cost limitation category of the NF/AH Waiver to use an aggregate cost limit formula. (The waiver currently uses an individual cost cap.)

12. Requires, by July 1, 2016, the aggregate cost limit formula to be based on the actual current rates for the corresponding institutional levels of care specified in the NF/AH Waiver. Requires any cost increase in an institutional level of care to be matched by an increase in the cost limitation of the corresponding NF/AH waiver level of care.

13. Requires DHCS to implement the waiver only if it can demonstrate DHCS’ actual total expenditures for HCBS and other services under the NF/AH Waiver will not, in any year of waiver period, exceed the amount that would be incurred by the Medi-Cal program for those individuals in institutions for which the individual qualifies without the waiver. (Current law requires DHCS to demonstrate fiscal neutrality within the overall DHCS budget.)

14. Requires implementation of this bill to commence within six months of DHCS receiving authorization for the necessary resources to provide the services to additional waiver participants. 

FISCAL EFFECT:

According to the Assembly Appropriations Committee:

1. One-time administrative costs in the range of $100,000 (General Fund (GF)/federal) for DHCS to apply for a waiver amendment and seek federal approval, and to establish new policies and procedures related to the bill's requirements, such as assessment of imminent risk and determinations of level of care.

2. Though a comprehensive budget neutrality analysis and assessment of unmet need for waiver services is not available, it is assumed total costs for Medi-Cal benefits will be cost-neutral, as the bill specifies. Within the overall budget neutrality, it is expected the state will incur unknown annual costs, likely in the hundreds of thousands of dollars (GF/federal), for additional state staff to conduct assessments for waiver eligibility on an expedited basis, as well as significant cost savings to the extent individuals are cared for at home instead of in a facility.

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, as the wife and caregiver of a proud American and proud Californian, bound to a wheelchair for the remainder of his life, the author wishes to remind members that 2015 marks the 25th anniversary of the Americans with Disabilities Act (ADA), which says that people with disabilities have a right to receive services in the most integrated setting. The 1999 Supreme Court Olmstead decision upheld that right. In this bill, the Assembly Committee on Aging and Long-Term Care is asking the legislature to modernize the NF/AH waiver to reflect the ADA and the 1999 Olmstead decision, and the wishes of vast numbers of Californians who want to stay at home to receive services. Additionally, the state budget savings that will be realized because home-based services are generally less expensive than comparable institutional services should offer tremendous confidence that this is the correct direction to move as the state faces the unknown implications of 1,000 people a day turning 65 and aging into a period of their lives when disability is more common than not. Currently, access to the NF/AH waiver is restricted to a fixed number of participants, thus creating an irrational barrier to a community-based option for care, while encouraging unfettered access to less desirable, more expensive institutional care. This bill revises our state policies to assure access to waiver services for more people. This measure would also moderate the way young disabled people are treated when they reach age 21, by preserving their eligibility for the community based care they receive in the EPTSD program.

2. Nursing Facility/Acute Hospital Waiver. The NF/AH Waiver is a federal 1915(c) Home and Community-Based Services Waiver in effect through December 31, 2016. Section 1915(c) waivers allow states to receive Medicaid funding to provide long-term care services in home and community settings, rather than in institutional settings. The goals of the waiver are to:

1. Facilitate a safe and timely transition of Medi-Cal eligible persons from a medical facility to his/her home or community setting utilizing NF/AH Waiver services;

2. Offer Medi-Cal eligible persons who reside in the community but are at risk of being institutionalized within the next 30 days, the option of utilizing NF/AH Waiver services to develop a home or community setting program that will safely meet his/her medical care needs; and,

3. Maintain overall cost neutrality so that the costs of the participant’s selected NF/AH Waiver and Medi-Cal state plan services do not exceed the Medi-Cal institutional cost at the participant’s assessed level of care (LOC) and necessary facility type.

DHCS’ Long-Term Care Division In-Home Operations Branch is responsible for the implementation and monitoring of the NF/AH waiver. Waiver participants must have a current Plan of Treatment (POT) signed by the participant and/or legal representative/ legally responsible adult, the participant’s primary care physician or designated physician assistant or nurse practitioner and all HCBS waiver providers. The POT describes all the participant’s care services, and frequency and providers of the identified services to ensure his/her health and safety in a home or community setting.

To be eligible for the waiver, an individual must:

1. Have full scope Medi-Cal eligibility;

2. Be physically disabled (of any age);

3. Meet the acute hospital, adult or pediatric subacute, nursing facility, distinct-part nursing facility, adult, or pediatric Level B (skilled) nursing facility, or Level A (intermediate) nursing facility (NF) Level of Care with the option of returning to and/or remaining in his/her home or home-like setting in the community in lieu of institutionalization; and,

4. Meet other criteria and requirements listed in the waiver

Waiver services are delivered through Medi-Cal HCBS Waiver providers such as home health agencies, durable medical equipment companies, individual nurse providers, licensed clinical social workers, marriage and family therapists, personal care agencies, non-profit organizations, professional corporations, individual personal care providers, and certain community residential facilities. Services provided under the waiver include the following:

1. Private Duty Nursing, including Shared Nursing;

2. Home Health Aide Services;

3. Case Management;

4. Transitional Case Management;

5. Environmental Accessibility Adaptations;

6. Personal Emergency Response Systems (PERS);

7. PERS Installation and Training;

8. Medical Equipment Operating Expenses;

9. Waiver Personal Care Services;

10. Community Transition;

11. Habilitation Services;

12. Respite Care (home and facility);

13. Developmentally Disabled/Continuous Nursing Care Non-Ventilator Dependent Services; and,

14. Developmentally Disabled/Continuous Nursing Care Ventilator Dependent Services 
    
    

Enrollment in the waiver is capped (referred to as “slots” by calendar year). For 2015, the enrollment cap is 3,792, increasing to 3,964 in 2016. DHCS indicates current enrollment waiver enrollment is 3,328 individuals. DHCS indicates there is not currently a wait list for the NF/AH waiver services, and there is priority enrollment for persons residing in hospitals, skilled nursing facilities, and children aging out of EPSDT. DHCS policy if there is a waitlist is that available waiver slots are assigned to NF/AH eligible individuals in the following order: (a) individuals who have been residing in a health care facility for at least 90 days at the time of submission of the waiver application; and (b) individuals residing in the community at the time of submission of the waiver application.

3. Waiver cost caps. As part of the NF/AH waiver, the state is required to provide assurances to the federal government, including assurances on cost neutrality of the waiver. Under the waiver, DHCS assures that:
   
   

1. For any year that the waiver is in effect, the average per capita expenditures under the waiver will not exceed the average per capita expenditures that would have been made under the Medicaid State plan (under Medi-Cal) for the level of care specified for the waiver, had the waiver not been granted; and,
   
   

2. The actual total expenditures for home and community-based waiver and other Medicaid services and its claim for FFP in expenditures for the services provided to individuals under the waiver would not, in any year of the waiver period, exceed the amount that would be incurred in the absence of the waiver by the State's Medicaid program for these individuals in the institutional setting specified for this waiver.
   
   

Under the NF/AH Waiver, DHCS refuses entry any otherwise qualified individual when it reasonably expects that the cost of home and community-based services furnished to that individual would exceed the following amount specified by the state that is less than the cost of a level of care specified for the waiver, as follows:

Institutional Level of Care Annual Institutional Rate Annual NF/AH

2014 Waiver Cost-Cap

Nursing Facility (NF)-A $33,781 $29,548

Nursing Facility (NF)-B $68,178 $48,180

NF-B Pediatric $102,200 $101,882

NF-Distinct Part $149,149 $77,600

Continuous Nursing (non-vent) NA (Adult)

NA (Pediatric) $140,678

Continuous Nursing (vent) NA $155,461

NF-Subacute, Adult $232,255 $180,219

NF-Subacute, Pediatric $289,591 $240,211

Acute Hospital $388,367 $305,283

The dollar limitation amounts in the NF/AH Waiver is referred to as an individual cost cap. Under an individual cost cap, services covered by Medi-Cal (such as IHSS) are deducted from each individual’s waiver budget, which reduces the amount of waiver services that can be purchased. When a waiver provider’s rates are increased, an individual receives additional hours of IHSS services, or the individual’s IHSS workers receive payment for overtime, these amounts are deducted from the individual’s waiver budget, which erodes the beneficiary’s purchasing power using waiver dollars.

To address these two issues, this bill requires an aggregate cost cap instead of an individual cost cap. This change makes the NF/AH waiver function more like an insurance model in that it would enable individuals who are currently at their dollar cap for waiver services to receive additional services from the “savings” resulting from individuals who are enrolled in the waiver but whose spending on waiver services is below their individual dollar cost cap.

In addition, this bill requires the aggregate cost limit formula shown in the chart above to be based on the actual current rates for the institutional level of care. Further, this bill would require those waiver amounts to be adjusted to account for changes in institutional care rates as a result of rate increases. The waiver cost caps are currently fixed amounts in the NF/AH waiver, and the dollar amounts are lower than the institutional level of care. This provision of the bill would require the waiver cap amounts be at parity with the institutional dollar amounts, and would require the waiver cost cap amounts to maintain parity by requiring the waiver cost caps to increase with any corresponding changes in the institutional rates.

4. EPSDT. The Medicaid program’s benefit for children and adolescents is known as EPSDT. EPSDT provides a comprehensive array of prevention, diagnostic, and treatment services for low-income infants, children and adolescents under age 21. The EPSDT benefit is more robust than the Medicaid benefit for adults and is designed to assure that children receive early detection and care, so that health problems are averted or diagnosed and treated as early as possible. EPSDT entitles enrolled infants, children and adolescents to any treatment or procedure that fits within any of the categories of Medicaid-covered services if that treatment or service is necessary to “correct or ameliorate” defects and physical and mental illnesses or conditions.
   
   This bill makes an individual who was receiving services under EPSDT eligible for at least the same level of services under the NF/AH Waiver that he or she received through EPSDT unless the individual agrees that the individual’s needs have decreased and a lower level of service is needed. There are several reasons for this change. The first is to prevent a reduction in home nursing as the Medi-Cal rates for adult facilities are considerably lower than those for pediatric facilities. For example, the NF-B adult rate is $68,178, as compared to the NF-B pediatric rate of $102,200. Second, the NF/AH waiver cost caps are lower for adults as compared to children. For example, the NF-Subacute cost cap under the waiver is $180,219 for adults versus $240,211 for children). Finally, children who meet the pediatric subacute level of care may not meet the more rigid adult subacute level of care, which can result in unnecessary placement in developmental centers or other institutions.
   
   

5. Prior legislation.SB 873 (Committee on Budget and Fiscal Review, Chapter 685, Statues of 2014), the human services budget trailer bill, among other provisions, required DHCS to work with and assist recipients receiving services pursuant to the NF/AH Waiver who are at or near their individual cost cap to avoid a reduction in the recipient's services that may result because of increased overtime pay for IHSS providers. As part of this effort, DHCS is required to consider allowing the recipient to exceed the individual cost cap, if appropriate, and DHCS is required to provide timely information to waiver recipients as to the steps that will be taken to implement this provision.

6. Support. This bill is sponsored by Disability Rights California (DRC), which writes that this bill came its clients who want to stay out of or return home from institutional long term care settings and are unable to do so because of the outdated design and implementation of the NF/AH waiver. DRC states the waiver is supposed to be a key tool in helping people receive care at home, beyond what they can get through the IHSS program. However, the problems with the waiver impede rather than assist people to get what they need, resulting in unnecessary institutionalization and other human and monetary costs. DRC states the outdated and unfair waiver and other state policies make it easier for somebody to get care in a more expensive and unneeded institution than to receive services at home. DRC states this bill makes a number of changes to address the waiver, including increasing the number of waiver slots as the current number is inadequate to meet the need. This bill also increases the cost cap for community care as DRC argues the amount is unnecessarily low when compared to the cost of institutionalization. DRC states this bill changes the cost cap from an individual cost cap to one based on aggregate costs because the individual cost cap results in the loss of waiver services when the costs of Medi-Cal services (such as IHSS, increase) because their individual waiver cap amounts do not increase. DRC explains the purpose of the cost neutrality language change in the most recent set of amendments is that the Administration has interpreted existing law to mean that the cost of the waiver cannot be more than the cost of not providing any services. DRC states that, because not providing services is always cheaper than providing services, this interpretation has caused the terrible situation where people in the community wait for years for waiver services, because the state doesn't "save money" on them as long as they go without services, and the state only "saves money" on people in nursing homes on Medi-Cal who enroll in the waiver. Finally, this bill would ensure that children leaving EPSDT coverage do not experience a service “cliff” and lose critically needed home nursing when they age out of EPSDT.

7. Is three business days sufficient time for waiver application processing? Under existing law, DHCS is required to expedite the processing of waiver applications for those patients who are in acute care hospitals and who are pending placement in a nursing facility. Existing law does not establish a timeframe for the expedited processing of waiver applications.
   
   This bill requires DHCS to also expedite the processing of waiver applications for those individuals who are at imminent risk of placement in a hospital or nursing facility. This bill defines expedited processing of waiver applications as DHCS making an eligibility and level of care determination and informing the individual about available waiver services within three business days of receipt of the application.
   
   DHCS indicates intake into the NF/AH waiver typically takes between 90-180 days, and intake consists of a DHCS-employed nurse conducting a complete level of care evaluation by performing a face-to-face assessment of an applicant. Initial evaluations include a series of assessments and comprehensive identification of all necessary medical care, social services and health care providers necessary to ensure a waiver participant’s health, safety and welfare for waiver enrollment.
   
   The argument for a quick turnaround on waiver application processing is individuals in the community are more likely to end up in an institutional setting as those placements are easier and faster to make than waiver determinations currently are. This results in people being placed in institutional settings when they could be enrolled in the waiver instead, at greater cost to the state than the additional cost of requiring faster waiver application processing.
   
   

SUPPORT AND OPPOSITION:

Support: Disability Rights California (sponsor)

American Federation of State, County and Municipal Employees

California Advocates for Nursing Home Reform

California Alliance for Retired Americans

California Association for Health Services at Home

California Association of Public Authorities for IHSS

California Commission on Aging

California Hospital Association

California In-Home Supportive Services Consumer Alliance

Congress of California Seniors

United Domestic Workers of America (UDW)/AFSCME Local 3930

Westside Center for Independent Living
Three individuals.

Oppose: None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1518

Author:(Committee on Aging and Long-Term Care)

As Amended Ver:April 27, 2015

Majority vote

SUMMARY: Requires the Department of Health Care Services (DHCS) to authorize an additional 5,000 slots beyond current standards for home and community-based patients, and updates requirements to the Nursing Facility/Acute Hospital (NF/AH) Waiver, as specified. Provides this bill only be implemented to the extent that DHCS can demonstrate fiscal neutrality within the DHCS budget and implementation is contingent on federal approval. Specifically, this bill:

1. Requires, by January 1, 2016, nursing home facilities to authorize an additional 5,000 slots beyond those currently authorized for home and community-based NF/AH Waiver. Requires DHCS to consider specified factors to calculate the need for, and seek federal approval of, additional slots to the waiver.

2. Updates requirements regarding the NF/AH Waiver to expedite the Waiver application process and clarify level of care for patients, as specified.

3. Requires DHCS to ensure a seamless transition for patients receiving private duty in-home nursing provided through the Early Periodic Screening, Diagnosis and Treatment program to medically necessary in-home nursing once a patient turns 21 years of age.

4. Adds new services to the NF/AH Waiver and adjusts the cost limitation category of the Waiver to use an aggregate cost limit formula, as specified.

FISCAL EFFECT: According to the Assembly Appropriations Committee:

1. One-time administrative costs in the range of $100,000 (General Fund (GF)/federal) DHCS to apply for a waiver amendment and seek federal approval, and to establish new policies and procedures related to the bill's requirements, such as assessment of imminent risk and determinations of level of care.

2. Though a comprehensive budget neutrality analysis and assessment of unmet need for waiver services is not available, it is assumed total costs for Medi-Cal benefits will be cost-neutral, as the bill specifies. Within the overall budget neutrality, it is expected the state will incur unknown annual costs, likely in the hundreds of thousands of dollars (GF/federal), for additional state staff to conduct assessments for waiver eligibility on an expedited basis, as well as significant cost savings to the extent individuals are cared for at home instead of in a facility.

COMMENTS: According to the author, California’s NF/AH Waiver program does not currently meet the needs of seniors and youth with disabilities who wish to receive services at home, and avoid nursing homes and other institutions. The author states that home-based services are typically less expensive, more desirable to the clients and their families, and consistent with state and federal priorities; however current state policies and limited funding and flexibility prevent individuals from being moved from institutions to home-based care. In addition, the author asserts that upon turning 21, many individuals, who received home care prior to their 21st birthday, are forced into institutions because they become ineligible due to age restrictions for specified services.

Disability Rights California, the sponsor of this bill, states the current NF/AH waiver offers much less money for home-based care than the state pays for care in comparable institutions. The sponsor points to the individual cost limit structure, outdated cost limits, a lengthy waiver approval process, and a risk of discontinued services for individuals who qualify for Early and Periodic Screening, Diagnostic, and Treatment services, as evidence for the need for this bill. Supporters assert this bill provides people with disabilities, including young people and seniors, more opportunities to receive long-term services and supports in their own homes and communities rather than forcing them into less desirable, unneeded and more expensive institutional settings. They also state this bill will reflect in state budget savings, as home-based services are less expensive than comparable institutional services.

There is no opposition to this bill.

Analysis Prepared by: An-Chi Tsou / HEALTH / (916) 319-2097 FN: 0000766

Date of Hearing: May 13, 2015

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Jimmy Gomez, Chair

ABPCA Bill Id:AB 1518

Author:(Committee on Aging and Long-Term Care) – As Amended Ver:April 27, 2015

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill stipulates new requirements for the state's Medi-Cal Nursing Facility/Acute Hospital Waiver (NF/AH waiver). Specifically, this bill requires Department of Health Care Services (DHCS) to:

1. Increase the allowable number of slots in the NF/AH waiver program by 5,000, and to seek additional slots based on an annual assessment of need.

2. Expedite eligibility processing for individuals at imminent risk of placement in institutional settings.

3. Qualify a participating enrollee for the same level of care in a community setting as they would have received in an institution.

4. Provide enrollees who age out of eligibility for Early Periodic Screening, Diagnosis, and Treatment (EPSDT) services at age 21, and who enroll in the waiver, the same level of services provided through EPSDT despite their age. Prohibits a reduction in in-home nursing for enrollees in this situation.

5. Use an aggregate, instead of individual, cost cap to establish budget neutrality, and requires a rebasing of the cost cap to the actual current costs for institutional care on an ongoing basis.

6. Implement this bill, only to the extent the department can demonstrate budget neutrality on a state level and on a federal level, as well as gain federal approval and financial participation, and requires implementation 6 months after the department receives authorization for necessary resources.

FISCAL EFFECT:

1. One-time administrative costs in the range of $100,000 (GF/federal) DHCS to apply for a waiver amendment and seek federal approval, and to establish new policies and procedures related to the bill's requirements, such as assessment of imminent risk and determinations of level of care.

2. Though a comprehensive budget neutrality analysis and assessment of unmet need for waiver services is not available, it is assumed total costs for Medi-Cal benefits will be cost-neutral, as the bill specifies. The cost neutrality would have to be monitored on a continuous basis. Costs or cost savings as compared to the status quo could vary depending on how robustly the expansion is implemented, how many individuals enroll, and how many are actually able to avoid institutionalization, who would otherwise be institutionalized. However, using aggregate, instead of individual cost caps, will make it more difficult to prove, and to attain, budget neutrality. This poses a higher level of fiscal risk to the state than the current waiver design, in which costs for waiver services are capped on an individual basis. Additionally, this bill raises the cost cap per individual for home and community-based services to the level for institutional care. This could increase costs, as compared to the status quo, by an unknown amount because it would likely result in some individuals receiving a higher level of service in their home than they otherwise would, because individuals who actually would qualify for a nursing level of care but choose to remain in their homes anyway do not currently incur institutional-level costs.

Within the overall budget neutrality, it is expected the state will incur unknown annual costs, likely in the hundreds of thousands of dollars (GF/federal), for additional state staff to conduct assessments for waiver eligibility on an expedited basis, as well as significant cost savings to the extent individuals are cared for at home instead of in a facility.

COMMENTS:

1. Purpose. The author argues California’s NF/AH waiver program does not currently meet the needs of seniors and youth with disabilities who wish to receive services at home, and avoid nursing homes and other institutions. The author states that home-based services are typically less expensive, more desirable to the clients and their families, and consistent with state and federal priorities; however, current state policies and limited funding and flexibility prevent individuals from being moved from institutions to home-based care.

2. Background. The NF/AH waiver is a 1915(c) Home and Community-Based Services Waiver that provides community-based alternatives to Medi-Cal eligible individuals who would otherwise be receiving care in either an acute hospital, adult or pediatric subacute facility, nursing facility, or distinct-part nursing facility. The Waiver is available to individuals who are currently residing in an institution but wish to transition to his/her home and community, as well as to individuals who reside in the community, but are at-risk for being institutionalized within the next 30 days. The current NH/AF Waiver has an enrollment cap of 3,792 persons in 2015 and 3,964 in 2016.

3. Cost Structure of NH/AF Waiver. A state may limit participation in a waiver based on the expected cost of the home and community-based services that would be furnished to a person. A waiver’s design may include reasonable methods to control overall spending, including the specification of an individual cost limit. California currently imposes a cost limit lower that is generally lower than the institutional level, that applies to each individual enrolled. The state does not provide a waiver slot to any otherwise qualified individual, when the state reasonably expects that the cost of home and community-based services (HCBS) furnished to that individual would exceed an amount specified by the state that is less than the cost of a level of care specified for the waiver. The costs for HCBS are set at 51% to 107% of institutional rates, depending on the facility type.

4. Related Legislation. AB 664 (Dodd), pending on the Suspense File of this committee, requires an evaluation of a universal assessment tool pilot program, currently being piloted by DHCS. A UAT is designed to assess an individual's LTC needs in a comprehensive way.

Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081

Date of Hearing: April 21, 2015

ASSEMBLY COMMITTEE ON HEALTH

Rob Bonta, Chair

ABPCA Bill Id:AB 1518

Author:(Committee on Aging and Long-Term Care) – As Amended Ver:March 26, 2015

SUBJECT: Medi-Cal: nursing facilities.

SUMMARY: Requires the Department of Health Care Services (DHCS) to authorize an additional 5,000 slots beyond current standards for home and community-based patients, and updates requirements to the Nursing Facility/Acute Hospital (NF/AH) Waiver, as specified. Provides this bill only be implemented to the extent that DHCS can demonstrate fiscal neutrality within the DHCS budget and implementation is contingent on federal approval. Specifically, this bill:

1. Requires, by January 1, 2016, nursing home facilities to authorize an additional 5,000 slots beyond those currently authorized for home and community-based NF/AH Waiver. Requires DHCS to consider specified factors to calculate the need for, and seek federal approval of, additional slots to the waiver.

2. Updates requirements regarding the NF/AH Waiver to expedite the Waiver application process and clarify level of care for patients, as specified.

3. Requires DHCS to ensure a seamless transition for patients receiving private duty in-home nursing provided through the Early Periodic Screening, Diagnosis and Treatment program to medically necessary in-home nursing once a patient turns 21 years of age.

4. Adds new services to the NF/AH Waiver and adjusts the cost limitation category of the Waiver to use an aggregate cost limit formula, as specified.

EXISTING LAW:

1. Establishes the Medi-Cal Benefits Program under the direction of DHCS, to provide qualifying individuals health care and a uniform schedule of benefits;

2. Allows DHCS to request the federal Centers for Medicare and Medicaid Services (CMS) for increased services in the home- and community-based waiver for nursing facilities, including the addition of 500 slots beyond what is currently authorized for the home- and community-based level A/B nursing facility and other services, as specified;

3. Requires DHCS to consider expanding the number of waiver slots upon renewal of the waiver.

FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, California’s NF/AH Waiver program does not currently meet the needs of seniors and youth with disabilities who wish to receive services at home, and avoid nursing homes and other institutions. The author states that home-based services are typically less expensive, more desirable to the clients and their families, and consistent with state and federal priorities; however current state policies and limited funding and flexibility prevent individuals from being moved from institutions to home-based care. In addition, the author asserts that upon turning 21, many individuals, who received home care prior to their 21^st birthday, are forced into institutions because they become ineligible due to age restrictions for specified services.

2. BACKGROUND.

   1. Home- and Community-Based Waivers. The federal Medicaid Act requires states to administer their Medicaid programs according to federal law and regulations in order to protect beneficiaries. However, Congress may grant waivers of certain laws and regulations in order to help states better meet their individual needs. The home- and community-based waivers primarily promote coverage and services which enable individuals who would otherwise be institutionalized to live in the community or at home.
      
      The NF/AH Waiver is a 1915(c) Home and Community-Based Services Waiver that provides community-based alternatives to Medi-Cal eligible individuals who would otherwise be receiving care in either an acute hospital, adult or pediatric subacute facility, nursing facility, or distinct-part nursing facility. There is no age limit for waiver services. The Waiver is available to individuals who are currently residing in an institution but wish to transition to his/her home and community, as well as to individuals who reside in the community, but are at-risk for being institutionalized within the next 30 days.

   2. Right to Community-Based Services. In 1999, the United States Supreme Court ruled in Olmstead vs. L.C., the pioneering court case related to community-based programs. The plaintiffs were patients with mental illness and developmental disabilities who were voluntarily admitted to the psychiatric unit in the state-run Georgia Regional Hospital. The patients remained at the institution for several years following their initial treatment, despite the suggestion of mental health professionals that each was ready to move to a community-based program. The patients filed suit under the Americans with Disabilities Act (ADA) for release from the hospital. The Supreme Court ruled that unjustified segregation of persons with disabilities constitutes discrimination in violation of Title II of the ADA. The Court held that public entities must provide community-based services to persons with disabilities when: i) such services are appropriate; ii) the affected persons do not oppose community-based treatment; and, iii) community-based services can be reasonably accommodated, taking into account the resources available to the public entity and the needs of others who are receiving disability services from the entity.

   3. Need for additional spots. The current NH/AF Waiver has an enrollment cap of 3,792 persons in 2015 and 3,964 in 2016. The current Waiver term is set to expire on December 31, 2016. According to a 2014 report by AARP, the Commonwealth Fund and the SCAN Foundation, California ranks ninth in the country in terms of providing high quality long-term services and supports (LTSS) for older adults, people with physical abilities and family caregivers.

   4. Legislative Reports. In January 2015, the California Senate Select Committee on Aging and Long-Term Care released a report titled “A Shattered System: Reforming Long-Term Care in California.” The report highlighted the committee’s recommendations on implementing a comprehensive, effective long-term care system within California. Among the recommendations, the report calls for a renewed focus on the transitional care from nursing homes to community and home-based settings. The report states that although individuals overwhelming prefer to receive services in the community rather than in an institution, limited resources, coordination, availability, and access often impose barriers to these efforts.

   5. Current Cost Structure of NH/AF Waiver. A state may limit participation in a waiver based on the expected cost of the home and community-based services that would be furnished to a person. A waiver’s design may include reasonable methods to control overall spending, including the specification of an individual cost limit. The individual cost limit does not specify an amount of waiver services to which an individual is entitled and must be applied uniformly to all potential waiver entrants. While federal guidance allows these limits to be managed in the aggregate to ensure cost-neutrality or achieve a targeted level of expenditures per waiver participant, entrance determinations must be made on an individual basis.
      
      States currently have four choices regarding the individual cost limit: i) no cost limit; ii) cost limit in excess of institutional costs; iii) institutional cost limits; and, iv) cost limits lower than institutional services. California currently elects to have a cost limit lower than institutional level, in which the state refuses provide a waiver slot to any otherwise qualified individual when the state reasonably expects that the cost of home and community-based services furnished to that individual would exceed an amount specified by the state that is less than the cost of a level of care specified for the waiver. Federal guidelines state that the selection of this limit generally is only appropriate in the case of waivers that target individuals who can be expected to have available services and supports from other sources (e.g., family caregivers or other public programs) that, in combination with waiver services, will be sufficient to assure their health and welfare.

3. SUPPORT. Disability Rights California, the sponsor of the bill, states the current NH/AF waiver offers much less money for home-based care than the state pays for care in comparable institutions. The sponsor asserts this state policy allows an individual to receive care in a more expensive and unneeded institution than to receive services at home and is the definition of “institutional bias.” The sponsor points to the individual cost limit structure, outdated cost limits, a lengthy waiver approval process, and a risk of discontinued services for individuals who qualify for Early and Periodic Screening, Diagnostic, and Treatment services, as evidence for the need for this bill. The sponsor also urges the need for additional waiver spots, evidenced by the data from a 2014 AARP report that shows if California was performing as well as the top state in the country in providing LTSS to residents, an additional 10,727 nursing home residents would be receiving LTSS in a community setting, and 11,785 additional new Medi-Cal LTSS beneficiaries would first receive services within the community.
   
   Supporters assert the bill provides people with disabilities, including young people and seniors, more opportunities to receive long-term services and supports in their own homes and communities rather than forcing them into less desirable, unneeded and more expensive institutional settings. They also state the bill will reflect in state budget savings, as home-based services are less expensive than comparable institutional services.

4. PREVIOUS LEGISLATION.

   1. AB 1477 (Budget Committee) of 2014 in part required the DHCS to work with and assist recipients under the NF/AH Waiver, who are at or near their individual cost cap, to avoid a reduction in services. This bill died on third reading file.

   2. SB 873, Chapter 685, Statues of 2014, requires DHCS to work with and assist recipients on the NF/AH Waiver who are at or near the individual cost cap to avoid a reduction in an individual’s services that could result because of increased overtime pay for providers.

5. DOUBLE REFERRED. This bill is double referred, upon passage of this Committee it will be referred to the Assembly Committee on Aging and Long-Term Care.

6. POLICY CONSIDERATION. This bill requires DHCS to adjust the cost limitation category of the NH/AF Waiver. Typically, federal Medicaid waivers are based on complex funding formulas and federal requirements. Waivers are required to be cost neutral for the federal government; amending the waiver will require a showing of cost neutrality and the willingness of CMS to consider and approve the amendment.  This bill would require DHCS to re-negotiate the terms of the waiver.  It is not clear whether the state could secure a revised waiver based on the adjusted cost structure.

7. SUGGESTED AMENDMENTS. The committee suggests the following clarifying amendments to be considered in future committees:

   1. The bill requires DHCS, in determining the need for additional waiver spots, to consider the needs identified by programs that assist people to leave nursing homes. The current language is broad and it is unclear how these programs are different from stakeholder groups which, under the bill, DHCS must also consult with in determining the number of waiver spots. The committee suggests the bill be amended to specify which local and/or state programs must be considered by DHCS when considering the number of Waiver slots.

   2. This bill requires DHCS to expedite the processing of waiver applications of those patients who are at imminent risk of being placed in a hospital or nursing facility. The language does not specify which entity has authority of determining whether or not a patient is of imminent risk. It also does not discuss what factors are to be considered in that determination. The committee suggests the bill be amended to clarify which entity has the authority to decide if an individual is at imminent risk, and what factors must be considered by that entity in making that determination.

   3. This bill currently requires DHCS to implement certain provisions by July 1, 2016, which is six months after the bill would become law. However, it is unknown when CMS will approve the requested for an amended waiver. The committee suggests adjusting the bill language to specify the time range by which the provisions must be implemented upon approval of the waiver by CMS, rather than specifying a date in statute.

REGISTERED SUPPORT / OPPOSITION:

Support
Disability Rights California (sponsor)

California Association of Public Authorities for IHSS

Independent Living Resource Center, Inc.

United Domestic Workers of America

Opposition

None on file.

Analysis Prepared by: An-Chi Tsou / HEALTH / (916) 319-2097