Existing law provides for the licensure and regulation of home health agencies by the State Department of Public Health. Existing law requires all private or public organizations that provide or arrange for skilled nursing services to patients in the home to obtain a home health agency license. Existing law also 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. Existing law provides that home health care services are covered Medi-Cal benefits, subject to utilization controls.

This bill would require the department, on or before January 1, 2017, to develop at least 3 regional pilot projects in counties located in designated areas of the state. The pilot projects would be targeted to increase access to in-home, private duty nursing care for children receiving Medi-Cal benefits who are eligible for in-home, shift nursing care services. services and participate in specified programs. The bill would require, for a period of at least 2 3 years, an increased reimbursement rate for participating licensed home health agencies that are currently providing private duty nursing. The bill would require that the pilot project be implemented only to the extent that federal financial participation is available, and would require the department to submit any state plan amendment, waiver, or waiver amendment application necessary for federal approval.

This bill would authorize the department department, in collaboration with home health agencies, to establish reasonable provider eligibility standards and participation requirements and also would require the department, or an entity contracting with the department, to report to specified committees of the Legislature an evaluation of the effectiveness of the pilot projects, with input from specified stakeholders. The bills provisions would become inoperative on July 1, 2019, 2020, and would be repealed as of January 1, 2020. 2021.

Existing law provides for the licensure and regulation of home health agencies by the State Department of Public Health. Existing law requires all private or public organizations that provide or arrange for skilled nursing services to patients in the home to obtain a home health agency license. Existing law also 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. Existing law provides that home health care services are covered Medi-Cal benefits, subject to utilization controls.

This bill would require the department, on or before January 1, 2017, to develop at least 3 regional pilot projects in counties located in designated areas of the state. The pilot projects would be targeted to increase access to in-home, private duty nursing care for children receiving Medi-Cal benefits who are eligible for in-home, shift nursing care services. The bill would require, for a period of at least 2 years, an increased reimbursement rate for participating licensed home health agencies that are currently providing private duty nursing. The bill would require that the pilot project be implemented only to the extent that federal financial participation is available, and would require the department to submit any state plan amendment, waiver, or waiver amendment application necessary for federal approval.

This bill would authorize the department to establish reasonable provider eligibility standards and participation requirements and also would require the department, or an entity contracting with the department, to report to specified committees of the Legislature an evaluation of the effectiveness of the pilot projects, with input from specified stakeholders. The bills provisions would become inoperative on July 1, 2019, and would be repealed as of January 1, 2020.

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

SB 1401 (McGuire) - Pediatric and Home Care Expansion Act

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

Bill Summary:

SB 1401 would require the Department of Health Care Services to establish a three-county pilot project, to provide increased reimbursement rates for pediatric in-home nursing care.

Fiscal Impact:

• Annual staff costs of about $130,000 per year for three years for program oversight and monitoring by the Department of Health Care Services (General Fund and federal funds).
• One-time contract costs, likely in the low hundreds of thousands, to develop data collection requirements, reporting methodologies, and evaluation methods (General Fund and federal funds).
• One-time contract costs of about $100,000 for the Department to contract for a final evaluation of the pilot project (General Fund and federal funds).
• Increased costs of $23 million per year for Medi-Cal reimbursement rates for in-home nursing care services currently being provided to Medi-Cal children in the pilot project counties (General Fund and federal funds). The cost above is based on a 20% increase in reimbursement rates and the most recent utilization data for pediatric in-home nursing care in the target counties. It is important to note that the costs above are for increased payments for services already being provided.
• Unknown increase in Medi-Cal payments for additional pediatric in-home nursing care services, to the extent that increased provider rates results in additional providers becoming willing to provide services to Medi-Cal beneficiaries. The intent of the bill is to incentivize existing Medi-Cal providers (direct care providers such as registered nurses and the home care agencies that employ those providers) to increase their participation in Medi-Cal and incentivize other providers to begin providing services to Medi-Cal beneficiaries. To the extent that the bill is successful in doing so, and there is unmet demand for in-home nursing care, the bill is likely to result in additional utilization and spending on those services.
• Unknown reduction in Medi-Cal payments for institutional care to children who would be cared for at home under the bill (General Fund and federal funds). To the extent that there is unmet demand for in-home nursing care, there are likely to be children who are currently receiving care in institutional settings (such as skilled nursing facilities or hospitals) who could be cared for at home using in-home nursing care. Given the very high cost for institutional care for children, the state is likely to realize savings for any children that shift from institutional care to in-home care under the bill. The extent of this effect is unknown, because there is not sufficient data available to determine the number of children currently being cared for in institutional settings who could be cared for at home, but for a lack of in-home nursing providers.

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.

The Medi-Cal program provides coverage for in-home nursing care either following a patient’s discharge from a hospital or other institution or when a patient can be maintained in the home with in-home nursing care in lieu of placement in an institutional setting. There are various requirements on the use of in-home nursing care in Medi-Cal. In providing in-home nursing care, the Department contracts with home health agencies, who directly employ licensed vocational nurses, registered nurses, and home health aides. Hourly rates paid to home health agencies were last increased in 2001. Unlike most Medi-Cal providers, home health agency rates were not subject to the 10% rate reductions imposed in 2011, due to concerns about access to services.

Supporters of the bill have raised the issue that the Medi-Cal portion of the home care industry has not seemed to grow inline either with recent growth in the Medi-Cal population or overall growth of home care services in the state health care market. In addition, surveys of providers indicate that home health agencies are limiting their participation in Medi-Cal due to low reimbursement rates.

Proposed Law:

SB 1401 would require the Department of Health Care Services to establish a three-county pilot project, to provide increased reimbursement rates for pediatric in-home nursing care.

Specific provisions of the bill would:

• Require the Department of Health Care Services to establish at least three regional pilot projects in the San Francisco Bay Area, the Central Valley, and Los Angeles County for home health agencies that provide services to children in the Medi-Cal program;
• Require the pilot projects to provide for an increase in in-home private duty nursing care for children of at least 20% above the current rate for at least three years;
• Make operation of the pilots contingent on federal funding;
• Authorize the Department to establish provider eligibility standards;
• Require a report evaluating the effectiveness of the pilot projects;
• Authorize the Department to request participating home health agencies to report specified information;
• Include a sunset of January 1, 2021.

Staff Comments:

By mandating an across-the-board reimbursement rate increase for private duty nursing care to children in the pilot project counties, the bill will result in increased state costs for services that are currently being provided. Those costs would not be offset by reduced institutional care costs, since those services are already being provided outside of institutional care.

To the extent that there is a supply limitation on the provision of private duty nursing care for Medi-Cal children and a that 20% rate increase would be sufficient to incent providers to provide more services, the bill could result in increased utilization for those services. If that results in Medi-Cal children moving from institutional care to a home care setting, the state would experience cost savings for that population of children. The extent of that impact is unknown and would depend on the current unmet demand for private duty nursing care by children who are receiving institutional care.

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SENATE COMMITTEE ON HEALTH

Senator Ed Hernandez, O.D., Chair

BILL NO: SB 1401

SUBJECT: Pediatric and Home Care Expansion Act

SUMMARY:

Requires the Department of Health Care Services to develop at least 3 regional pilot projects in counties located in the San Francisco Bay Area, the Central Valley and Los Angeles County to increase access for children receiving Medi-Cal or California Children’s Services Program benefits who are eligible for in-home, shift nursing care services by increasing private duty nursing reimbursement rates by 20% for participating licensed home health agencies. Sunsets the provisions of this bill on July 1, 2020.

Existing law:

1. Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), under which qualified low-income individuals receive health care services.
   
2. Establishes a schedule of benefits under the Medi-Cal program, which includes Early and Periodic Diagnosis, Screening and Treatment (EPSDT) for any individual under 21 years of age, consistent with federal Medicaid requirements. Home health care services are covered Medi-Cal benefits, subject to utilization controls.
3. Establishes the California Childrens Services (CCS) Program to provide specified medical care and therapy services to children with CCS-eligible conditions. CCS eligible conditions are generally described in regulation and include severe genetic diseases, chronic medical conditions, infectious diseases producing major sequelae, and traumatic injuries.

This bill:

1. Requires DHCS, on or before January 1, 2017, to establish at least three regional pilot projects, located in counties in the San Francisco Bay area, the Central Valley, and the County of Los Angeles, applicable to home health agencies that treat children who receive skilled nursing services through the Medi-Cal program.
   
2. Requires the three regional pilot project areas, at a minimum, to include the following counties:
   
   1. San Francisco Bay Area (Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma Counties);
   2. Central Valley region (Fresno, Kern, Kings, Madera, Merced, San Joaquin, Stanislaus, and Tulare Counties); and,
   3. Los Angeles County.
3. Requires the pilot projects to be targeted to increase access to in-home, private duty nursing care for children receiving Medi-Cal benefits who are eligible for in-home, shift nursing care services and participate in the In-Home Operations Waiver (IHO), CCS, or EPSDT.
4. Increases the applicable reimbursement rate for licensed home health agencies that are currently providing private duty nursing care by 20% above the Medi-Cal rate schedule in effect as of July 1, 2015. Requires this increased reimbursement rate to remain in effect for at least three years.
   
5. Implements this bill only to the extent that federal financial participation is available. Requires DHCS to submit any necessary application to the federal Centers for Medicare and Medicaid Services for a state plan amendment, waiver, or amendment to a waiver to implement the pilot project.
   
6. Permits DHCS, in collaboration with home health agencies, to establish reasonable provider eligibility standards and participation requirements for the pilot projects. Requires collaborating home health agencies to include, but are not limited to, agencies in good standing with the Department of Public Health, agencies that are participating in the Medi-Cal program, and agencies that are accredited by the Accreditation Commission for Health Care.
   
7. Requires, no later than April 1, 2020, DHCS, or a qualified academic institution or other entity with which DHCS contracts, to submit a report evaluating the effectiveness of the pilot projects to the Senate Committee on Health, the Assembly Committee on Health, the Senate Committee on Budget and Fiscal Review, and the Assembly Committee on Budget.
   
8. Permits DHCS, in order to compare access to necessary and approved services before and after the establishment of the pilot projects, to request participating home health agencies to report on key access to care indicators identified by DHCS, the participating agencies, and referring hospitals. Requires the key access to care indicators to include, but need not be limited to:
   
   1. The increase or decrease in hospital discharges to home health agencies’
   2. The number of nursing hours filled, as compared to the number of hours that have been approved; and,
   3. The number of available licensed home health agencies that accept pediatric patients.
      
9. Requires DHCS, in evaluating the effectiveness of the pilot projects, to cooperate with, and consider input from, home health agencies, consumer groups, hospitals, and other provider associations.
   
10. Makes legislative findings and declarations regarding home care services, the pediatric patients served by home health agencies, federal Medicaid law regarding reimbursement, barriers to home health services, the reduction in home health services to Medi-Cal patients.
11. Sunsets this bill on July 1, 2020, and repeals its provisions January 1, 2021.

FISCAL EFFECT:

This bill has not been analyzed by a fiscal committee.

COMMENTS:

1. Author’s statement. According to the author, there are almost 5,000 children statewide with severe long term, complex and catastrophic health needs eligible for Medi-Cal in-home nursing care. Most of these children are medically fragile, permanently disabled, are on continuous life support or require life-sustaining equipment such as ventilators and feeding tubes. In-home skilled nursing care allows these children to be safely discharged from expensive ICU-level hospital care back into their homes at a fraction of the cost to the state. In the last decade, Californians have seen growing barriers to accessing care. Factors such as out-of-date reimbursement rates and difficulty recruiting nurses with a unique combination of skills have resulted in waiting lists and in some counties, no in-home care options. Typically, medically fragile children are being treated in expensive neonatal or pediatric intensive care units but can come home if the appropriate care is available. Without the access to skilled in-home nursing, the state is unnecessarily spending limited resources and preventing children from being at home with their families. This bill provide a targeted Medi-Cal rate increase paid to eligible licensed home health agencies for private duty nursing services provided to children in three regional pilot areas that are currently facing access to care challenges.
   
2. Background on Medi-Cal coverage of home health services. Medi-Cal coverage of home health agency services is outlined in its manual of criteria. In order for a patient to be eligible to receive home health agency services, the patient must have a medical condition requiring skilled care so as to prevent further disability and/or promote improvement, and the patient's medical condition for which services are being prescribed must be reasonably responsive to the prescribed service. Home health services are authorized only after being prescribed by a physician as to the extent and duration of the services and in accordance with a written treatment plan. The treatment plan must be reviewed by a physician every 60 days. The treatment plan must include a need for one or more covered services such as skilled nursing care, physical therapy, occupational therapy, speech therapy, medical social worker, home health aide, and appropriate medical supplies. Medi-Cal covers home health agency services in the following two general situations:
3. During the convalescent phase of post-hospital or institutional discharge or during the convalescent phase following an acute episode or exacerbation of an illness of a homebound patient; and,
4. When a homebound patient can be maintained at home in lieu of institutional placement with skilled nursing or other care.

Home health agency rates were reduced by 1% in 2009 but home health agencies were not subject to the 10% rate reduction required by AB 97 (Committee on Budget, Chapter 3, Statutes of 2011), because of potential access concerns. Home health agency rates were last increased in 2001.

1. Study on home health access for Medi-Cal patients. A 2015 study by Leavitt Partners funded by Maxim Healthcare Services (a home health agency) entitled “Analysis of California Home Health Care: Decreasing Access for Medi-Cal Patients” found that while total capacity of the home health care market is growing, services available for Medi-Cal patients have remained stagnant since 2002. The report states significant growth in new Medi-Cal enrollees and lack of growth in agencies willing to provide services to enrollees suggests a substantial access-to-care gap materializing between Medi-Cal patients and non-Medi-Cal patients for home health services. Key findings from the report are as follows:
   1. That the Medi-Cal population has grown by 39% in seven years (1.8 million more people), while the number of home health visits provided to Medi-Cal patients has stayed relatively stable during the same time period;
      An increasing percentage of home health agencies are not treating Medi-Cal patients (22% in 2002 to 56% in 2013);
   2. Home health agencies are significantly more likely to immediately accept new patients if they are privately insured than if they are on Medi-Cal;
   3. 60% of all the agencies treating Medi-Cal patients are only able to provide 0 to 25% of the approved hours to Medi-Cal patients;
   4. 17% of all agencies have a cap on the number of Medi-Cal patients they will accept; and,
   5. By 2018, only four in 10 Medi-Cal certified agencies will actually accept Medi-Cal patients in a given year.

The report concluded that the movement of home health agencies away from providing services to Medi-Cal suggests three important conclusions:

1. Growth in the home health care market has not increased access to care for Medi-Cal patients as might have been expected;
2. When entering the home health market, new agencies are less likely to provide
   services to Medi-Cal patients; and,
3. Access-to-care problems are exacerbated for certain sub-populations, such as high-needs pediatric patients.
4. Support. This bill is supported by home health agencies and children’s specialty providers. Maxim Healthcare Services (Maxim) writes in support that children throughout the state with severe medical conditions are eligible for in-home nursing services through Medi-Cal, but the current fee schedule causes access problems for in-home nursing services as inadequate reimbursement rates to licensed home health agencies restrict their ability to recruit and retain nurses for this medically fragile pediatric population. When in-home nursing services are not readily available, these children are treated in expensive hospital neonatal or pediatric intensive care units longer than necessary or they are being discharged to family members without trained nurses available to assist these families. A likely result of the poor access is longer hospital admissions days or readmissions due to the lack of nursing care available in the community. Maxim states this bill addresses this urgent problem by establishing a pilot project in three geographic areas where home health agency Medi-Cal reimbursement rates are increased by 20%. To provide accountability for the rate increase, this bill requires data to be reported to the Legislature on the effectiveness of the pilot by assessing the number of nursing hours provided and Medi-Cal savings through moving children from hospital stays and to care in their homes. Maxim concludes that, without an increase in reimbursement rates, the access gap to home health agency service will continue to grow, as fewer home health agencies are willing to accept Medi-Cal patients, which will result in increased wait times for those seeking in-home nursing services and higher state costs as these patients remain in acute care hospitals.

SUPPORT AND OPPOSITION:

Support: American Academy of Pediatrics, California

California Association for Health Services at Home

California Children’s Hospital Association

Children’s Specialty Care Coalition

Premier Health
Maxim Healthcare Services

An individual

Oppose: None received

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