Existing law establishes various veterans homes for the benefit of the aged and disabled persons who served in the Armed Forces of the United States of America.

This bill would require the Department of Veterans Affairs, on or before February 1, 2019, and annually thereafter, to submit to the Legislature and post on its Internet Web site a specified financial report of the veterans homes located in Barstow, Chula Vista, Fresno, Lancaster, Redding, Ventura, West Los Angeles, and Yountville. The bill would further require the department to review the use of a veterans home, using specified factors, no later than 5 years before the expiration of a specified use restriction imposed by federal law to determine the best continued, unrestricted use of the veterans home. The bill would require the department, every 5 years after the date of the expiration of the use restriction, to review the veterans home, using specified factors, to determine its best continued use.

Existing law establishes various veterans homes for the benefit of the aged and disabled persons who served in the Armed Forces of the United States of America.

This bill would require the Department of Veterans Affairs, on or before February 1, 2019, and annually thereafter, to submit to the Legislature and post on its Internet Web site a specified financial report of the veterans homes located in Barstow, Chula Vista, Fresno, Lancaster, Redding, Ventura, West Los Angeles, and Yountville. The bill would further require the department to review the use of a veterans home, using specified factors, no later than 5 years before the expiration of a specified use restriction imposed by federal law to determine the best continued, unrestricted use of the veterans home. The bill would require the department, every 5 years after the date of the expiration of the use restriction, to review the veterans home, using specified factors, to determine its best continued use.

Existing law establishes various veterans homes for the benefit of the aged and disabled persons who served in the Armed Forces of the United States of America.

This bill would require the Department of Veterans Affairs, on or before January February 1, 2019, and annually thereafter, to submit to the Legislature and post on its Internet Web site a specified financial report of the veterans homes located in Barstow, Chula Vista, Fresno, Lancaster, Redding, Ventura, West Los Angeles, and Yountville. The bill would further require the department to review the use of a veterans home, using specified factors, no later than 5 years before the expiration of a specified use restriction imposed by federal law to determine the best continued, unrestricted use of the veterans home. The bill would require the department, every 5 years after the date of the expiration of the use restriction, to review the veterans home, using specified factors, to determine its best continued use.

Existing law authorizes a member of the United States Military Reserve or the National Guard who is called to active duty, as specified, to defer payments on certain obligations while serving on active duty.

This bill would make technical, nonsubstantive changes to this provision.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1365

Author:(Reyes)

As Amended Ver:September 8, 2017

Majority vote

Original Committee Reference: V.A.

SUMMARY: Requires annual financial reporting, as specified, on the state veterans homes by the California Department of Veterans Affairs (CalVet), and regular review and planning on the use of veterans homes. Specifically, this bill:

1. Requires the Department of Veterans Affairs, (CalVet) on or before February 1, 2019, and annually thereafter, to submit to the Legislature and post on its Internet Web site a financial report on the veterans homes.
2. Requires the report to include: The amount of state funds budgeted to and the amount of revenue collected from the home; the remaining amount of expected revenue from the home over a period of several years, as applicable; aggregated cost of care per resident, segregated by level of care, for the home; current maintenance costs of the home; Projected maintenance costs for the home.
3. Requires CalVet to review the use of a veterans home, using specified factors, no later than five years before the expiration of a specified use restriction imposed by federal law to determine the best continued, unrestricted use of the veterans home.

Mandates that the review shall include: Every financial report created for that home as specified; current needs of the regional veterans population; projections regarding the changing composition of the veterans population; assessment of resources available to serve the projected veterans population; input from veteran residents of the home, community members near the home, and other stakeholders; any other factors the department determines are necessary to review to make the determination.

1. Requires CalVet, within five years after the date of the expiration of the use restriction imposed by federal law on a home to review the home to determine the best continued use of the home.
2. Specifies that CalVet must review all of the following in making the determination: Financial reports pertaining to that home as specified; current needs of the regional veterans population; projections regarding the changing composition of the veteran population; assessment of resources available to serve the projected veteran population; input from veteran residents of the home, community members near the home, and other stakeholders; any other factors the department determines are necessary to review to make the determination.
3. Requires the department, every five years after the date of the expiration of the use restriction, to review the veterans home, using specified factors, to determine its best continued use.
4. Requires CalVet to submit reports to the Legislature as specified.

The Senate amendments move the initial due date for the mandated annual report from January 1, 2019, to February 1, 2019; moves the date for the report's first annual update from January 1, 2020 to February 1, 2020 and for annual updates required thereafter from January 1 to February 1. The amendments also provide that the report data category defined as "costs of care per resident, segregated by level of care, for the home" is redefined to be "aggregated costs of care per resident, segregated by level of care, for the home."

EXISTING LAW: Military and Veterans Code Division 5 Chapter 1, creates the Veterans' Home of California.

FISCAL EFFECT: According to the Senate Appropriations Committee, significant ongoing GF costs to CalVet, likely in the low hundreds of thousands of dollars, for increased workload to collect data on the cost of care per resident, to analyze, validate, and compile the details of the maintenance cost reporting, to create the annual financial reports, and to conduct the research on need, demand, and use of the homes

COMMENTS: In March of 2017, the Little Hoover Commission (Commission) issued a report entitled "A New Approach to California's Veterans Homes" (Report 237, March 2017). The report made several recommendations including periodic evaluations, cost and otherwise, of each home including the foundational questions about whether it is sound public policy and a wise use of the state's funds to continue the operation of a home.

This bill codifies some of the recommendations from the Commission's report. In particular, the bill codifies recommendations to clarify the costs of the care and services provided at each veterans home, as well as shaping the system to meet the changing needs of California's veteran population.

According to the author, "This bill would establish a process to systematically evaluate and review each CalVet home every five years after the initial 20-year period, to assess available resources and determine if those resources are being put to the best use."

California is home to approximately 1.8 million of the estimated 21 million veterans in the United States, more than any other state. As of 2016, it is estimated that 90% of California's veterans are male, more than half are over the age of 60, and veterans who served in the Vietnam War make up the largest share of the veteran population.

CalVet's Veterans Homes Division provides rehabilitative, residential medical care and services in a homelike environment for aged and disabled veterans (and eligible veteran spouses) residing in the State's eight veterans homes, which are located in Barstow, Chula Vista, Fresno, Lancaster, Redding, Ventura, West Los Angeles, and Yountville. As of mid-March 2017, more than 2,200 members in total resided in the homes.

Analysis Prepared by: Christian Burkin / V.A. / (916) 319-3550 FN: 0002299

 THIRD READING  

Bill No: AB 1365

Author:

:

Vote:

SENATE VETERANS AFFAIRS COMMITTEE: 6-0, 7/11/17

AYES: Newman, Dodd, Hueso, Nguyen, Roth, Wilk

NO VOTE RECORDED: Nielsen

SENATE APPROPRIATIONS COMMITTEE: 7-0, 9/1/17

AYES: Lara, Bates, Beall, Bradford, Hill, Nielsen, Wiener

ASSEMBLY FLOOR: 77-0, 5/30/17 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill requires financial reporting and planning, as specified, for the state veterans homes, which are managed by the California Department of Veterans Affairs (CalVet).

Senate Floor Amendments of 9/8/17 adjust the initial due date for the mandated annual report to from January 1, 2019, to February 1, 2019. The amendments also provide that the report data category defined as “costs of care per member, segregated by level of care, for the home” is redefined to be “aggregated costs of care per member, segregated by level of care, for the home.”

ANALYSIS:

Existing law:

1. Authorizes establishment and operation of the Veterans’ Home of California system. Establishes CalVet’s authority and responsibilities in administering the system.
2. Requires each on-site home administrator to adopt rules and regulations for the administration of each home.
3. Defines criteria for admission to a veterans’ home.
4. Requires that home members (residents) pay fees and charges as determined by CalVet, subject to a specified fee schedule. Authorizes CalVet to investigate a veteran’s financial status for admission purposes.

This bill:

1. Requires CalVet, on or before February 1, 2019, and annually thereafter, to submit to the Legislature and post on its Internet Web site a financial report of the veterans homes.
2. Requires the report to include:
   1. The amount of state funds budgeted to and the amount of revenue collected from the home.
   2. The remaining amount of expected revenue from the home over a period of several years, as applicable.
   3. Aggregated costs of care per member, segregated by level of care, for the home.
   4. Current maintenance costs of the home.
   5. Projected maintenance costs for the home.
3. Requires CalVet to review the use of a veterans home, using specified factors, no later than five years before expiration of a specified use restriction imposed by federal law to determine the best continued, unrestricted use of the home.
4. Mandates that the review shall include:
   1. Every financial report created for that home as specified.
   2. Current needs of the regional veterans population.
   3. Projections regarding the changing composition of the veterans population.
   4. Assessment of resources available to serve the projected veterans population.
   5. Input from veteran members of the home, community members near the home, and other stakeholders.
   6. Any other factors the department determines are necessary to review to make the determination.
5. Requires CalVet, within five years after the date of the expiration of the use restriction imposed by federal law on a home to review the home to determine the best continued use of the home.
6. Requires CalVet review all of the following in making the determination:
   1. Financial reports pertaining to that home as specified.
   2. Current needs of the regional veterans population.
   3. Projections regarding the changing composition of the veteran population.
   4. Assessment of resources available to serve the projected veteran population.
   5. Input from veteran members of the home, community members near the home, and other stakeholders.
   6. Any other factors the department determines are necessary to review to make the determination.
7. Requires CalVet, every five years after the date of the expiration of the use restriction, to review the veterans home, using specified factors, to determine its best continued use.
8. Requires CalVet to submit reports to the Legislature as specified.

Background

State Veterans Homes. CalVet’s Veterans Homes Division provides rehabilitative, residential medical care and services in a homelike environment for aged and disabled veterans (and eligible veteran spouses) residing in the State's eight veterans homes, which are located in Barstow, Chula Vista, Fresno, Lancaster. Redding, Ventura, West Los Angeles, and Yountville. As of mid-March 2017, more than 2,200 members in total resided in the homes.

The eight campuses offer different combinations of the following levels of care that generate increasing levels of cost:

1. Independent living/domiciliary care: Barstow, Chula Vista, Yountville.
2. Residential care for the elderly (RCFE)/assisted living: All homes except Barstow.
3. Intermediate care: Barstow, Yountville.
4. Skilled nursing facility (SNF) care: Barstow, Chula Vista, Fresno, Redding, West Los Angeles, Yountville.
5. Memory care (MC) within skilled nursing facilities: Fresno, Redding, West Los Angeles, Yountville.
6. Outpatient clinic: All homes.

Home funding. Funding for the annual operating expenses of the veterans homes comes from the State's General Fund (GF), and any additional revenues that the Veterans Homes Division receives are subsequently remitted to the GF. These additional sources of revenue primarily consist of reimbursements from five sources:

1. Medicare, a federally funded program which pays hospital inpatient and outpatient care, and some skilled nursing care;
2. Medi-Cal (Medicaid), funded by the federal and state governments, which pays skilled nursing facility daily rates and various healthcare costs;
3. Member fees, which veterans' home members pay in accordance with their income and level of care;
4. So-called "aid and attendance," which are federal payments for veterans who need personal care assistance; and
5. The U.S. Department of Veterans Affairs (USDVA), which pays a per diem rate for each veteran in the homes.

Member fee schedules. Member fee amounts are determined by CalVet, and that determination takes into account those times when the costs of a member’s care (e.g. dental care, acute medical care, etc.) exceed the basic fee.

Under existing law, the total of the individual member’s fees and charges for any fiscal year shall not be greater than:

• 47.5 percent of the member’s annual income for domiciliary care.
• 55 percent of the member’s annual income for RCFE or assisted living.
• 65 percent of the member’s annual income for intermediate care.
• 70 percent of the member’s annual income for skilled nursing care.

Federal per diem rates. Most veteran members are eligible to have the USDVA make per diem payments to the state that help reduce costs to state taxpayers. The USDVA manages the “State Veterans Home Program,” a grant program that provides federal assistance to states by (a) participating in a percentage of the cost of construction of state veterans homes and (b) paying per diem for ongoing provision of care to eligible veterans residing in federally recognized state veterans homes. The per diem is the approved daily rate established by the USDVA to reimburse state homes for providing specified levels of care to eligible veterans.

The federal “Basic State Home Per Diem Rates” for Fiscal Year 2017:

• Adult Day Health Care: $84.52
• Domiciliary: $45.79
• Nursing Homes: $106.10 per member

If a resident at the Intermediate, SNF or MC level of care has a service-connected condition (any combination of mental/physical conditions) rated 70% or higher by the USDVA, then a “super per diem rate” is paid to the state veteran home per person per day. That higher per diem can vary by location.

Per CalVet, the USDVA’s higher per diem payments for eligible veterans for FY 2017 are as follow:

Home              $ Amount

Barstow 495.84

Chula Vista          495.84

Fresno                 495.84

Lancaster             (Does not provide Intermediate, SNF, or MC)

Redding               544.76

Ventura            (Does not provide Intermediate, SNF, or MC)

West LA 495.84

Yountville  569.63

In the 2009-10 Budget Act, the Legislature instituted a major General Fund policy adjustment that affected home member fees. Specifically, it increased the amount of fees collected from home members from $17.2 million to $20 million – an increase of $2.8 million.

Previously, members paid fees based on a percentage of their income, up to a dollar cap, with the percentage and cap increasing as the level of care increases. The 2009 budget proposal increased member fees by:

• Removing the dollar caps;
• Increasing the percentage for RCFE;
• Revising the fee structure for nonveteran spouses to more accurately reflect their share of costs because they are ineligible for the federal per diem payments.

In May 2013, the State Auditor released Audit Report 2012-119, which examined CalVet’s management of the veterans homes. Among the report’s conclusions:

General CalVet has not maximized its ability to generate revenue for the care provided to its members. Between fiscal years 2009-10 and 2011-12, CalVet generated revenues to offset less than half of the cost to operate its veterans homes. However, according to the chief financial officer, before 2012 CalVet did not have policies and procedures for consistently monitoring and increasing the amount of revenue generated at the veterans homes. For example:

• State laws and department policies also limit CalVet’s ability to recover the full cost of providing care to members of veterans homes while they are living at a home and from using funds collected from members' estates after they pass away to offset the costs of their care.
• Under state law, CalVet can use only a member's annual income in determining the member's fee that CalVet may charge; it is not allowed to consider a member's assets other than income—which may include personal or real property, stocks and bonds, and automobiles—in the calculation.
• In addition, state law limits the total fees members pay to a certain percentage of their annual income, depending on the level of care he or she receives. For example, according to state law, members at the domiciliary level of care may be charged no more than 47.5 percent of their annual income for member fees, while members in skilled nursing care may be charged no more than 70 percent of their annual income.
• Therefore, most members pay only a portion of their actual costs of care while living at the veterans home. Because CalVet offsets less than half of its annual operating expenditures for the veterans homes with funds from existing revenue sources, it should analyze its cost-recovery models, including an evaluation of the state laws that limit the amount of revenue CalVet can collect for the care it provides to its members at the homes. We believe such an analysis would provide CalVet with useful information that could help it determine how best to offset the costs charged to the GF for providing care to members.

Related/Prior Legislation

SB 485 (Nielsen & Newman, 2017), among other things, adjusts admissions criteria to give veterans with service-connected disability priority over veterans without such disabilities, and authorize the CalVet Secretary to establish needs-based criteria for admission.

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

According to the Senate Appropriations Committee, significant ongoing GF costs to CalVet, likely in the low hundreds of thousands of dollars, for increased workload to collect data on the cost of care per resident, to analyze, validate, and compile the details of the maintenance cost reporting, to create the annual financial reports, and to conduct the research on need, demand, and use of the homes.

SUPPORT: (Verified 9/1/17)

Disabled American Veterans, Department of California

Little Hoover Commission

OPPOSITION: (Verified 9/1/17)

None received

ASSEMBLY FLOOR: 77-0, 5/30/17

AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Calderon, Cervantes, Chávez, Chen, Chiu, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

NO VOTE RECORDED: Chau, Choi, Eggman

Prepared by:

9/9/17 16:13:41

**** END ****

 THIRD READING  

Bill No: AB 1365

Author:

:

Vote:

SENATE VETERANS AFFAIRS COMMITTEE: 6-0, 7/11/17

AYES: Newman, Dodd, Hueso, Nguyen, Roth, Wilk

NO VOTE RECORDED: Nielsen

SENATE APPROPRIATIONS COMMITTEE: 7-0, 9/1/17

AYES: Lara, Bates, Beall, Bradford, Hill, Nielsen, Wiener

ASSEMBLY FLOOR: 77-0, 5/30/17 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill requires financial reporting and planning, as specified, for the state veterans homes, which are managed by the California Department of Veterans Affairs (CalVet).

ANALYSIS:

Existing law:

1. Authorizes establishment and operation of the Veterans’ Home of California system. Establishes CalVet’s authority and responsibilities in administering the system.
2. Requires each on-site home administrator to adopt rules and regulations for the administration of each home.
3. Defines criteria for admission to a veterans’ home.
4. Requires that home members (residents) pay fees and charges as determined by CalVet, subject to a specified fee schedule. Authorizes CalVet to investigate a veteran’s financial status for admission purposes.

This bill:

1. Requires CalVet, on or before January 1, 2019, and annually thereafter, to submit to the Legislature and post on its Internet Web site a financial report of the veterans homes.
2. Requires the report to include:
   1. The amount of state funds budgeted to and the amount of revenue collected from the home.
   2. The remaining amount of expected revenue from the home over a period of several years, as applicable.
   3. Costs of care per member, segregated by level of care, for the home.
   4. Current maintenance costs of the home.
   5. Projected maintenance costs for the home.
3. Requires CalVet to review the use of a veterans home, using specified factors, no later than five years before expiration of a specified use restriction imposed by federal law to determine the best continued, unrestricted use of the home.
4. Mandates that the review shall include:
   1. Every financial report created for that home as specified.
   2. Current needs of the regional veterans population.
   3. Projections regarding the changing composition of the veterans population.
   4. Assessment of resources available to serve the projected veterans population.
   5. Input from veteran members of the home, community members near the home, and other stakeholders.
   6. Any other factors the department determines are necessary to review to make the determination.
5. Requires CalVet, within five years after the date of the expiration of the use restriction imposed by federal law on a home to review the home to determine the best continued use of the home.
6. Requires CalVet review all of the following in making the determination:
   1. Financial reports pertaining to that home as specified.
   2. Current needs of the regional veterans population.
   3. Projections regarding the changing composition of the veteran population.
   4. Assessment of resources available to serve the projected veteran population.
   5. Input from veteran members of the home, community members near the home, and other stakeholders.
   6. Any other factors the department determines are necessary to review to make the determination.
7. Requires CalVet, every five years after the date of the expiration of the use restriction, to review the veterans home, using specified factors, to determine its best continued use.
8. Requires CalVet to submit reports to the Legislature as specified.

Background

State Veterans Homes. CalVet’s Veterans Homes Division provides rehabilitative, residential medical care and services in a homelike environment for aged and disabled veterans (and eligible veteran spouses) residing in the State's eight veterans homes, which are located in Barstow, Chula Vista, Fresno, Lancaster. Redding, Ventura, West Los Angeles, and Yountville. As of mid-March 2017, more than 2,200 members in total resided in the homes.

The eight campuses offer different combinations of the following levels of care that generate increasing levels of cost:

1. Independent living/domiciliary care: Barstow, Chula Vista, Yountville.
2. Residential care for the elderly (RCFE)/assisted living: All homes except Barstow.
3. Intermediate care: Barstow, Yountville.
4. Skilled nursing facility (SNF) care: Barstow, Chula Vista, Fresno, Redding, West Los Angeles, Yountville.
5. Memory care (MC) within skilled nursing facilities: Fresno, Redding, West Los Angeles, Yountville.
6. Outpatient clinic: All homes.

Home funding. Funding for the annual operating expenses of the veterans homes comes from the State's General Fund (GF), and any additional revenues that the Veterans Homes Division receives are subsequently remitted to the GF. These additional sources of revenue primarily consist of reimbursements from five sources:

1. Medicare, a federally funded program which pays hospital inpatient and outpatient care, and some skilled nursing care;
2. Medi-Cal (Medicaid), funded by the federal and state governments, which pays skilled nursing facility daily rates and various healthcare costs;
3. Member fees, which veterans' home members pay in accordance with their income and level of care;
4. So-called "aid and attendance," which are federal payments for veterans who need personal care assistance; and
5. The U.S. Department of Veterans Affairs (USDVA), which pays a per diem rate for each veteran in the homes.

Member fee schedules. Member fee amounts are determined by CalVet, and that determination takes into account those times when the costs of a member’s care (e.g. dental care, acute medical care, etc.) exceed the basic fee.

Under existing law, the total of the individual member’s fees and charges for any fiscal year shall not be greater than:

• 47.5 percent of the member’s annual income for domiciliary care.
• 55 percent of the member’s annual income for RCFE or assisted living.
• 65 percent of the member’s annual income for intermediate care.
• 70 percent of the member’s annual income for skilled nursing care.

Federal per diem rates. Most veteran members are eligible to have the USDVA make per diem payments to the state that help reduce costs to state taxpayers. The USDVA manages the “State Veterans Home Program,” a grant program that provides federal assistance to states by (a) participating in a percentage of the cost of construction of state veterans homes and (b) paying per diem for ongoing provision of care to eligible veterans residing in federally recognized state veterans homes. The per diem is the approved daily rate established by the USDVA to reimburse state homes for providing specified levels of care to eligible veterans.

The federal “Basic State Home Per Diem Rates” for Fiscal Year 2017:

• Adult Day Health Care: $84.52
• Domiciliary: $45.79
• Nursing Homes: $106.10 per member

If a resident at the Intermediate, SNF or MC level of care has a service-connected condition (any combination of mental/physical conditions) rated 70% or higher by the USDVA, then a “super per diem rate” is paid to the state veteran home per person per day. That higher per diem can vary by location.

Per CalVet, the USDVA’s higher per diem payments for eligible veterans for FY 2017 are as follow:

Home              $ Amount

Barstow 495.84

Chula Vista          495.84

Fresno                 495.84

Lancaster             (Does not provide Intermediate, SNF, or MC)

Redding               544.76

Ventura            (Does not provide Intermediate, SNF, or MC)

West LA 495.84

Yountville  569.63

In the 2009-10 Budget Act, the Legislature instituted a major General Fund policy adjustment that affected home member fees. Specifically, it increased the amount of fees collected from home members from $17.2 million to $20 million – an increase of $2.8 million.

Previously, members paid fees based on a percentage of their income, up to a dollar cap, with the percentage and cap increasing as the level of care increases. The 2009 budget proposal increased member fees by:

• Removing the dollar caps;
• Increasing the percentage for RCFE;
• Revising the fee structure for nonveteran spouses to more accurately reflect their share of costs because they are ineligible for the federal per diem payments.

In May 2013, the State Auditor released Audit Report 2012-119, which examined CalVet’s management of the veterans homes. Among the report’s conclusions:

General CalVet has not maximized its ability to generate revenue for the care provided to its members. Between fiscal years 2009-10 and 2011-12, CalVet generated revenues to offset less than half of the cost to operate its veterans homes. However, according to the chief financial officer, before 2012 CalVet did not have policies and procedures for consistently monitoring and increasing the amount of revenue generated at the veterans homes. For example:

• State laws and department policies also limit CalVet’s ability to recover the full cost of providing care to members of veterans homes while they are living at a home and from using funds collected from members' estates after they pass away to offset the costs of their care.
• Under state law, CalVet can use only a member's annual income in determining the member's fee that CalVet may charge; it is not allowed to consider a member's assets other than income—which may include personal or real property, stocks and bonds, and automobiles—in the calculation.
• In addition, state law limits the total fees members pay to a certain percentage of their annual income, depending on the level of care he or she receives. For example, according to state law, members at the domiciliary level of care may be charged no more than 47.5 percent of their annual income for member fees, while members in skilled nursing care may be charged no more than 70 percent of their annual income.
• Therefore, most members pay only a portion of their actual costs of care while living at the veterans home. Because CalVet offsets less than half of its annual operating expenditures for the veterans homes with funds from existing revenue sources, it should analyze its cost-recovery models, including an evaluation of the state laws that limit the amount of revenue CalVet can collect for the care it provides to its members at the homes. We believe such an analysis would provide CalVet with useful information that could help it determine how best to offset the costs charged to the GF for providing care to members.

Related/Prior Legislation

SB 485 (Nielsen & Newman, 2017), among other things, adjusts admissions criteria to give veterans with service-connected disability priority over veterans without such disabilities, and authorize the CalVet Secretary to establish needs-based criteria for admission. (Pending in Assembly Veterans Affairs Committee)

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

According to the Senate Appropriations Committee, significant ongoing GF costs to CalVet, likely in the low hundreds of thousands of dollars, for increased workload to collect data on the cost of care per resident, to analyze, validate, and compile the details of the maintenance cost reporting, to create the annual financial reports, and to conduct the research on need, demand, and use of the homes.

SUPPORT: (Verified 9/1/17)

Disabled American Veterans, Department of California

Little Hoover Commission

OPPOSITION: (Verified 9/1/17)

None received

ASSEMBLY FLOOR: 77-0, 5/30/17

AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Calderon, Cervantes, Chávez, Chen, Chiu, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

NO VOTE RECORDED: Chau, Choi, Eggman

Prepared by:

9/5/17 9:47:04

**** END ****

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2017 - 2018 Regular Session

AB 1365 (Reyes) - Veterans homes: planning strategy

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

Bill Summary:

AB 1365 would require the California Department of Veterans Affairs (CalVet) to submit a financial report, as specified, of its state veterans homes and to review the use of a veterans home to determine the best continued, unrestricted use of the veterans home.

Fiscal Impact:

Significant ongoing costs to CalVet, likely in the low hundreds of thousands of dollars, for increased workload to collect data on the cost of care per resident, to analyze, validate, and compile the details of the maintenance cost reporting, to create the annual financial reports, and to conduct the research on need, demand, and use of the homes. (GF)

Background:

CalVet operates eight veterans homes throughout the State. These homes provide rehabilitative, residential, and medical care and services to the state's aged or disabled veterans (and eligible veteran spouses). The homes range in size from 60 residents on a 20 acre site to over 1,000 residents on 500 acres. At full capacity, the homes can house and care for approximately 3,000 veterans. Approximately 2,200 members reside in the homes. The eight veterans homes campuses offer different combinations of levels of care, including independent living/domiciliary care, residential care/assisted living, intermediate care, skilled nursing care, memory care, and outpatient clinic care.

Funding for the annual operating expenses of the veterans homes come from the State’s General Fund; any additional revenues that the Veterans homes Division receives are subsequently remitted to the General Fund. The additional sources of revenue primarily consist of reimbursements from Medicare, Medi-Cal, member fees, federal “aid and attendance,” and the U.S. Department of Veterans Affairs.

In May 2013, the State Auditor released a report on CalVet’s management of the veterans homes. The report concluded that “CalVet has not maximized its ability to generate revenue for the care provided to its members… Between fiscal years 2009-10 and 2011-12, CalVet generated revenues to offset less than half of the cost to operate its veterans homes. However, according to the chief financial officer, before 2012 CalVet did not have policies and procedures for consistently monitoring and increasing the amount of revenue generated at the veterans homes.”

Proposed Law:

This bill would:

• Require CalVet, by January 1, 2019, to submit to the Legislature and post on its Internet Web site in an accessible and searchable format a financial report that provides, for each home, the amount of state funds budgeted to and the amount of revenue collected from the home, the remaining amount of expected revenue from the home over a period of several years, the costs of care per resident, and the current and projected maintenance costs of the home;
• Require CalVet to update the report by January 1, 2020, and annually thereafter;
• Require CalVet to review the use of a home no later than five years before the expiration of the use restriction imposed by federal law on the home to determine the best continued, unrestricted use of the home. CalVet would be required to review every financial report created for that home, the current needs of the regional veterans population, projections regarding the changing composition of the veterans population, resources available to serve the projected veterans population, input from veterans homes residents and nearby community members, and any other factors the department determines are necessary to review to make the determination;
• Require CalVet, five years after the expiration of the use restriction imposed by federal law on a home, to review the home to determine the best continued use of the home. In making the determination, CalVet would be required to use the same review factors as the pre-expiration review;
• Require CalVet to update the determination every five years from the date of the last determination;
• Require CalVet to submit each report to the Legislature.

Related Legislation:

SB 485 (Nielsen & Newman, 2017), among other things, would adjust admissions criteria to give veterans with service-connected disability priority over veterans without service-connected disabilities and would authorize the Secretary of CalVet to establish needs-based criteria for admission. This bill is pending in the Assembly Veterans Affairs Committee.

-- END --

SENATE COMMITTEE ON VETERANS AFFAIRS

Senator Josh Newman, Chair

2017 - 2018 Regular

Bill No: AB 1365 Hearing Date: 7/11/17

Subject: Veterans homes: planning strategy

DESCRIPTION

Summary:

This bill requires financial reporting and planning, as specified, for the state veterans homes, which are managed by the California Department of Veterans Affairs (CalVet).

Existing law:

1. Authorizes establishment and operation of the Veterans’ Home of California (VHC) system. Establishes CalVet’s authority and responsibilities in administering the system.
2. Requires each on-site home administrator to adopt rules and regulations for the administration of each home.
3. Defines criteria for admission to a veterans’ home.
4. Requires that home members (residents) pay fees and charges as determined by CalVet, subject to a specified fee schedule. Authorizes CalVet to investigate a veteran’s financial status for admission purposes.

This bill:

1. Requires the Department of Veterans Affairs, (CalVet) on or before January 1, 2019, and annually thereafter, to submit to the Legislature and post on its Internet Web site a financial report of the veterans homes.
2. Requires the report to include:
   1. The amount of state funds budgeted to and the amount of revenue collected from the home.
   2. The remaining amount of expected revenue from the home over a period of several years, as applicable.
   3. Costs of care per member, segregated by level of care, for the home.
   4. Current maintenance costs of the home.
   5. Projected maintenance costs for the home.
3. Requires CalVet to review the use of a veterans home, using specified factors, no later than 5 years before the expiration of a specified use restriction imposed by federal law to determine the best continued, unrestricted use of the veterans home.
4. Mandates that the review shall include:
   1. Every financial report created for that home as specified.
   2. Current needs of the regional veterans population.
   3. Projections regarding the changing composition of the veterans population.
   4. Assessment of resources available to serve the projected veterans population.
   5. Input from veteran members of the home, community members near the home, and other stakeholders.
   6. Any other factors the department determines are necessary to review to make the determination.
5. Requires CalVet, within five years after the date of the expiration of the use restriction imposed by federal law on a home to review the home to determine the best continued use of the home.
6. Specifies that CalVet must review all of the following in making the determination:
   1. Financial reports pertaining to that home as specified.
   2. Current needs of the regional veterans population.
   3. Projections regarding the changing composition of the veteran population.
   4. Assessment of resources available to serve the projected veteran population.
   5. Input from veteran members of the home, community members near the home, and other stakeholders.
   6. Any other factors the department determines are necessary to review to make the determination.
7. Requires the department, every 5 years after the date of the expiration of the use restriction, to review the veterans home, using specified factors, to determine its best continued use.
8. Requires CalVet to submit reports to the Legislature as specified.

BACKGROUND

State Veterans Homes. CalVet’s Veterans Homes Division provides rehabilitative, residential medical care and services in a homelike environment for aged and disabled veterans (and eligible veteran spouses) residing in the State's eight veterans homes, which are located in Barstow, Chula Vista, Fresno, Lancaster. Redding, Ventura, West Los Angeles, and Yountville. As of mid-March 2017, more than 2,200 members in total resided in the homes.

The eight campuses offer different combinations of the following levels of care that generate increasing levels of cost:

1. Independent living/domiciliary care: Barstow, Chula Vista, Yountville.
2. Residential care for the elderly (RCFE)/assisted living: All homes except Barstow.
3. Intermediate care: Barstow, Yountville.
4. Skilled nursing facility (SNF) care: Barstow, Chula Vista, Fresno, Redding, West LA, Yountville.
5. Memory care (MC) within skilled nursing facilities: Fresno, Redding, West LA, Yountville.
6. Outpatient clinic: All homes.

Home funding and member fees. Funding for the annual operating expenses of the veterans homes comes from the State's General Fund, and any additional revenues that the Veterans Homes Division receives are subsequently remitted to the General Fund. These additional sources of revenue primarily consist of reimbursements from five sources:

1. Medicare, a federally funded program which pays hospital inpatient and outpatient care, and some skilled nursing care;
2. Medi-Cal (Medicaid), funded by the federal and state governments, which pays skilled nursing facility daily rates and various healthcare costs;
3. Member fees, which veterans' home members pay in accordance with their income and level of care;
4. So-called "aid and attendance," which are federal payments for veterans who need personal care assistance; and
5. The U.S. Department of Veterans Affairs (USDVA), which pays a per diem rate for each veteran in the homes.

Member fee amounts are determined by CalVet, and that determination takes into account those times when the costs of a member’s care (e.g. dental care, acute medical care, etc.) exceed the basic fee.

Under existing law, the total of the individual member’s fees and charges for any fiscal year shall not be greater than:

• 47.5 percent of the member’s annual income for domiciliary care.
• 55 percent of the member’s annual income for RCFE or assisted living.
• 65 percent of the member’s annual income for intermediate care.
• 70 percent of the member’s annual income for skilled nursing care.

Most veteran members are eligible to have the USDVA make per diem payments to the state that help reduce costs to state taxpayers. The USDVA manages the “State Veterans Home Program,” a grant program that provides federal assistance to states by (a) participating in a percentage of the cost of construction of state veterans homes and (b) paying per diem for ongoing provision of care to eligible veterans residing in federally recognized state veterans homes. The per diem is the approved daily rate established by the USDVA to reimburse state homes for providing specified levels of care to eligible veterans.

The federal “Basic State Home Per Diem Rates” for Fiscal Year 2017 are as follow:

• Adult Day Health Care: $84.52 per day
• Domiciliary: $45.79 per day
• Nursing Homes: $106.10 per member per day

If a resident at the Intermediate, SNF or Memory Care level of care has a service-connected condition (any combination of mental/physical conditions) rated 70% or higher by the USDVA, then a “super per diem rate” is paid to the state veteran home per person per day. That higher per diem can vary by location.

Per the CA Department of Veterans’ Affairs, the USDVA’s higher per diem payments for eligible veterans for FY 2017 are as follow:

Home              $ Amount

Barstow 495.84

Chula Vista          495.84

Fresno                 495.84

Lancaster             (Does not provide Intermediate, SNF, or MC)

Redding               544.76

Ventura            (Does not provide Intermediate, SNF, or MC)

West LA 495.84

Yountville  569.63

In the 2009-10 Budget Act, the Legislature instituted a major General Fund policy adjustment that affected home member fees. Specifically, it increased the amount of fees collected from home members from $17.2 million to $20 million – an increase of $2.8 million.

Previously, members paid fees based on a percentage of their income, up to a dollar cap, with the percentage and cap increasing as the level of care increases. The 2009 budget proposal increased member fees by:

• Removing the dollar caps;
• Increasing the percentage for the Residential Care for the Elderly (RCFE); and
• Revising the fee structure for nonveteran spouses to more accurately reflect their share of costs because they are ineligible for the federal per diem payments.

In May 2013 the State Auditor released Audit Report 2012-119, which examined CalVet’s management of the veterans homes. Among the report’s conclusions:

General CalVet has not maximized its ability to generate revenue for the care provided to its members. Between fiscal years 2009-10 and 2011-12, CalVet generated revenues to offset less than half of the cost to operate its veterans homes. However, according to the chief financial officer, before 2012 CalVet did not have policies and procedures for consistently monitoring and increasing the amount of revenue generated at the veterans homes. For example:

• State laws and department policies also limit CalVet’s ability to recover the full cost of providing care to members of veterans homes while they are living at a home and from using funds collected from members' estates after they pass away to offset the costs of their care.
• Under state law, CalVet can use only a member's annual income in determining the member's fee that CalVet may charge; it is not allowed to consider a member's assets other than income—which may include personal or real property, stocks and bonds, and automobiles—in the calculation.
• In addition, state law limits the total fees members pay to a certain percentage of their annual income, depending on the level of care he or she receives. For example, according to state law, members at the domiciliary level of care may be charged no more than 47.5 percent of their annual income for member fees, while members in skilled nursing care may be charged no more than 70 percent of their annual income.
• Therefore, most members pay only a portion of their actual costs of care while living at the veterans home. Because CalVet offsets less than half of its annual operating expenditures for the veterans homes with funds from existing revenue sources, it should analyze its cost-recovery models, including an evaluation of the state laws that limit the amount of revenue CalVet can collect for the care it provides to its members at the homes. We believe such an analysis would provide CalVet with useful information that could help it determine how best to offset the costs charged to the General Fund for providing care to members.

COMMENT

Prior/Related Legislation:

SB 485 (Nielsen & Newman, 2017), among numerous things, would adjust admissions criteria to give veterans with service-connected disability priority over veterans without service-connected disabilities, and authorize the CalVet Secretary to establish needs-based criteria for admission. (Pending, Assembly Veterans Affairs Committee)

POSITIONS

Sponsor: Author.

Support: Little Hoover Commission

Oppose: None received.

-- END --

SENATE COMMITTEE ON

Senator Josh Newman, Chair

2017 - 2018 Regular

Bill No: Hearing Date: 6/27/17

Subject:

DESCRIPTION

Summary:

Requires financial reporting and planning, as specified, for the state veterans homes, which are managed by the California Department of Veterans Affairs (CalVet).

Existing law:

1. Authorizes establishment and operation of the Veterans’ Home of California (VHC) system. Establishes CalVet’s authority and responsibilities in administering the system.
2. Requires each on-site home administrator to adopt rules and regulations for the administration of each home.
3. Defines criteria for admission to a veterans’ home.
4. Requires that home members (residents) pay fees and charges as determined by CalVet, subject to a specified fee schedule. Authorizes CalVet to investigate a veteran’s financial status for admission purposes.

This bill:

1. Requires the Department of Veterans Affairs, (CalVet) on or before January 1, 2019, and annually thereafter, to submit to the Legislature and post on its Internet Web site a financial report of the veterans homes.
2. Requires the report to include:
   1. The amount of state funds budgeted to and the amount of revenue collected from the home.
   2. The remaining amount of expected revenue from the home over a period of several years, as applicable.
   3. Costs of care per member, segregated by level of care, for the home.
   4. Current maintenance costs of the home.
   5. Projected maintenance costs for the home.
3. Requires CalVet to review the use of a veterans home, using specified factors, no later than 5 years before the expiration of a specified use restriction imposed by federal law to determine the best continued, unrestricted use of the veterans home.
4. Mandates that the review shall include:
   1. Every financial report created for that home as specified.
   2. Current needs of the regional veterans population.
   3. Projections regarding the changing composition of the veterans population.
   4. Assessment of resources available to serve the projected veterans population.
   5. Input from veteran members of the home, community members near the home, and other stakeholders.
   6. Any other factors the department determines are necessary to review to make the determination.
5. Requires CalVet, within five years after the date of the expiration of the use restriction imposed by federal law on a home to review the home to determine the best continued use of the home.
6. Specifies that CalVet must review all of the following in making the determination:
   1. Financial reports pertaining to that home as specified.
   2. Current needs of the regional veterans population.
   3. Projections regarding the changing composition of the veteran population.
   4. Assessment of resources available to serve the projected veteran population.
   5. Input from veteran members of the home, community members near the home, and other stakeholders.
   6. Any other factors the department determines are necessary to review to make the determination.
7. Requires the department, every 5 years after the date of the expiration of the use restriction, to review the veterans home, using specified factors, to determine its best continued use.
8. Requires CalVet to submit reports to the Legislature as specified.

BACKGROUND

State Veterans Homes. CalVet’s Veterans Homes Division provides rehabilitative, residential medical care and services in a homelike environment for aged and disabled veterans (and eligible veteran spouses) residing in the State's eight veterans homes, which are located in Barstow, Chula Vista, Fresno, Lancaster. Redding, Ventura, West Los Angeles, and Yountville. As of mid-March 2017, more than 2,200 members in total resided in the homes.

The eight campuses offer different combinations of the following levels of care that generate increasing levels of cost:

1. Independent living/domiciliary care: Barstow, Chula Vista, Yountville.
2. Residential care for the elderly (RCFE)/assisted living: All homes except Barstow.
3. Intermediate care: Barstow, Yountville.
4. Skilled nursing facility (SNF) care: Barstow, Chula Vista, Fresno, Redding, West LA, Yountville.
5. Memory care (MC) within skilled nursing facilities: Fresno, Redding, West LA, Yountville.
6. Outpatient clinic: All homes.

Home funding and member fees. Funding for the annual operating expenses of the veterans homes comes from the State's General Fund, and any additional revenues that the Veterans Homes Division receives are subsequently remitted to the General Fund. These additional sources of revenue primarily consist of reimbursements from five sources:

1. Medicare, a federally funded program which pays hospital inpatient and outpatient care, and some skilled nursing care;
2. Medi-Cal (Medicaid), funded by the federal and state governments, which pays skilled nursing facility daily rates and various healthcare costs;
3. Member fees, which veterans' home members pay in accordance with their income and level of care;
4. So-called "aid and attendance," which are federal payments for veterans who need personal care assistance; and
5. The U.S. Department of Veterans Affairs (USDVA), which pays a per diem rate for each veteran in the homes.

Member fee amounts are determined by CalVet, and that determination takes into account those times when the costs of a member’s care (e.g. dental care, acute medical care, etc.) exceed the basic fee.

Under existing law, the total of the individual member’s fees and charges for any fiscal year shall not be greater than:

• 47.5 percent of the member’s annual income for domiciliary care.
• 55 percent of the member’s annual income for RCFE or assisted living.
• 65 percent of the member’s annual income for intermediate care.
• 70 percent of the member’s annual income for skilled nursing care.

Most veteran members are eligible to have the USDVA make per diem payments to the state that help reduce costs to state taxpayers. The USDVA manages the “State Veterans Home Program,” a grant program that provides federal assistance to states by (a) participating in a percentage of the cost of construction of state veterans homes and (b) paying per diem for ongoing provision of care to eligible veterans residing in federally recognized state veterans homes. The per diem is the approved daily rate established by the USDVA to reimburse state homes for providing specified levels of care to eligible veterans.

The federal “Basic State Home Per Diem Rates” for Fiscal Year 2017 are as follow:

• Adult Day Health Care: $84.52 per day
• Domiciliary: $45.79 per day
• Nursing Homes: $106.10 per member per day

If a resident at the Intermediate, SNF or Memory Care level of care has a service-connected condition (any combination of mental/physical conditions) rated 70% or higher by the USDVA, then a “super per diem rate” is paid to the state veteran home per person per day. That higher per diem can vary by location.

Per the CA Department of Veterans’ Affairs, the USDVA’s higher per diem payments for eligible veterans for FY 2017 are as follow:

Home              $ Amount

Barstow 495.84

Chula Vista          495.84

Fresno                 495.84

Lancaster             (Does not provide Intermediate, SNF, or MC)

Redding               544.76

Ventura            (Does not provide Intermediate, SNF, or MC)

West LA 495.84

Yountville  569.63

In the 2009-10 Budget Act, the Legislature instituted a major General Fund policy adjustment that affected home member fees. Specifically, it increased the amount of fees collected from home members from $17.2 million to $20 million – an increase of $2.8 million.

Previously, members paid fees based on a percentage of their income, up to a dollar cap, with the percentage and cap increasing as the level of care increases. The 2009 budget proposal increased member fees by:

• Removing the dollar caps;
• Increasing the percentage for the Residential Care for the Elderly (RCFE); and
• Revising the fee structure for nonveteran spouses to more accurately reflect their share of costs because they are ineligible for the federal per diem payments.

In May 2013 the State Auditor released Audit Report 2012-119, which examined CalVet’s management of the veterans homes. Among the report’s conclusions:

General CalVet has not maximized its ability to generate revenue for the care provided to its members. Between fiscal years 2009-10 and 2011-12, CalVet generated revenues to offset less than half of the cost to operate its veterans homes. However, according to the chief financial officer, before 2012 CalVet did not have policies and procedures for consistently monitoring and increasing the amount of revenue generated at the veterans homes. For example:

• State laws and department policies also limit CalVet’s ability to recover the full cost of providing care to members of veterans homes while they are living at a home and from using funds collected from members' estates after they pass away to offset the costs of their care.
• Under state law, CalVet can use only a member's annual income in determining the member's fee that CalVet may charge; it is not allowed to consider a member's assets other than income—which may include personal or real property, stocks and bonds, and automobiles—in the calculation.
• In addition, state law limits the total fees members pay to a certain percentage of their annual income, depending on the level of care he or she receives. For example, according to state law, members at the domiciliary level of care may be charged no more than 47.5 percent of their annual income for member fees, while members in skilled nursing care may be charged no more than 70 percent of their annual income.
• Therefore, most members pay only a portion of their actual costs of care while living at the veterans home. Because CalVet offsets less than half of its annual operating expenditures for the veterans homes with funds from existing revenue sources, it should analyze its cost-recovery models, including an evaluation of the state laws that limit the amount of revenue CalVet can collect for the care it provides to its members at the homes. We believe such an analysis would provide CalVet with useful information that could help it determine how best to offset the costs charged to the General Fund for providing care to members.

COMMENT

Prior/Related Legislation:

SB 485 (Nielsen & Newman, 2017), among numerous things, would adjust admissions criteria to give veterans with service-connected disability priority over veterans without service-connected disabilities, and authorize the CalVet Secretary to establish needs-based criteria for admission. (Pending, Assembly Veterans Affairs Committee)

POSITIONS

Sponsor: Author.

Support: Little Hoover Commission

Oppose: None received.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1365

Author:(Reyes)

As Amended Ver:March 21, 2017

Majority vote

SUMMARY: Requires financial reporting and planning for the state veterans homes as specified. Specifically, this bill:

1. Requires the Department of Veterans Affairs, (CalVet) on or before January 1, 2019, and annually thereafter, to submit to the Legislature and post on its Internet Web site a financial report of the veterans homes.
2. Requires the report to include:
   1. The amount of state funds budgeted to and the amount of revenue collected from the home.
   2. The remaining amount of expected revenue from the home over a period of several years, as applicable.
   3. Costs of care per resident, segregated by level of care, for the home.
   4. Current maintenance costs of the home.
   5. Projected maintenance costs for the home.
3. Requires CalVet to review the use of a veterans home, using specified factors, no later than five years before the expiration of a specified use restriction imposed by federal law to determine the best continued, unrestricted use of the veterans home.

Mandates that the review shall include:

Every financial report created for that home as specified.

Current needs of the regional veterans population.

Projections regarding the changing composition of the veterans population.

Assessment of resources available to serve the projected veterans population.

Input from veteran residents of the home, community members near the home, and other stakeholders.

Any other factors the department determines are necessary to review to make the determination.

1. Requires CalVet, within five years after the date of the expiration of the use restriction imposed by federal law on a home to review the home to determine the best continued use of the home.
2. Specifies that CalVet must review all of the following in making the determination:
   1. Financial reports pertaining to that home as specified.
   2. Current needs of the regional veterans population.
   3. Projections regarding the changing composition of the veteran population.
   4. Assessment of resources available to serve the projected veteran population.
   5. Input from veteran residents of the home, community members near the home, and other stakeholders.
   6. Any other factors the department determines are necessary to review to make the determination.
3. Requires the department, every five years after the date of the expiration of the use restriction, to review the veterans home, using specified factors, to determine its best continued use
4. Requires CalVet to submit reports to the Legislature as specified.

FISCAL EFFECT: CalVet anticipates costs of $572,000 (GF) in Fiscal Year 2017-18 and $544,000 (GF) annually thereafter for 4.0 Associated Governmental Program Analysist (AGPA) positions and 1.0 Research Program Specialist I position, and associated travel and other costs. These positions will perform the necessary data analysis and research, analyze, validate and compile the details of the maintenance cost reporting, and create the required financial reports.

COMMENTS: According to the author:

This bill would establish a process to systematically evaluate and review each CalVet home every five years after the initial 20-year period to assess available resources and if those resources are being put to the best use. This bill would also make available, the yearly fiscal reports it makes available to the legislature, online in an easily accessible and readable format.

"I'm very sensitive to the fact that so large a part of my effort – personnel, dollars and everything else – goes to the homes where we're treating .001% of our California [veteran] population." - Dr. Vito Imbasciani, Secretary, California Department of Veterans Affairs.

This bill takes certain recommendations from a report by the Little Hoover Commission, A New Approach to California's Veterans Homes (Report 237, March 2017), (hereinafter the "Report") and would adopt them formally into code. In particular, the bill would implement the recommendations that pertain to making clear the cost associated with the care and services provided at each home and shaping the Home system to meet the changing needs of California's veteran population. The bill would require periodic evaluations of each home up to and including the foundational questions about whether it is sound public policy and a wise use of the state's funds to continue the operation of a home.

Under the terms of the federal program which helped fund the construction of the Homes, California was required to run seven of the Homes exclusively as a veterans home for 20 years from the date of the agreement pertaining to each home. As stated by the Report:

…Some experts question whether it makes sense for the state to continue operating some of its existing veterans homes and suggest the veterans homes should not continue to operate in perpetuity. Instead, they said the state should regularly evaluate their effectiveness in meeting the needs of California's veterans, whether they offer appropriate levels of care or if they should be repurposed to meet different needs.

Federal regulations require state veterans homes built with federal construction funds, as seven of California's eight veterans homes were, to operate for at least 20 years. If states use the facility for another purpose within 20 years after construction, a portion of the construction grant must be repaid to the federal government. However, after 20 years, states do not face a monetary penalty for repurposing veterans homes.

CalVet has begun a statewide needs assessment. It has hired two experts in the field of behavioral care and demographics to help the department assess the needs of future veterans home residents. The mission of these experts is to ascertain whether the department is satisfying the needs of current veterans home residents and, looking forward, how the changing demographic composition of veterans in the state will change the needs of those living in the state's veterans homes.

The bill aims to interrupt the cycle of operating the system in a certain way simply because it has previously been operated that way, then to compel a conscious decision about how to go forward. The outcome of the decision may very well be to continue as before, but the goal is to require periodic, conscious decisionmaking, informed by data. The Report states in pertinent part:

CalVet also should right-size its costly veterans home program to better meet the needs of today's veterans… Additionally, just as California's veterans population changes and becomes more diverse, so, too, must the state's programs for veterans evolve. Going forward, CalVet leaders and state policymakers should not take for granted the need for the state's veterans homes. Simply because they have been the state's go-to approach in the past to expand veterans services does not make the homes the only viable care model going forward.

Repurposing or shuttering veterans homes that have outlived their purpose or not lived up to their promise should be considered viable options when planning for the future. CalVet should continuously evaluate the veterans home program, along with the needs of the state's overall veteran population, to ensure that the state invests in the most needed model of care and that benefits are spread widely among the veteran population…

It makes sense to periodically re-examine a program that costs this much yet reaches such a small percentage of California veterans. The Legislature and the executive branch may still determine to sustain the current structure and cost of the Homes, or may even determine to expand the system, but those decisions merit informed discussions. This bill will place the reasonable burden on CalVet as the operator of the Homes and the state's authority on veterans to undertake the requisite data gathering and to make informed recommendations for each home. The laudable goals of this bill are to avoid blindly performing "government as usual" and to prompt what can be difficult discussions and decisions of the kind which might otherwise be avoided.

The content of this bill has also been discussed in Budget Subcommittee 4 with regard to CalVet's budget trailer bill.

Analysis Prepared by: John Spangler / V.A. / (916) 319-3550 FN: 0000806

Date of Hearing: May 3, 2017

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 1365

Author:(Reyes) – As Amended Ver:March 21, 2017

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

SUMMARY:

This bill requires the Department of Veterans Affairs, (CalVet), on or before January 1, 2019, and annually thereafter, to submit to the Legislature, and post on its Internet Web site, a specified financial report of its veterans homes. The bill further requires CalVet to review the use of a veterans home, using specified factors, no later than 5 years before, and within 5 years after, the expiration of a federally imposed use restriction to determine the best continued, unrestricted use of a veterans home.

FISCAL EFFECT:

CalVet anticipates costs of $572,000 (GF) in FY 2017-18 and $544,000 (GF) annually thereafter for 4.0 Associated Governmental Program Analysist (AGPA) positions and 1.0 Research Program Specialist I position, and associated travel and other costs. These positions will perform the necessary data analysis and research, analyze, validate and compile the details of the maintenance cost reporting, and create the required financial reports.

COMMENTS:

1. Purpose. In March of 2017, the Little Hoover Commission (Commission) issued a report entitled, "A New Approach to California’s Veterans Homes" (Report 237, March 2017). The report made several recommendations including periodic evaluations, cost and otherwise, of each home including the foundational questions about whether it is sound public policy and a wise use of the state’s funds to continue the operation of a home.

This bill codifies some of the recommendations from the Commission's report. In particular, the bill codifies recommendations to clarify the costs of the care and services provided at each veterans home, as well as shaping the system to meet the changing needs of California’s veteran population. According to the author, "This bill would establish a process to systematically evaluate and review each CalVet home every five years after the initial 20-year period, to assess available resources and determine if those resources are being put to the best use."

1. Background. California is home to approximately 1.8 million of the estimated 21 million veterans in the United States, more than any other state. As of 2016, it is estimated that 90% of California's veterans are male, more than half are over the age of 60, and veterans who served in the Vietnam war make up the largest share of the veteran population.

CalVet runs eight Veterans Homes with 3,000 beds that house approximately 2,700 veterans (<0.5% of California's veteran population). The homes provide residential and long-term care for eligible veterans who are aged or disabled, and who were discharged honorably. There are five levels of care available in increasing degrees of specialized attention, depending on health needs or personal conditions: domiciliary (independent) living, Residential Care Facility for the Elderly (Assisted Living), Intermediate Care, Skilled Nursing Facility, and Memory Care. As of January 2017, there were more than 750 wait list applicants across all homes, with the longest wait lists for skilled nursing and memory care.

The Commission, in its report, noted that the state's eight veterans homes are expensive to operate and consume the bulk of General Funds (GF) allocated to CalVet each year. In fiscal year 2017-18, California’s eight veterans homes received state funds totaling more than $306 million. After accounting for expected reimbursements which CalVet collects from the federal government, resident fees and other revenue sources, ongoing annual operational GF costs approach $185 million. This amounts to approximately $71,000 a year per bed after reimbursements, with an average total cost per bed of approximately $117,000.

Federal regulations require state veterans homes built with federal construction funds, as seven of California’s eight veterans homes were, to operate for at least 20 years. If states use the facility for another purpose within 20 years after construction, a portion of the construction grant must be repaid to the federal government. However, after 20 years, states do not face a monetary penalty for repurposing veterans homes.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 4, 2017

ASSEMBLY COMMITTEE ON VETERANS AFFAIRS

Jacqui Irwin, Chair

ABPCA Bill Id:AB 1365 (

Author:Reyes) – As Amended Ver:March 21, 2017

SUBJECT: Veterans homes: planning strategy

SUMMARY: Requires financial reporting and planning for the state veterans homes as specified. Specifically, this bill:

1. Requires the Department of Veterans Affairs, (CalVet) on or before January 1, 2019, and annually thereafter, to submit to the Legislature and post on its Internet Web site a financial report of the veterans homes.
2. Requires the report to include:
   1. The amount of state funds budgeted to and the amount of revenue collected from the home.
   2. The remaining amount of expected revenue from the home over a period of several years, as applicable.
   3. Costs of care per resident, segregated by level of care, for the home.
   4. Current maintenance costs of the home.
   5. Projected maintenance costs for the home.
3. Requires CalVet to review the use of a veterans home, using specified factors, no later than 5 years before the expiration of a specified use restriction imposed by federal law to determine the best continued, unrestricted use of the veterans home.

Mandates that the review shall include:

Every financial report created for that home as specified.

Current needs of the regional veterans population.

Projections regarding the changing composition of the veterans population.

Assessment of resources available to serve the projected veterans population.

Input from veteran residents of the home, community members near the home, and other stakeholders.

Any other factors the department determines are necessary to review to make the determination.

1. Requires CalVet, within five years after the date of the expiration of the use restriction imposed by federal law on a home to review the home to determine the best continued use of the home.
2. Specifies that CalVet must review all of the following in making the determination:
   1. Financial reports pertaining to that home as specified.
   2. Current needs of the regional veterans population.
   3. Projections regarding the changing composition of the veteran population.
   4. Assessment of resources available to serve the projected veteran population.
   5. Input from veteran residents of the home, community members near the home, and other stakeholders.
   6. Any other factors the department determines are necessary to review to make the determination.
3. Requires the department, every 5 years after the date of the expiration of the use restriction, to review the veterans home, using specified factors, to determine its best continued use
4. Requires CalVet to submit reports to the Legislature as specified.

EXISTING LAW: Military and Veterans Code Division 5 Chapter 1, creates the Veterans Home of California

FISCAL EFFECT: Unknown at this time.

COMMENTS: According to the author:

This bill would establish a process to systematically evaluate and review each CalVet home every five years after the initial 20-year period to assess available resources and if those resources are being put to the best use. This bill would also make available, the yearly fiscal reports it makes available to the legislature, online in an easily accessible and readable format.

“I’m very sensitive to the fact that so large a part of my effort – personnel, dollars and everything else – goes to the homes where we’re treating .001 percent of our California [veteran] population.” - Dr. Vito Imbasciani, Secretary, California Department of Veterans Affairs.

This bill takes certain recommendations from a report by the Little Hoover Commission, A New Approach to California’s Veterans Homes (Report 237, March 2017), (hereinafter the “Report”) and would adopt them formally into code. In particular, the bill would implement the recommendations that pertain to making clear the cost associated with the care and services provided at each home and shaping the Home system to meet the changing needs of California’s veteran population. The bill would require periodic evaluations of each home up to and including the foundational questions about whether it is sound public policy and a wise use of the state’s funds to continue the operation of a home.

Under the terms of the federal program which helped fund the construction of the Homes, California was required to run 7 of the Homes exclusively as a veterans home for 20 years from the date of the agreement pertaining to each home. As stated by the Report:

…Some experts question whether it makes sense for the state to continue operating some of its existing veterans homes and suggest the veterans homes should not continue to operate in perpetuity. Instead, they said the state should regularly evaluate their effectiveness in meeting the needs of California’s veterans, whether they offer appropriate levels of care or if they should be repurposed to meet different needs.

Federal regulations require state veterans homes built with federal construction funds, as seven of California’s eight veterans homes were, to operate for at least 20 years. If states use the facility for another purpose within 20 years after construction, a portion of the construction grant must be repaid to the federal government. However, after 20 years, states do not face a monetary penalty for repurposing veterans homes.

CalVet has begun a statewide needs assessment. It has hired two experts in the field of behavioral care and demographics to help the department assess the needs of future veterans home residents. The mission of these experts is to ascertain whether the department is satisfying the needs of current veterans home residents and, looking forward, how the changing demographic composition of veterans in the state will change the needs of those living in the state’s veterans homes.

The bill aims to interrupt the cycle of operating the system in a certain way simply because it has previously been operated that way, then to compel a conscious decision about how to go forward. The outcome of the decision may very well be to continue as before, but the goal is to require periodic, conscious decisionmaking, informed by data. The Report states in pertinent part:

CalVet also should right-size its costly veterans home program to better meet the needs of today’s veterans. … Additionally, just as California’s veterans population changes and becomes more diverse, so, too, must the state’s programs for veterans evolve. Going forward, CalVet leaders and state policymakers should not take for granted the need for the state’s veterans homes. Simply because they have been the state’s go-to approach in the past to expand veterans services does not make the homes the only viable care model going forward.

Repurposing or shuttering veterans homes that have outlived their purpose or not lived up to their promise should be considered viable options when planning for the future. CalVet should continuously evaluate the veterans home program, along with the needs of the state’s overall veteran population, to ensure that the state invests in the most needed model of care and that benefits are spread widely among the veteran population…

It makes sense to periodically re-examine a program that costs this much yet reaches such a small percentage of California veterans. The Legislature and the executive branch may still determine to sustain the current structure and cost of the Homes, or may even determine to expand the system, but those decisions merit informed discussions. This bill will place the reasonable burden on CalVet as the operator of the Homes and the state’s authority on veterans to undertake the requisite data gathering and to make informed recommendations for each home. The laudable goals of this bill are to avoid blindly performing “government as usual” and to prompt what can be difficult discussions and decisions of the kind which might otherwise be avoided.

REGISTERED SUPPORT / OPPOSITION:

Support

Little Hoover Commission.

Opposition

None on File.

Analysis Prepared by: John Spangler / V.A. / (916) 319-3550