Bill Text: CA AB574 | 2011-2012 | Regular Session | Amended

California Assembly Bill 574 (Prior Session Legislation)

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Program of All-Inclusive Care for the Elderly.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2011-09-30 - Chaptered by Secretary of State - Chapter 367, Statutes of 2011. [AB574 Detail]

Download: California-2011-AB574-Amended.html
BILL NUMBER: AB 574	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 23, 2011

INTRODUCED BY   Assembly Member Bonnie Lowenthal

                        FEBRUARY 16, 2011

   An act to  amend Section 14598   add Chapter
8.75 (commencing with Section 14591) to, and to repeal Chapter 8.75
(commencing with Section 14590) of, Part 3 of Division 9  of the
Welfare and Institutions Code, relating to the elderly.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 574, as amended, Bonnie Lowenthal. Program of All-Inclusive
Care for the Elderly.
   Existing law establishes the federal Medicaid  program
  Program  , administered by each state, California'
s version of which is the Medi-Cal program. The Medi-Cal program,
which is administered by the State Department of Health Care Services
under the direction of the Director of Health Care Services,
provides qualified low-income persons with health care services.
Existing federal law establishes the Program of All-Inclusive Care
for the Elderly (PACE), which provides specified services for older
individuals so that they may continue living in the community.
Federal law authorizes states to implement the PACE program as a
Medicaid state option.
   Existing state law authorizes the director to establish the
California Program of All-Inclusive Care for the Elderly and 
contract with up to 10 demonstration projects to develop risk-based,
long-term care pilot programs. Existing law also  establishes
PACE program services as a covered benefit of the Medi-Cal program.
Existing law authorizes the department to enter into specified
contracts for implementation of the PACE program, and also enter into
separate contracts with certain PACE organizations, to fully
implement the single state agency responsibilities assumed by the
department, as specified. Existing law authorizes the department to
enter into separate contracts with up to 10 PACE organizations, but
prohibits certain contracts unless a Medicaid state plan amendment,
electing PACE as a state Medicaid option, has been approved by the
federal Centers for Medicare and Medicaid Services. 
   This bill would increase to 20 the number of authorized separate
contracts.  
   This bill would, instead, require the department to establish the
California Program of All-Inclusive Care for the Elderly and would
delete the pilot program and demonstration project requirements in
these provisions. This bill would also increase to 20 the number of
separate contracts the department may enter into with PACE
organizations, as defined. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Chapter 8.75 (commencing with Section
14590) of Part 3 of Division 9 of the   Welfare and
Institutions Code   is repealed. 
   SEC. 2.    Chapter 8.75 (commencing with Section
14591) is added to Part 3 of Division 9 of the   Welfare and
Institutions Code   , to read:  
      CHAPTER 8.75.  PROGRAM OF ALL-INCLUSIVE CARE FOR THE ELDERLY


   14591.  The Legislature finds and declares all of the following:
   (a) Community-based services to the frail elderly are often
uncoordinated, fragmented, inappropriate, or insufficient to meet the
needs of frail elderly who are at risk of institutionalization,
often resulting in unnecessary placement in nursing homes.
   (b) Steadily increasing health care costs for the frail elderly
provide incentive to develop programs providing quality services at
reasonable costs.
   (c) Capitated "risk-based" financing provides an alternative to
the traditional fee-for-service payment system by providing a fixed,
per capita monthly payment for a package of health care services and
requiring the provider to assume financial responsibility for cost
overruns.
   (d) On Lok Senior Health Services began as a federal and state
demonstration program in 1973 to test whether comprehensive
community-based services could be provided to the frail elderly at no
greater cost than nursing home care.
   (e) Since 1983, On Lok Senior Health Services of San Francisco has
successfully provided a comprehensive package of services and
operated within a cost-effective, capitated risk-based financing
system.
   (f) Recognizing On Lok's success, Congress passed legislation in
1986 and 1987 encouraging the expansion of capitated long-term care
programs by permitting federal Medicare and Medicaid waivers to be
granted indefinitely to On Lok and authorizing the federal Centers
for Medicare and Medicaid Services (CMS) to grant waivers in up to 10
new sites throughout the nation in order to replicate the On Lok
model.
   (g) In response, the Legislature authorized the State Department
of Health Care Services to seek a waiver to contract with up to 10
demonstration projects to develop risk-based, long-term care pilot
programs modeled upon On Lok Senior Health Services.
   (h) The demonstration projects authorized by the Legislature
proved to be successful at providing comprehensive, community-based
services to frail elderly individuals at no greater cost than
providing nursing home care.
   (i) In 1997, Congress passed the Balanced Budget Act of 1997
(Public Law 105-33) authorizing states to offer PACE program services
as optional services under the state's Medicaid state plan.
   (j) Based upon the success of the demonstration projects in
California, the state is now providing community-based, risk-based,
and capitated long-term care services under the PACE program as
optional services under California's Medi-Cal State Plan.
   14592.  (a) For purposes of this chapter, "PACE organization"
means an entity as defined in Section 460.6 of Title 42 of the Code
of Federal Regulations.
   (b) The Director of Health Care Services shall establish the
California Program of All-Inclusive Care for the Elderly, to provide
community-based, risk-based, and capitated long-term care services as
optional services under the state's Medi-Cal State Plan and under
contracts entered into between the federal Centers for Medicare and
Medicaid Services, the department, and PACE organizations, meeting
the requirements of the Balanced Budget Act of 1997 (Public Law
105-33) and Part 460 (commencing with Section 460.2) of Title 42 of
the Code of Federal Regulations.
   14593.  (a) (1) The department may enter into contracts for
implementation of the PACE program, and also may enter into separate
contracts with PACE organizations, to fully implement the single
state agency responsibilities assumed by the department in those
contracts, Section 14132.94, and any other state requirement found
necessary by the department to provide comprehensive community-based,
risk-based, and capitated long-term care services to California's
frail elderly.
   (2) The department may enter into separate contracts as specified
in subdivision (a) with up to 20 PACE organizations.
   (b) The requirements of the PACE model, as provided for pursuant
to Section 1894 (42 U.S.C. Sec. 1395eee) and Section 1934 (42 U.S.C.
Sec. 1396u-4) of the federal Social Security Act, shall not be waived
or modified. The requirements that shall not be waived or modified
include all of the following:
   (1) The focus on frail elderly qualifying individuals who require
the level of care provided in a nursing facility.
   (2) The delivery of comprehensive, integrated acute and long-term
care services.
   (3) The interdisciplinary team approach to care management and
service delivery.
   (4) Capitated, integrated financing that allows the provider to
pool payments received from public and private programs and
individuals.
   (5) The assumption by the provider of full financial risk.
   (6) The provision of a PACE benefit package for all participants,
regardless of source of payment, that shall include all of the
following:
   (A) All Medicare-covered items and services.
   (B) All Medicaid-covered items and services, as specified in the
state's Medicaid plan.
   (C) Other services determined necessary by the interdisciplinary
team to improve and maintain the participant's overall health status.

   (c) Sections 14002, 14005.12, 14005.17, and 14006 shall apply when
determining the eligibility for Medi-Cal of a person receiving the
services from an organization providing services under this chapter.
   (d) Provisions governing the treatment of income and resources of
a married couple, for the purposes of determining the eligibility of
a nursing-facility certifiable or institutionalized spouse, shall be
established so as to qualify for federal financial participation.
   (e) (1) The department shall establish capitation rates paid to
each PACE organization at no less than 90 percent of the
fee-for-service equivalent cost, including the department's cost of
administration, that the department estimates would be payable for
all services covered under the PACE organization contract if all
those services were to be furnished to Medi-Cal beneficiaries under
the fee-for-service Medi-Cal program provided for pursuant to Chapter
7 (commencing with Section 14000).
   (2)  This subdivision shall be implemented only to the extent that
federal financial participation is available.
   (f) Contracts under this chapter may be on a nonbid basis and
shall be exempt from Chapter 2 (commencing with Section 10290) of
Part 2 of Division 2 of the Public Contract Code.  
  SECTION 1.    Section 14598 of the Welfare and
Institutions Code is amended to read:
   14598.  (a) The Legislature finds and declares both of the
following:
   (1) The demonstration projects authorized by this article have
proven to be successful at providing comprehensive, community-based
services to frail elderly individuals at no greater cost than for
providing nursing home care.
   (2) Based upon that success, California now desires to provide
community-based, risk-based, and capitated long-term care services
under the Programs of All-Inclusive Care for the Elderly (PACE) as
optional services under California's Medicaid state plan and under
contracts, entered into between the federal Centers for Medicare and
Medicaid Services, the department, as the single state medicaid
agency, and PACE organizations, meeting the requirements of the
Balanced Budget Act of 1997 (P.L. 105-33) and Part 460 (commencing
with Section 460.2) of Subchapter E of Chapter IV of Title 42 of the
Code of Federal Regulations.
   (b) The department may enter into the contracts specified in
subdivision (a) for implementation of the PACE program, and also may
enter into separate contracts with the PACE organizations contracting
under subdivision (a), to fully implement the single state agency
responsibilities assumed by the department in those contracts,
Section 14132.94, and any other state requirement found necessary by
the department to provide comprehensive community-based, risk-based,
and capitated long-term care services to California's frail elderly.
The department may enter into separate contracts specified in
subdivision (a) with up to 20 PACE organizations. The department may
not enter into any contracts specified in subdivision (a) unless a
Medicaid state plan amendment, electing PACE as a state Medicaid
option as provided for in Section 14132.94, has been approved by the
federal Centers for Medicare and Medicaid Services.
   (c) Notwithstanding subdivisions (a) and (b), any demonstration
project contract entered into under this article prior to January 1,
2004, shall remain in full force and effect under its own terms, but
shall not be renewed or amended beyond the termination date in effect
on that date.
   (d) The requirements of the PACE model, as provided for pursuant
to Section 1894 (42 U.S.C. Sec. 1395eee) and Section 1934 (42 U.S.C.
Sec. 1396u-4) of the federal Social Security Act, shall not be waived
or modified. The requirements that shall not be waived or modified
include all of the following:
   (1) The focus on frail elderly qualifying individuals who require
the level of care provided in a nursing facility.
   (2) The delivery of comprehensive, integrated acute and long-term
care services.
   (3) The interdisciplinary team approach to care management and
service delivery.
   (4) Capitated, integrated financing that allows the provider to
pool payments received from public and private programs and
individuals.
   (5) The assumption by the provider of full financial risk.
   (6) The provision of a PACE benefit package for all participants,
regardless of source of payment, that shall include all of the
following:
   (A) All Medicare-covered items and services.
   (B) All Medicaid-covered items and services, as specified in the
state's Medicaid plan.
   (C) Other services determined necessary by the interdisciplinary
team to improve and maintain the participant's overall health status.

   (e) For purposes of this section, "PACE organizations" means those
entities as defined in Section 460.6 of Title 42 of the Code of
Federal Regulations.