Bill Text: CA SB92 | 2015-2016 | Regular Session | Amended
Bill Title: Public health: Medi-Cal: nursing facilities.
Spectrum: Unknown
Status: (Failed) 2016-11-30 - From Assembly without further action. [SB92 Detail]
Download: California-2015-SB92-Amended.html
BILL NUMBER: SB 92 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 11, 2015
INTRODUCED BY Committee on Budget and Fiscal Review
JANUARY 9, 2015
An act relating to the Budget Act of 2015.
to amend Sections 1324.23, 1324.29, and 1324.30 of the Health and
Safet y Code, and to amend Sections 14126.022, 14126.027,
14126.033, and 14126.036 of the Welfare and Institutions Code,
relating to public health, and making an appropriation therefor, to
take effect immediately, bill related to the budget.
LEGISLATIVE COUNSEL'S DIGEST
SB 92, as amended, Committee on Budget and Fiscal Review.
Budget Act of 2015. Public health: Medi-Cal: nursing
facilities.
Existing law provides for the Medi-Cal program, which is
administered by the State Department of Health Care Services, under
which qualified low-income individuals receive health care services.
The Medi-Cal program is, in part, governed and funded by federal
Medicaid Program provisions.
Existing law requires the department to impose a uniform quality
assurance fee on each skilled nursing facility, with certain
exceptions, in accordance with a prescribed formula. Existing law
requires that the fee be based on the entire net revenue of all
skilled nursing facilities subject to the fee. Under existing law,
the fee may not be assessed after July 31, 2015, and these provisions
will be repealed on January 1, 2016.
Existing law, the Medi-Cal Long-Term Care Reimbursement Act,
requires the department to implement a facility-specific
reimbursement ratesetting system for certain skilled nursing
facilities. Reimbursement rates for freestanding skilled nursing
facilities are funded by a combination of federal funds and moneys
collected pursuant to the skilled nursing uniform quality assurance
fee. Existing law also establishes the Skilled Nursing Facility
Quality and Accountability Special Fund in the State Treasury, which
is a continuously appropriated fund that contains moneys from the
assessment of specified administrative penalties and set asides of
General Fund moneys, for the purposes of making quality and
accountability payments. Under existing law, the rate methodology
will become inoperative after July 31, 2015, and these provisions
will be repealed on January 1, 2016.
This bill would modify the calculation of rates under the
above-referenced rate methodology, and would extend the assessment of
the quality assurance fee, implementation of the rate methodology,
as modified, and implementation of related provisions until July 31,
2020. By extending the period of time during which transfers are made
to the Skilled Nursing Facility Quality and Accountability Special
Fund, the bill would make an appropriation. The bill would also make
changes to the amount of set-asides to be transferred to the fund.
The bill would require the department, in coordination with the State
Department of Public Health, to report specified information to the
relevant Assembly and Senate budget subcommittees by May 1, 2016.
This bill would include a change in state statute that would
result in a taxpayer paying a higher tax within the meaning of
Section 3 of Article XIII A of the California Constitution, and thus
would require for passage the approval of 2/3 of the membership of
each house of the Legislature.
This bill would declare that it is to take effect immediately as a
bill providing for appropriations related to the Budget Bill.
This bill would express the intent of the Legislature to enact
statutory changes relating to the Budget Act of 2015.
Vote: majority 2/3 . Appropriation:
no yes . Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1324.23 of the
Health and Safety Code is amended to read:
1324.23. (a) The Director of Health Care Services, or his or her
designee, shall administer this article.
(b) The director may adopt regulations as are necessary to
implement this article. These regulations may be adopted as emergency
regulations in accordance with the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
For purposes of this article, the adoption of regulations shall be
deemed an emergency and necessary for the immediate preservation of
the public peace, health and safety, or general welfare. The
regulations shall include, but need not be limited to, any
regulations necessary for any of the following purposes:
(1) The administration of this article, including the proper
imposition and collection of the quality assurance fee not to exceed
amounts reasonably necessary for purposes of this article.
(2) The development of any forms necessary to obtain required
information from facilities subject to the quality assurance fee.
(3) To provide details, definitions, formulas, and other
requirements.
(c) As an alternative to subdivision (b), and notwithstanding the
rulemaking provisions of Chapter 3.5 (commencing with Section 11340)
of Part 1 of Division 3 of Title 2 of the Government Code, the
director may implement this article, in whole or in part, by means of
a provider bulletin or other similar instructions, without taking
regulatory action, provided that no such bulletin or other similar
instructions shall remain in effect after July 31, 2015.
2020. It is the intent of the Legislature that
the regulations adopted pursuant to subdivision (b) shall be adopted
on or before July 31, 2015. 2020.
SEC. 2. Section 1324.29 of the Health
and Safety Code is amended to read:
1324.29. (a) The quality assurance fee shall cease to be assessed
after July 31, 2015. 2020.
(b) Notwithstanding subdivision (a) and Section 1324.30, the
department's authority and obligation to collect all quality
assurance fees and penalties, including interest, shall continue in
effect and shall not cease until the date that all amounts are paid
or recovered in full.
(c) This section shall remain operative until the date that all
fees and penalties, including interest, have been recovered pursuant
to subdivision (b), and as of that date is repealed.
SEC. 3. Section 1324.30 of the Health
and Safety Code is amended to read:
1324.30. This article shall become inoperative after July 31,
2015, 2020, and, as of January 1,
2016, 2021, is repealed, unless a later
enacted statute, that becomes operative on or before January 1,
2016, 2021, deletes or extends the
dates on which it becomes inoperative and is repealed.
SEC. 4. Section 14126.022 of the
Welfare and Institutions Code is amended to read:
14126.022. (a) (1) By August 1, 2011, the department shall
develop the Skilled Nursing Facility Quality and Accountability
Supplemental Payment System, subject to approval by the federal
Centers for Medicare and Medicaid Services, and the availability of
federal, state, or other funds.
(2) (A) The system shall be utilized to provide supplemental
payments to skilled nursing facilities that improve the quality and
accountability of care rendered to residents in skilled nursing
facilities, as defined in subdivision (c) of Section 1250 of the
Health and Safety Code, and to penalize those facilities that do not
meet measurable standards.
(B) A freestanding pediatric subacute care facility, as defined in
Section 51215.8 of Title 22 of the California Code of Regulations,
shall be exempt from the Skilled Nursing Facility Quality and
Accountability Supplemental Payment System.
(3) The system shall be phased in, beginning with the 2010-11 rate
year.
(4) The department may utilize the system to do all of the
following:
(A) Assess overall facility quality of care and quality of care
improvement, and assign quality and accountability payments to
skilled nursing facilities pursuant to performance measures described
in subdivision (i).
(B) Assign quality and accountability payments or penalties
relating to quality of care, or direct care staffing levels, wages,
and benefits, or both.
(C) Limit the reimbursement of legal fees incurred by skilled
nursing facilities engaged in the defense of governmental legal
actions filed against the facilities.
(D) Publish each facility's quality assessment and quality and
accountability payments in a manner and form determined by the
director, or his or her designee.
(E) Beginning with the 2011-12 fiscal year, establish a base year
to collect performance measures described in subdivision (i).
(F) Beginning with the 2011-12 fiscal year, in coordination with
the State Department of Public Health, publish the direct care
staffing level data and the performance measures required pursuant to
subdivision (i).
(5) The department, in coordination with the State Department of
Public Health, shall report to the relevant Assembly and Senate
budget subcommittees by May 1, 2016, information regarding the
quality and accountability supplemental payments, including, but not
limited to, its assessment of whether the payments are adequate to
incentivize quality care and to sustain the program.
(b) (1) There is hereby created in the State Treasury, the Skilled
Nursing Facility Quality and Accountability Special Fund. The fund
shall contain moneys deposited pursuant to subdivisions (g) and (j)
to (l), (m), inclusive. Notwithstanding
Section 16305.7 of the Government Code, the fund shall contain all
interest and dividends earned on moneys in the fund.
(2) Notwithstanding Section 13340 of the Government Code, the fund
shall be continuously appropriated without regard to fiscal year to
the department for making quality and accountability payments, in
accordance with subdivision (m), (n),
to facilities that meet or exceed predefined measures as established
by this section.
(3) Upon appropriation by the Legislature, moneys in the fund may
also be used for any of the following purposes:
(A) To cover the administrative costs incurred by the State
Department of Public Health for positions and contract funding
required to implement this section.
(B) To cover the administrative costs incurred by the State
Department of Health Care Services for positions and contract funding
required to implement this section.
(C) To provide funding assistance for the Long-Term Care Ombudsman
Program activities pursuant to Chapter 11 (commencing with Section
9700) of Division 8.5.
(c) No appropriation associated with this bill is intended to
implement the provisions of Section 1276.65 of the Health and Safety
Code.
(d) (1) There is hereby appropriated for the 2010-11 fiscal year,
one million nine hundred thousand dollars ($1,900,000) from the
Skilled Nursing Facility Quality and Accountability Special Fund to
the California Department of Aging for the Long-Term Care Ombudsman
Program activities pursuant to Chapter 11 (commencing with Section
9700) of Division 8.5. It is the intent of the Legislature for the
one million nine hundred thousand dollars ($1,900,000) from the fund
to be in addition to the four million one hundred sixty-eight
thousand dollars ($4,168,000) proposed in the Governor's May Revision
for the 2010-11 Budget. It is further the intent of the Legislature
to increase this level of appropriation in subsequent years to
provide support sufficient to carry out the mandates and activities
pursuant to Chapter 11 (commencing with Section 9700) of Division
8.5.
(2) The department, in partnership with the California Department
of Aging, shall seek approval from the federal Centers for Medicare
and Medicaid Services to obtain federal Medicaid reimbursement for
activities conducted by the Long-Term Care Ombudsman Program. The
department shall report to the fiscal committees of the Legislature
during budget hearings on progress being made and any unresolved
issues during the 2011-12 budget deliberations.
(e) There is hereby created in the Special Deposit Fund
established pursuant to Section 16370 of the Government Code, the
Skilled Nursing Facility Minimum Staffing Penalty Account. The
account shall contain all moneys deposited pursuant to subdivision
(f).
(f) (1) Beginning with the 2010-11 fiscal year, the State
Department of Public Health shall use the direct care staffing level
data it collects to determine whether a skilled nursing facility has
met the nursing hours per patient per day requirements pursuant to
Section 1276.5 of the Health and Safety Code.
(2) (A) Beginning with the 2010-11 fiscal year, the State
Department of Public Health shall assess a skilled nursing facility,
licensed pursuant to subdivision (c) of Section 1250 of the Health
and Safety Code, an administrative penalty if the State Department of
Public Health determines that the skilled nursing facility fails to
meet the nursing hours per patient per day requirements pursuant to
Section 1276.5 of the Health and Safety Code as follows:
(i) Fifteen thousand dollars ($15,000) if the facility fails to
meet the requirements for 5 percent or more of the audited days up to
49 percent.
(ii) Thirty thousand dollars ($30,000) if the facility fails to
meet the requirements for over 49 percent or more of the audited
days.
(B) (i) If the skilled nursing facility does not dispute the
determination or assessment, the penalties shall be paid in full by
the licensee to the State Department of Public Health within 30 days
of the facility's receipt of the notice of penalty and deposited into
the Skilled Nursing Facility Minimum Staffing Penalty Account.
(ii) The State Department of Public Health may, upon written
notification to the licensee, request that the department offset any
moneys owed to the licensee by the Medi-Cal program or any other
payment program administered by the department to recoup the penalty
provided for in this section.
(C) (i) If a facility disputes the determination or assessment
made pursuant to this paragraph, the facility shall, within 15 days
of the facility's receipt of the determination and assessment,
simultaneously submit a request for appeal to both the department and
the State Department of Public Health. The request shall include a
detailed statement describing the reason for appeal and include all
supporting documents the facility will present at the hearing.
(ii) Within 10 days of the State Department of Public Health's
receipt of the facility's request for appeal, the State Department of
Public Health shall submit, to both the facility and the department,
all supporting documents that will be presented at the hearing.
(D) The department shall hear a timely appeal and issue a decision
as follows:
(i) The hearing shall commence within 60 days from the date of
receipt by the department of the facility's timely request for
appeal.
(ii) The department shall issue a decision within 120 days from
the date of receipt by the department of the facility's timely
request for appeal.
(iii) The decision of the department's hearing officer, when
issued, shall be the final decision of the State Department of Public
Health.
(E) The appeals process set forth in this paragraph shall be
exempt from Chapter 4.5 (commencing with Section 11400) and Chapter 5
(commencing with Section 11500), of Part 1 of Division 3 of Title 2
of the Government Code. The provisions of Section 100171 and 131071
of the Health and Safety Code shall not apply to appeals under this
paragraph.
(F) If a hearing decision issued pursuant to subparagraph (D) is
in favor of the State Department of Public Health, the skilled
nursing facility shall pay the penalties to the State Department of
Public Health within 30 days of the facility's receipt of the
decision. The penalties collected shall be deposited into the Skilled
Nursing Facility Minimum Staffing Penalty Account.
(G) The assessment of a penalty under this subdivision does not
supplant the State Department of Public Health's investigation
process or issuance of deficiencies or citations under Chapter 2.4
(commencing with Section 1417) of Division 2 of the Health and Safety
Code.
(g) The State Department of Public Health shall transfer, on a
monthly basis, all penalty payments collected pursuant to subdivision
(f) into the Skilled Nursing Facility Quality and Accountability
Special Fund.
(h) Nothing in this section shall impact the effectiveness or
utilization of Section 1278.5 or 1432 of the Health and Safety Code
relating to whistleblower protections, or Section 1420 of the Health
and Safety Code relating to complaints.
(i) (1) Beginning in the 2010-11 fiscal year, the department, in
consultation with representatives from the long-term care industry,
organized labor, and consumers, shall establish and publish quality
and accountability measures, benchmarks, and data submission
deadlines by November 30, 2010.
(2) The methodology developed pursuant to this section shall
include, but not be limited to, the following requirements and
performance measures:
(A) Beginning in the 2011-12 fiscal year:
(i) Immunization rates.
(ii) Facility acquired pressure ulcer incidence.
(iii) The use of physical restraints.
(iv) Compliance with the nursing hours per patient per day
requirements pursuant to Section 1276.5 of the Health and Safety
Code.
(v) Resident and family satisfaction.
(vi) Direct care staff retention, if sufficient data is available.
(B) If this act is extended beyond the dates on which it becomes
inoperative and is repealed, in accordance with Section 14126.033,
the department, in consultation with representatives from the
long-term care industry, organized labor, and consumers, beginning in
the 2013-14 rate year, shall incorporate additional measures into
the system, including, but not limited to, quality and accountability
measures required by federal health care reform that are identified
by the federal Centers for Medicare and Medicaid Services.
(C) The department, in consultation with representatives from the
long-term care industry, organized labor, and consumers, may
incorporate additional performance measures, including, but not
limited to, the following:
(i) Compliance with state policy associated with the United States
Supreme Court decision in Olmstead v. L.C. ex rel. Zimring (1999)
527 U.S. 581.
(ii) Direct care staff retention, if not addressed in the 2012-13
rate year.
(iii) The use of chemical restraints.
(D) Beginning with the 2015-16 fiscal year, the department, in
consultation with representatives from the long-term care industry,
organized labor, and consumers, shall incorporate direct care staff
retention as a performance measure in the methodology developed
pursuant to this section.
(j) (1) Beginning with the 2010-11 rate year, and pursuant to
subparagraph (B) of paragraph (5) of subdivision (a) of Section
14126.023, the department shall set aside savings achieved from
setting the professional liability insurance cost category, including
any insurance deductible costs paid by the facility, at the 75th
percentile. From this amount, the department shall transfer the
General Fund portion into the Skilled Nursing Facility Quality and
Accountability Special Fund. A skilled nursing facility shall provide
supplemental data on insurance deductible costs to facilitate this
adjustment, in the format and by the deadlines determined by the
department. If this data is not provided, a facility's insurance
deductible costs will remain in the administrative costs category.
(2) Notwithstanding paragraph (1), for the 2012-13 rate year only,
savings from capping the professional liability insurance cost
category pursuant to paragraph (1) shall remain in the General Fund
and shall not be transferred to the Skilled Nursing Facility Quality
and Accountability Special Fund.
(k) Beginning with For
the 2013-14 rate year, if there is a rate increase in the weighted
average Medi-Cal reimbursement rate, the department shall set aside
the first 1 percent of the weighted average Medi-Cal reimbursement
rate increase for the Skilled Nursing Facility Quality and
Accountability Special Fund.
( l ) If this act is extended beyond the dates on which
it becomes inoperative and is repealed, in accordance with
Section 14126.033, beginning with for the
2014-15 rate year, in addition to the amount set aside pursuant to
subdivision (k), if there is a rate increase in the weighted average
Medi-Cal reimbursement rate, the department shall set aside at least
one-third of the weighted average Medi-Cal reimbursement rate
increase, up to a maximum of 1 percent, from which the department
shall transfer the General Fund portion of this amount into the
Skilled Nursing Facility Quality and Accountability Special Fund.
(m) Beginning with the 2015-16 rate year, and each subsequent rate
year thereafter for which this article is operative, an amount equal
to the amount deposited in the fund pursuant to subdivisions (k) and
(l) for the 2014-15 rate year shall be deposited into the Skilled
Nursing Facility Quality and Accountability Special Fund, for the
purposes specified in this section.
(m)
(n) (1) (A) Beginning with the 2013-14 rate year, the
department shall pay a supplemental payment, by April 30, 2014, to
skilled nursing facilities based on all of the criteria in
subdivision (i), as published by the department, and according to
performance measure benchmarks determined by the department in
consultation with stakeholders.
(B) (i) The department may convene a diverse stakeholder group,
including, but not limited to, representatives from consumer groups
and organizations, labor, nursing home providers, advocacy
organizations involved with the aging community, staff from the
Legislature, and other interested parties, to discuss and analyze
alternative mechanisms to implement the quality and accountability
payments provided to nursing homes for reimbursement.
(ii) The department shall articulate in a report to the fiscal and
appropriate policy committees of the Legislature the implementation
of an alternative mechanism as described in clause (i) at least 90
days prior to any policy or budgetary changes, and seek subsequent
legislation in order to enact the proposed changes.
(2) Skilled nursing facilities that do not submit required
performance data by the department's specified data submission
deadlines pursuant to subdivision (i) shall not be eligible to
receive supplemental payments.
(3) Notwithstanding paragraph (1), if a facility appeals the
performance measure of compliance with the nursing hours per patient
per day requirements, pursuant to Section 1276.5 of the Health and
Safety Code, to the State Department of Public Health, and it is
unresolved by the department's published due date, the department
shall not use that performance measure when determining the facility'
s supplemental payment.
(4) Notwithstanding paragraph (1), if the department is unable to
pay the supplemental payments by April 30, 2014, then on May 1, 2014,
the department shall use the funds available in the Skilled Nursing
Facility Quality and Accountability Special Fund as a result of
savings identified in subdivisions (k) and (l), less the
administrative costs required to implement subparagraphs (A) and (B)
of paragraph (3) of subdivision (b), in addition to any Medicaid
funds that are available as of December 31, 2013, to increase
provider rates retroactively to August 1, 2013.
(n)
(o) The department shall seek necessary approvals from
the federal Centers for Medicare and Medicaid Services to implement
this section. The department shall implement this section only in a
manner that is consistent with federal Medicaid law and regulations,
and only to the extent that approval is obtained from the federal
Centers for Medicare and Medicaid Services and federal financial
participation is available.
(o)
(p) In implementing this section, the department and
the State Department of Public Health may contract as necessary, with
California's Medicare Quality Improvement Organization, or other
entities deemed qualified by the department or the State Department
of Public Health, not associated with a skilled nursing facility, to
assist with development, collection, analysis, and reporting of the
performance data pursuant to subdivision (i), and with demonstrated
expertise in long-term care quality, data collection or analysis, and
accountability performance measurement models pursuant to
subdivision (i). This subdivision establishes an accelerated process
for issuing any contract pursuant to this section. Any contract
entered into pursuant to this subdivision shall be exempt from the
requirements of the Public Contract Code, through December 31,
2013. 2020.
(p)
(q) Notwithstanding Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, the following shall apply:
(1) The director shall implement this section, in whole or in
part, by means of provider bulletins, or other similar instructions
without taking regulatory action.
(2) The State Public Health Officer may implement this section by
means of all facility letters, or other similar instructions without
taking regulatory action.
(q)
(r) Notwithstanding paragraph (1) of subdivision
(m), (n), if a final judicial
determination is made by any state or federal court that is not
appealed, in any action by any party, or a final determination is
made by the administrator of the federal Centers for Medicare and
Medicaid Services, that any payments pursuant to subdivisions (a) and
(m), (n), are invalid, unlawful, or
contrary to any provision of federal law or regulations, or of state
law, these subdivisions shall become inoperative, and for the 2011-12
rate year, the rate increase provided under subparagraph (A) of
paragraph (4) of subdivision (c) of Section 14126.033 shall be
reduced by the amounts described in subdivision (j). For the 2013-14
rate year, and for each subsequent
2014-15 rate year,
years, any rate increase shall be reduced by the amounts
described in subdivisions (j) to (l), inclusive.
SEC. 5. Section 14126.027 of the
Welfare and Institutions Code is amended to read:
14126.027. (a) (1) The Director of Health Care Services, or his
or her designee, shall administer this article.
(2) The regulations and other similar instructions adopted
pursuant to this article shall be developed in consultation with
representatives of the long-term care industry, organized labor,
seniors, and consumers.
(b) (1) The director may adopt regulations as are necessary to
implement this article. The adoption, amendment, repeal, or
readoption of a regulation authorized by this section is deemed to be
necessary for the immediate preservation of the public peace, health
and safety, or general welfare, for purposes of Sections 11346.1 and
11349.6 of the Government Code, and the department is hereby
exempted from the requirement that it describe specific facts showing
the need for immediate action.
(2) The regulations adopted pursuant to this section may include,
but need not be limited to, any regulations necessary for any of the
following purposes:
(A) The administration of this article, including the specific
analytical process for the proper determination of long-term care
rates.
(B) The development of any forms necessary to obtain required cost
data and other information from facilities subject to the
ratesetting methodology.
(C) To provide details, definitions, formulas, and other
requirements.
(c) As an alternative to the adoption of regulations pursuant to
subdivision (b), and notwithstanding Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, the director may implement this article, in whole or in part,
by means of a provider bulletin or other similar instructions,
without taking regulatory action, provided that no such bulletin or
other similar instructions shall remain in effect after July 31,
2015. 2020. It is the intent of the
Legislature that regulations adopted pursuant to subdivision (b)
shall be in place on or before July 31, 2015.
2020.
SEC. 6. Section 14126.033 of the Welfare
and Institutions Code is amended to read:
14126.033. (a) The Legislature finds and declares all of the
following:
(1) Costs within the Medi-Cal program continue to grow due to the
rising cost of providing health care throughout the state and also
due to increases in enrollment, which are more pronounced during
difficult economic times.
(2) In order to minimize the need for drastically cutting
enrollment standards or benefits during times of economic crisis, it
is crucial to find areas within the program where reimbursement
levels are higher than required under the standard provided in
Section 1902(a)(30)(A) of the federal Social Security Act and can be
reduced in accordance with federal law.
(3) The Medi-Cal program delivers its services and benefits to
Medi-Cal beneficiaries through a wide variety of health care
providers, some of which deliver care via managed care or other
contract models while others do so through fee-for-service
arrangements.
(4) The setting of rates within the Medi-Cal program is complex
and is subject to close supervision by the United States Department
of Health and Human Services.
(5) As the single state agency for Medicaid in California, the
State Department of Health Care Services has unique expertise that
can inform decisions that set or adjust reimbursement methodologies
and levels consistent with the requirements of federal law.
(b) Therefore, it is the intent of the Legislature for the
department to analyze and identify where reimbursement levels can be
reduced consistent with the standard provided in Section 1902(a)(30)
(A) of the federal Social Security Act and also consistent with
federal and state law and policies, including any exemptions
contained in the act that added this section, provided that the
reductions in reimbursement shall not exceed 10 percent on an
aggregate basis for all providers, services, and products.
(c) This article, including Section 14126.031, shall be funded as
follows:
(1) General Fund moneys appropriated for purposes of this article
pursuant to Section 6 of the act adding this section shall be used
for increasing rates, except as provided in Section 14126.031, for
freestanding skilled nursing facilities, and shall be consistent with
the approved methodology required to be submitted to the federal
Centers for Medicare and Medicaid Services pursuant to Article 7.6
(commencing with Section 1324.20) of Chapter 2 of Division 2 of the
Health and Safety Code.
(2) (A) Notwithstanding Section 14126.023, for the 2005-06 rate
year, the maximum annual increase in the weighted average Medi-Cal
rate required for purposes of this article shall not exceed 8 percent
of the weighted average Medi-Cal reimbursement rate for the 2004-05
rate year as adjusted for the change in the cost to the facility to
comply with the nursing facility quality assurance fee for the
2005-06 rate year, as required under subdivision (b) of Section
1324.21 of the Health and Safety Code, plus the total projected
Medi-Cal cost to the facility of complying with new state or federal
mandates.
(B) Beginning with the 2006-07 rate year, the maximum annual
increase in the weighted average Medi-Cal reimbursement rate required
for purposes of this article shall not exceed 5 percent of the
weighted average Medi-Cal reimbursement rate for the prior fiscal
year, as adjusted for the projected cost of complying with new state
or federal mandates.
(C) Beginning with the 2007-08 rate year and continuing through
the 2008-09 rate year, the maximum annual increase in the weighted
average Medi-Cal reimbursement rate required for purposes of this
article shall not exceed 5.5 percent of the weighted average Medi-Cal
reimbursement rate for the prior fiscal year, as adjusted for the
projected cost of complying with new state or federal mandates.
(D) For the 2009-10 rate year, the weighted average Medi-Cal
reimbursement rate required for purposes of this article shall not be
increased with respect to the weighted average Medi-Cal
reimbursement rate for the 2008-09 rate year, as adjusted for the
projected cost of complying with new state or federal mandates.
(3) (A) For the 2010-11 rate year, if the increase in the federal
medical assistance percentage (FMAP) pursuant to the federal American
Recovery and Reinvestment Act of 2009 (ARRA) (Public Law 111-5) is
extended for the entire 2010-11 rate year, the maximum annual
increase in the weighted average Medi-Cal reimbursement rate for the
purposes of this article shall not exceed 3.93 percent, or 3.14
percent, if the increase in the FMAP pursuant to ARRA is not extended
for that period of time, plus the projected cost of complying with
new state or federal mandates. If the increase in the FMAP pursuant
to ARRA is extended at a different rate, or for a different time
period, the rate adjustment for facilities shall be adjusted
accordingly.
(B) The weighted average Medi-Cal reimbursement rate increase
specified in subparagraph (A) shall be adjusted by the department for
the following reasons:
(i) If the federal Centers for Medicare and Medicaid Services does
not approve exemption changes to the facilities subject to the
quality assurance fee.
(ii) If the federal Centers for Medicare and Medicaid Services
does not approve any proposed modification to the methodology for
calculation of the quality assurance fee.
(iii) To ensure that the state does not incur any additional
General Fund expenses to pay for the 2010-11 weighted average
Medi-Cal reimbursement rate increase.
(C) If the maximum annual increase in the weighted average
Medi-Cal rate is reduced pursuant to subparagraph (B), the department
shall recalculate and publish the final maximum annual increase in
the weighted average Medi-Cal reimbursement rate.
(4) (A) Subject to the following provisions, for the 2011-12 rate
year, the increase in the Medi-Cal reimbursement rate for the purpose
of this article, for each skilled nursing facility as defined in
subdivision (c) of Section 1250 of the Health and Safety Code, shall
not exceed 2.4 percent of the rate on file that was applicable on May
31, 2011, plus the projected cost of complying with new state or
federal mandates. The percentage increase shall be applied equally to
each rate on file as of May 31, 2011.
(B) The weighted average Medi-Cal reimbursement rate increase
specified in subparagraph (A) shall be adjusted by the department for
the following reasons:
(i) If the federal Centers for Medicare and Medicaid Services does
not approve exemption changes to the facilities subject to the
quality assurance fee.
(ii) If the federal Centers for Medicare and Medicaid Services
does not approve any proposed modification to the methodology for
calculation of the quality assurance fee.
(iii) To ensure that the state does not incur any additional
General Fund expenses to pay for the 2011-12 weighted average
Medi-Cal reimbursement rate increase.
(C) The department may recalculate and publish the weighted
average Medi-Cal reimbursement rate increase for the 2011-12 rate
year if the difference in the projected quality assurance fee
collections from the 2011-12 rate year, compared to the projected
quality assurance fee collections for the 2010-11 rate year, would
result in any additional General Fund expense to pay for the 2011-12
rate year weighted average reimbursement rate increase.
(5) To the extent that rates are projected to exceed the adjusted
limits calculated pursuant to subparagraphs (A) to (D), inclusive, of
paragraph (2) and, as applicable, paragraphs (3) and (4), the
department shall adjust each skilled nursing facility's projected
rate for the applicable rate year by an equal percentage.
(6) (A) (i) Notwithstanding any other provision of law, and except
as provided in subparagraph (B), payments resulting from the
application of paragraphs (3) and (4), the provisions of paragraph
(5), and all other applicable adjustments and limits as required by
this section, shall be reduced by 10 percent for dates of service on
and after June 1, 2011, through July 31, 2012. This is a one-time
reduction evenly distributed across all facilities to ensure
long-term stability of nursing homes serving the Medi-Cal population.
(ii) Notwithstanding any other provision of law, the director may
adjust the percentage reductions specified in clause (i), as long as
the resulting reductions, in the aggregate, total no more than 10
percent.
(iii) The adjustments authorized under this subparagraph shall be
implemented only if the director determines that the payments
resulting from the adjustments comply with paragraph (7).
(B) Payments to facilities owned or operated by the state shall be
exempt from the payment reduction required by this paragraph.
(7) (A) Notwithstanding any other provision of this section, the
payment reductions and adjustments required by paragraph (6) shall be
implemented only if the director determines that the payments that
result from the application of paragraph (6) will comply with
applicable federal Medicaid requirements and that federal financial
participation will be available.
(B) In determining whether federal financial participation is
available, the director shall determine whether the payments comply
with applicable federal Medicaid requirements, including those set
forth in Section 1396a(a)(30)(A) of Title 42 of the United States
Code.
(C) To the extent that the director determines that the payments
do not comply with applicable federal Medicaid requirements or that
federal financial participation is not available with respect to any
payment that is reduced pursuant to this section, the director
retains the discretion to not implement the particular payment
reduction or adjustment and may adjust the payment as necessary to
comply with federal Medicaid requirements.
(8) For managed care health plans that contract with the
department pursuant to this chapter and Chapter 8 (commencing with
Section 14200), except for contracts with the Senior Care Action
Network and AIDS Healthcare Foundation, and to the extent that these
services are provided through any of those contracts, payments shall
be reduced by the actuarial equivalent amount of the reduced provider
reimbursements specified in paragraph (6) pursuant to contract
amendments or change orders effective on July 1, 2011, or thereafter.
(9) (A) For the 2012-13 rate year, all of the following shall
apply:
(i) The department shall determine the amounts of reduced payments
for each skilled nursing facility, as defined in subdivision (c) of
Section 1250 of the Health and Safety Code, resulting from the
10-percent reduction imposed pursuant to clause (i) of subparagraph
(A) of paragraph (6) for the period beginning on June 1, 2011,
through July 31, 2012.
(ii) For claims adjudicated through October 1, 2012, each skilled
nursing facility as defined in subdivision (c) of Section 1250 of the
Health and Safety Code that is reimbursed under the Medi-Cal
fee-for-service program, shall receive the total payments calculated
by the department in clause (i), not later than December 31, 2012.
(iii) For managed care plans that contract with the department
pursuant to this chapter or Chapter 8 (commencing with Section
14200), except contracts with Senior Care Action Network and AIDS
Healthcare Foundation, and to the extent that skilled nursing
services are provided through any of those contracts, payments shall
be adjusted by the actuarial equivalent amount of the reimbursements
calculated in clause (i) pursuant to contract amendments or change
orders effective on July 1, 2012, or thereafter.
(B) Notwithstanding subparagraph (A), beginning on August 1, 2012,
through July 31, 2013, the department shall pay the facility
specific Medi-Cal reimbursement rate that was on file and applicable
to the specific skilled nursing facility on August 1, 2011, prior to
and excluding any rate reduction implemented pursuant to clause (i)
of subparagraph (A) of paragraph (6) for the period beginning on June
1, 2011, to July 31, 2012, inclusive, and adjusted for the projected
costs of complying with new state or federal mandates. These rates
are deemed to be sufficient to meet operating expenses.
(C) The weighted average Medi-Cal reimbursement rate increase
specified in subparagraph (B) shall be adjusted by the department if
the federal Centers for Medicare and Medicaid Services does not
approve any proposed modification to the methodology for calculation
of the skilled nursing quality assurance fee pursuant to Article 7.6
(commencing with Section 1324.20) of Chapter 2 of Division 2 of the
Health and Safety Code.
(D) Notwithstanding any other provision of law, beginning on
January 1, 2013, Article 7.6 (commencing with Section 1324.20) of
Chapter 2 of Division 2 of the Health and Safety Code, which imposes
a skilled nursing facility quality assurance fee, shall not be
enforceable against any skilled nursing facility unless each skilled
nursing facility is paid the rate provided for in subparagraphs (A)
and (B). Any amount collected during the 2012-13 rate year by the
department pursuant to Article 7.6 (commencing with Section 1324.20)
of Chapter 2 of Division 2 of the Health and Safety Code shall be
refunded to each facility not later than February 1, 2013.
(E) The provisions of this paragraph shall also be included as
part of a state plan amendment implementing the 2011-12 and 2012-13
Medi-Cal reimbursement rates authorized under this article.
(10) (A) Subject to the following provisions, for the 2013-14 and
2014-15 rate years, the annual increase in the weighted average
Medi-Cal reimbursement rate for the purpose of this article, for each
skilled nursing facility as defined in subdivision (c) of Section
1250 of the Health and Safety Code, shall be 3 percent for each rate
year, respectively, plus the projected cost of complying with new
state or federal mandates.
(B) (i) For the 2013-14 rate year, if there is a rate increase in
the weighted average Medi-Cal reimbursement rate, the department
shall set aside 1 percent of the increase in the weighted average
Medi-Cal reimbursement rate, from which the department shall transfer
the nonfederal portion into the Skilled Nursing Facility Quality and
Accountability Special Fund, to be used for the supplemental rate
pool.
(ii) For the 2014-15 rate year, if there is a rate increase in the
weighted average Medi-Cal reimbursement rate, the department shall
set aside at least one-third of the weighted average Medi-Cal
reimbursement rate increase, up to a maximum of 1 percent, from which
the department shall transfer the nonfederal portion of this amount
into the Skilled Nursing Facility Quality and Accountability Special
Fund.
(C) The weighted average Medi-Cal reimbursement rate increase
specified in subparagraph (A) shall be adjusted by the department for
the following reasons:
(i) If the federal Centers for Medicare and Medicaid Services does
not approve exemption changes to the facilities subject to the
quality assurance fee.
(ii) If the federal Centers for Medicare and Medicaid Services
does not approve any proposed modification to the methodology for
calculation of the quality assurance fee.
(11) The director shall seek any necessary federal approvals for
the implementation of this section. This section shall not be
implemented until federal approval is obtained. When federal approval
is obtained, the payments resulting from the application of
paragraph (6) shall be implemented retroactively to June 1, 2011, or
on any other date or dates as may be applicable.
(12) (A) Beginning with the 2015-16 rate year, the annual increase
in the weighted average Medi-Cal reimbursement rate, required for
the purposes of this article, shall be 3.62 percent, plus the
projected cost of complying with new state or federal mandates.
(B) The weighted average Medi-Cal reimbursement rate increase
specified in subparagraph (A) may be adjusted by the department as it
deems necessary to obtain any applicable federal approval.
(d) The rate methodology shall cease to be implemented after July
31, 2015. 2020.
(e) (1) It is the intent of the Legislature that the
implementation of this article result in individual access to
appropriate long-term care services, quality resident care, decent
wages and benefits for nursing home workers, a stable workforce,
provider compliance with all applicable state and federal
requirements, and administrative efficiency.
(2) Not later than December 1, 2006, the Bureau of State Audits
shall conduct an accountability evaluation of the department's
progress toward implementing a facility-specific reimbursement
system, including a review of data to ensure that the new system is
appropriately reimbursing facilities within specified cost categories
and a review of the fiscal impact of the new system on the General
Fund.
(3) Not later than January 1, 2007, to the extent information is
available for the three years immediately preceding the
implementation of this article, the department shall provide baseline
information in a report to the Legislature on all of the following:
(A) The number and percent of freestanding skilled nursing
facilities that complied with minimum staffing requirements.
(B) The staffing levels prior to the implementation of this
article.
(C) The staffing retention rates prior to the implementation of
this article.
(D) The numbers and percentage of freestanding skilled nursing
facilities with findings of immediate jeopardy, substandard quality
of care, or actual harm, as determined by the certification survey of
each freestanding skilled nursing facility conducted prior to the
implementation of this article.
(E) The number of freestanding skilled nursing facilities that
received state citations and the number and class of citations issued
during calendar year 2004.
(F) The average wage and benefits for employees prior to the
implementation of this article.
(4) Not later than January 1, 2009, the department shall provide a
report to the Legislature that does both of the following:
(A) Compares the information required in paragraph (2) to that
same information two years after the implementation of this article.
(B) Reports on the extent to which residents who had expressed a
preference to return to the community, as provided in Section 1418.81
of the Health and Safety Code, were able to return to the community.
(5) The department may contract for the reports required under
this subdivision.
SEC. 7. Section 14126.036 of the
Welfare and Institutions Code is amended to read:
14126.036. This article shall become inoperative on August 1,
2015, 2020, and as of January 1,
2016, 2021, is repealed, unless a later
enacted statute that is enacted before January 1, 2016,
2021, deletes or extends that date.
SEC. 8. This act is a bill providing for
appropriations related to the Budget Bill within the meaning of
subdivision (e) of Section 12 of Article IV of the California
Constitution, has been identified as related to the budget in the
Budget Bill, and shall take effect immediately.
SECTION 1. It is the intent of the Legislature
to enact statutory changes relating to the Budget Act of 2015.
