CONTROVERSY ERUPTS OVER AB 411 NURSING FACILITY BILL – SENATE HEALTH COMMITTEE HEARING 9/8 TUESDAY
(9/7/2009)

Many Disability Advocacy Groups Say De La Torre Bill Is A Unfair “Gut and Amend” Measure - Would Reverse Freestanding Nursing Facility Rate Freeze in 2009-2010 State Budget Trailer Bill Passed In July



SACRAMENTO, CALIF (CDCAN) [Updated 09/07/09 4:00 PM (Pacific Time) - Major controversy has erupted over a bill, AB 411 by Assemblymember Hector De La Torre (Democrat – South Gate, 50th Assembly District), that was completely changed with amendments on September 2nd, - a legislative maneuver known as “gut and amend” - that would reverse the rate freeze imposed on freestanding nursing facilities originally imposed as part of the revised 2009-2010 State Budget enacted in late July.



That rate freeze was in one of several budget related bills (called “trailer bills”), ABx4 5 (“x4” stands for 4th special or extraordinary session). The bill, as amended last week, could pit many disability, senior advocacy groups and unions representing nursing home workers against each other who normally would be allies on other issues such as In-Home Supportive Services (IHSS). (see CDCAN website at www.cdcan.us for copies of all the bills mentioned in this report)



Bill Set For Hearing September 8th In Senate Health Committee

AB 411, as amended, is set for hearing Tuesday, September 8th, in the Senate Health Committee, at the State Capitol in Room 3191. The hearing starts when called or announced by the chair.



The committee chair, State Sen. Elaine Alquist (Democrat – Santa Clara, 13th District), has not yet announced when the hearing will start. The State Senate is not scheduled to convene after the four day holiday weekend until 11:00 AM on Tuesday – so the hearing is likely to occur sometime after that time.



Testimony is limited to a total of 3 minutes each for 2 persons in support of the bill and 3 minutes each for two persons who are against it. Other persons for and against the bill can put their position on the record with the committee by simply identifying themselves and their position for or against the bill.



Persons and organizations can also send their letters of support or opposition on the bill to the Senate Health Committee office (see below for phone and fax numbers). Given that there are only four days left before both houses adjourn for the 2009 legislative session for the rest of the year, sending letters by US Mail will arrive too late.



Democrats control the 11 member committee 7 to 4, and the bill needs 6 votes to pass. However, with a Republican co-author, who is also vice chair of the same committee, and the chair of the committee also a co-author, it would appear AB 411 stands a good chance of passage out of the committee. Beyond that, the prospects are not as certain.



Next Steps

AB 411 would have to pass 1 possibly 2 committees in the Senate, then pass the full Senate, and then repeat that process in the Assembly all on or before September 11th – Friday – when the Legislature is scheduled to adjourn the 2009 legislative session for the rest of the year.



However with only four days remaining before the Legislature adjourns the 2009 session for the rest of the year, there will be very little time to provide advance public notice on the hearings in the Senate and Assembly.



The bill is an “urgency” measure – meaning it would take effect immediately upon approval of the Governor if passed by the Legislature.



Passage of an “urgency” bill on the Assembly and Senate floors requires 2/3rds vote in both houses – 54 votes in the 80 member Assembly and 27 votes in the 40 member State Senate. To pass out of a committee, an “urgency” bill would only need a majority of the total committee membership however.



Many Advocacy Groups Say AB 411 Violates 1999 “Olmstead Decision”

Many disability advocacy groups and individuals have raised strong objections to the bill, not only for the “gut and amend” maneuver that happens frequently to bills late in the legislative session , but for what they claim is a major reversal of the state’s compliance with the landmark 1999 US Supreme Court’s “Olmstead Decision”.



That lawsuit was filed by two women from Georgia with developmental and other disabilities – Elaine Wilson and Lois Curtis against the then head of the Georgia State agency that oversaw health and human service programs – State Commissioner Tommy Olmstead. The 1999 Supreme Court decision required the states to takes steps to avoid the unnecessary and unjustified institutionalization of persons with disabilities, seniors and others. [Note: Lois Curtis spoke at the recent Disability Capitol Action Day in May, interviewed on stage by Marty Omoto]



AB 411 Rate Increase Restoration Desperately Needed Say Supporters – Opponents Say Increase Unfair and Nursing Home Quality Has Not Improved

Several advocacy groups say the rate increase that AB 411 would allow would not be fair given the major spending reductions that was enacted as part of the revised 2009-2010 State budget impacting a wide range of community-based programs and services that serve people outside of nursing and other health facilities.



Those advocates also say that the State has not done a good job in making sure that the quality assurance provisions of AB 1629 – passed in 2004, were met by nursing facilities. They cite statistics from the Department of Public Health that showed increases in complaints and that nursing facilities received a higher reimbursement regardless of whether or not quality had actually improved. .



Advocates for nursing facilities and others dispute those charges by disability advocacy groups, and also claim that AB 411 as amended would provide increased reimbursements that providers were paying for through increased provider “Quality Assurance Fees” that providers agreed to under AB 1629 as passed in late 2004.



Dario Frommer, a Los Angeles Assemblymember Democrat in 2004, who authored AB 1629, said then that his bill would create “incentives to improve care by improving wages, staffing and the physical plant”. The bill in 2004 divided advocacy groups – with several major senior advocacy groups supporting it, and others, including disability groups, opposing it. Despite the opposition, AB 1629 passed overwhelmingly in both houses in 2004, with only 1 legislator on the Assembly and Senate floors opposing it then.



Supporters of the De La Torre bill also say that the new legislation would remove an exemption for certain nursing homes, who, under AB 411, would be required to pay a higher “Quality Assurance Fee” because other revenues to their facility would be counted, including those from other programs such as Medicare.



Disability advocacy groups claim that removing the exemption that would result in a higher “Quality Assurance Fee” on certain providers would likely mean that persons in those facilities not covered by Medi-Cal or Medicare but who are paying for their own care would likely see an increase.



Advocacy groups also say that existing “Quality Assurance Fee” under AB 1629 increased reimbursements to providers and are also funded by money from the State general fund and from federal matching funds – not just by increased fees by providers and with no measurable requirements to improve the quality of care.

Supporters of the bill disagree and also say it still means more money to the State general fund that otherwise would not be there.



State Senate Health Committee Members & Staff

Total Senate Health Committee members: 11 (takes 6 votes to pass a bill out of this committee).

Members – Democrats (7): Elaine Alquist (Chair), Gil Cedillo, Mark DeSaulnier, Mark Leno (chair of the Senate Budget Subcommittee #3 on Health and Human Services), Gloria Negrete McLeod, Fran Pavley and Lois Wolk

Members – Republicans (4): Tony Strickland (Vice Chair), Sam Aanestad, Dave Cox, and Abel Maldonaldo.

Committee Staff: Peter Hansel (committee staff director); Roger Dunstan, Concepcion Tadeo, Mia Orr, Scott Bain and Lisa Chan–Sawin (all committee consultants); Carol

Thomas and Stephanie Hineline. (both committee assistants).

Senate Health Committee Capitol Office Phone: 916-651–4111

Senate Health Committee Capitol Office FAX: 916-324-0384

Senate Health Committee Office: State Capitol, Room 2191 (hearing room is different location).



Note: if the bill passes out of this committee and out of the Senate it will then head to the Assembly, and be likely heard – off the floor and with little advance announcement – by the Assembly Health Committee.



Background of Issue that AB 411 Focuses On

AB 411 deals with issues first raised in 2004’s AB 1629, and in a budget trailer bill passed and enacted in July 2009, ABx4 5:



QUALITY ASSURANCE FEE & NEW REIMBURSMENT RATES

· AB 1629 by then Assemblymember Dario Frommer, was amended on 08/16/04 with the “Skilled Nursing Facility Quality Assurance Fee Program” and the “Medi-Cal Long Term Care Reimbursement Act”.

· AB 1629 passed the State Senate on 08/25/04 by vote of 29 to 1, after being gutted and amended on 08/16/04 (meaning previous contents of the bill were deleted and replaced by the “Quality Assurance Fee” provisions). The bill as amended then passed the Assembly (concurrence or agreement in amendments made in Senate) by vote of 79 to 1 on 08/28/04. It was signed by Governor Schwarzenegger on 09/29/04, and chaptered (filed) by the Secretary of State on that same day, Chapter 875, Statutes of 2004.

· AB 1629 in 2004, imposed a “Quality Assurance Fee” on freestanding skilled nursing facilities (with some exceptions) that would draw down additional matching federal funds in order to increase skilled nursing facility Medi-Cal reimbursement rates. Federal Medicaid law permits states to impose such fees on certain health care service providers and in turn repay those providers through increased reimbursements, and keeping some of the increased federal money for the State general fund for other purposes. A similar quality assurance fee has been implemented for the Intermediate Care Facilities for the Developmentally Disabled (ICF/DD).

· AB 1629 in 2004 also enacted the “Medi-Cal Long-Term Care Reimbursement Act”, requiring the Department of Health Care Services – which oversees California’s Medicaid program, to implement new facility-specific reimbursement rates by August 1, 2005.

· That new annual rate increase under state law then provided for a maximum annual rate increase of no more than 5% of the “weighted average Medi-Cal reimbursement rate” from the prior state budget year (meaning the rate increase could not exceed 5% of the previous year’s reimbursement).



TWO YEAR RATE FREE

· As part of the revised 2009-2010 State Budget (in ABx4 5) passed in late July and signed by the Governor on July 28, rates for Level B freestanding skilled nursing facilities, (excluding skilled nursing facilities that are a distinct part of a facility that is licensed as a general acute care hospital) were frozen at the level is was during the 2008-2009 State Budget year (July 1, 2008 through June 30, 2009) for two state budget years (July 1, 2009 through June 30, 2010 and July 1, 2010 through June 30, 2011) .

· Those nursing facilities were covered by AB 1629 and referred sometimes as the “AB 1629 homes” and the rate freeze applied to those facilities and other long term care facilities.

· ABx4 5 also expanded the AB 1629 “Quality Assurance Fee” to include Medicare revenues in the calculation in the fee that providers would pay (the increased fees would mean an estimated $18 million to the State general fund), resulting in a higher fee – but also a higher reimbursement back from the State. Some nursing home providers who serve more persons who are covered by Medicare than Medicaid (Medi-Cal), said that this was not fair because while money from Medicare would be counted to increase the fee they paid – they would only receive a higher reimbursement based on the persons they served who were under the Medicaid (Medi-Cal) program.



AB 411 SEEKS TO REVERSE FREEZE

· AB 411, as amended on September 2, 2009, would reverse the rate freeze in ABx4 5, for freestanding nursing facilities with a partial restoration. The bill would allow for an annual rate increase for those facilities of no more than 2.5% for the 2009-2010 and 2010-2011 State budget years. Prior to the freeze imposed in July, the annual rate increase could be no more than 5%.

· The bill would also change existing State law which now requires that the “Quality Assurance Fee” will be based upon the entire net revenue (including revenue from Medicare) of all skilled nursing facilities subject to the fee, but exempts a facility, as defined to include (among other facilities) a skilled nursing facility that is part of a continuing care retirement community. AB 411 would eliminate the exemption for a skilled nursing facility that is part of a continuing care retirement community, which would require them to pay a higher “Quality Assurance Fee” because their other revenue – including Medicare – would not be exempt.

· Prior to September 2, 2009, AB 411 was authored by Assemblymembers Martin Garrick (Republican – Carlsbad, 74th District) and Diane Harkey (Republican – Laguna Niguel, 73rd District). On September 2, the bill contents of the bill – which originally focused on hospital seismic retrofits – were deleted and replaced by amendments dealing with nursing facility rates.

· The bill is now authored by Assemblymember Hector De La Torre (Democrat – South Gate, 50th Assembly District), who is also the chair of the Assembly Accountability and Administrative Review Committee and a member of the Assembly Health Committee.

· The authors of the bill were deleted and replaced by Assemblymembers Hector De La Torre and co-authored by Assemblymember Dave Jones (Democrat – Sacramento, 9th Assembly District), State Senators Elaine Alquist (Democrat – Santa Clara, 13th Assembly District) and Tony Strickland (Republican – Thousand Oaks, 19th State Senate District)

· Jones is chair of the Assembly Health Committee and Alquist the chair of the State Senate Health Committee. Tony Strickland is vice chair of the Senate Health Committee.

· Interesting Ironic Note: ABx4 5 – which was the “health” budget trailer bill that contained major cuts to Medi-Cal and other health programs, also contained the rate freeze that AB 411 seeks to partially restore. That budget trailer bill, which also contained major Medi-Cal cuts, was then in July supported by Assemblymember Hector De La Torre – the author of AB 411, and Assemblymember Dave Jones, co-author of AB 411, and Sen. Elaine Alquist, another co-author. It was opposed then by Republican Sen. Tony Strickland, who is also a co-author of AB 411.