SECTIONS 14590-14598 - California Statutes

WELFARE AND INSTITUTIONS CODE

SECTION 14590-14598

14590. The Legislature finds and declares that:
(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 to grant waivers in up to 10 new
sites throughout the nation in order to replicate the On Lok model.
(g) In California, numerous agencies have expressed interest in
developing programs similar to On Lok and will need the cooperation
of the State Department of Health Care Services to successfully
obtain the necessary available federal waivers to develop risk-based
capitated long-term care demonstration programs.
(h) Through the development of these demonstration programs, the
viability of a cost-effective statewide program offering quality
long-term care services can be evaluated.
(i) To achieve maximum cost-effectiveness in demonstration
projects under this chapter, an expedited contract process is
necessary.

14591. The State Director of Health Care Services may establish the
California Program of All-Inclusive Care for the Elderly, to promote
the development of community-based, risk-based capitated, long-term
care programs.

14592. (a) The director may contract with up to ten demonstration
projects to develop risk-based long-term care pilot programs modeled
upon On Lok Senior Health Services in San Francisco. The department
shall seek necessary federal waivers for each demonstration site
pursuant to Section 1115 of the Social Security Act (42 U.S.C.A. Sec.
1315). The director shall not enter into contracts with any
demonstration program unless necessary federal waivers are obtained.
(b) The demonstration sites shall be public or private nonprofit
organizations providing or having the capacity to provide, as
determined by the director, comprehensive health care services on a
risk-based capitated basis to frail elderly persons certifiable for
institutional care. Implementation of this section shall be in
accordance with Section 4118(g)(1)(2) of the federal Omnibus Budget
Reconciliation Act of 1987.
(c) 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). This subdivision shall be
implemented only to the extent that federal financial participation
is available.

14593. (a) The director shall continue to request waivers pursuant
to Section 1115 of the Social Security Act (42 U.S.C.A. Sec. 301 et
seq.) for the On Lok Senior Health Services Program and other
demonstration projects as long as the director determines they are
cost-effective, they remain in compliance with the terms of their
contract with the department, and the demonstration program is in
compliance and acting in accordance with its waiver agreement.
(b) The department may grant the On Lok Senior Health Services
permanent program status contingent upon the obtaining of federal
waivers authorized under Section 9220 of Public Law 99-272. Until
permanent status is granted, the On Lok Senior Health Services
demonstration project shall continue as a demonstration program.

14594. 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.

14596. 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.

14597. In order to promote the development of community-based,
risk-based, capitated long-term care programs, and to enable
prospective frail elderly demonstration projects to assume increasing
risk before federal waivers are obtained, the director may contract
with public or private nonprofit organizations to provide
comprehensive health care, including long-term care, to
nursing-facility certifiable persons. Prior to obtaining federal
waivers, provisions governing the treatment of income and resources
of a married couple, for purposes of determining the eligibility of a
nursing-facility certifiable or institutionalized spouse, shall be
established so as to qualify for federal financial participation.

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 10 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.