14590-14598
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.