Meet the New Costs, Same as the Old Costs

By David Gorn, California Healthline

(Photo: Kaiser Health News)

(Photo: Kaiser Health News)

After more than a year of battling over eliminating and then restructuring adult day health care coverage for Medi-Cal beneficiaries, California’s budget for delivering that care is similar to what it was before all the haggling started.

The Community-Based Adult Services program grew out of a lawsuit challenging the state’s proposal and replaces the Adult Day Health Care program. CBAS will provide services to 80 percent of previous ADHC beneficiaries and is funded at a similar level to the original program.

“The original budget for ADHC was $170 million, and the current CBAS budget is

“I guess I just don’t understand why we had to go through all of this.”
$155 million,” said Lydia Missaelides, executive director of the California Association of Adult Day Services. “That means you’re looking at roughly the same cost to provide the same services to 80% of the beneficiaries.”

Of course, that doesn’t count the expense of legal battles, or the daunting number of man hours spent designing and implementing a new system, not to mention the constant arguing and debating over more than a year, she said. Missaelides sighed at the idea of it.

“I guess I just don’t understand,” she said, “why we had to go through all of this.”

The ADHC-to-CBAS metamorphosis — which began in budget proposals more than a year ago — sparked legislation, multiple hearings at the Capitol and a lengthy lawsuit.

“We are in the process of implementing a legal settlement of substantial scope, and we are starting an entirely new program — two very costly activities,” said Norman Williams, deputy director of public affairs at the Department of Health Care Services. “Because of this, in subsequent years we expect additional savings to be realized.”

The state’s costs related to the lawsuit and settlement are separate from CBAS expenditures.

Process Slowing Down

DHCS recently announced it would phase in its new adult day health program, rather than implement it all at once on July 1. The shift involves several complicated steps: determining eligibility for 40,000 frail and elderly patients across the state, moving 80 percent of them to managed care plans and converting existing centers to not-for-profit status. The state recently adjusted its timetable and built in a three-month cushion to ease the transition.

State officials said 31 of the 253 adult day health care centers in California will make the switch in July, while the bulk of the centers now are eyeing an Oct. 1 deadline.

The extra time was necessary, health officials said, to work out a number of crucial details. For instance, the state requires any for-profit adult day health care center to switch to not-for-profit status to qualify as a Community-Based Adult Services center. But here we are — just about a month to the July 1 deadline and the state has not yet issued guidelines for that requirement.

In addition:

  • Rates still need to be worked out for health plans
  • Questions remain about what will happen if the for-profits can’t make the switch
  • And what about patient eligibility denials?

Appeals to denials will be heard starting next week. The Adult Day Health Care Association recently announced that it will file an appeal to reverse the state’s 10 percent provider rate cut. Meanwhile, two more ADHC centers recently closed.

The good news for adult day health care beneficiaries is that state officials agreed to spend more on the new program. In the May budget revision, the CBAS budget was raised to $156 million for the next year.

Missaelides said state officials clearly have been listening to stakeholders’ concerns these days, as evidenced by the decision to delay implementation for most of the centers, with the new phase-in approach.

The relative handful of CBAS centers that will lead the way with a July 1 implementation date were selected because they are all County Organized Health Systems, according to Jane Ogle, deputy director of the Department of Health Care Services.

“We picked the COHS counties first because the beneficiaries are already members of the plan and don’t have to make a plan selection,” Ogle said. “This eliminates one step in the process.”

In the rest of the counties, a big step in the process will be enrollment into Medi-Cal managed care plans. Medi-Cal is California’s Medicaid program.

“In those counties where beneficiaries have to make a choice,” Ogle said, “we will wait until October, to give them plenty of time to make that selection.”

Related