CALIFORNIA
The long-term care system in California was subject to a number of different influences in 2002 and 2003 as a result of the state's major fiscal crisis. Huge budget shortfalls saw California officials reviewing a number of different strategies, which included cuts in 2002 to many services for the elderly, people with mental illness, and other people with disabilities as part of a range of cost-cutting measures. Other strategies called for freezing state agency spending, transferring certain programs to counties, and reorganizing state agencies.
The Budget
On November 26, 2002, Governor Gray Davis issued an executive order directing state agencies to freeze spending where possible and to begin implementing current-year reductions in nonessential functions. Governor Davis announced in January 2003 that his FY 2003-2004 budget proposed $20.7 billion in program reductions, saying that "Nearly every program gets cut." As the centerpiece in the administration's spending plan for FY 2003-2004, Governor Davis proposed a realignment of about 12 percent of state general fund program obligations by shifting those obligations to counties. The state would increase a variety of taxes by a net of $8.2 billion and shift this funding to the counties to cover the costs of the programs transferred to them. Chief among these programs would be 100 percent of the state's cost for Medi-Cal (Medicaid) long-term care (nursing homes), a total cost of $1.1 billion to $1.4 billion.
In its analysis of the administration's budget, the Legislative Analyst's Office (LAO) recommended against legislative approval of the proposed shift, saying that counties " ... would have few tools to manage this major new funding responsibility. Counties would not have authority over major factors driving Medi-Cal long-term costs: provider reimbursement rates, program eligibility, or the decision to place Medi-Cal recipients into nursing homes." However, the LAO said that, since the state's long-term care delivery system was seriously fragmented and lacked coordination, the system " ... would benefit greatly by county coordination and control." The LAO recommended that the Legislature transform the administration's proposal " ... into a plan that phases in over a longer period an integrated system of long-term care, managed by counties."
Another program that the administration proposed shifting entirely to counties is the In-Home Supportive Services (IHSS) Program, for which the county share is currently 35 percent (for the state-funded part of the program). The LAO said the Legislature might consider increasing the county share to 50 percent and giving the counties more control over the program. The LAO also suggested that the Legislature consider eliminating the California Department of Aging and shifting its functions to the Department of Social Services, since both operated programs that support the senior population. The move would eliminate 37 positions and produce a net savings of $3.4 million, the LAO said.
The FY 2002-2003 budget estimated an increase of more than 8 percent in the average monthly caseloads for the In-Home Supportive Services program for a total of 296,800 cases. The budget also supported an estimated 10,000-caseload increase in the number of people with developmental disabilities served by regional centers.
2002 Legislation
In 2002, the Legislature enacted several measures to address long-term care issues. One bill clarifies the differences between "care and supervision" and "community living support services" in supportive housing to exempt the latter from required state licensing requirements. The bill's author contended that, under current law, when individuals with disabilities were provided supportive living services, confusion could arise about whether they needed a level of care and supervision that would require them to live in a licensed facility. The enacted bill was intended to encourage counties to develop innovative ways to support independent living for people with disabilities.
Another measure allows individuals who receive hospice services to enter a residential care facility without having to disenroll from hospice. Elder abuse also was addressed by the Legislature, with laws to increase the penalties for elder abuse, to add clergy to the list of mandated reporters, to expand the list of people who may receive and disclose information of suspected abuse, and to instruct the Department of Social Services to develop guidelines for adult protective services.
Grant Initiatives
The state received a federal Systems Change grant for $1,385,000 in 2002, which the California Department of Social Services planned to use to develop training, educational materials, and other methods of support to aid participants in the In-Home Supportive Services Program. State officials said that, although the vast majority of Medicaid consumers in the IHSS program recruit, hire, train and supervise their care providers, no statewide assistance or training had been available to support them. Grant funds would be used, they said, to conduct needs assessments of IHSS consumers and providers. Based on those assessments, project staff planned to design or obtain training and educational materials and other supportive resources. As of January 1, 2003, almost all of California's 58 counties had established a public authority that, by law, must make consumer and worker training available.
In May 2002, Governor Davis announced a $10.5 million grant to increase the state's front-line health care work force by up to 2,000 people within the next 20 months. The certified nurse assistant training program uses nursing facilities as training sites.
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