CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 315Introduced by Assembly Member BontaJanuary 23, 2025 An act to amend Section 14132.991 of, and to add Section 14132.992 to, the Welfare and Institutions Code, relating to Medi-Cal.LEGISLATIVE COUNSEL'S DIGESTAB 315, as introduced, Bonta. Medi-Cal: Home and Community-Based Alternatives Waiver.Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.Under existing law, home- and community-based services (HCBS) approved by the United States Department of Health and Human Services are covered for eligible individuals to the extent that federal financial participation is available for those services under the state plan or waivers granted in accordance with certain federal provisions. Existing law authorizes the Director of Health Care Services to seek waivers for any or all approvable HCBS. Existing law sets forth provisions for the implementation of the Nursing Facility/Acute Hospital Transition and Diversion Waiver, which is the predecessor of the Home and Community-Based Alternatives (HCBA) Waiver, for purposes of providing care management services to individuals who are at risk of nursing facility or institutional placement.This bill would recast those provisions to refer to the HCBA Waiver. The bill would delete a provision authorizing the expansion of the number of waiver slots up to 5,000 additional slots, and would instead require the enrollment of all eligible individuals who apply for the HCBA Waiver. The bill would require the department, by March 1, 2026, to seek any necessary amendments to the waiver to ensure that there is sufficient capacity to enroll all eligible individuals who are currently on a waiting list for the waiver, as specified.The bill would require the department, by March 1, 2026, to submit a rate study to the appropriate fiscal and policy committees of the Legislature addressing the sustainability, quality, and transparency of rates for the HCBA Waiver. The bill would require that the study include an assessment of the effectiveness of the methods used to pay for services under the waiver, with consideration of certain factors. The bill would make related legislative findings.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all of the following:(a) Californias Home and Community-Based Alternatives (HCBA) Waiver, within the Medi-Cal program, provides important services to allow individuals with significant medical needs to receive care in their own homes or community settings, preventing the need for institutionalization in a nursing home or other institutional setting.(b) Californias HCBA Waiver promotes independence, maintains quality of life, and allows people to stay connected with their loved ones and community.(c) Californias HCBA Waiver allows for customized care plans tailored to each persons specific needs, including medical, personal care, and community support services, while promoting culturally competent care.(d) In many cases, providing care in the home through the waiver can be more cost effective than institutional care.(e) The State Department of Health Care Services has outlined a plan to integrate certain HCBA Waiver services into Medi-Cal managed care plans by 2028.(f) The Home and Community-Based Services (HCBS) programs that the department is considering carving into managed care include the Assisted Living Waiver (ALW), the HCBA Waiver, the Multipurpose Senior Services Program (MSSP), and the Medi-Cal Waiver Program (MCWP).(g) These waivers are currently serving nearly 35,000 Californians, with thousands more on waiting lists. Disabled older adults and individuals with disabilities enrolled in these HCBS programs have very complex care needs and are at high risk of institutionalization if they experience disruption in the critical support that these programs provide.(h) The 2024 HCBS needs and gaps analysis, as released by Governor Newsoms administration, does not include an analysis of rates.(i) Stagnant rates in the HCBA Waiver, which have not been raised since the programs inception in 2007, have led to a shrinking pool of providers, which in turn impacts availability and quality of services and participant choice. Habilitation rates, case management, respite, and personal care services have been stagnant for 17 years. For example, transitional case management (TCM), an HCBA Waiver service to transition someone home from an institution, was reimbursed in 2006 at $45.43 per hour. The 2024 rate for this service was still $45.43 per hour. Likewise, respite care per day for children at the pediatric nursing facility level was reimbursed in 2006 at $172 per day. The 2024 rate for this service was still $172 per day.(j) Inadequate HCBA Waiver reimbursement rates also make it difficult to ensure a sufficient workforce, to keep pace with the cost of living, and to keep up with inflation.(k) Taken as a whole, the failure to adequately reimburse HCBS programs creates a scarcity of providers, keeps people unnecessarily institutionalized, and disproportionately impacts communities of color.(l) Therefore, in order to ensure that there are adequate services and providers for the HCBA Waiver prior to the transition to Medi-Cal managed care plans, the Legislature is prompted to ensure that rates are adequate.SEC. 2. Section 14132.991 of the Welfare and Institutions Code is amended to read:14132.991. (a) When renewing the Nursing Facility/Acute Hospital Transition and Diversion administering the Home and Community-Based Alternatives (HCBA) Waiver, as authorized by subdivision (t) of Section 14132, the director may take the following actions, among others:(1) Contract with one or more organizations, referred to as a care management contractor, qualified to provide or arrange for delivery of care management and waiver services, including, but not limited to, personal needs assessments, and arranging for services available through public and private agencies, including services available under the waiver, for the waiver participants and applicants. The contract with the care management contractor, the care management contract, may require the care management contractor or their subcontractor, or both, to do all of the following, among other things:(A) Provide, arrange for, or subcontract with community-based providers for the provision of, waiver services to waiver participants.(B) Recognize program and service linkages, coordinate service delivery mechanisms and promote prevention of avoidable institutional placement, emergency room visits or inpatient hospital stays, or both, and coordination between health, social, and long-term services and supports by person-centered care planning.(C) Provide or arrange for, care management to each waiver participant to stabilize their health care, and provide access to home- and community-based services, including managing and anticipating episodes of medical crisis in which transitional care management is needed.(D) Carry out the waivers person-centered model of care, pursuant to the requirements set forth in Sections 441.720, 441.725, and 441.540 of Title 42 of the Code of Federal Regulations.(E) Submit all information and reports required by the department, including, but not limited to, annual financial statements in the timeframe specified by the department.(F) Pay any providers of waiver services who are not directly employed by or contracted with the care management contractor no less than the rates specified in the waiver or the departments fee schedule, whichever is less, for the provider type.(G) Bill the department, at the rate established by the state, for all services the care management contractor provides to waiver participants, directly or through a subcontractor or other direct service provider.(H) Comply with the requirements of the waiver, including any other requirements established by the department regarding waiver operations, including, but not limited to, requirements regarding care coordination. These requirements may be set forth in the care management contract, care management manual, all-county letters, plan letters, plan or provider bulletins or policy letters, or similar instructions.(2) Propose that the waiver provide for achievement of annual cost neutrality in the aggregate to allow enrollment and authorization of waiver services based on the medical necessity of the waiver services on a case-by-case basis.(3)Expand the number of waiver slots up to 5,000 additional slots, the director may seek federal approval to amend the waiver to add additional slots or make changes to the waiver model with approval from the Department of Finance.(4)(3) Require care management contractors to enroll at least 60 percent of all total annual enrollments from either of the following:(A) Hospital, nursing facility, or other institutional settings assisting members with transitions back to the home or community, or both, setting.(B) Individuals who had been continuously receiving in home care services, of the type offered under the waiver, under the Early and Periodic Screening, Diagnosis, and Treatment State Plan benefit, California Children Services or Pediatric Palliative Care programs for children, for at least the prior three months but have at the time of transition exceeded the age limit for that benefit.(5)(4) If the director determines that the care management contractor is not fiscally solvent, or is in danger of becoming fiscally insolvent, the director has the option to immediately terminate the contract with the care management contractor.(6)(5) Terminate or refuse to renew, in whole or in part, a care management contract when the director determines that the action is necessary to protect the health of the beneficiaries or funds appropriated to the Medi-Cal program.(b)Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of all-county letters, plan letters, plan or provider bulletins, policy letters, or other similar instructions, without taking regulatory action.(b) All eligible individuals who apply for the HCBA Waiver shall be enrolled. The department shall seek all necessary amendments to the HCBA Waiver to accommodate those individuals.(c) By March 1, 2026, the department shall seek any necessary amendments to the HCBA Waiver to ensure that there is sufficient capacity to enroll all eligible individuals who apply for the HCBA Waiver and who are currently on a waiting list for the waiver. The department shall continue to monitor the capacity of the HCBA Waiver and shall expand capacity through any necessary HCBA Waiver amendments at least 180 calendar days prior to reaching capacity, based on enrollment trends, to ensure that no individual is placed on a waiting list for the HCBA Waiver.(c)(d) In order to achieve maximum cost savings savings, the Legislature hereby determines that an expedited contract process for contracts under this section is necessary. Therefore, contracts entered into or amended pursuant to this section shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, and Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code and shall be exempt from the review or approval of any division of the Department of General Services.(d)The department shall implement this section only to the extent it can demonstrate federal cost neutrality as required under the terms of the waiver, and only to the extent any necessary federal approvals are obtained and federal financial participation is available.(e) (1) This section shall be implemented only to the extent that any necessary federal approvals have been obtained and that federal financial participation is available.(2) The department may seek amendments to the HCBA Waiver or take other action as necessary to implement this section.(3) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of letters or other similar instructions, without taking regulatory action.SEC. 3. Section 14132.992 is added to the Welfare and Institutions Code, immediately following Section 14132.991, to read:14132.992. (a) By March 1, 2026, the department shall submit a rate study to the appropriate fiscal and policy committees of the Legislature, in accordance with Section 9795 of the Government Code, addressing the sustainability, quality, and transparency of rates for the Home and Community-Based Alternatives (HCBA) Waiver, as described in Section 14132.991. The department shall consult with stakeholders in developing the study.(b) The study shall include, but not be limited to, an assessment of the effectiveness of the methods used to pay for services under the HCBA Waiver. This assessment shall include consideration of all of the following factors for each category of service provider:(1) Whether the current method of ratesetting for a service provides an adequate supply of providers, including, but not limited to, whether there is a sufficient supply of providers to enable participants throughout the state to have a choice of providers, depending on the nature of the service, and whether there are waiting times for services.(2) Whether the current method of ratesetting for a service provides for an adequate workforce and keeps pace with inflation.(3) A comparison of the estimated fiscal effects of alternative rate methodologies for each service.(4) Regional variations in service costs.(5) Options for addressing rate increases in the future, including, but not limited to, linking rate increases to rate increases for skilled nursing facilities, the Sacramento Consumer Price Index, or the Medical Consumer Price Index.
CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 315Introduced by Assembly Member BontaJanuary 23, 2025 An act to amend Section 14132.991 of, and to add Section 14132.992 to, the Welfare and Institutions Code, relating to Medi-Cal.LEGISLATIVE COUNSEL'S DIGESTAB 315, as introduced, Bonta. Medi-Cal: Home and Community-Based Alternatives Waiver.Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.Under existing law, home- and community-based services (HCBS) approved by the United States Department of Health and Human Services are covered for eligible individuals to the extent that federal financial participation is available for those services under the state plan or waivers granted in accordance with certain federal provisions. Existing law authorizes the Director of Health Care Services to seek waivers for any or all approvable HCBS. Existing law sets forth provisions for the implementation of the Nursing Facility/Acute Hospital Transition and Diversion Waiver, which is the predecessor of the Home and Community-Based Alternatives (HCBA) Waiver, for purposes of providing care management services to individuals who are at risk of nursing facility or institutional placement.This bill would recast those provisions to refer to the HCBA Waiver. The bill would delete a provision authorizing the expansion of the number of waiver slots up to 5,000 additional slots, and would instead require the enrollment of all eligible individuals who apply for the HCBA Waiver. The bill would require the department, by March 1, 2026, to seek any necessary amendments to the waiver to ensure that there is sufficient capacity to enroll all eligible individuals who are currently on a waiting list for the waiver, as specified.The bill would require the department, by March 1, 2026, to submit a rate study to the appropriate fiscal and policy committees of the Legislature addressing the sustainability, quality, and transparency of rates for the HCBA Waiver. The bill would require that the study include an assessment of the effectiveness of the methods used to pay for services under the waiver, with consideration of certain factors. The bill would make related legislative findings.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION
Assembly Bill
No. 315
Introduced by Assembly Member BontaJanuary 23, 2025
Introduced by Assembly Member Bonta
January 23, 2025
An act to amend Section 14132.991 of, and to add Section 14132.992 to, the Welfare and Institutions Code, relating to Medi-Cal.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
AB 315, as introduced, Bonta. Medi-Cal: Home and Community-Based Alternatives Waiver.
Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.Under existing law, home- and community-based services (HCBS) approved by the United States Department of Health and Human Services are covered for eligible individuals to the extent that federal financial participation is available for those services under the state plan or waivers granted in accordance with certain federal provisions. Existing law authorizes the Director of Health Care Services to seek waivers for any or all approvable HCBS. Existing law sets forth provisions for the implementation of the Nursing Facility/Acute Hospital Transition and Diversion Waiver, which is the predecessor of the Home and Community-Based Alternatives (HCBA) Waiver, for purposes of providing care management services to individuals who are at risk of nursing facility or institutional placement.This bill would recast those provisions to refer to the HCBA Waiver. The bill would delete a provision authorizing the expansion of the number of waiver slots up to 5,000 additional slots, and would instead require the enrollment of all eligible individuals who apply for the HCBA Waiver. The bill would require the department, by March 1, 2026, to seek any necessary amendments to the waiver to ensure that there is sufficient capacity to enroll all eligible individuals who are currently on a waiting list for the waiver, as specified.The bill would require the department, by March 1, 2026, to submit a rate study to the appropriate fiscal and policy committees of the Legislature addressing the sustainability, quality, and transparency of rates for the HCBA Waiver. The bill would require that the study include an assessment of the effectiveness of the methods used to pay for services under the waiver, with consideration of certain factors. The bill would make related legislative findings.
Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.
Under existing law, home- and community-based services (HCBS) approved by the United States Department of Health and Human Services are covered for eligible individuals to the extent that federal financial participation is available for those services under the state plan or waivers granted in accordance with certain federal provisions. Existing law authorizes the Director of Health Care Services to seek waivers for any or all approvable HCBS.
Existing law sets forth provisions for the implementation of the Nursing Facility/Acute Hospital Transition and Diversion Waiver, which is the predecessor of the Home and Community-Based Alternatives (HCBA) Waiver, for purposes of providing care management services to individuals who are at risk of nursing facility or institutional placement.
This bill would recast those provisions to refer to the HCBA Waiver. The bill would delete a provision authorizing the expansion of the number of waiver slots up to 5,000 additional slots, and would instead require the enrollment of all eligible individuals who apply for the HCBA Waiver. The bill would require the department, by March 1, 2026, to seek any necessary amendments to the waiver to ensure that there is sufficient capacity to enroll all eligible individuals who are currently on a waiting list for the waiver, as specified.
The bill would require the department, by March 1, 2026, to submit a rate study to the appropriate fiscal and policy committees of the Legislature addressing the sustainability, quality, and transparency of rates for the HCBA Waiver. The bill would require that the study include an assessment of the effectiveness of the methods used to pay for services under the waiver, with consideration of certain factors. The bill would make related legislative findings.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all of the following:(a) Californias Home and Community-Based Alternatives (HCBA) Waiver, within the Medi-Cal program, provides important services to allow individuals with significant medical needs to receive care in their own homes or community settings, preventing the need for institutionalization in a nursing home or other institutional setting.(b) Californias HCBA Waiver promotes independence, maintains quality of life, and allows people to stay connected with their loved ones and community.(c) Californias HCBA Waiver allows for customized care plans tailored to each persons specific needs, including medical, personal care, and community support services, while promoting culturally competent care.(d) In many cases, providing care in the home through the waiver can be more cost effective than institutional care.(e) The State Department of Health Care Services has outlined a plan to integrate certain HCBA Waiver services into Medi-Cal managed care plans by 2028.(f) The Home and Community-Based Services (HCBS) programs that the department is considering carving into managed care include the Assisted Living Waiver (ALW), the HCBA Waiver, the Multipurpose Senior Services Program (MSSP), and the Medi-Cal Waiver Program (MCWP).(g) These waivers are currently serving nearly 35,000 Californians, with thousands more on waiting lists. Disabled older adults and individuals with disabilities enrolled in these HCBS programs have very complex care needs and are at high risk of institutionalization if they experience disruption in the critical support that these programs provide.(h) The 2024 HCBS needs and gaps analysis, as released by Governor Newsoms administration, does not include an analysis of rates.(i) Stagnant rates in the HCBA Waiver, which have not been raised since the programs inception in 2007, have led to a shrinking pool of providers, which in turn impacts availability and quality of services and participant choice. Habilitation rates, case management, respite, and personal care services have been stagnant for 17 years. For example, transitional case management (TCM), an HCBA Waiver service to transition someone home from an institution, was reimbursed in 2006 at $45.43 per hour. The 2024 rate for this service was still $45.43 per hour. Likewise, respite care per day for children at the pediatric nursing facility level was reimbursed in 2006 at $172 per day. The 2024 rate for this service was still $172 per day.(j) Inadequate HCBA Waiver reimbursement rates also make it difficult to ensure a sufficient workforce, to keep pace with the cost of living, and to keep up with inflation.(k) Taken as a whole, the failure to adequately reimburse HCBS programs creates a scarcity of providers, keeps people unnecessarily institutionalized, and disproportionately impacts communities of color.(l) Therefore, in order to ensure that there are adequate services and providers for the HCBA Waiver prior to the transition to Medi-Cal managed care plans, the Legislature is prompted to ensure that rates are adequate.SEC. 2. Section 14132.991 of the Welfare and Institutions Code is amended to read:14132.991. (a) When renewing the Nursing Facility/Acute Hospital Transition and Diversion administering the Home and Community-Based Alternatives (HCBA) Waiver, as authorized by subdivision (t) of Section 14132, the director may take the following actions, among others:(1) Contract with one or more organizations, referred to as a care management contractor, qualified to provide or arrange for delivery of care management and waiver services, including, but not limited to, personal needs assessments, and arranging for services available through public and private agencies, including services available under the waiver, for the waiver participants and applicants. The contract with the care management contractor, the care management contract, may require the care management contractor or their subcontractor, or both, to do all of the following, among other things:(A) Provide, arrange for, or subcontract with community-based providers for the provision of, waiver services to waiver participants.(B) Recognize program and service linkages, coordinate service delivery mechanisms and promote prevention of avoidable institutional placement, emergency room visits or inpatient hospital stays, or both, and coordination between health, social, and long-term services and supports by person-centered care planning.(C) Provide or arrange for, care management to each waiver participant to stabilize their health care, and provide access to home- and community-based services, including managing and anticipating episodes of medical crisis in which transitional care management is needed.(D) Carry out the waivers person-centered model of care, pursuant to the requirements set forth in Sections 441.720, 441.725, and 441.540 of Title 42 of the Code of Federal Regulations.(E) Submit all information and reports required by the department, including, but not limited to, annual financial statements in the timeframe specified by the department.(F) Pay any providers of waiver services who are not directly employed by or contracted with the care management contractor no less than the rates specified in the waiver or the departments fee schedule, whichever is less, for the provider type.(G) Bill the department, at the rate established by the state, for all services the care management contractor provides to waiver participants, directly or through a subcontractor or other direct service provider.(H) Comply with the requirements of the waiver, including any other requirements established by the department regarding waiver operations, including, but not limited to, requirements regarding care coordination. These requirements may be set forth in the care management contract, care management manual, all-county letters, plan letters, plan or provider bulletins or policy letters, or similar instructions.(2) Propose that the waiver provide for achievement of annual cost neutrality in the aggregate to allow enrollment and authorization of waiver services based on the medical necessity of the waiver services on a case-by-case basis.(3)Expand the number of waiver slots up to 5,000 additional slots, the director may seek federal approval to amend the waiver to add additional slots or make changes to the waiver model with approval from the Department of Finance.(4)(3) Require care management contractors to enroll at least 60 percent of all total annual enrollments from either of the following:(A) Hospital, nursing facility, or other institutional settings assisting members with transitions back to the home or community, or both, setting.(B) Individuals who had been continuously receiving in home care services, of the type offered under the waiver, under the Early and Periodic Screening, Diagnosis, and Treatment State Plan benefit, California Children Services or Pediatric Palliative Care programs for children, for at least the prior three months but have at the time of transition exceeded the age limit for that benefit.(5)(4) If the director determines that the care management contractor is not fiscally solvent, or is in danger of becoming fiscally insolvent, the director has the option to immediately terminate the contract with the care management contractor.(6)(5) Terminate or refuse to renew, in whole or in part, a care management contract when the director determines that the action is necessary to protect the health of the beneficiaries or funds appropriated to the Medi-Cal program.(b)Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of all-county letters, plan letters, plan or provider bulletins, policy letters, or other similar instructions, without taking regulatory action.(b) All eligible individuals who apply for the HCBA Waiver shall be enrolled. The department shall seek all necessary amendments to the HCBA Waiver to accommodate those individuals.(c) By March 1, 2026, the department shall seek any necessary amendments to the HCBA Waiver to ensure that there is sufficient capacity to enroll all eligible individuals who apply for the HCBA Waiver and who are currently on a waiting list for the waiver. The department shall continue to monitor the capacity of the HCBA Waiver and shall expand capacity through any necessary HCBA Waiver amendments at least 180 calendar days prior to reaching capacity, based on enrollment trends, to ensure that no individual is placed on a waiting list for the HCBA Waiver.(c)(d) In order to achieve maximum cost savings savings, the Legislature hereby determines that an expedited contract process for contracts under this section is necessary. Therefore, contracts entered into or amended pursuant to this section shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, and Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code and shall be exempt from the review or approval of any division of the Department of General Services.(d)The department shall implement this section only to the extent it can demonstrate federal cost neutrality as required under the terms of the waiver, and only to the extent any necessary federal approvals are obtained and federal financial participation is available.(e) (1) This section shall be implemented only to the extent that any necessary federal approvals have been obtained and that federal financial participation is available.(2) The department may seek amendments to the HCBA Waiver or take other action as necessary to implement this section.(3) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of letters or other similar instructions, without taking regulatory action.SEC. 3. Section 14132.992 is added to the Welfare and Institutions Code, immediately following Section 14132.991, to read:14132.992. (a) By March 1, 2026, the department shall submit a rate study to the appropriate fiscal and policy committees of the Legislature, in accordance with Section 9795 of the Government Code, addressing the sustainability, quality, and transparency of rates for the Home and Community-Based Alternatives (HCBA) Waiver, as described in Section 14132.991. The department shall consult with stakeholders in developing the study.(b) The study shall include, but not be limited to, an assessment of the effectiveness of the methods used to pay for services under the HCBA Waiver. This assessment shall include consideration of all of the following factors for each category of service provider:(1) Whether the current method of ratesetting for a service provides an adequate supply of providers, including, but not limited to, whether there is a sufficient supply of providers to enable participants throughout the state to have a choice of providers, depending on the nature of the service, and whether there are waiting times for services.(2) Whether the current method of ratesetting for a service provides for an adequate workforce and keeps pace with inflation.(3) A comparison of the estimated fiscal effects of alternative rate methodologies for each service.(4) Regional variations in service costs.(5) Options for addressing rate increases in the future, including, but not limited to, linking rate increases to rate increases for skilled nursing facilities, the Sacramento Consumer Price Index, or the Medical Consumer Price Index.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. The Legislature finds and declares all of the following:(a) Californias Home and Community-Based Alternatives (HCBA) Waiver, within the Medi-Cal program, provides important services to allow individuals with significant medical needs to receive care in their own homes or community settings, preventing the need for institutionalization in a nursing home or other institutional setting.(b) Californias HCBA Waiver promotes independence, maintains quality of life, and allows people to stay connected with their loved ones and community.(c) Californias HCBA Waiver allows for customized care plans tailored to each persons specific needs, including medical, personal care, and community support services, while promoting culturally competent care.(d) In many cases, providing care in the home through the waiver can be more cost effective than institutional care.(e) The State Department of Health Care Services has outlined a plan to integrate certain HCBA Waiver services into Medi-Cal managed care plans by 2028.(f) The Home and Community-Based Services (HCBS) programs that the department is considering carving into managed care include the Assisted Living Waiver (ALW), the HCBA Waiver, the Multipurpose Senior Services Program (MSSP), and the Medi-Cal Waiver Program (MCWP).(g) These waivers are currently serving nearly 35,000 Californians, with thousands more on waiting lists. Disabled older adults and individuals with disabilities enrolled in these HCBS programs have very complex care needs and are at high risk of institutionalization if they experience disruption in the critical support that these programs provide.(h) The 2024 HCBS needs and gaps analysis, as released by Governor Newsoms administration, does not include an analysis of rates.(i) Stagnant rates in the HCBA Waiver, which have not been raised since the programs inception in 2007, have led to a shrinking pool of providers, which in turn impacts availability and quality of services and participant choice. Habilitation rates, case management, respite, and personal care services have been stagnant for 17 years. For example, transitional case management (TCM), an HCBA Waiver service to transition someone home from an institution, was reimbursed in 2006 at $45.43 per hour. The 2024 rate for this service was still $45.43 per hour. Likewise, respite care per day for children at the pediatric nursing facility level was reimbursed in 2006 at $172 per day. The 2024 rate for this service was still $172 per day.(j) Inadequate HCBA Waiver reimbursement rates also make it difficult to ensure a sufficient workforce, to keep pace with the cost of living, and to keep up with inflation.(k) Taken as a whole, the failure to adequately reimburse HCBS programs creates a scarcity of providers, keeps people unnecessarily institutionalized, and disproportionately impacts communities of color.(l) Therefore, in order to ensure that there are adequate services and providers for the HCBA Waiver prior to the transition to Medi-Cal managed care plans, the Legislature is prompted to ensure that rates are adequate.
SECTION 1. The Legislature finds and declares all of the following:(a) Californias Home and Community-Based Alternatives (HCBA) Waiver, within the Medi-Cal program, provides important services to allow individuals with significant medical needs to receive care in their own homes or community settings, preventing the need for institutionalization in a nursing home or other institutional setting.(b) Californias HCBA Waiver promotes independence, maintains quality of life, and allows people to stay connected with their loved ones and community.(c) Californias HCBA Waiver allows for customized care plans tailored to each persons specific needs, including medical, personal care, and community support services, while promoting culturally competent care.(d) In many cases, providing care in the home through the waiver can be more cost effective than institutional care.(e) The State Department of Health Care Services has outlined a plan to integrate certain HCBA Waiver services into Medi-Cal managed care plans by 2028.(f) The Home and Community-Based Services (HCBS) programs that the department is considering carving into managed care include the Assisted Living Waiver (ALW), the HCBA Waiver, the Multipurpose Senior Services Program (MSSP), and the Medi-Cal Waiver Program (MCWP).(g) These waivers are currently serving nearly 35,000 Californians, with thousands more on waiting lists. Disabled older adults and individuals with disabilities enrolled in these HCBS programs have very complex care needs and are at high risk of institutionalization if they experience disruption in the critical support that these programs provide.(h) The 2024 HCBS needs and gaps analysis, as released by Governor Newsoms administration, does not include an analysis of rates.(i) Stagnant rates in the HCBA Waiver, which have not been raised since the programs inception in 2007, have led to a shrinking pool of providers, which in turn impacts availability and quality of services and participant choice. Habilitation rates, case management, respite, and personal care services have been stagnant for 17 years. For example, transitional case management (TCM), an HCBA Waiver service to transition someone home from an institution, was reimbursed in 2006 at $45.43 per hour. The 2024 rate for this service was still $45.43 per hour. Likewise, respite care per day for children at the pediatric nursing facility level was reimbursed in 2006 at $172 per day. The 2024 rate for this service was still $172 per day.(j) Inadequate HCBA Waiver reimbursement rates also make it difficult to ensure a sufficient workforce, to keep pace with the cost of living, and to keep up with inflation.(k) Taken as a whole, the failure to adequately reimburse HCBS programs creates a scarcity of providers, keeps people unnecessarily institutionalized, and disproportionately impacts communities of color.(l) Therefore, in order to ensure that there are adequate services and providers for the HCBA Waiver prior to the transition to Medi-Cal managed care plans, the Legislature is prompted to ensure that rates are adequate.
SECTION 1. The Legislature finds and declares all of the following:
### SECTION 1.
(a) Californias Home and Community-Based Alternatives (HCBA) Waiver, within the Medi-Cal program, provides important services to allow individuals with significant medical needs to receive care in their own homes or community settings, preventing the need for institutionalization in a nursing home or other institutional setting.
(b) Californias HCBA Waiver promotes independence, maintains quality of life, and allows people to stay connected with their loved ones and community.
(c) Californias HCBA Waiver allows for customized care plans tailored to each persons specific needs, including medical, personal care, and community support services, while promoting culturally competent care.
(d) In many cases, providing care in the home through the waiver can be more cost effective than institutional care.
(e) The State Department of Health Care Services has outlined a plan to integrate certain HCBA Waiver services into Medi-Cal managed care plans by 2028.
(f) The Home and Community-Based Services (HCBS) programs that the department is considering carving into managed care include the Assisted Living Waiver (ALW), the HCBA Waiver, the Multipurpose Senior Services Program (MSSP), and the Medi-Cal Waiver Program (MCWP).
(g) These waivers are currently serving nearly 35,000 Californians, with thousands more on waiting lists. Disabled older adults and individuals with disabilities enrolled in these HCBS programs have very complex care needs and are at high risk of institutionalization if they experience disruption in the critical support that these programs provide.
(h) The 2024 HCBS needs and gaps analysis, as released by Governor Newsoms administration, does not include an analysis of rates.
(i) Stagnant rates in the HCBA Waiver, which have not been raised since the programs inception in 2007, have led to a shrinking pool of providers, which in turn impacts availability and quality of services and participant choice. Habilitation rates, case management, respite, and personal care services have been stagnant for 17 years. For example, transitional case management (TCM), an HCBA Waiver service to transition someone home from an institution, was reimbursed in 2006 at $45.43 per hour. The 2024 rate for this service was still $45.43 per hour. Likewise, respite care per day for children at the pediatric nursing facility level was reimbursed in 2006 at $172 per day. The 2024 rate for this service was still $172 per day.
(j) Inadequate HCBA Waiver reimbursement rates also make it difficult to ensure a sufficient workforce, to keep pace with the cost of living, and to keep up with inflation.
(k) Taken as a whole, the failure to adequately reimburse HCBS programs creates a scarcity of providers, keeps people unnecessarily institutionalized, and disproportionately impacts communities of color.
(l) Therefore, in order to ensure that there are adequate services and providers for the HCBA Waiver prior to the transition to Medi-Cal managed care plans, the Legislature is prompted to ensure that rates are adequate.
SEC. 2. Section 14132.991 of the Welfare and Institutions Code is amended to read:14132.991. (a) When renewing the Nursing Facility/Acute Hospital Transition and Diversion administering the Home and Community-Based Alternatives (HCBA) Waiver, as authorized by subdivision (t) of Section 14132, the director may take the following actions, among others:(1) Contract with one or more organizations, referred to as a care management contractor, qualified to provide or arrange for delivery of care management and waiver services, including, but not limited to, personal needs assessments, and arranging for services available through public and private agencies, including services available under the waiver, for the waiver participants and applicants. The contract with the care management contractor, the care management contract, may require the care management contractor or their subcontractor, or both, to do all of the following, among other things:(A) Provide, arrange for, or subcontract with community-based providers for the provision of, waiver services to waiver participants.(B) Recognize program and service linkages, coordinate service delivery mechanisms and promote prevention of avoidable institutional placement, emergency room visits or inpatient hospital stays, or both, and coordination between health, social, and long-term services and supports by person-centered care planning.(C) Provide or arrange for, care management to each waiver participant to stabilize their health care, and provide access to home- and community-based services, including managing and anticipating episodes of medical crisis in which transitional care management is needed.(D) Carry out the waivers person-centered model of care, pursuant to the requirements set forth in Sections 441.720, 441.725, and 441.540 of Title 42 of the Code of Federal Regulations.(E) Submit all information and reports required by the department, including, but not limited to, annual financial statements in the timeframe specified by the department.(F) Pay any providers of waiver services who are not directly employed by or contracted with the care management contractor no less than the rates specified in the waiver or the departments fee schedule, whichever is less, for the provider type.(G) Bill the department, at the rate established by the state, for all services the care management contractor provides to waiver participants, directly or through a subcontractor or other direct service provider.(H) Comply with the requirements of the waiver, including any other requirements established by the department regarding waiver operations, including, but not limited to, requirements regarding care coordination. These requirements may be set forth in the care management contract, care management manual, all-county letters, plan letters, plan or provider bulletins or policy letters, or similar instructions.(2) Propose that the waiver provide for achievement of annual cost neutrality in the aggregate to allow enrollment and authorization of waiver services based on the medical necessity of the waiver services on a case-by-case basis.(3)Expand the number of waiver slots up to 5,000 additional slots, the director may seek federal approval to amend the waiver to add additional slots or make changes to the waiver model with approval from the Department of Finance.(4)(3) Require care management contractors to enroll at least 60 percent of all total annual enrollments from either of the following:(A) Hospital, nursing facility, or other institutional settings assisting members with transitions back to the home or community, or both, setting.(B) Individuals who had been continuously receiving in home care services, of the type offered under the waiver, under the Early and Periodic Screening, Diagnosis, and Treatment State Plan benefit, California Children Services or Pediatric Palliative Care programs for children, for at least the prior three months but have at the time of transition exceeded the age limit for that benefit.(5)(4) If the director determines that the care management contractor is not fiscally solvent, or is in danger of becoming fiscally insolvent, the director has the option to immediately terminate the contract with the care management contractor.(6)(5) Terminate or refuse to renew, in whole or in part, a care management contract when the director determines that the action is necessary to protect the health of the beneficiaries or funds appropriated to the Medi-Cal program.(b)Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of all-county letters, plan letters, plan or provider bulletins, policy letters, or other similar instructions, without taking regulatory action.(b) All eligible individuals who apply for the HCBA Waiver shall be enrolled. The department shall seek all necessary amendments to the HCBA Waiver to accommodate those individuals.(c) By March 1, 2026, the department shall seek any necessary amendments to the HCBA Waiver to ensure that there is sufficient capacity to enroll all eligible individuals who apply for the HCBA Waiver and who are currently on a waiting list for the waiver. The department shall continue to monitor the capacity of the HCBA Waiver and shall expand capacity through any necessary HCBA Waiver amendments at least 180 calendar days prior to reaching capacity, based on enrollment trends, to ensure that no individual is placed on a waiting list for the HCBA Waiver.(c)(d) In order to achieve maximum cost savings savings, the Legislature hereby determines that an expedited contract process for contracts under this section is necessary. Therefore, contracts entered into or amended pursuant to this section shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, and Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code and shall be exempt from the review or approval of any division of the Department of General Services.(d)The department shall implement this section only to the extent it can demonstrate federal cost neutrality as required under the terms of the waiver, and only to the extent any necessary federal approvals are obtained and federal financial participation is available.(e) (1) This section shall be implemented only to the extent that any necessary federal approvals have been obtained and that federal financial participation is available.(2) The department may seek amendments to the HCBA Waiver or take other action as necessary to implement this section.(3) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of letters or other similar instructions, without taking regulatory action.
SEC. 2. Section 14132.991 of the Welfare and Institutions Code is amended to read:
### SEC. 2.
14132.991. (a) When renewing the Nursing Facility/Acute Hospital Transition and Diversion administering the Home and Community-Based Alternatives (HCBA) Waiver, as authorized by subdivision (t) of Section 14132, the director may take the following actions, among others:(1) Contract with one or more organizations, referred to as a care management contractor, qualified to provide or arrange for delivery of care management and waiver services, including, but not limited to, personal needs assessments, and arranging for services available through public and private agencies, including services available under the waiver, for the waiver participants and applicants. The contract with the care management contractor, the care management contract, may require the care management contractor or their subcontractor, or both, to do all of the following, among other things:(A) Provide, arrange for, or subcontract with community-based providers for the provision of, waiver services to waiver participants.(B) Recognize program and service linkages, coordinate service delivery mechanisms and promote prevention of avoidable institutional placement, emergency room visits or inpatient hospital stays, or both, and coordination between health, social, and long-term services and supports by person-centered care planning.(C) Provide or arrange for, care management to each waiver participant to stabilize their health care, and provide access to home- and community-based services, including managing and anticipating episodes of medical crisis in which transitional care management is needed.(D) Carry out the waivers person-centered model of care, pursuant to the requirements set forth in Sections 441.720, 441.725, and 441.540 of Title 42 of the Code of Federal Regulations.(E) Submit all information and reports required by the department, including, but not limited to, annual financial statements in the timeframe specified by the department.(F) Pay any providers of waiver services who are not directly employed by or contracted with the care management contractor no less than the rates specified in the waiver or the departments fee schedule, whichever is less, for the provider type.(G) Bill the department, at the rate established by the state, for all services the care management contractor provides to waiver participants, directly or through a subcontractor or other direct service provider.(H) Comply with the requirements of the waiver, including any other requirements established by the department regarding waiver operations, including, but not limited to, requirements regarding care coordination. These requirements may be set forth in the care management contract, care management manual, all-county letters, plan letters, plan or provider bulletins or policy letters, or similar instructions.(2) Propose that the waiver provide for achievement of annual cost neutrality in the aggregate to allow enrollment and authorization of waiver services based on the medical necessity of the waiver services on a case-by-case basis.(3)Expand the number of waiver slots up to 5,000 additional slots, the director may seek federal approval to amend the waiver to add additional slots or make changes to the waiver model with approval from the Department of Finance.(4)(3) Require care management contractors to enroll at least 60 percent of all total annual enrollments from either of the following:(A) Hospital, nursing facility, or other institutional settings assisting members with transitions back to the home or community, or both, setting.(B) Individuals who had been continuously receiving in home care services, of the type offered under the waiver, under the Early and Periodic Screening, Diagnosis, and Treatment State Plan benefit, California Children Services or Pediatric Palliative Care programs for children, for at least the prior three months but have at the time of transition exceeded the age limit for that benefit.(5)(4) If the director determines that the care management contractor is not fiscally solvent, or is in danger of becoming fiscally insolvent, the director has the option to immediately terminate the contract with the care management contractor.(6)(5) Terminate or refuse to renew, in whole or in part, a care management contract when the director determines that the action is necessary to protect the health of the beneficiaries or funds appropriated to the Medi-Cal program.(b)Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of all-county letters, plan letters, plan or provider bulletins, policy letters, or other similar instructions, without taking regulatory action.(b) All eligible individuals who apply for the HCBA Waiver shall be enrolled. The department shall seek all necessary amendments to the HCBA Waiver to accommodate those individuals.(c) By March 1, 2026, the department shall seek any necessary amendments to the HCBA Waiver to ensure that there is sufficient capacity to enroll all eligible individuals who apply for the HCBA Waiver and who are currently on a waiting list for the waiver. The department shall continue to monitor the capacity of the HCBA Waiver and shall expand capacity through any necessary HCBA Waiver amendments at least 180 calendar days prior to reaching capacity, based on enrollment trends, to ensure that no individual is placed on a waiting list for the HCBA Waiver.(c)(d) In order to achieve maximum cost savings savings, the Legislature hereby determines that an expedited contract process for contracts under this section is necessary. Therefore, contracts entered into or amended pursuant to this section shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, and Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code and shall be exempt from the review or approval of any division of the Department of General Services.(d)The department shall implement this section only to the extent it can demonstrate federal cost neutrality as required under the terms of the waiver, and only to the extent any necessary federal approvals are obtained and federal financial participation is available.(e) (1) This section shall be implemented only to the extent that any necessary federal approvals have been obtained and that federal financial participation is available.(2) The department may seek amendments to the HCBA Waiver or take other action as necessary to implement this section.(3) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of letters or other similar instructions, without taking regulatory action.
14132.991. (a) When renewing the Nursing Facility/Acute Hospital Transition and Diversion administering the Home and Community-Based Alternatives (HCBA) Waiver, as authorized by subdivision (t) of Section 14132, the director may take the following actions, among others:(1) Contract with one or more organizations, referred to as a care management contractor, qualified to provide or arrange for delivery of care management and waiver services, including, but not limited to, personal needs assessments, and arranging for services available through public and private agencies, including services available under the waiver, for the waiver participants and applicants. The contract with the care management contractor, the care management contract, may require the care management contractor or their subcontractor, or both, to do all of the following, among other things:(A) Provide, arrange for, or subcontract with community-based providers for the provision of, waiver services to waiver participants.(B) Recognize program and service linkages, coordinate service delivery mechanisms and promote prevention of avoidable institutional placement, emergency room visits or inpatient hospital stays, or both, and coordination between health, social, and long-term services and supports by person-centered care planning.(C) Provide or arrange for, care management to each waiver participant to stabilize their health care, and provide access to home- and community-based services, including managing and anticipating episodes of medical crisis in which transitional care management is needed.(D) Carry out the waivers person-centered model of care, pursuant to the requirements set forth in Sections 441.720, 441.725, and 441.540 of Title 42 of the Code of Federal Regulations.(E) Submit all information and reports required by the department, including, but not limited to, annual financial statements in the timeframe specified by the department.(F) Pay any providers of waiver services who are not directly employed by or contracted with the care management contractor no less than the rates specified in the waiver or the departments fee schedule, whichever is less, for the provider type.(G) Bill the department, at the rate established by the state, for all services the care management contractor provides to waiver participants, directly or through a subcontractor or other direct service provider.(H) Comply with the requirements of the waiver, including any other requirements established by the department regarding waiver operations, including, but not limited to, requirements regarding care coordination. These requirements may be set forth in the care management contract, care management manual, all-county letters, plan letters, plan or provider bulletins or policy letters, or similar instructions.(2) Propose that the waiver provide for achievement of annual cost neutrality in the aggregate to allow enrollment and authorization of waiver services based on the medical necessity of the waiver services on a case-by-case basis.(3)Expand the number of waiver slots up to 5,000 additional slots, the director may seek federal approval to amend the waiver to add additional slots or make changes to the waiver model with approval from the Department of Finance.(4)(3) Require care management contractors to enroll at least 60 percent of all total annual enrollments from either of the following:(A) Hospital, nursing facility, or other institutional settings assisting members with transitions back to the home or community, or both, setting.(B) Individuals who had been continuously receiving in home care services, of the type offered under the waiver, under the Early and Periodic Screening, Diagnosis, and Treatment State Plan benefit, California Children Services or Pediatric Palliative Care programs for children, for at least the prior three months but have at the time of transition exceeded the age limit for that benefit.(5)(4) If the director determines that the care management contractor is not fiscally solvent, or is in danger of becoming fiscally insolvent, the director has the option to immediately terminate the contract with the care management contractor.(6)(5) Terminate or refuse to renew, in whole or in part, a care management contract when the director determines that the action is necessary to protect the health of the beneficiaries or funds appropriated to the Medi-Cal program.(b)Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of all-county letters, plan letters, plan or provider bulletins, policy letters, or other similar instructions, without taking regulatory action.(b) All eligible individuals who apply for the HCBA Waiver shall be enrolled. The department shall seek all necessary amendments to the HCBA Waiver to accommodate those individuals.(c) By March 1, 2026, the department shall seek any necessary amendments to the HCBA Waiver to ensure that there is sufficient capacity to enroll all eligible individuals who apply for the HCBA Waiver and who are currently on a waiting list for the waiver. The department shall continue to monitor the capacity of the HCBA Waiver and shall expand capacity through any necessary HCBA Waiver amendments at least 180 calendar days prior to reaching capacity, based on enrollment trends, to ensure that no individual is placed on a waiting list for the HCBA Waiver.(c)(d) In order to achieve maximum cost savings savings, the Legislature hereby determines that an expedited contract process for contracts under this section is necessary. Therefore, contracts entered into or amended pursuant to this section shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, and Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code and shall be exempt from the review or approval of any division of the Department of General Services.(d)The department shall implement this section only to the extent it can demonstrate federal cost neutrality as required under the terms of the waiver, and only to the extent any necessary federal approvals are obtained and federal financial participation is available.(e) (1) This section shall be implemented only to the extent that any necessary federal approvals have been obtained and that federal financial participation is available.(2) The department may seek amendments to the HCBA Waiver or take other action as necessary to implement this section.(3) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of letters or other similar instructions, without taking regulatory action.
14132.991. (a) When renewing the Nursing Facility/Acute Hospital Transition and Diversion administering the Home and Community-Based Alternatives (HCBA) Waiver, as authorized by subdivision (t) of Section 14132, the director may take the following actions, among others:(1) Contract with one or more organizations, referred to as a care management contractor, qualified to provide or arrange for delivery of care management and waiver services, including, but not limited to, personal needs assessments, and arranging for services available through public and private agencies, including services available under the waiver, for the waiver participants and applicants. The contract with the care management contractor, the care management contract, may require the care management contractor or their subcontractor, or both, to do all of the following, among other things:(A) Provide, arrange for, or subcontract with community-based providers for the provision of, waiver services to waiver participants.(B) Recognize program and service linkages, coordinate service delivery mechanisms and promote prevention of avoidable institutional placement, emergency room visits or inpatient hospital stays, or both, and coordination between health, social, and long-term services and supports by person-centered care planning.(C) Provide or arrange for, care management to each waiver participant to stabilize their health care, and provide access to home- and community-based services, including managing and anticipating episodes of medical crisis in which transitional care management is needed.(D) Carry out the waivers person-centered model of care, pursuant to the requirements set forth in Sections 441.720, 441.725, and 441.540 of Title 42 of the Code of Federal Regulations.(E) Submit all information and reports required by the department, including, but not limited to, annual financial statements in the timeframe specified by the department.(F) Pay any providers of waiver services who are not directly employed by or contracted with the care management contractor no less than the rates specified in the waiver or the departments fee schedule, whichever is less, for the provider type.(G) Bill the department, at the rate established by the state, for all services the care management contractor provides to waiver participants, directly or through a subcontractor or other direct service provider.(H) Comply with the requirements of the waiver, including any other requirements established by the department regarding waiver operations, including, but not limited to, requirements regarding care coordination. These requirements may be set forth in the care management contract, care management manual, all-county letters, plan letters, plan or provider bulletins or policy letters, or similar instructions.(2) Propose that the waiver provide for achievement of annual cost neutrality in the aggregate to allow enrollment and authorization of waiver services based on the medical necessity of the waiver services on a case-by-case basis.(3)Expand the number of waiver slots up to 5,000 additional slots, the director may seek federal approval to amend the waiver to add additional slots or make changes to the waiver model with approval from the Department of Finance.(4)(3) Require care management contractors to enroll at least 60 percent of all total annual enrollments from either of the following:(A) Hospital, nursing facility, or other institutional settings assisting members with transitions back to the home or community, or both, setting.(B) Individuals who had been continuously receiving in home care services, of the type offered under the waiver, under the Early and Periodic Screening, Diagnosis, and Treatment State Plan benefit, California Children Services or Pediatric Palliative Care programs for children, for at least the prior three months but have at the time of transition exceeded the age limit for that benefit.(5)(4) If the director determines that the care management contractor is not fiscally solvent, or is in danger of becoming fiscally insolvent, the director has the option to immediately terminate the contract with the care management contractor.(6)(5) Terminate or refuse to renew, in whole or in part, a care management contract when the director determines that the action is necessary to protect the health of the beneficiaries or funds appropriated to the Medi-Cal program.(b)Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of all-county letters, plan letters, plan or provider bulletins, policy letters, or other similar instructions, without taking regulatory action.(b) All eligible individuals who apply for the HCBA Waiver shall be enrolled. The department shall seek all necessary amendments to the HCBA Waiver to accommodate those individuals.(c) By March 1, 2026, the department shall seek any necessary amendments to the HCBA Waiver to ensure that there is sufficient capacity to enroll all eligible individuals who apply for the HCBA Waiver and who are currently on a waiting list for the waiver. The department shall continue to monitor the capacity of the HCBA Waiver and shall expand capacity through any necessary HCBA Waiver amendments at least 180 calendar days prior to reaching capacity, based on enrollment trends, to ensure that no individual is placed on a waiting list for the HCBA Waiver.(c)(d) In order to achieve maximum cost savings savings, the Legislature hereby determines that an expedited contract process for contracts under this section is necessary. Therefore, contracts entered into or amended pursuant to this section shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, and Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code and shall be exempt from the review or approval of any division of the Department of General Services.(d)The department shall implement this section only to the extent it can demonstrate federal cost neutrality as required under the terms of the waiver, and only to the extent any necessary federal approvals are obtained and federal financial participation is available.(e) (1) This section shall be implemented only to the extent that any necessary federal approvals have been obtained and that federal financial participation is available.(2) The department may seek amendments to the HCBA Waiver or take other action as necessary to implement this section.(3) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of letters or other similar instructions, without taking regulatory action.
14132.991. (a) When renewing the Nursing Facility/Acute Hospital Transition and Diversion administering the Home and Community-Based Alternatives (HCBA) Waiver, as authorized by subdivision (t) of Section 14132, the director may take the following actions, among others:
(1) Contract with one or more organizations, referred to as a care management contractor, qualified to provide or arrange for delivery of care management and waiver services, including, but not limited to, personal needs assessments, and arranging for services available through public and private agencies, including services available under the waiver, for the waiver participants and applicants. The contract with the care management contractor, the care management contract, may require the care management contractor or their subcontractor, or both, to do all of the following, among other things:
(A) Provide, arrange for, or subcontract with community-based providers for the provision of, waiver services to waiver participants.
(B) Recognize program and service linkages, coordinate service delivery mechanisms and promote prevention of avoidable institutional placement, emergency room visits or inpatient hospital stays, or both, and coordination between health, social, and long-term services and supports by person-centered care planning.
(C) Provide or arrange for, care management to each waiver participant to stabilize their health care, and provide access to home- and community-based services, including managing and anticipating episodes of medical crisis in which transitional care management is needed.
(D) Carry out the waivers person-centered model of care, pursuant to the requirements set forth in Sections 441.720, 441.725, and 441.540 of Title 42 of the Code of Federal Regulations.
(E) Submit all information and reports required by the department, including, but not limited to, annual financial statements in the timeframe specified by the department.
(F) Pay any providers of waiver services who are not directly employed by or contracted with the care management contractor no less than the rates specified in the waiver or the departments fee schedule, whichever is less, for the provider type.
(G) Bill the department, at the rate established by the state, for all services the care management contractor provides to waiver participants, directly or through a subcontractor or other direct service provider.
(H) Comply with the requirements of the waiver, including any other requirements established by the department regarding waiver operations, including, but not limited to, requirements regarding care coordination. These requirements may be set forth in the care management contract, care management manual, all-county letters, plan letters, plan or provider bulletins or policy letters, or similar instructions.
(2) Propose that the waiver provide for achievement of annual cost neutrality in the aggregate to allow enrollment and authorization of waiver services based on the medical necessity of the waiver services on a case-by-case basis.
(3)Expand the number of waiver slots up to 5,000 additional slots, the director may seek federal approval to amend the waiver to add additional slots or make changes to the waiver model with approval from the Department of Finance.
(4)
(3) Require care management contractors to enroll at least 60 percent of all total annual enrollments from either of the following:
(A) Hospital, nursing facility, or other institutional settings assisting members with transitions back to the home or community, or both, setting.
(B) Individuals who had been continuously receiving in home care services, of the type offered under the waiver, under the Early and Periodic Screening, Diagnosis, and Treatment State Plan benefit, California Children Services or Pediatric Palliative Care programs for children, for at least the prior three months but have at the time of transition exceeded the age limit for that benefit.
(5)
(4) If the director determines that the care management contractor is not fiscally solvent, or is in danger of becoming fiscally insolvent, the director has the option to immediately terminate the contract with the care management contractor.
(6)
(5) Terminate or refuse to renew, in whole or in part, a care management contract when the director determines that the action is necessary to protect the health of the beneficiaries or funds appropriated to the Medi-Cal program.
(b)Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of all-county letters, plan letters, plan or provider bulletins, policy letters, or other similar instructions, without taking regulatory action.
(b) All eligible individuals who apply for the HCBA Waiver shall be enrolled. The department shall seek all necessary amendments to the HCBA Waiver to accommodate those individuals.
(c) By March 1, 2026, the department shall seek any necessary amendments to the HCBA Waiver to ensure that there is sufficient capacity to enroll all eligible individuals who apply for the HCBA Waiver and who are currently on a waiting list for the waiver. The department shall continue to monitor the capacity of the HCBA Waiver and shall expand capacity through any necessary HCBA Waiver amendments at least 180 calendar days prior to reaching capacity, based on enrollment trends, to ensure that no individual is placed on a waiting list for the HCBA Waiver.
(c)
(d) In order to achieve maximum cost savings savings, the Legislature hereby determines that an expedited contract process for contracts under this section is necessary. Therefore, contracts entered into or amended pursuant to this section shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, and Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code and shall be exempt from the review or approval of any division of the Department of General Services.
(d)The department shall implement this section only to the extent it can demonstrate federal cost neutrality as required under the terms of the waiver, and only to the extent any necessary federal approvals are obtained and federal financial participation is available.
(e) (1) This section shall be implemented only to the extent that any necessary federal approvals have been obtained and that federal financial participation is available.
(2) The department may seek amendments to the HCBA Waiver or take other action as necessary to implement this section.
(3) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of letters or other similar instructions, without taking regulatory action.
SEC. 3. Section 14132.992 is added to the Welfare and Institutions Code, immediately following Section 14132.991, to read:14132.992. (a) By March 1, 2026, the department shall submit a rate study to the appropriate fiscal and policy committees of the Legislature, in accordance with Section 9795 of the Government Code, addressing the sustainability, quality, and transparency of rates for the Home and Community-Based Alternatives (HCBA) Waiver, as described in Section 14132.991. The department shall consult with stakeholders in developing the study.(b) The study shall include, but not be limited to, an assessment of the effectiveness of the methods used to pay for services under the HCBA Waiver. This assessment shall include consideration of all of the following factors for each category of service provider:(1) Whether the current method of ratesetting for a service provides an adequate supply of providers, including, but not limited to, whether there is a sufficient supply of providers to enable participants throughout the state to have a choice of providers, depending on the nature of the service, and whether there are waiting times for services.(2) Whether the current method of ratesetting for a service provides for an adequate workforce and keeps pace with inflation.(3) A comparison of the estimated fiscal effects of alternative rate methodologies for each service.(4) Regional variations in service costs.(5) Options for addressing rate increases in the future, including, but not limited to, linking rate increases to rate increases for skilled nursing facilities, the Sacramento Consumer Price Index, or the Medical Consumer Price Index.
SEC. 3. Section 14132.992 is added to the Welfare and Institutions Code, immediately following Section 14132.991, to read:
### SEC. 3.
14132.992. (a) By March 1, 2026, the department shall submit a rate study to the appropriate fiscal and policy committees of the Legislature, in accordance with Section 9795 of the Government Code, addressing the sustainability, quality, and transparency of rates for the Home and Community-Based Alternatives (HCBA) Waiver, as described in Section 14132.991. The department shall consult with stakeholders in developing the study.(b) The study shall include, but not be limited to, an assessment of the effectiveness of the methods used to pay for services under the HCBA Waiver. This assessment shall include consideration of all of the following factors for each category of service provider:(1) Whether the current method of ratesetting for a service provides an adequate supply of providers, including, but not limited to, whether there is a sufficient supply of providers to enable participants throughout the state to have a choice of providers, depending on the nature of the service, and whether there are waiting times for services.(2) Whether the current method of ratesetting for a service provides for an adequate workforce and keeps pace with inflation.(3) A comparison of the estimated fiscal effects of alternative rate methodologies for each service.(4) Regional variations in service costs.(5) Options for addressing rate increases in the future, including, but not limited to, linking rate increases to rate increases for skilled nursing facilities, the Sacramento Consumer Price Index, or the Medical Consumer Price Index.
14132.992. (a) By March 1, 2026, the department shall submit a rate study to the appropriate fiscal and policy committees of the Legislature, in accordance with Section 9795 of the Government Code, addressing the sustainability, quality, and transparency of rates for the Home and Community-Based Alternatives (HCBA) Waiver, as described in Section 14132.991. The department shall consult with stakeholders in developing the study.(b) The study shall include, but not be limited to, an assessment of the effectiveness of the methods used to pay for services under the HCBA Waiver. This assessment shall include consideration of all of the following factors for each category of service provider:(1) Whether the current method of ratesetting for a service provides an adequate supply of providers, including, but not limited to, whether there is a sufficient supply of providers to enable participants throughout the state to have a choice of providers, depending on the nature of the service, and whether there are waiting times for services.(2) Whether the current method of ratesetting for a service provides for an adequate workforce and keeps pace with inflation.(3) A comparison of the estimated fiscal effects of alternative rate methodologies for each service.(4) Regional variations in service costs.(5) Options for addressing rate increases in the future, including, but not limited to, linking rate increases to rate increases for skilled nursing facilities, the Sacramento Consumer Price Index, or the Medical Consumer Price Index.
14132.992. (a) By March 1, 2026, the department shall submit a rate study to the appropriate fiscal and policy committees of the Legislature, in accordance with Section 9795 of the Government Code, addressing the sustainability, quality, and transparency of rates for the Home and Community-Based Alternatives (HCBA) Waiver, as described in Section 14132.991. The department shall consult with stakeholders in developing the study.(b) The study shall include, but not be limited to, an assessment of the effectiveness of the methods used to pay for services under the HCBA Waiver. This assessment shall include consideration of all of the following factors for each category of service provider:(1) Whether the current method of ratesetting for a service provides an adequate supply of providers, including, but not limited to, whether there is a sufficient supply of providers to enable participants throughout the state to have a choice of providers, depending on the nature of the service, and whether there are waiting times for services.(2) Whether the current method of ratesetting for a service provides for an adequate workforce and keeps pace with inflation.(3) A comparison of the estimated fiscal effects of alternative rate methodologies for each service.(4) Regional variations in service costs.(5) Options for addressing rate increases in the future, including, but not limited to, linking rate increases to rate increases for skilled nursing facilities, the Sacramento Consumer Price Index, or the Medical Consumer Price Index.
14132.992. (a) By March 1, 2026, the department shall submit a rate study to the appropriate fiscal and policy committees of the Legislature, in accordance with Section 9795 of the Government Code, addressing the sustainability, quality, and transparency of rates for the Home and Community-Based Alternatives (HCBA) Waiver, as described in Section 14132.991. The department shall consult with stakeholders in developing the study.
(b) The study shall include, but not be limited to, an assessment of the effectiveness of the methods used to pay for services under the HCBA Waiver. This assessment shall include consideration of all of the following factors for each category of service provider:
(1) Whether the current method of ratesetting for a service provides an adequate supply of providers, including, but not limited to, whether there is a sufficient supply of providers to enable participants throughout the state to have a choice of providers, depending on the nature of the service, and whether there are waiting times for services.
(2) Whether the current method of ratesetting for a service provides for an adequate workforce and keeps pace with inflation.
(3) A comparison of the estimated fiscal effects of alternative rate methodologies for each service.
(4) Regional variations in service costs.
(5) Options for addressing rate increases in the future, including, but not limited to, linking rate increases to rate increases for skilled nursing facilities, the Sacramento Consumer Price Index, or the Medical Consumer Price Index.