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Money for Nothing, as Program Put Off

Here’s a riddle for you: When is $85 million not $85 million?

The answer lies in the budget’s passage at the end of last week, when the governor approved the long-sought $85 million for adult day health care — but didn’t approve the program that went with it.

Couple that news with Friday’s federal approval of a Sept. 1 end date for the state’s adult day health care program, and you have a grim outlook for ADHC advocates, who had hoped for a smooth transition to the Legislature-approved replacement for the ADHC program.

The federal approval for elimination of the current ADHC program came from CMS.

“This is a decision the State of California has the authority to make under the Medicaid statute and regulations,” a CMS official said of the state plan amendment. “We are continuing to work with the state to mitigate the effects of this on Medicaid beneficiaries.”

That means the last day for ADHC program funding will be Aug. 31, and that will likely shutter most, if not all, of the roughly 300 centers in California, which help about 35,000 people.

Hope in the ADHC community centered on a plan to launch a new adult day health care program with about half the funding of the current one ($85 million instead of $169 million). The new program was dubbed Keeping Adults Free from Institutions (KAFI) and was passed by the Legislature.

Everyone waited to see if Gov. Jerry Brown (D) would veto the $85 million for the new program, which he did not do. He approved it.

However, there’s no program to go with it. The Legislature did not send that trailer bill to the governor, at his request. And the governor vetoed language — specifically Provision 13 in the budget bill — that was designed to tie the money to the KAFI program.

So now ADHC advocates are all dressed up with their $85 million, but have nowhere to go to spend it.

Lydia Missaelides of California Association of Adult Day Services could not believe her eyes.

“So it’s good there is $85 million, when in January there was zero,” Missaelides said. But as for the programmatic rug being pulled from ADHC?

“We are told the governor asked legislative leaders to hold back AB 96 [the bill that establishes creation of KAFI],” Missaelides said, “and work with his administration to craft more specific legislation by the end of session.”

That’s a huge problem, though. With the current program ending Sept. 1, that gives almost no time to set up a new program. The Legislature would have to reintroduce it, pass it through committees, take another floor vote and then re-send it to the governor for his signature.

At that point, the Department of Health Care Services would need to research, write and apply for a new federal CMS waiver — a process that usually takes months — and then wait through the CMS approval process.

Only then could the state launch a new program, and that takes time, as well.

“Timing is a problem if there is no bill until the end of August,” Missaelides said. “We are very worried that without timely legislation, there will be a significant gap in funding, and centers will make the painful decision to close because they do not see a way to be reimbursed under the transition plan issued on July 1.”

That timeline would have been extremely tight and difficult if the program had been approved by Brown on Friday, given federal acceptance of Sept. 1 as an end date for the current ADHC program.

But given Brown’s veto of the new program and pursuit of a different solution, it looks like time may have run out for adult day health care programs in California.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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