Report 2006-035 Recommendation 1 Responses

Report 2006-035: Department of Health Services: It Has Not Yet Fully Implemented Legislation Intended to Improve the Quality of Care in Skilled Nursing Facilities (Release Date: February 2007)

Recommendation #1 To: Health Care Services, Department of

To provide more complete information to the Legislature on the reimbursement rate and fee systems, Health Services should include information on any savings to the General Fund in the reports its licensing division is required to prepare.

Annual Follow-Up Agency Response From October 2012

DHCS will not be able to implement recommendation No 1 (2006-035, February 2007), the recommendation that general fund savings associated with the AB1629 rate-setting methodology and quality assurance fee (QAF) be noted in report the licensing division is required to prepare. General fund savings can no longer be determined as a result of the AB1629 methodology having significantly changed facility spending practices when compared to the previous rate setting methodology. Specifically, the previous methodology, which was a flat-rate methodology, reimbursed facilities at the same rate, regardless of their spending patterns, whereas the AB 1629 methodology, which is a facility-specific methodology, reimburses facilities based on their individual costs, which encourages facilities to increase spending to improve their infrastructure. Since the AB 1629 methodology has been in place for six years and current spending patterns have changed significantly from the previous methodology, a comparison of the two different methodologies is no longer valid.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

All Recommendations in 2006-035

Agency responses received after June 2013 are posted verbatim.