20250AB__208198AMD INTRODUCED 2026-02-18 AMENDED_ASSEMBLY 2026-03-26 REVISED 2026-05-14 2025 AB AMD Introduced by Assembly Member Stefani (Principal coauthor: Assembly Member Bonta) (Coauthors: Assembly Members Connolly, Elhawary, Kalra, Michelle Rodriguez, and Schiavo) LEAD_AUTHOR ASSEMBLY Stefani PRINCIPAL_COAUTHOR ASSEMBLY Bonta COAUTHOR ASSEMBLY Connolly COAUTHOR ASSEMBLY Elhawary COAUTHOR ASSEMBLY Kalra COAUTHOR ASSEMBLY Michelle Rodriguez COAUTHOR ASSEMBLY Schiavo

An act to amend

Section 14132.991 of the Welfare and Institutions Code, relating to Medi-Cal. Medi-Cal 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 by, and funded pursuant to, 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, subject to federal cost neutrality. Existing law sets forth provisions authorizing the director to expand the number of waiver slots up to 5,000 additional slots.

This bill would recast the above-described waiver provisions to refer to the HCBA Waiver and would delete the provision relating to the 5,000 slots. The bill would require the department, beginning in 2027, and for the HCBA Waiver period, to increase the total number of waiver slots by 10,000, in addition to any planned expansion of waiver slots federally approved as of January 1, 2026, as specified.

The bill would require the department to prepare and submit an annual report to the Legislature that provides certain information about waiver slot numbers, waiting list numbers, demographics, and departmental efforts, as specified.</xhtml:p>"?> The bill would require the department, by March 1, 2027, to seek any necessary amendments to the HCBA Waiver to ensure that there is sufficient capacity to enroll all individuals who are eligible for, and express an interest in, participating in the HCBA Waiver who are currently on a waiting list.

The bill would require the department to continue to monitor the capacity of the HCBA Waiver and to expand capacity, as specified. Existing law requires the department to implement the waiver only to the extent that 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.</xhtml:p><xhtml:p>This bill would recast those conditions, removing the federal cost neutrality criterion.

The bill would authorize the department to seek amendments to the HCBA Waiver or take other actions as necessary to implement these provisions.</xhtml:p>"?> MAJORITY NO YES NO NO NO NO NO NO NO NO The people of the State of California do enact as follows:

SECTION

Section 14132.991 of the Welfare and Institutions Code is amended to read: 14132.991. (

a) When 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 waiver’s person-centered model of care, pursuant to the requirements set forth in Sections 441.720, 441.725, and 441.540 of Title 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 department’s 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) Require care management contractors to enroll at least 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.

(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.

(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) Beginning in 2027, and for the HCBA Waiver period, the department shall increase the total number of HCBA Waiver slots by 10,000, in addition to any planned expansion of waiver slots federally approved as of January 1, 2026. Nothing in this subdivision is intended to alter or supersede existing federal requirements applicable to the HCBA Waiver, including requirements related to enrollment priorities for individuals transitioning from institutional settings or similar programs and for individuals under years of age.

The addition of new waiver slots pursuant to this subdivision shall be implemented in a manner consistent with those requirements. (c)<xhtml:span class="EnSpace"/>(1)<xhtml:span class="EnSpace"/>The department shall prepare and submit an annual report to the Legislature, in accordance with

Section of the Government Code, beginning on January 1, 2027, that provides all of the following information:</xhtml:p><xhtml:p>(A)<xhtml:span class="EnSpace"/>The total number of waiver slots available and filled for the preceding year.</xhtml:p><xhtml:p>(B)<xhtml:span class="EnSpace"/>The total number of individuals on the waiting list for waiver services, including a comparison to the preceding year’s waiting list numbers.</xhtml:p><xhtml:p>(C)<xhtml:span class="EnSpace"/>A demographic breakdown of individuals enrolled in the waiver during the preceding year, including, but not limited to, age, race, ethnicity, and primary language.</xhtml:p><xhtml:p>(D)<xhtml:span class="EnSpace"/>A

summary of efforts undertaken by the department to reduce the waiting list and ensure that all available waiver slots are filled.</xhtml:p><xhtml:p>(2)<xhtml:span class="EnSpace"/>The department shall present the findings of this report annually to the appropriate policy and budget committees of the Legislature, beginning in 2027.</xhtml:p><xhtml:p>(d)</xhtml:p>"?> (c)

(1) By March 1, 2027, the department shall seek any necessary amendments to the HCBA Waiver to ensure that there is sufficient capacity to enroll all individuals who are eligible for, and express an interest in, participating in the HCBA Waiver who are currently on a waiting list.

(2) The department shall continue to monitor the capacity of the HCBA Waiver and shall expand capacity through any necessary HCBA Waiver amendments at least 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. (e)</xhtml:p>"?> (

d) In order to achieve maximum cost 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 of Title of the Government Code,

Section of the Government Code, and

Part 2 (commencing with

Section 10100) of Division of the Public Contract Code and shall be exempt from the review or approval of any division of the Department of General Services. (f)<xhtml:span class="EnSpace"/>(1)<xhtml:span class="EnSpace"/>This

section shall be implemented only to the extent that any necessary federal approvals have been obtained and that federal financial participation is available.</xhtml:p>"?> (e)

(1) The department shall implement this

section only to the extent that it can demonstrate federal cost neutrality as required under the terms of the HCBA Waiver, and only to the extent that any necessary federal approvals are obtained and federal financial participation is available.

(2) The department may seek amendments to the HCBA Waiver or take other actions as necessary to implement this section.

(3) Notwithstanding

Chapter 3.5 (commencing with

Section 11340) of Part of Division of Title 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. REVISIONS: Heading—Line 2.