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California's Attempt to Cut Adult Day Health Care Services Ends

A settlement of a federal class-action lawsuit challenging the elimination of Adult Day Health Care (ADHC) as a Medicaid (in California, known as Medi-Cal) optional benefit will transition the ADHC program from a Medi-Cal state plan optional benefit into a new service: Community Based Adult Services or "CBAS," which will be provided through a Medi-Cal waiver program.


The Settlement Agreement resolves the more than two-year-old class-action lawsuit that had been filed initially by several elderly individuals with disabilities seeking to stop cuts to ADHC services enacted by the legislature. They sought to stop the elimination of ADHC unless and until adequate replacement services were in place, asserting that the elimination of the benefit would place them at risk of unnecessary institutionalization and violated their rights under the federal Americans with Disabilities Act (ADA), Rehabilitation Act, Medicaid Act, the Due Process Clause of the U.S. Constitution, and state laws.

In March 2011, the legislature voted to eliminate ADHC as an optional Medi-Cal benefit. ADHC is a Medi-Cal funded community-based program for low-income elderly and disabled adults designed to support individuals who live at home or in licensed residential care facilities to avoid unnecessary hospitalization or placement in nursing homes or other institutions. ADHC centers provide nursing services, personal care services, social services, therapy, case management, medication management, meals and transportation to participants from one to five days per week, depending on their assessed needs.

Twice before, preliminary injunctions had halted the cuts, which, the court had found, placed people at risk of institutionalization in nursing facilities and hospitals and caused them irreparable harm. The injunctions remained in place as the case was appealed. The settlement covers the entire case and settles claims on appeal as well.

The initial ADHC elimination date was scheduled for September 1, which was moved by the State to December 1, with a court hearing scheduled for Nov. 17, 2011. The parties reached settlement prior to the court hearing.

Current ADHC participants will be re-assessed for CBAS eligibility and transitioned into the new program over the next few months. Current ADHC providers will be given the opportunity to apply to become CBAS providers as well. ADHC participants found to be not eligible for CBAS will receive Enhanced Case Management to assist them to transition to their community-based services.
What's at Stake

California's Medicaid program is the main source of health care insurance for more than 7 million Californians, and 35,000 people are enrolled in ADHC, each of whom would be affected by this case. The closely watched dispute also implicated the civil rights of people who want to avoid institutionalization, instead aging in the place they call home.

Case Status

In early 2012, the court will hold a "Fairness Hearing" that will give class members the opportunity to give their input on the terms of the settlement agreement. The judge must approve a final settlement agreement before ADHC is eliminated.