BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K Alquist, Chair
BILL NO: AB 2555
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AUTHOR: Feuer, Jones & Neilsen
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AMENDED: May 28, 2010
HEARING DATE: June 16, 2010
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CONSULTANT:
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Bain
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SUBJECT
Ombudsman programs: appropriation
SUMMARY
Appropriates $1.6 million from the State Health Facilities
Citation Penalties Account (State Account) to the
California Department of Aging (CDA) for local ombudsman
programs. Takes effect immediately as an urgency statute.
CHANGES TO EXISTING LAW
Existing law:
Under existing law, long-term health care facilities are
defined to include skilled nursing facilities, intermediate
care facilities, congregate living facilities, nursing
facilities, and pediatric day health and respite
facilities. Existing law requires the Department of Public
Health (DPH) to inspect and license health facilities.
Under existing law, the Long-Term Care, Health, Safety, and
Security Act of 1973, DPH can assess penalties for
violations of prescribed state and federal requirements.
Money collected as a result of state and federal civil
penalties imposed under the existing state Long-Term Care,
Continued---
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Health, Safety, and Security Act of 1973, or federal law,
must be deposited into the State Health Facilities Citation
Penalties Account (State Account), which contains money
collected from violations of state law, or the Federal
Health Facilities Citation Penalties Account (Federal
Account), which contains money collected from violations of
federal law.
Existing law establishes the California State Long-Term
Care Ombudsman Program within CDA, and requires the Office
of the state Long-Term Care Ombudsman to investigate and
seek to resolve complaints and concerns communicated by, or
on behalf of, patients, residents, or clients of any
long-term care (LTC) facility (nursing facility, skilled
nursing facility or residential care facilities for the
elderly). Existing state law sets forth a distribution
formula by which CDA must allocate federal and state funds
for local ombudsman programs.
This bill:
This bill would appropriate $1.6 million from the State
Account to CDA for use in funding local ombudsman programs
under the existing distribution schedule. This bill would
authorize these funds to be used for this purpose through
the end of the 2010-11 fiscal year, at which time remaining
unencumbered funds would be required to revert to the State
Account. The provisions of this bill would take immediate
effect as an urgency statute.
FISCAL IMPACT
According to the Assembly Appropriations Committee
analysis, AB 2555 would result in a one-time $1.6 million
special fund appropriation from the State Account to CDA to
support local ombudsman programs. This bill makes funds
available for expenditure through 2010-11. Any unspent
funds at the end of the 2010-11 revert to the original
State Account.
BACKGROUND AND DISCUSSION
According to the author, this bill ensures that Long Term
Care Ombudsman programs continue to have adequate funding
for the 2010-11 fiscal year, by appropriating $1.6 million
from the State Account, which is funded with state civil
penalties issued against long-term health care facilities.
STAFF ANALYSIS OF ASSEMBLY BILL 2555 (Feuer) Page
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Last year, the Governor signed into law AB 392 (Feuer &
Jones), which restored $1.6 million in funding for this
important program for the 2009-10 fiscal year using revenue
from the Federal Account. The Federal Account is funded
with federal civil penalties issued against long-term
health care facilities. The author states that funding
provided by AB 392 has nearly run out.
The author argues local ombudsman programs protect
vulnerable residents of nursing homes and assisted living
facilities from abuse and neglect through unannounced
monitoring visits and investigations of thousands of abuse
cases reported to them each year. In contrast to
government agencies, which may only review facilities
annually (or less), the author argues ombudsman programs
serve as the front line in the provision of immediate
investigative services for isolated and frail residents.
The author states there is no other program or agency that
duplicates this critical advocacy service, and these
cost-effective programs can significantly improve
residents' quality of life and quality of care. Finally,
the author concludes that the use of penalty funds for
ombudsman programs has been approved by the federal Centers
for Medicare and Medicaid Services.
Long-Term Care Ombudsman Programs
According to CDA, the primary responsibility of the
ombudsman program is to investigate and endeavor to resolve
complaints made by, or on behalf of, individual residents
in LTC facilities. CDA indicates the Office of the State
Long-Term Care Ombudsman develops policy and provides
oversight to the local Long-Term Care Ombudsman Programs,
confers with state licensing agencies regarding difficult
cases, meets with the CDA legal counsel to clarify laws and
develop plans for implementing them, defines program roles,
and provides ongoing statewide ombudsman training.
Residents or their family members can file a complaint
directly with the local Long-Term Care Ombudsman or by
calling a statewide toll-free telephone line.
CDA indicates the local Long-Term Care Ombudsman Program is
a community-supported program. Volunteers are an integral
part of this program. The Office of the State Long-Term
Care Ombudsman and its 35 local ombudsman program
coordinators are responsible for recruiting, training, and
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supervising the volunteer ombudsman representatives.
Ombudsman budget
The Governor's May Revise proposes $4.1 million in local
assistance funding for the Long-Term Care Ombudsman
Program. As part of the May Revision, the Governor's
budget proposes to shift $680,000 in General Fund spending
from the Department of Public Health (DPH) to CDA.
----------------------------------------------------------
| | 2007/08 |2008/09 | 2009/10 | May |
| | | | | Revision |
| | | | | Proposal |
| | | | | 2010/11 |
|---------------+-----------+--------+----------+----------|
|General Fund | $3,822,000| $0| $0| $680,000|
|---------------+-----------+--------+----------+----------|
|Federal Older | $2,726,000|$2,726,0|$2,726,000|$2,726,000|
|Americans Act | | 00| | |
|Funds | | | | |
|---------------+-----------+--------+----------+----------|
|Federal | $1,442,000|$1,442,0|$3,042,000| $762,000|
|Account | | 00| | |
|---------------+-----------+--------+----------+----------|
|Total Funding | $7,990,000|$4,168,0|$5,768,000|$4,168,000|
| | | 00| | |
----------------------------------------------------------
The Federal Account is not expected to be able to fund the
ombudsman program at budgeted levels in 2009-10. As a
result, the Administration recently received increased
reimbursement authority which allows CDA to use up to
$700,000 in General Fund revenue from operational savings
within DPH to fund the anticipated Federal Account
shortfall in the current year.
According to DPH, the estimated fund balance of the State
Account is projected to be $4.5 million at the end of
2009-2010 fiscal year. Current law caps the balance in the
State Account, at any time, at $10 million.
For the budget year, the Assembly Budget Committee adopted
placeholder trailer bill language to fund the ombudsman
program using revenue from a Quality Assurance Fee imposed
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on skilled nursing facilities. The Senate Budget Committee
also adopted placeholder trailer bill language to send the
issue to the full Budget Conference Committee.
State and federal penalty accounts
Under existing law, funds in the State Account and the
Federal Account must be used, upon appropriation by the
Legislature, in accordance with state and federal law for
the protection of health or property of residents of LTC
facilities, including, but not limited to, the following:
Relocation expenses incurred by DPH, in the event of a
facility closure;
Maintenance of facility operation pending correction of
deficiencies or closure, such as temporary management or
receivership, in the event that the revenues of the
facility are insufficient;
Reimbursing residents for personal funds lost; and,
The costs associated with informational meetings required
if DPH proceeds with a receivership petition.
Audit of Citation Penalty Accounts
In January 2010, several legislators requested an audit of
the Federal and State Accounts maintained by DPH for the
protection of vulnerable nursing home residents. That
audit was approved by the Joint Legislative Audit
Committee, and the results are expected this month. The
audit is expected to review the revenues and expenditures
from the two accounts since 2003, as well as the reasons
DPH is not fully collecting the fines owed, in the hope
that the Legislature can determine the level of funds that
exist in the accounts and the ability of the accounts to
fund programs that protect nursing home residents,
including ombudsman programs.
Arguments in support
Supporters of this bill include senior, and nursing home
advocacy groups, which argue this bill preserves critical
oversight services for long-term care facility residents by
appropriating $1.6 million from the State Account to help
fund long-term care ombudsman services to residents of
nursing homes and assisted living facilities.
Supporters argue it is urgent that these funds be
appropriated now to prevent further damage to long-term
care ombudsman services, and that ombudsmen staff and
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volunteers play a critical role in identifying,
investigating and reporting abuse and neglect. Supporters
argue ombudsman programs' ability to respond was severely
compromised in 2008 when the Governor vetoed $3.8 million
in General Fund support for the local long-term care
ombudsman programs, representing about half of their
funding. Supporters further state that, in 2009, the
Legislature passed AB 392, which appropriated $1.6 million
from the Federal Account to partially restore the funds
cut, and that this bill would continue the funding
established by AB 392 using funds in the State Account.
Finally, supporters argue there are sufficient funds in the
State Account for this bill, and that this bill is a
short-term measure that is desperately needed to keep the
long-term care ombudsman programs in operation until a
longer term funding source is established.
Arguments in opposition
Aging Services of California (ASC) writes in opposition
that, while they recognizes the need for and support a
robust, long-term care ombudsman program, this bill
continues to raid funds from penalty accounts needed to
protect the health and property of residents in problem
facilities. ASC argues the state must meet its obligation
to long-term care residents through the usual appropriation
process for the ombudsman program.
The California Association of Health Facilities (CAHF) and
Crestwood Behavioral Health, Inc. (Crestwood) also write in
opposition that money in the State Account should be
available by DPH to protect residents in problem
facilities, that this is not a sustainable source to fund
another agency's program, and that by funding ombudsman
programs through this source, the state is encouraging the
wrong behavior by giving the ombudsman program a stake in
making sure there is funding in the State Account to
support their program. Both CAHF and Crestwood suggest
that, instead of the transfer of $1.6 million from the
State Account to the ombudsman program, proponents could
direct that any funds in excess of the $10 million cap on
the State Account go toward funding the ombudsman program.
The California Department of Public Health (DPH) writes in
opposition this bill does not provide a solution to the
on-going problem of funding for the ombudsman program, and
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without a more comprehensive solution, this program is
likely to continue to face funding shortages in future
years. DPH also argues these penalty accounts cannot
sustain a repeated diversion of funds and remain solvent
for its intended purposes.
Related legislation
AB 392 (Feuer), Chapter 102, Statutes of 2009, appropriated
$1.6 million from the Federal Account to CDA for local
ombudsman programs.
AB 935 (Feuer) would have required at least one-half of the
funds in the State Account and the Federal Account to be
used to fund local ombudsman programs using the funding
distribution schedule in existing law. AB 935 was held on
the Assembly Appropriations suspense file.
PRIOR ACTIONS
Assembly Aging and Long Term Care: 4-0
Assembly Appropriations: 17-0
Assembly Floor: 76-0
POSITIONS
Support: AARP (co-sponsor)
Bet Tzedek Legal Services (co-sponsor)
California Advocates for Nursing Home Reform
(co-sponsor)
Ombudsman Services of Northern California
(co-sponsor)
Alzheimer's Association
Area 4 Agency on Aging
California Alliance for Retired Americans
California Commission on Aging
California Senior Legislature
California State Association of Counties
Catholic Charities of California United
Congress of California Seniors
Council on Aging - Orange County
County of Los Angeles Board of Supervisors
Long -Term Care Ombudsman Program for Santa Cruz and
San Benito
Counties
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Long Term Care Services of Ventura County
Ombudsman & HICAP Services of Northern
California
Ombudsman Services of San Mateo County, Inc.
Ombudsman Services of Northern California - Shasta
Region
The Arc of California
Regional Council of Rural Counties
Senior Advocacy Services
Sonoma County Area Agency on Aging Advisory Council
Ventura County Board of Supervisors
WISE & Healthy Aging
Several individuals
Oppose: Aging Services of California
California Association of Health Facilities
California Department of Public Health
Crestwood Behavioral Health, Inc.
University of California, San Diego, Linguistics
Language Program
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