BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
2555 (Feuer/Jones/Nielsen)
Hearing Date: 8/12/2010 Amended: 5/28/2010
Consultant: Katie Johnson Policy Vote: Health 7-1
_________________________________________________________________
____
BILL SUMMARY: AB 2555, an urgency measure, would appropriate
$1.6 million from the State Health Facilities Citation Penalties
Account to the California Department of Aging to fund its local
ombudsman programs.
_________________________________________________________________
____
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Appropriation to fund CDA $1,600 $0
$0Special*
local ombudsman programs
*State Health Facilities Citation Penalties Account
_________________________________________________________________
____
STAFF COMMENTS: SUSPENSE FILE.
This bill would make a one-time appropriation of $1.6 million
from the State Health Facilities Citation Penalties Account
(State Account) to the California Department of Aging (CDA) to
fund local ombudsman programs where 35 local ombudsman
coordinators and volunteers monitor long-term care facilities
and respond to local complaints. The State Account is funded by
penalties paid by nursing homes for violations of state law. The
fund balance for FY 2010-2011 is projected to be $4.45 million
after an estimated $1.97 million in revenues and $2.15 million
in expenditures. Funds in the State Account may be appropriated
by the Legislature for the protection of health or property of
residents of long-term health care facilities.
According to a report released by the Bureau of State Audits in
June 2010, the monies in the State Account are primarily used to
fund temporary management companies that take over long-term
care facilities when one becomes insolvent. The report also
states that the State Account fund balance fluctuates greatly
from year to year and this bill could potentially limit CDPH's
ability to pay these management companies. The number of
long-term care facilities that become insolvent each year is
unpredictable.
Additionally, the audit gives recommendations on how CDPH could
increase the amount of revenue in the State Account by
increasing oversight of its penalties tracking system and
altering when the payment of appealed claims occurs.
Current Budget
The proposed FY 2010-2011 local assistance ombudsman budget is
$4.2 million from federal, special, and General funds. This bill
would add an additional $1.6 million in special funds to that
estimate. On Friday, June 18, 2010, the Department of Health
Care Services (DHCS) announced its intention to augment the
proposed FY 2010-2011 local
Page 2
AB 2555 (Feuer)
assistance ombudsman budget by proposing to transfer an
unspecified amount of skilled nursing facility Quality Assurance
Fee (QAF) revenue to CDA to fund the local ombudsman programs in
FY 2010-2011. The Budget Conference Committee recently voted to
approve $1.9 million in QAF revenues for this program and
required DHCS to apply for federal approval in order to draw
down any available federal matching funds.
Background
In the 2008-2009 Budget Act, a $3.8 million General Fund
appropriation for the ombudsman programs was line-item vetoed.
The local assistance ombudsman budget in FY 2007-2008 was $7.2
million, including the $3.8 million General Fund.
AB 392 (Feuer, 2009) appropriated $1.6 million for FY 2009-2010
from the Federal Health Facilities Citation Penalties Account
(Federal Account) to CDA to partially backfill that elimination.
In order to make up for an expected insolvency of the Federal
Account, CDPH has the authority to transfer up to $700,000 in
General Funds to CDA to equal the total $1.6 million.