BILL ANALYSIS                                                                                                                                                                                                    






                                 SENATE HEALTH
                               COMMITTEE ANALYSIS
                        Senator Elaine K. Alquist, Chair


          BILL NO:       AB 2675                                      
          A
          AUTHOR:        Chesbro                                      
          B
          AMENDED:       As Introduced                               
          HEARING DATE:  June 9, 2010                                 
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          CONSULTANT:                                                 
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          Bain                                                        
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                                     SUBJECT
                                         
                    Health facilities:  licensee orientation

                                     SUMMARY  

          Increases the coursework hour requirement from 8 to 16  
          hours for an applicant for initial licensure as an  
          intermediate care facility/developmentally  
          disabled-habilitative (ICF/DD-H) and an intermediate care  
          facility/developmentally disabled-nursing (ICF-DD-N) by  
          requiring an additional 8 hours on the statutory and  
          regulatory requirements related to business management.

                             CHANGES TO EXISTING LAW 

          Existing law:
          Existing law establishes the California Department of  
          Public Health (DPH), which is responsible for the licensing  
          and regulation of health facilities, including ICF/DD-H and  
          ICF-DD-N. 

          Existing law defines an ICF/DD-H as a facility with a  
          capacity of 4 to 15 beds that provides 24-hour personal  
          care, habilitation, developmental, and supportive health  
          services to 15 or fewer persons with developmental  
          disabilities who have intermittent, recurring needs for  
                                                         Continued---



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          nursing services, but have been certified by a physician as  
          not requiring the availability of continuous skilled  
          nursing care. 

          Existing law defines an ICF/DD-N in the same manner as an  
          ICF/DD-H, except that an ICF/DD-N does not have to provide  
          habilitation services.  Additionally, an ICF/DD-N must  
          serve medically fragile persons with developmental  
          disabilities, or who demonstrate significant developmental  
          delay that may lead to a developmental disability if not  
          treated.

          Existing law requires an applicant for initial licensure as  
          an ICF/DD-H or an ICF/DD-N to attend an eight-hour  
          orientation program containing prescribed components  
          approved by the Department of Developmental Services (DDS).

          Existing law defines a "developmental disability" as a  
          disability that originates before an individual attains age  
          18, that continues (or can be expected to continue)  
          indefinitely, and constitutes a substantial disability for  
          that individual.  A developmental disability includes  
          mental retardation, cerebral palsy, epilepsy, autism, and  
          includes disabling conditions found to be closely related  
          to mental retardation or to require treatment similar to  
          that required for individuals with mental retardation.

          This bill:
          Increases, from 8 hours to 16 hours, the course requirement  
          an applicant or his or her designee must take for initial  
          licensure as an ICF/DD-H or an ICF/DD-N.  The additional  
          eight hours required by this bill are required to outline  
          the statutory and regulatory requirements related to  
          business management.  The additional eight-hour program  
          must include, but need not be limited to, cost reporting  
          (required under current law), general accounting  
          principles, the Department of Health Care Services' audit  
          process, and the regional center vendorization process.  
          
                                  FISCAL IMPACT  

          According to the Assembly Appropriations Committee  
          analysis, no direct fiscal impact to DDS to approve and  
          monitor the ICF/DD orientation program.  According to the  
          sponsors of this bill, fewer than 20 individuals complete  




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          the training annually and training fees are paid by  
          participants, not DDS or facilities.  

                            BACKGROUND AND DISCUSSION  

          This bill is sponsored by the California Association of  
          Health Facilities (CAHF), which states the majority of  
          persons with developmental disabilities in California now  
          reside in the community.  As one result, small homes for  
          persons with developmental disabilities (such as ICF/DD-N  
          and ICF/DD-H) continue to be developed throughout the  
          state.  CAHF states those seeking to operate these  
          facilities typically do so as they wish to serve this  
          population because of personal interests, such as a family  
          member with a developmental disability, or a care-giving  
          background in nursing or a related field.

          CAHF states that although most potential licensees have  
          knowledge and education related to consumer needs and the  
          "how-to" of delivering consumer-driven services, they often  
          have little or no practical business experience.  CAHF  
          states this becomes problematic once these facilities begin  
          operating and the licensee struggles to implement effective  
          payroll, cost reporting and budgeting processes.

          CAHF states that in 1997, the Legislature recognized the  
          need to educate licensees of small ICF/DD-H and ICF/DD-N  
          about the rules and regulations governing their operation.  
          As a result, these providers are required to complete a  
          statutorily mandated eight-hour orientation prior to  
          licensure.  The eight-hour course focuses on California's  
          developmental disabilities system and facility programmatic  
          and regulatory requirements.  Although there is a brief  
          overview of business-related regulatory requirements, a  
          practical discussion of business considerations is lacking.  
           CAHF states there is increasing feedback from new  
          operators and overseeing departments that new licensees are  
          struggling to manage the financial aspects of their  
          business.  This can lead to poorly crafted business plans  
          that may ultimately place some of these small providers at  
          greater risk of financial insolvency.  CAHF argues that  
          adding eight hours to the existing course requirement will  
          address this issue by allowing instructors with expertise  
          in accounting and business practices specific to ICFs/DD to  
          more thoroughly educate potential providers about key  




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          business operations. 

          Background on ICF/DD-H and ICF/DD-N
          A state license is required to operate health facilities,  
          including the four types of intermediate care facilities  
          (ICF) that provide services to developmentally disabled  
          individuals.  Intermediate care facilities differ in their  
          bed size, the level of nursing services provided, whether  
          habilitative services are provided, and the type of  
          developmental deficit of the individuals receiving services  
          in the facility.  

          For example, an ICF/DD-N are generally defined in the same  
          manner as an ICF/DD-H, except that an ICF/DD-N does not  
          have to provide habilitation services (habilitation  
          services are services to assist an individual with  
          behavioral skills, such as communication and social  
          skills).  In addition, an ICF/DD-N must serve medically  
          fragile persons with developmental disabilities, or who  
          demonstrate significant developmental delay that may lead  
          to a developmental disability if not treated.

          Applicants for licensing and/or certification (for Medi-Cal  
          reimbursement) as an ICF/DD-H and ICF/DD-N must submit an  
          application package to the Department of Public Health's  
          Licensing and Certification (L&C) Program that includes  
          specified information, including information on the owner  
          type, licensee name and address, whether the license wishes  
          to participate in Medicare and Medi-Cal, the person in  
          charge of the facility, individuals having five percent or  
          more ownership interest, financial resources, a program  
          plan, and property ownership.  Applicants must also pay  
          licensing fees ($938.01 per bed for 2009-10 for ICF/DD-H  
          and ICF/DD-N).  In addition, applicants for licensure as an  
          ICF/DD-H and ICF/DD-N must submit a program plan for  
          approval by DDS.

          DPH indicates that there are 405 licensed ICF/DD-N with  
          2,481 beds, and 766 licensed ICF/DD-H with 4,715 beds.  In  
          2009, DPH indicates it received 6 initial licensure  
          applications for an ICF/DD-N and 6 for an ICF/DD-H.

          Existing law requires an applicant for initial licensure of  
          an ICF-DD-H or an ICF/DD-N to attend an eight-hour  
          orientation program containing prescribed components  




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          approved by DDS.  The orientation must outline the role,  
          requirements, and regulations of each of the following:  

            The scope of responsibility for operation including  
            regulatory requirements and statutes governing the  
            facility type;
           Cost reporting;
           Local planning;  
            Regional center and other community support services;  
            All federal and state agencies responsible for licensing  
            and certification, and data collection; and,
           Government and private agencies responsible for ensuring  
            the rights of the developmentally disabled. 

          Under existing law, the orientation must be conducted by  
          relevant community services and provider organizations.   
          Orientation instructors must have knowledge or experience  
          in the subject area to be taught, and must either possess a  
          four-year college degree relevant to the course or courses  
          to be taught, be a health professional with a valid and  
          current license to practice in California, or have at least  
          two years experience in California as an administrator of a  
          long-term health care facility that provides services to  
          persons with developmental disabilities within the last  
          eight years. 

          According to the DDS web site, there are four providers who  
          provide the mandatory eight-hour orientation program  
          approved by DDS, including one provided by the nonprofit  
          foundation of CAHF.  The current cost of the training  
          program of three of the four providers is $189, $225 and  
          $359.  
           
          Prior legislation
          AB 2488 (Alby), Chapter 471, Statutes of 1996, established  
          an eight-hour orientation program for licensure of  
          applicants of ICF/DD-H and ICF/DD-N that outlines the scope  
          of responsibility for facility operation, including  
          regulatory requirements and statutes governing the facility  
          type.  AB 2488 was also sponsored by CAHF.

                                  PRIOR ACTIONS

           Assembly Health Committee          18-0
          Assembly Appropriations Committee15-0




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          Assembly Floor           74-0

                                    POSITIONS  
                                        
          Support:  California Association of Health Facilities  
          (sponsor)

          Oppose:  None received






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