BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 641
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          Date of Hearing:   May 18, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                     AB 641 (Feuer) - As Amended:  May 10, 2011 

          Policy Committee:                             JudiciaryVote:7-2
                       Health                           Vote: 13-4

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              No

           SUMMARY  

          This bill implements several recommendations related to a recent 
          state audit of penalty accounts within the Department of Public 
          Health (DPH). Specifically, this bill:

          1)Streamlines the citation appeals process for long-term health 
            care facilities (LTC facilities) by eliminating Citation 
            Review Conferences (CRCs). 

          2)Increases the maximum fine for Class "B" citations for LTC 
            facilities.

          3)Allows fines to be levied from both state and federal agencies 
            when an incident at a LTC facility violates both state and 
            federal laws.

           FISCAL EFFECT  

          1)The elimination of CRCs will likely have a minimal fiscal 
            impact on DPH operations.  DPH indicates the total annual 
            costs for CRCs are $470,000, but that staff is redirected from 
            other priority assignments in order to complete work for CRCs. 
             Eliminating CRCs would free up staff resources within the 
            Licensing and Certification program to focus on other 
            activities, some of which currently have a backlog. 

          2)Estimated increased penalty revenues from increasing the 
            maximum penalty for a Class B citation in the range of 
            $400,000- $800,000. 

           COMMENTS  








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           1)Rationale . According to the author, the current citation 
            review conference (CRC) process is inefficient and 
            ineffective.  CRC appeals can sometimes take years, and due to 
            appeals, the CRC process rarely provide a means to settle 
            cases.  The author maintains that it makes sense to remove the 
            CRC appeals process in favor of the more trusted appeals 
            processes in existing law, such as an administrative law judge 
            or a California Superior Court.

          The author further argues that Class "B" citations for LTC 
            facilities have not been modified since 1985, and can include 
            fairly serious incidents.  The author maintains that the 
            current maximum penalty of $1,000 does not reflect the gravity 
            of the worst Class "B" incidents, such as serious pest 
            infestations or sexual abuse, and that the department should 
            have the ability in these cases to levy a penalty of $2,000.

            The author also argues that California is one of a few states 
            that bars a monetary penalty from both a state and federal 
            agency when a LTC facility action involves noncompliance with 
            both a state and federal law.  The author asserts that it 
            makes sense to allow both entities to act if the laws of 
            either were violated. According to the author, there are no 
            requirements in this bill that such levies should be done for 
            each and every citation and this bill provides DPH with the 
            discretion to cite a higher penalty for the most egregious 
            violations.

           2)Recent State Auditor's Report  .  A recent state audit made a 
            number of findings and recommendations regarding the state's 
            processes for issuing citations against LTC facilities, 
            collecting penalties, and tracking related financial 
            information.  The state auditor found that a backlog of CRC 
            appeals was impeding the state's ability to collect penalty 
            revenue and that it could take steps to increase penalty 
            revenue. In response to the report, DPH also made three 
            recommendations that address the auditor's findings.  This 
            bill implements these recommendations. 

           Analysis Prepared by  :    Lisa Murawski / APPR. / (916) 319-2081 












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