BILL ANALYSIS Ó SENATE COMMITTEE ON HEALTH Senator Ed Hernandez, O.D., Chair BILL NO: AB 1710 AUTHOR: Yamada AMENDED: April 26, 2012 HEARING DATE: June 20, 2012 CONSULTANT: Marchand SUBJECT : Nursing home administrators: fees and fines. SUMMARY : Revises how nursing home administrator licensing fees are to be adjusted so that fee revenue is sufficient to cover the regulatory costs to the Department of Public Health (DPH), and revises and increases DPH reporting requirements regarding the Nursing Home Administrator Program (NHAP). Existing law: 1.Establishes the NHAP to license and regulate nursing home administrators. 2.Requires the administrators of skilled nursing facilities, intermediate care facilities, and intermediate care facilities/developmentally disabled to be licensed under NHAP. 3.Requires applicants for licensure as a nursing home administrator to be at least 18 years old, and meet one of several pathway requirements, including the following: a. A master's degree in nursing home administration or related health administration field, which included an internship or residency of at least 480 hours in a skilled nursing or intermediate care facility; b. A baccalaureate degree and the completion of a NHAP-approved Administrator-in-Training (AIT) program of at least 1,000 hours; c. Ten years of recent full-time work experience, a current license as a registered nurse, and the completion of a NHAP-approved AIT program of at least 1,000 hours; d. Ten years of full-time work experience in any department of a skilled nursing facility or an intermediate care facility with at least 60 semester units of college courses, and the completion of a NHAP-approved AIT program of at least 1,000 hours; or e. Ten years of full-time hospital administration experience in an acute care hospital with at least 60 semester units of college courses, and the completion of a Continued--- AB 1710 | Page 2 NHAP-approved AIT program of at least 1,000 hours. 4.Establishes a list of fees for purpose of NHAP, such as application, examination, and license fees, and requires these fees be adjusted annually, as directed by the Legislature in the annual Budget Act. The fees include $190 for the initial license and the biennial license renewal. 5.Prohibits the adjustment in the NHAP examination fees from exceeding the increase in the California Consumer Price Index (CPI), unless the revenue projected to be collected is less than the projected costs for the budget year, in which case the fees cannot exceed twice the increase in the CPI. 6.Requires DPH to provide an annual NHAP fee report to the Legislature each April 1. This bill: 1.Deletes the existing provisions of law governing how NHAP fees are to be adjusted, which limit fee increases to no more than the increase in the CPI or to no more than twice the CPI if revenue is projected to be less than costs. 2.Requires DPH to propose that NHAP fees be adjusted, if the revenue projected to be collected is less than the projected costs for the budget year, to an amount sufficient to cover the reasonable regulatory costs to the DPH. Requires DPH to publish a list of proposed adjustments to these fees on February 1, 2013, and every February thereafter. 3.Revises the requirement that DPH publish a list of actual numerical fee charges for NHAP by July 30 each year and instead requires DPH to publish this list within 30 days of the enactment of the annual Budget Act. 4.Requires DPH to publish the final fee list by all of the following means: a. Issuing a letter to all licensed nursing home administrators, all skilled nursing facilities and intermediate care facilities, and all continuing education providers; b. Posting the list on DPH's website; and c. Including the final fee list as part of the licensing application package. 5.Requires DPH to conduct a staffing and systems analysis for purposes of ensuring efficient and effective utilization of AB 1710 | Page 3 fees and the proper allocation of departmental resources for the administration of activities required by NHAP. Requires DPH to make a report of this analysis to the Legislature by March 31, 2013, and to post it on its website. 6.Deletes a requirement that DPH provide an annual fiscal year NHAP fee report to the Legislature each April 1, and instead requires DPH to prepare a report, by January 15 each year, containing the following information: a. Estimates of costs to implement activities required by NHAP and estimated fee revenue; b. Recommended adjustments to fees based on projected workload and costs; and c. An analysis containing the following information for the current fiscal year and each of the previous four fiscal years: i. The number of persons applying for a nursing home administrator's license, the number of licenses approved or denied, and the number renewed; ii. The number of applicants taking the licensing exam and the number who pass or fail; iii. The number of persons applying for, accepted into, and completing the AIT Program; iv. The number, source, and disposition of complaints made against persons in the AIT Program and licensees, including the time between receipt of the complaint and completion of the investigation; v. The number and type of final administrative, remedial, or disciplinary actions taken against licensed nursing home administrators; vi. A listing of the names and nature of violations for individual licensed nursing home administrators, including final administrative, remedial, or disciplinary actions taken; and vii. The number of appeals, informal conferences, or hearings filed by nursing home administrators or held, the length of time between the request being filed and the final determination of the appeal, and the number of administrative, remedial, or disciplinary actions taken. 7.Requires all fees collected pursuant to NHAP, as well as administrative fines against licensees, to be paid into the Nursing Home Administrator Licensing Account in DPH's Licensing and Certification Program Fund, rather than the Nursing Home Administrator's State License Examining Fund AB 1710 | Page 4 8.States the intent of the Legislature that activities of the NHAP related to licensure of nursing home administrators be supported by fee revenue that is sufficient to fund these activities. FISCAL EFFECT : According to the Assembly Appropriations Committee: 1.Potential increased fee revenue of up to $400,000 annually could be assessed if DPH supported all NHAP activities by NHAP-related fee revenue as envisioned in this bill. For example, if all fees related to NHAP were increased proportionately, fees for nursing home administrators could approximately double from the current biennial fee of $190 to $380. 2.Costs associated with new reporting requirements are expected to be minor and absorbable. PRIOR VOTES : Assembly Health: 13- 6 Assembly Appropriations:12- 4 Assembly Floor: 47- 25 COMMENTS : 1.Author's statement. According to the author, this bill will end the practice of charging the costs of some NHAP functions to other programs, federal funds, or the General Fund. This bill makes the NHAP within DPH self-sustaining by revising accounting procedures, eliminating the cap on fee increases, and conforming the report date. This bill enacts the same licensing fee adjustment mechanism for NHAP that DPH uses for certified nurse assistants, home health aides, and all categories of health facilities, agencies and clinics. This will assure full resources necessary for the entire licensing and certification program to perform efficiently and effectively, while placing no burden upon federal funds, the General Fund, or other licensing programs. This bill assures the proper allocation of DPH resources for administering NHAP. The staffing and systems analysis called for in this bill ensures that the Legislature will be informed of the ongoing activities, challenges, and necessary fee adjustments in time for budget hearings. 2.Background on NHAP. The fees established in statute for the NHAP program have not changed since the licensing and AB 1710 | Page 5 regulation of nursing home administrators was shifted to DPH from the State Board of Nursing Home Administrators in the Department of Consumer Affairs, which was initially accomplished through an interagency agreement on July 1, 1998, and then by statute effective January 1, 2002. According to DPH's NHAP Annual Fee Report (Fee Report) for the 2011-12 fiscal year (FY), released in April of 2011, NHAP fees have remained constant since 1998. Beginning in FY 2003-04 through FY 2007-08, NHAP cost exceeded revenues. In FY 2006-07, NHAP's operating expenses increased to $507,000 while the revenues remained constant at $392,000. In FY 2007-08, the Governor's Budget included an additional 2.5 NHAP positions and increased budget authority to enable the NHAP to accomplish the mandated workload. NHAP's operating expenses thus continued to increase to $579,000, while the revenues decreased to $334,373, which reduced the contingency reserve significantly. The Fee Report states that an analysis of the duties and responsibilities of NHAP staff was conducted that revealed some functions were more general in nature and consistent with Licensing and Certification (L&C) activities and that these costs would more appropriately be charged to the L&C Special Fund. The Fee Report projects that in 2011-12, there will be $387,000 in NHAP fee revenue, while expenditures from the Nursing Home Administrator's State License Examining Fund (NHA Fund) will total $366,000. DPH notes that if revenue is projected to be less than the projected costs for the budget year, DPH is authorized by statute to propose that fees be adjusted by up to twice the increase in the CPI. However, with the reduction in appropriation from the NHA Fund as a result of shifting some expenses to the L&C Special Fund, revenues have exceeded actual and projected costs during FY 2008-09 through FY 2011-12, and therefore, DPH proposes no fee increases. 3.Prior legislation. AB 1807 (Committee on Budget), Chapter 74, Statutes of 2006, among other provisions, provided DPH new authority for restructuring fees that are collected from health facilities and other entities licensed by DPH so that the L&C Division of DPH would be entirely supported by federal funds and special funds beginning in the 2009-10 FY. AB 1409 (Chan), Chapter 687, Statutes of 2001, established AB 1710 | Page 6 with DPH the authority to license and regulate nursing home administrators and made additional changes to NHAP regarding the examination and licensing of nursing home administrators. 4.Support. This bill is supported by the California Advocates for Nursing Home Reform (CANHR), which states that this bill will have a positive fiscal impact on DPH, while having no cost to the state. More importantly, CANHR argues this bill will create a more effective way of reporting what is done with administrator fees. CANHR states that requiring DPH to report projected costs annually to the Legislature would make the use of the money transparent. SUPPORT AND OPPOSITION : Support: California Advocates for Nursing Home Reform Oppose: None received. -- END --