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 --