BILL ANALYSIS                                                                                                                                                                                                    Ó






                                 SENATE HEALTH
                               COMMITTEE ANALYSIS
                       Senator Ed Hernandez, O.D., Chair


          BILL NO:       SB 177                                      
          S
          AUTHOR:        Strickland                                  
          B
          AMENDED:       As Introduced                               
          HEARING DATE:  April 13, 2011                              
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          CONSULTANT:                                                
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          Hansel                                                     
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                                     SUBJECT
                                         
                      Congregate living health facilities


                                     SUMMARY  

          Raises the bed limit for congregate living health 
          facilities that serve terminally ill patients in counties 
          that have populations of more than 400,000, but less than 
          500,000, persons.


                             CHANGES TO EXISTING LAW  

          Existing law:
          Provides for the licensure and regulation of health 
          facilities, including hospitals, skilled nursing 
          facilities, and congregate living health facilities 
          (CLHFs).

          Under current law, a CLHF is defined as a residential home 
          with a capacity of no more than 12 beds, that provides 
          inpatient care, medical supervision, 24-hour skilled 
          nursing and supportive care, and other services to persons 
          who meet one of the following:

                 Persons who are mentally alert who have physical 
               disabilities, who may be ventilator dependent;

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                 Persons who have a diagnosis of terminal illness, 
               or life-threatening illness, or both, as defined; or 

                 Persons who are catastrophically and severely 
               disabled, as defined.

          Notwithstanding the 12-bed limit, provides that a CLHF that 
          is operated by a city and county may have 59 beds, and 
          provides that a CLHF that is not operated by a city and 
          county that serves persons who have a diagnosis of terminal 
          illness or life-threatening illness, or both, that is 
          located in a county of 500,000 or more persons, may have 
          not more than 25 beds.
          Provides that the primary need of CLHF residents shall be 
          for skilled nursing care on a recurring, intermittent, 
          extended, or continuous basis, and provides that this care 
          is generally less intense than that provided in general 
          acute care hospitals but more intense than that provided in 
          skilled nursing facilities.

          Provides for the licensure and regulation by the Department 
          of Public Health (DPH) of persons or agencies that provide 
          hospice services in a person's home or other care setting, 
          defined as a specialized form of interdisciplinary health 
          care that is designed to provide palliative care, alleviate 
          the physical, emotional, social, and spiritual discomforts 
          of an individual diagnosed with a terminal illness, and 
          provide supportive care to the primary caregiver and the 
          family.  
          
          This bill:
          Provides that a CLHF that is not operated by a city and 
          county, that serves persons who have a diagnosis of 
          terminal illness, or life-threatening illness, or both, 
          that is located in a county of 400,000 or more persons may 
          have not more than 25 beds.  This would allow counties that 
          have population between 400,000 and 500,000 persons to site 
          CLHFs at the higher 25-bed limit.  According to current 
          population estimates, five counties currently fall into 
          this category:  Monterey, Santa Barbara, Solano, Sonoma, 
          and Tulare.      


                                  FISCAL IMPACT  





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          This bill has not been analyzed by a fiscal committee.


                            BACKGROUND AND DISCUSSION  

          According to the author, SB 177 would extend the higher 
          CLHF bed limits that apply to counties with populations of 
          500,000 or more persons, to counties with populations above 
          400,000.  This change would increase the maximum number of 
          patient beds allowable under the CLHF regulations for the 
          purpose of serving persons who are terminally ill or have 
          been diagnosed with a life-threatening illness.

          The author states that Santa Barbara County currently has 
          only one licensed CLHF facility, Serenity House, which is a 
          six bed facility operated by the Visiting Nurse and Hospice 
          Care of Santa Barbara (VNHC).  It has become clear that 
          additional end-of-life beds are required to satisfy the 
          growing needs of the county's aging population. Between 
          2008 and 2009, Serenity House saw a 71 percent increase in 
          the number of patients served, and has developed a growing 
          waiting list due to a lack of available beds for 
          end-of-life patients.  

          The author states that without the enactment of SB 177, a 
          new Serenity House facility, which is scheduled for opening 
          in May 2011, will have to operate as a 12-bed facility. 
          Enactment of SB 177 will allow the six additional beds to 
          become operative in January 2012 and thus provide more 
          critical hospice bed capacity to the Santa Barbara region 
          of the central coast. 

          CLHFs that serve terminally ill persons
          CLHFs are residential-based care facilities that provide 
          inpatient care, medical supervision, 24-hour skilled 
          nursing and supportive care, and other services to one of 
          three categories of persons:  (1) Persons who are mentally 
          alert who have physical disabilities, who may be ventilator 
          dependent; (2) Persons who have a diagnosis of terminal 
          illness, or life-threatening illness, or both; or (3) 
          Persons who are catastrophically and severely disabled.  

          According DPH, 53 CLHFs are currently licensed in 
          California to provide services to these populations.  Of 
          these, 12 serve terminally ill patients.  CLHFs that serve 




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          terminally ill patients are sometimes referred to as 
          CLHF-Bs, which denotes the subparagraph of the statute that 
          refers to them. 

          Hospice services that are provided to terminally ill 
          patients and their families generally fall into four 
          categories or levels of care - routine home care, 
          continuous home care, inpatient respite care, and general 
          inpatient care.  Routine home care and continuous home care 
          services are generally provided in the patient's home, 
          which can include a licensed health or residential care 
          facility that they reside in.  CLHF-Bs can provide this 
          level of care, when it is not feasible for a patient to be 
          cared for at home.  When a hospice patient needs an 
          inpatient level of care, either to provide respite to 
          family members or due to a need for 24-hour pain control 
          and symptom management, hospice service providers generally 
          must arrange to place the patient in a licensed health 
          facility, such as a hospital, skilled nursing facility or 
          CLHF-B.  

          Several hospice service providers currently operate their 
          own facilities to accommodate hospice patients with these 
          higher levels of needs.  One currently operates a special 
          hospital in San Diego with 24 beds, which is operating 
          under a pilot project that was established in 1980.  Eleven 
          hospice service providers operate CLHF-Bs to serve patients 
          who need inpatient care.  

          Bed limits and county size
          In order to provide options for providing care to 
          chronically ill patients outside of hospitals, CLHFs were 
          established as a category of licensed health facilities in 
          1986.  CLHFs were initially limited to having no more than 
          six beds and were limited to serving mentally alert, 
          physically disabled residents, who can be 
          ventilator-dependent.  In 1988, a second category of CLHFs 
          was authorized to provide 24-hour inpatient care to 
          terminally ill patients.  These facilities were allowed to 
          have 25 beds in counties which have a population of 500,000 
          or more persons.  In 1989, a third category of CLHFs was 
          established, to serve persons who are catastrophically and 
          severely disabled, which were allowed to have 12 beds in 
          counties with more than 500,000 persons.  In 2005, 
          legislation was enacted which raised the bed-size limit for 




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          CLHFs in all counties to 12 beds, while retaining the 
          higher 25-bed limit for CLHFs serving terminally ill 
          patients in counties with more than 500,000 persons.

          The impetus for the 1988 legislation establishing the new 
          CLHF category for terminally ill patients, with a bed limit 
          of 25 in counties with over 500,000 persons, was to enable 
          a proposed 25-bed hospice facility serving persons with 
          AIDS, which was proposed to be operated by Barlow Hospital 
          in Los Angeles, to be licensed as a CLHF.


          Serenity House in Santa Barbara County
          In 1994, Visiting Nurse and Hospice Care (VNHC), a 
          nonprofit provider of hospice services, opened Serenity 
          House, a six-bed, Medicare-certified CLHF-B serving Santa 
          Barbara and Ventura counties.  Because it is the only 
          similar facility in Santa Barbara County, VNHC states that 
          the facility generally has a waiting list of 8 to 12 
          patients.  In 2004, VNHC initiated a community needs study 
          to determine if the community needed more hospice facility 
          beds.  Based on that study, VNHC decided in 2005 to build a 
          new 18-bed facility, which it began construction on in 
          2009.  Serenity House representatives state that while they 
          were aware of the 12 bed limit that applied to CLHF-Bs in 
          counties with population below 500,000, which includes 
          Santa Barbara, they believed that it would be possible to 
          get a waiver from DPH to operate at the larger bed-size.  
          While DPH does have authority to grant program flexibility 
          to waive or modify certain requirements that apply to 
          health facilities, including CLHFs, it cannot modify or 
          waive the bed limits in statute.  As a result, VNHC plans 
          to serve 12 patients in the new facility, but will expand 
          that to 18 if SB 177 or another bill is enacted that raises 
          the bed limit.  VNHC plans to transfer patients from its 
          existing six-bed facility and to close the existing 
          facility at the end of 2011.

          VNHC could have built a second 12-bed facility, which in 
          conjunction with its existing six-bed facility, would have 
          provided the same total number of beds for the area as a 
          single 18-bed facility.  However, it concluded, based on 
          research of hospice facilities across the country, that 
          efficiently run facilities have 16 to 24 beds.  Because of 
          the need to maintain two staffs at two facilities, have two 




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          directors, and maintain two grounds, VNHC concluded that a 
          single 18-bed facility would be more efficient to operate 
          than two separate facilities.  

          The new facility was built to comply with I-1 building 
          standards, as promulgated in the 2007 edition of the 
          California Building Code.  Those standards apply to 
          buildings housing clients on a 24 hour basis, who because 
          of age, mental disability or other reasons, live in a 
          supervised residential environment that provides personal 
          care services.  This occupancy may contain more than six 
          non-ambulatory and/or bedridden clients, and includes 
          Residential Care Facilities, Residential Care Facilities 
          for the Elderly (RCFEs), Congregate Living Health 
          Facilities, Group homes, Residential Care Facilities for 
          the Chronically Ill, and CLHF-Bs serving terminally ill 
          patients.  In October 2010, the Office of Statewide Health 
          Planning and Development (OSHPD) issued a letter to Senator 
          Alquist, the previous chair of the Senate Health Committee, 
          stating that the building came under its jurisdiction and 
          needed to meet construction standards applicable to skilled 
          nursing facilities or hospitals.  After further review, 
          OSHPD concluded in January 2011 that it did not have 
          jurisdiction over the building and that it was subject to 
          local building jurisdiction under the California Building 
          Code.

          Related bills
          SB 135 (Hernandez) creates a new health facility licensing 
          category, and requires DPH to develop regulations for, 
          hospice facilities, as defined.  Imposes various 
          requirements on these facilities.  Provides that DPH may 
          use specified federal regulations as the basis for hospice 
          facility licensure until it adopts regulations.  

          SB 804 (Corbett) requires the Department of Health Care 
          Services to allow CLHFs, as defined, that solely provide 
          pediatric subacute care services and do not provide 
          Medicare services, to participate in the Medi-Cal subacute 
          care program.

          Prior legislation
          AB 950 (Hernandez) of 2009-10 Session was substantially 
          similar to SB 135.  Held under submission in Senate 
          Appropriations Committee.




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          AB  2523 (Nava) of 2009-10 Session, in its final amended 
          form would have made the same changes as SB 177.  Died in 
          Senate Rules Committee.

          SB 1164 (Corbett) of 2009-10 would have required the 
          definition of CLHF to include facilities that provide 
          services to children who have a diagnosis of terminal 
          illness or a diagnosis of life-threatening illness.  
          Referred to Senate Health Committee, hearing canceled at 
          the request of the author.
          
          SB 666 (Aanestad), Chapter 443, Statutes of 2005, increases 
          the capacity of a CLHF from no more than six beds to no 
          more than 12 beds.  Maintains an exception to allow CLHFs 
          which serve terminally ill patients and which are located 
          in counties with 500,000 or more persons to have 25 beds.
          
          AB 3535 (Wright), Chapter 1459, Statutes of 1986, created 
          the CLHF licensure category, and defined a CLHF as a 
          residential home with a capacity of no more than six beds, 
          which provides inpatient care to mentally alert, physically 
          disabled residents, who may be ventilator dependent.

          AB 4536 (Polanco), Chapter 1478, Statutes of 1988, created 
          a second category of CLHFs, to provide 24-hour inpatient 
          care to terminally ill patients.  These facilities were 
          allowed to have 25 beds in counties which have a population 
          of 500,000 or more persons.  
          
          AB 68 (Polanco), Chapter 1393, Statutes of 1989, 
          established a third category of CLHFs, to serve persons who 
          are catastrophically and severely disabled, which were 
          allowed to have 12 beds in counties with more than 500,000 
          persons.  
          
          Arguments in support
          VNHC, the sponsor of SB 177, states that as the only 
          licensed hospice inpatient facility in Santa Barbara 
          County, Serenity House has struggled to meet demands for 
          end-of-life beds.  Between 2008 and 2009, Serenity House 
          saw a 71 percent increase in the number of patients served 
          and has a growing waiting list due to the lack of available 
          beds for end of life patients.  VNHC states that based on 
          current population projections, the number of people over 




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          the age of 65 in Santa Barbara County will increase by 24 
          percent by 2050.  While VNHC acknowledges that it made an 
          error in assuming it would be able to build an 18-bed 
          facility, because it believed that a waiver or exception 
          process existed to allow it to operate at the higher 
          bed-size, VNHC states that the need for additional 
          end-of-life beds continues to be critical in Santa Barbara 
          County and SB 177 will enable it to meet these needs and 
          continue providing compassionate care to persons at the end 
          of life.  

          Numerous other entities and individuals, including the 
          California Hospital Association, Santa Barbara Medical 
          Society, Alzheimer's Association-Central Coast, and the 
          Santa Barbara County Board of Supervisors strongly support 
          SB 177 because it will increase the number of hospice 
          facility beds in Santa Barbara county and meet the growing 
          needs for these services.  

          Arguments in opposition
          The California Nurses Association (CNA) objects to the fact 
          that the one CLFH facility that would benefit from the bed 
          limit change in SB 177 was built outside of existing bed 
          limits that apply to CLHFs, and that the administrators of 
          Serenity House did not abide by state law when planning and 
          constructing the facility.  CNA argues that it is not 
          appropriate to make an accommodation for this one facility. 
           CNA further questions whether the building standards for 
          the Serenity House facility have been correctly applied and 
          would be sufficient to keep patients and staff safe.  CNA 
          notes that the type of patients that can reside in a CLHF 
          include persons who are catastrophically and severely 
          neurologically disabled, and urges the committee to gain a 
          fuller understanding of why OSHPD reversed its claim of 
          jurisdiction over the building standards for the facility.
                                         
                                         
                                    POSITIONS  

          Support:  Visiting Nurse & Hospice Care (sponsor)
                    All Saints-by-the Sea Episcopal Church
                    Alliance for Living and Dying Well
                    Alzheimer's Association, California Central Coast 
                    Chapter
                    American Dream Concepts




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                    The Beatitude Society
                    Brown & Brown Insurance
                    California Association for Health Services at 
                    Home
                    California Hospital Association
                    California Hospice and Palliative Care 
                    Association
                    California Transplant Donor Network
                    CenCal Health
                    City of Goleta
                    Community Hospice
                    Cottage Health System
                    Council on Alcoholism and Drug Abuse
                    County of Santa Barbara Board of Supervisors
                    Dream Foundation
                    Frank Schipper Construction Co.
                    Friendship Center
                    Grace House
                    Hospice of Santa Barbara, Inc.
                    Hospice of the East Bay
                    Hospice of the Foothills
                    Hutton Parker Foundation
                    Livingston Memorial Visiting Nurse Association
                    Maravilla
                    Orfalea Foundations
                    PMSM Architects
                    Santa Barbara Cancer Center
                    Santa Barbara County Medical Society
                    Santa Barbara Neighborhood Clinics
                    Santa Barbara Region Chamber of Commerce
                    Santa Barbara Village
                    Sharon Kennedy Estate Management
                    Sharp Hospice Care
                    St. Francis Foundation
                    United Way of Santa Barbara County
                    Visiting Nurse Association of the Inland Counties
                    Vista Del Monte Retirement Community
                    182 individuals

          Oppose:   California Nurses Association


                                   -- END --
          





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