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 1 CONSULTANT: 7 Hansel 7 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; Continued--- STAFF ANALYSIS OF SENATE BILL 177 (Strickland) Page 2 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 STAFF ANALYSIS OF SENATE BILL 177 (Strickland) Page 3 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 STAFF ANALYSIS OF SENATE BILL 177 (Strickland) Page 4 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 STAFF ANALYSIS OF SENATE BILL 177 (Strickland) Page 5 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 STAFF ANALYSIS OF SENATE BILL 177 (Strickland) Page 6 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. STAFF ANALYSIS OF SENATE BILL 177 (Strickland) Page 7 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 STAFF ANALYSIS OF SENATE BILL 177 (Strickland) Page 8 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 STAFF ANALYSIS OF SENATE BILL 177 (Strickland) Page 9 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 -- STAFF ANALYSIS OF SENATE BILL 177 (Strickland) Page 10