BILL ANALYSIS                                                                                                                                                                                                    Ó






                                  SENATE HUMAN
                               SERVICES COMMITTEE
                            Senator Jim Beall, Chair


          BILL NO:       AB 2236                                      
          A
          AUTHOR:        Maienschein                                  
          B
          VERSION:       April 21, 2014
          HEARING DATE:  June 24, 2014                                
          2
          FISCAL:        Yes                                          
          2
                                                                      
          3
          CONSULTANT:    Sara Rogers                                  
          6

                                        

                                     SUBJECT
                                         
               Residential care facilities for the elderly: civil  
                                   penalties

                                     SUMMARY  

          This bill increases the minimum and maximum civil penalties  
          issued by the California Department of Social Services  
          (CDSS) against a Residential Care Facility for the Elderly  
          (RCFE) for serious violations, for violations that are  
          determined to be the direct proximate cause of death or  
          serious injury for a resident, and for other lesser  
          violations. This bill also provides that the deficiencies  
          appeals process must include an option for review by an  
          administrative law judge. This bill further requires CDSS  
          to prove that a death or serious injury was the result of a  
          violation that was the proximate cause of the injury or  
          death, as specified, and after CDSS has met that burden,  
          provides a licensee with an additional opportunity to prove  
          it did what might reasonably be expected of an RCFE, acting  
          under similar circumstances, to comply with the statute or  
          regulation. Additionally requires citations for death or  
          serious injury be reviewed by the department's legal  

                                                         Continued---




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          division and approved by the deputy director.


                                     ABSTRACT  

           Existing Law: 
           
          1)Establishes the Residential Care Facilities for the  
            Elderly Act to license and regulate RCFEs as a separate  
            category within the existing residential care licensing  
            structure of CDSS. (HSC 1569 et seq.) 


          2)Provides that RCFEs shall be subject to unannounced  
            visits by CDSS and that the department shall visit  
            facilities as often as necessary to ensure the quality of  
            care provided, as specified. (HSC 1569.33)


          3)Permits establishment of an emergency resident relocation  
            fund to not which more than 50 percent of each civil  
            penalty is transmitted to CDSS to be used for the  
            relocation and care of residents when a facility's  
            license is revoked or temporarily suspended, as  
            specified.  (HSC 1569.48)


          4)Requires that any person who operates an unlicensed  
            facility, as defined in HSC 1569.10 or 1569.44, shall be  
            assessed by the department an immediate civil penalty in  
            the amount of one hundred dollars ($100) per resident for  
            each day of the violation, unless other remedies  
            available to the department, including criminal  
            prosecution, are deemed more effective by the department,  
            as specified. (HSC 1549.485)


          5)Permits CDSS to levy civil penalties for citations, in  
            addition to the suspension, temporary suspension or  
            revocation of a license and specifies penalties to be  
            issued for specific categories of violations, as follows:


               a.     Not less than $25 or more than $50 per day for  
                 each violation except where the nature or  





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                 seriousness of the violation or the frequency of the  
                 violation warrants a higher penalty or an immediate  
                 civil penalty assessment, or both, as determined by  
                 the department. 


               b.     Requires that in no event, shall a civil  
                 penalty assessment exceed one hundred fifty dollars  
                 ($150) per day per violation, as specified. (HSC  
                 1569.49 (b))


               c.     An immediate civil penalty of $150 per day per  
                 violation for any of the following serious  
                 violations (HSC 1569.49 (c)):


                     i.          Fire clearance violations,  
                      including, but not limited to, overcapacity,  
                      ambulatory status, inoperable smoke alarms, and  
                      inoperable fire alarm systems. The civil  
                      penalty shall not be assessed if the licensee  
                      has done either of the following: Requested the  
                      appropriate fire clearance based on ambulatory,  
                      nonambulatory, or bedridden status, and the  
                      decision is pending, or initiated eviction  
                      proceedings, as specified.


                     ii.         Absence of supervision as required  
                      by statute or regulation.


                     iii.        Accessible bodies of water, when  
                      prohibited in this chapter or regulations  
                      adopted pursuant to this chapter.


                     iv.         Accessible firearms, ammunition, or  
                      both.


                     v.          Refused licensing staff entry to a  
                      facility or any part of a facility, as  
                      specified in HSC 1569.32, HSC 1569.33, or HSC  





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                      1569.35.


                     vi.         The presence of an excluded person  
                      on the premises.


               d.     Additionally, any RCFE that is cited for  
                 repeating the same violation of this chapter within  
                 12 months of the first violation is subject to an  
                 immediate civil penalty of one hundred fifty dollars  
                 ($150) and fifty dollars ($50) for each day the  
                 violation continues until the deficiency is  
                 corrected. (HSC 1569.49 (d))


               e.     Any RCFE that is assessed a civil penalty which  
                 repeats the same violation of this chapter within 12  
                 months of the violation shall be assessed an  
                 immediate civil penalty of one thousand dollars  
                 ($1,000) and one hundred dollars ($100) for each day  
                 the violation continues until the deficiency is  
                 corrected, as specified. (HSC 1569.49 (e))


          6)Requires CDSS to adopt regulations setting forth the  
            appeal procedures for deficiencies. (HSC 1649.49 (a))

           This bill:

           1)Officially names the emergency relocation fund, The  
            Emergency Resident Relocation Fund, and establishes it in  
            the state Treasury. Additionally, requires, instead of  
            permitting, the department to deposit 50 percent of each  
            civil penalty assessed into the fund.  


           2)Adds to the current deficiency appeals process notice to  
            the complainant, affected residents, and, if possible,  
            their legal representatives, and the opportunity to  
            participate in the appeal. Additionally, requires the  
            appeal procedure to include an option for review by an  
            administrative law judge.  







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           3)Increases the minimum civil penalty from $25 to $100 per  
            day per violation, and the maximum from $100 to $250 per  
            day per violation for general violations of law or  
            regulation.  


           4)Strikes the requirement that in no event, shall a civil  
            penalty assessment exceed one hundred fifty dollars  
            ($150) per day per violation for serious offenses.  


           5)Specifies that civil penalties assessed on a per-day  
            basis shall end once the licensee submits documentation  
            of the correction, if the correction is verified by the  
            department.  


           6)Changes the civil penalty for specified serious  
            violations from $150 per violation per day to $1,000 per  
            violation per day. These include violations of fire  
            clearance, absence of supervision, accessible firearms  
            and others.


          7)Adds a minimum civil penalty of $5,000 and maximum of  
            $15,000 for a violation that CDSS determines was the  
            direct proximate cause of death to a resident.

          8)Adds a minimum civil penalty of $1,000 and maximum of  
            $10,000 for a violation that CDSS determines was the  
            direct proximate cause of "serious bodily injury" as  
            defined.


          9)Adds a minimum civil penalty of $500 and maximum of  
            $2,500 for a violation that CDSS determines constitutes  
            "physical abuse" as defined, but does not result in  
            "serious bodily injury," as defined, and it is determined  
            by the department that the abuse was committed by the  
            licensee or an employee of the licensee.


          10)Requires the department to prove in cases of death or  
            serious injury both of the following:






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               a.     The violation was a direct proximate cause of  
                 the death or serious bodily injury of a resident.
               b.     The death or serious bodily injury resulted  
                 from an occurrence of a nature that the statute or  
                 regulation was designed to prevent.


          11)Requires dismissal of a citation if the licensee proves  
            that he or she did what might reasonably be expected of  
            an RCFE licensee, acting under similar circumstances, to  
            comply with the statute or regulation.


          12)Requires that prior to the issuance of a citation  
            imposing a civil penalty for death or serious bodily  
            injury, the decision shall be reviewed by the  
            department's legal division and approved by the deputy  
            director.


          13)Changes the civil penalty for a repeated violation  
            within 12 months from an immediate civil penalty of $150,  
            plus $50 per day for each day the violation is repeated,  
            to an immediate penalty of $1,000 and $200 per day that  
            the violation is repeated, until the licensee submits  
            documentation of the correction, if the correction is  
            verified by CDSS.


          14)Requires CDSS in assessing a civil penalty for a  
            violation to consider all relevant information,  
            including, but not limited to, both of the following:


               a.     The probability and severity of the risk of  
                 harm that the violation presents to the resident's  
                 mental and physical condition.
               b.     The good faith efforts of the facility to  
                 prevent the violation from occurring.


          15)Requires that in any enforcement actions taken by the  
            department, the licensee shall be liable for the acts and  
            omissions of its officers and employees.





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          16)Requires CDSS by January 1, 2016, to amend its  
            regulations to reflect changes in this bill and  
            stipulates that existing regulations shall remain in  
            effect until those amendments are made to regulation.

                                  FISCAL IMPACT  

          An analysis by the Assembly Committee on Appropriations  
          projected ongoing significant  costs to CDSS, likely in the  
          $200,000 to $300,000 range (GF), for legal review and  
          approval of potential citations, one-time minor costs to  
          CDSS, likely in the tens of thousands (GF), for penalty  
          system adjustments and unknown, but likely significant  
          costs CDSS and the courts for an expanded appeal and review  
          process.


                            BACKGROUND AND DISCUSSION  

          According to the author, the current civil penalty  
          structure for RCFEs does not distinguish between violations  
          of differing severities and has remained essentially  
          unchanged since its establishment in 1985. The author  
          states that today, the civil penalty for a violation that  
          led to a death of a resident of an RCFE is $150 and that  
          such a low fine is not meaningful.


          This bill would increase civil penalties for RCFEs from the  
          current maximum of $150 per day to as much as $15,000 for  
          incidents that result in death and up to $10,000 for those  
          resulting in serious injury. In instances of physical abuse  
          without serious bodily injury the bill authorizes a civil  
          penalty of up to $2,500. According to the author, this bill  
          creates a broader range of fine options for CDSS to  
          consider, and requires that specified serious violations,  
          including a lack of fire clearance, the presence of an  
          excluded individual, refusing to allow entry to a state  
          inspector would be subject to a penalty of $1,000 per day,  
          per violation.


          The author states that lower level citations, which  





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          currently carry penalties of $25 to $100, would be  
          increased to $100 to $250 per incident per day. Further,  
          the author states that this bill also establishes an  
          appeals process similar to that used for nursing homes for  
          the most serious violations. It requires that citations of  
          death or serious injury be reviewed by the department's  
          legal staff and signed off by the department's deputy  
          director prior to issuance.


          Recent events

          A series of recent events has drawn attention to questions  
          about the adequacy of oversight with the Community Care  
          Licensing Division of CDSS and the state's ability to  
          protect people who receive services within CDSS-licensed  
          facilities. 


           In July 2013, ProPublica and Frontline reporters wrote  
            and produced a series of stories on Emeritus, the  
            nation's largest RCFE provider.<1> Featured in the  
            article was a woman who died after receiving poor care at  
            in a facility in Auburn, California. The series  
            documented chronic understaffing, a lack of required  
            assessments and substandard care. 


           Reports in September 2013, prompted by a consumer  
            watchdog group that had hand-culled through stacks of  
            documents in San Diego, revealed that more than two dozen  
            seniors had died in recent years in RCFEs under  
            questionable circumstances that went ignored or  
            unpunished by CCL.<2> 


          -------------------------
          <1>  
          http://www.propublica.org/article/life-and-death-in-assisted 
          -living-single


          <2> "Care Home Deaths Show System Failures," San Diego  
          Union Tribune, Sept.7, 2013






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           In late October 2013, 19 frail seniors were abandoned at  
            Valley Springs Manor in Castro Valley by the licensee and  
            all but two staff after the state began license  
            revocation proceedings for the facility. CDSS inspectors,  
            noting the facility had been abandoned, left the two  
            unpaid service staff to care for the abandoned residents  
            with insufficient food and medication, handing them a  
            $3,800 citation before leaving for the weekend. The next  
            day sheriff's deputies and paramedics sent the patients  
            to local hospitals.


          Residential Care Facilities for the Elderly


          Within California's continuum of long term care, situated  
          between in-home care and skilled nursing facilities, is the  
          RCFE, also commonly called Assisted Living, Board and Care,  
          or Residential Care. There are approximately 8,000 Assisted  
          Living, Board and Care, and Continuing Care Retirement  
          homes that are licensed as RCFEs in California. These  
          residences are designed to provide homelike housing options  
          to residents who need some help with activities of daily  
          living, such as cooking, bathing, or getting dressed, but  
          otherwise do not need continuous, 24-hour assistance or  
          nursing care. Increasingly residents are entering RCFEs  
          with significant health needs including diabetes, bedsores,  
          or require the use of oxygen tanks, catheters, colostomies  
          or ileostomies.  


          The RCFE licensure category includes facilities with as few  
          as six beds to those with hundreds of residents, whose  
          needs may vary widely. Typically, the smaller facilities  
          are homes in residential neighborhoods while the larger  
          facilities resemble apartment complexes with structured  
          activities for their residents. Generally, residents are  
          free to leave the facility if they choose, and may  
          entertain guests, and otherwise maintain a high level of  
          independence. Facilities licensed to serve residents with  
          dementia or Alzheimer's disease, also known as "memory care  
          units," may maintain a secure perimeter. 


          Joint Hearing on RCFEs





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          On February 11, 2014, the Senate and Assembly Human  
          Services Committees jointly held an informational hearing  
          investigating efforts to increase accountability and  
          oversight of Assisted Living Facilities. Testimony during  
          the hearing highlighted significant technological barriers  
          to the tracking of complaints and deficiencies, limited  
          follow-up practices by the department to ensure that  
          deficiencies are corrected, frequent failure to collect  
          assessed fines and penalties, a lengthy appeals process  
          that hinders immediate action when necessary, and use of a  
          shortened inspection tool that has not been validated for  
          use in RCFEs.   


          CDSS acknowledged at the hearing that there were serious  
          and historic failures of regulatory oversight over RCFEs,  
          highlighted most recently at Valley Springs Manor in  
          Alameda County. CDSS has acknowledged that it waited until  
          after the facility administrator abandoned the residents to  
          take emergency action, despite receiving no communication  
          or response from the licensee during the nearly five months  
          since the Department had initiated license revocation  
          proceedings. CDSS said it made a "judgment error" in  
          deciding that the facility, then staffed only by an  
          untrained janitor and cook, and without access to  
          medications or sufficient food, could function through the  
          weekend. 


          CDSS has additionally stated that the Community Care  
          Licensing division (CCL) erred in not directing existing  
          staff or deploying additional field staff to remain on site  
          until the transfer of the residents was completed and the  
          facility was closed. At the hearing, the Department  
          acknowledged that despite the severity of the violations of  
          the licensee, the maximum fine that could be imposed was a  
          $150 fine/per violation per day. In such an instance, this  
          bill would increase the maximum to $1,000 per day. 


          2014-2015 Budget Act

          As part of the Governor's 2014-2015 proposed budget, the  
          Administration put forth trailer bill language that had  





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          substantial overlap with provisions of this bill but that  
          language ultimately was not included in SB 855 (Committee  
          on Budget and Fiscal Review, 2014) the Human Services  
          omnibus trailer bill which was passed by the Legislature on  
          June 15th. Instead of amending the civil penalty structure  
          in the budget, the Legislature adopted the following intent  
          language:


            The Legislature finds and declares that the current civil  
            penalty structure for facilities licensed by the State  
            Department of Social Services is insufficient to ensure  
            the health and safety of those in care. It is the intent  
            of the Legislature to comprehensively increase these  
            penalties for all facilities in subsequent legislation,  
            with particular emphasis on penalties for violations that  
            result in serious injury or death.


          In its original proposal, the Administration proposed  
          significant changes to the civil penalty structure using a  
          substantially different methodology than this bill.  
          Specifically, the Governor's proposal sought to amend the  
          penalty structure for all community care facilities,  
          residential care facilities for the elderly and child care  
          facilities and homes. This bill addresses the civil  
          penalties only for Residential Care Facilities for the  
          Elderly. Additionally, the Governor's proposal established  
          a penalty structure for serious offenses of five times the  
          amount of the annual licensing fee per day per violation.  
          The stated reasoning behind this method was that given the  
          wide variation in size of facilities, even within licensing  
          categories, it was not feasible to set an appropriate  
          penalty amount that would not either be excessively  
          burdensome on small facilities, or so small as to have no  
          deterrent effect on large facilities. The department argued  
          that establishing a civil penalty structure based on a  
          factor of a facilities licensing fee would create a  
          structural penalty variation proportionate to the size of  
          each facility. 


          In contrast, this measure establishes a range of dollar  
          amounts that the department would have discretion in  
          setting; however the bill does not establish clear criteria  





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          for how the department would set varied civil penalties  
          within the range.


                                     COMMENTS

           Staff recommends the author commit to engage in a  
          stakeholder meeting with both policy committees and  
          stakeholders to discuss the following:


           1. The Legislature's adopted intent language in the  
             2014-2015 Budget Act to comprehensively increase civil  
             penalties for all facilities in subsequent legislation,  
             pending further policy conversations regarding the  
             appropriate methodology. At this time, a comprehensive  
             policy conversation has not occurred, and the policy  
             committees have not had an opportunity to consider the  
             Governor's proposed methodology, or alternative  
             methodologies such as a blend between the two  
             approaches. This bill would establish a course of action  
             for RCFEs in advance of that conversation.


           2. Concerns have been raised with provisions of this bill  
             that require CDSS to have a burden of proof that a  
             licensing violation was the "proximate cause" of death  
             or serious injury of a resident. "Proximate cause" is  
             not a clearly defined legal term, but originated with  
             civil law cases and was later applied to death  
             certification as the proximate cause of death. Such  
             proof requires that a medical examiner or coroner be  
             able to explain the reasoning behind a death  
             certification. For example, if an individual is  
             neglected in an RCFE and develops bed sores, and then  
             later dies as a result of an infection that was obtained  
             after the resident was sent to the hospital, the bill as  
             drafted may not permit the department to cite the RCFE  
             for that death.


           3. Concerns have been raised about establishing a range of  
             penalties for death, serious injuries and serious  
             violations, which this bill would do. The concerns  
                                             center on creating a situation in which the citation  





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             amount is subjective and would lead to an increase the  
             number of citations that are appealed, leading to  
             substantial costs to the department to collect civil  
             penalties. 



                                   PRIOR VOTES

           Assembly Floor      78 - 0
          Assembly Appropriations  16 - 0
          Assembly Human Services     7 - 0



                                    POSITIONS  

          Support:       California Assisted Living Association
                         California Long-Term Care Ombudsman  
          Association
                         Congress of California Seniors
                         Law Offices of Sanford I. Horowitz
                         Leading Age California
                         Stanislaus County Commission on Aging
                         2 Individuals
                         

          Oppose:   None received.






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