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--- STAFF ANALYSIS OF ASSEMBLY BILL 2236 (Maienschein) PageB 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 STAFF ANALYSIS OF ASSEMBLY BILL 2236 (Maienschein) PageC 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 STAFF ANALYSIS OF ASSEMBLY BILL 2236 (Maienschein) PageD 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. STAFF ANALYSIS OF ASSEMBLY BILL 2236 (Maienschein) PageE 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: STAFF ANALYSIS OF ASSEMBLY BILL 2236 (Maienschein) PageF 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. STAFF ANALYSIS OF ASSEMBLY BILL 2236 (Maienschein) PageG 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 STAFF ANALYSIS OF ASSEMBLY BILL 2236 (Maienschein) PageH 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 STAFF ANALYSIS OF ASSEMBLY BILL 2236 (Maienschein) PageI 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 STAFF ANALYSIS OF ASSEMBLY BILL 2236 (Maienschein) PageJ 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 STAFF ANALYSIS OF ASSEMBLY BILL 2236 (Maienschein) PageK 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 STAFF ANALYSIS OF ASSEMBLY BILL 2236 (Maienschein) PageL 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 STAFF ANALYSIS OF ASSEMBLY BILL 2236 (Maienschein) PageM 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. -- END --