BILL ANALYSIS                                                                                                                                                                                                    Ó




                                                                  SB 1382
                                                                  Page A
          SENATE THIRD READING
          SB 1382 (Block)
          As Amended  August 22, 2014
          Majority vote

           SENATE VOTE  :23-8  
           
           HUMAN SERVICES      6-1                                         
           
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          |Ayes:|Stone, Maienschein,       |     |                          |
          |     |Ammiano,                  |     |                          |
          |     |Ian Calderon, Garcia,     |     |                          |
          |     |Lowenthal                 |     |                          |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Grove                     |     |                          |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 

           SUMMARY  :  Increases Residential Care Facilities for the Elderly  
          (RCFE) licensing fees by 20% as they existed prior to the 10%  
          increase made by SB 855 (Budget and Fiscal Review Committee),  
          Chapter 29, Statutes of 2014, the 2014-15 Human Services Budget  
          Trailer Bill.  

           FISCAL EFFECT  :  None.  This bill has been keyed non-fiscal by  
          the Legislative Counsel.

           COMMENTS  :  Prior to the adoption of SB 855 (Chapter 29, Statutes  
          of 2014), the 2014-15 Human Services Budget Trailer Bill, this  
          bill proposed to increase RCFE licensing fees by 20%.   However,  
          SB 855 adopted a 10% increase.  As proposed, this bill now  
          increases licensing fees by approximately nine percent, which  
          reflects the difference between the initial 20% increase and the  
          increase made by SB 855. 

          Background:  RCFEs, commonly referred to as assisted living  
          facilities, are licensed retirement residential homes and board  
          and care homes that accommodate and provide services to meet the  
          varying, and at times, fluctuating health care needs of  
          individuals who are 60 years of age and over, and persons under  
          the age of 60 with compatible needs.  Licensed by Department of  
          Social Services (DSS) Community Care Licensing Division (CCLD),  
          they can range in size from residential homes with six or less  









                                                                  SB 1382
                                                                  Page B
          beds to more formal residential facilities with 100 beds or  
          more.  There is also no uniform common care model; rather the  
          types of assistive services can vary widely, which can include  
          differing levels of personal care and protective supervision,  
          based upon the needs of the resident. 

          If a resident needs medical care in his or her residence in  
          order to maintain an independent lifestyle, incidental medical  
          services are permitted to be provided by a licensed or otherwise  
          approved external provider, such as a home healthcare agency  
          (HHA), which is licensed by the California Department of Public  
          Health.  Additionally, some RCFEs, upon approval of DSS and  
          after having met specified orientation and training  
          requirements, may provide assistive memory care services to  
          individuals with dementia or Alzheimer's disease. 

          Growing demand:  Over the past thirty years, the demand for  
          RCFEs has grown substantially.  Although RCFEs have been  
          generally available, they experienced explosive growth in the  
          1990s, more than doubling the number of beds between 1990 and  
          2002,<1> and continued to grow 16% between 2001 and 2010.<2>   
          Nationwide, states reported 1.2 million beds in licensed RCFEs  
          in 2010.<3>  That same year, the national Centers for Disease  
          Control and Prevention reported that 40% of RCFE residents  
          needed help with three or more activities of daily living and  
          three-fourths of residents had at least two of the 10 most  
          common chronic conditions.<4>

          According to DSS, as of June 2, 2014, there are 7,587 licensed  
          RCFEs in California with a capacity to serve 176,891 residents. 

          Financial Structure:  More than 90% of RCFE licenses in  
          California are held by for-profit providers, the majority of  
          ---------------------------
          <1>  Flores and Newcomer, "Monitoring Quality of Care in  
          Residential Care for the Elderly: The Information Challenge".  
          Journal of Aging and Social Policy, 21:225-242, 2009.
          <2>  SCAN Foundation. "Long Term Care Fundamentals: Residential  
          Care Facilities for the Elderly." March 2011.
          http://thescanfoundation.org/sites/thescanfoundation.org/files/LT 
          C_Fundamental_7_0.pdf
          <3>  "Assisted Living and Residential Care in the States in  
          2010," Mollica, Robert, AARP Public Policy Institute
          <4>  "Residents Living in Residential Care Facilities: United  
          States, 2010, Caffrey, Christine, et al., US Centers for
          Disease Control, April 2012








                                                                  SB 1382
                                                                  Page C
          which have six or fewer beds.  Most residents pay privately or  
          with long-term care insurance since there is very little public  
          funding available through Medi-Cal, Supplemental Security  
          Income/State Supplemental Payment Program (SSI/SSP) or Medicare,  
          and fees can range from $1,500 to more than $8,000 per month.   
          Very few beds are available to seniors who use their entire  
          SSI/SSP checks to pay rent.  In 2013, the maximum SSI/SSP grant  
          was $866.40.  Residents who rely solely on Social Security  
          Income may have a maximum payment of $2,642 per month in  
          2014,<5> although that amount varies widely based on the  
          recipient's prior income while working.

          As a result, low-income seniors and middle-income seniors who do  
          not have long term care insurance are largely unable to afford  
          to reside in a RCFE.  Most low-income seniors may receive  
          services through In Home Supportive Services or a skilled  
          nursing facility if they are Medi-Cal eligible.  A small number  
          of Medi-Cal patients who are eligible for nursing home care may  
          be placed in an RCFE through the state's Assisted Living Waiver,  
          which began in 2006.  According to state data, 172 RCFEs  
          currently participate in the waiver program benefitting 2,200  
          residents.  There are an additional 3,700 slots available. 

          Increasingly, complex corporate mergers and acquisitions have  
          meant that many RCFEs are owned by national corporate chains  
          that control more than one facility.  Administrators employed by  
          these chains may also oversee multiple facilities.  This  
          development has led to regulatory challenges since CCLD  
          citations and other licensing reports are facility specific, and  
          management problems common to multiple RCFEs with the same owner  
          may easily go unnoticed.

          Need for the bill:  Stating the need for this bill, the author  
          states:

               Recent scrutiny of RCFEs has sparked multiple  
               legislative changes to address deficiencies and  
               improve regulation and supervision of assisted living  
               facilities in order to better protect our seniors.   
               Among these proposals is the need to inspect RCFEs  
               every year instead of  every five years, require more  
               training of direct care staff and administrators, and  
               require the Community Care Licensing division, charged  
               with investigating complaints, to begin investigating  



               ----------------------
          <5> http://www.ssa.gov/pressoffice/factsheets/colafacts2014.pdf








                                                                  SB 1382
                                                                  Page D
               certain complaints within 24 hours and to complete  
               these investigations within 30 days. 

               These important changes that will help uplift the  
               entire RCFE system cost money and the Department of  
               Social Services is barely keeping up with its current  
               regulatory programs. Increasing the RCFE licensing  
               fees by a moderate 30% will improve the department's  
               oversight and regulation and allow for new measures to  
               be fully implemented.

           
          Analysis Prepared by  :    Chris Reefe / HUM. S. / (916) 319-2089 


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