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 ----------------------------------------------------------------- |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 FN: 0005207