BILL ANALYSIS Ó
AB 601
Page 1
Date of Hearing: April 28, 2015
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Kansen Chu, Chair
AB 601
(Eggman) - As Amended April 23, 2015
SUBJECT: Residential Care Facilities for the Elderly:
licensing and regulation
SUMMARY: Expands and further specifies licensure requirements
for Residential Care Facilities for the Elderly.
Specifically, this bill:
1)Specifies that any party applying for a license for a
residential care facility for the elderly (RCFE) that is a
firm, or other entity, shall submit evidence affirming the
reputable and responsible character of any members or
shareholders holding a beneficial ownership interest of at
least 10% and of the person holding operational control of the
RCFE in question, as specified.
2)Requires an applicant for an RCFE license to disclose the
following:
a) Whether it is a for-profit or not-for-profit provider;
AB 601
Page 2
b) The names and license numbers of other community care
and health care facilities owned, managed, or operated by
the same applicant or by any parent organizations of the
applicant;
c) The names and business addresses of any persons,
organizations, or entities listed as the owner of record in
the real estate of the facility, as specified; and
d) The email address of the applicant.
1)Expands required disclosure of an RCFE license applicant's
prior and present administrative service in or ownership of,
as specified, any health or care facility to include any
similarly licensed facility. Further, specifies that such
facilities can be located in California or any other state and
that disclosure must encompass the past 10 years, as
specified.
2)Requires an RCFE license applicant to disclose the applicant's
chief executive officer's, general partner's, or like party's
prior and present administrative service in or ownership of
any health or care facility within the past 10 years, as
specified.
3)Expands and specifies required disclosure of an RCFE license
applicant's licensing history to include actions taken in
California or any other state, and to include any suspension,
probation, or similar disciplinary action taken or in the
process of being taken against a health or care facility, as
specified, or against a license held or previously held by the
applicant or the applicant's chief executive officer, general
partner, or like party, within the past 10 years.
AB 601
Page 3
4)Requires an RCFE license applicant to submit evidence of right
of possession of the facility at the time the license is
granted, as specified.
5)Requires the Department of Social Services (DSS) to
cross-check the RCFE license applicant's information regarding
facility ownership, as specified, with the Department of
Public Health (DPH).
6)Removes the requirement that failure of an RCFE license
applicant to cooperate with DSS in completion of the
application, as specified, result in denial of the application
and instead makes such denial permissive.
7)Requires RCFE license application information, as specified,
to be provided to DSS upon initial application and further
requires that any changes in such information be provided to
DSS within 30 calendar days of that change.
8)Requires DSS to deny an RCFE license application, and allows
it to subsequently revoke an RCFE license, if the applicant
knowingly made a false statement of fact regarding application
information.
9)Permits DSS to deny an RCFE application or subsequently revoke
an RCFE license if the applicant did not disclose enforcement
actions, as specified, on the application.
10)Requires DSS, to the extent that its computer system can
accommodate additional RCFE information, to post identifying
and descriptive information, as specified, for licensed
AB 601
Page 4
providers.
11)Permits DSS to deny an application for an RCFE license if the
applicant has a history of noncompliance with licensure
requirements for RCFEs or other health or care facilities,
applicable state and federal laws, and requirements governing
facility operators, as specified.
12)States that noncompliance by the chief executive officer,
general partner, or like party with RCFE licensure
requirements and implementing regulations, as specified, may
be the basis for license decisions against the owner.
EXISTING LAW:
1)Establishes the California Residential Care Facilities for the
Elderly Act. (HSC 1569 et seq.)
2)Defines "residential care facility for the elderly" as a
housing arrangement chosen voluntarily by individuals ages 60
and older, or their authorized representative, where care and
services, as specified, are provided based upon individuals'
varying needs and as determined in order for them to be
admitted and remain in the facility. (HSC 1569.2 (l))
3)Requires DSS to inspect and license RCFEs and further
specifies that an RCFE license is not transferable. (HSC
1596.11)
4)Sets forth requirements for anyone seeking an RCFE license,
including but not limited to filing with DSS: evidence
satisfactory to DSS that the applicant is of reputable and
AB 601
Page 5
responsible character, as specified; evidence satisfactory to
DSS that the applicant has sufficient financial resources to
maintain the standards of service required, as specified; and
disclosure of licensing and violation history, as specified.
(HSC 1569.15)
5)Requires DSS to cease review of an RCFE license application if
that application indicates, or DSS determines, that the
applicant was previously issued a license for a facility, as
specified, or a certificate of approval by a foster family
agency, and that license or certificate was revoked in the
past two years; specifies that this cessation of review should
last until two years after the revocation in question. (HSC
1569.16)
6)Requires DSS to cease review of an RCFE license application if
that application indicates, or DSS determines, that the
applicant was previously excluded from a facility licensed by
DSS unless the excluded individual has been reinstated, as
specified. (HSC 1569.16)
7)Requires DSS to make a determination regarding the
completeness of an initial RCFE license application within
five working days of its filing, as specified. Further
requires DSS, within 60 days of a determination that a file is
complete, to make a determination as to whether the
application is in compliance with all pertinent law, rules,
and regulations and to immediately issue the license or notify
the applicant of deficiencies, and whether those deficiencies
constitute a denial of the application or further corrections
will likely result in approval. (HSC 1569.20)
8)Requires the director of DSS to establish an automated license
information system on RCFE licensees and former RCFE
licensees, as specified. (HSC 1569.355)
AB 601
Page 6
9)States that individuals found in violation of RCFE licensing
laws and regulations, as specified, are guilty of a
misdemeanor and shall be subject to a fine of up to $1,000,
imprisonment in county jail for up to one year, or both. (HSC
1569.40)
10)States that operation of an RCFE without a license is subject
to a court summons and punishable as a misdemeanor, as
specified. (HSC 1569.40)
11)Allows DSS to deny an application for an RCFE license or
suspend or revoke an RCFE license for certain acts and
violations, as specified. (HSC 1569.50)
12)Permits DSS to exclude individuals from facilities and
certain other activities, affiliations, and interactions, if
they are found to have committed certain violations or have
engaged in certain conduct, as specified. (HSC 1569.58)
FISCAL EFFECT: Unknown
COMMENTS:
Residential Care Facilities for the Elderly: RCFEs, sometimes
referred to as "assisted living facilities," provide housing,
care, supervision, and assistance with activities of daily
living to individual ages 60 and older, as well as individuals
under the age of 60 with compatible needs. RCFEs differ from
Skilled Nursing Facilities (SNFs) in that RCFEs are considered a
housing alternative, while SNFs are considered a medical
facility; however, incidental medical services may be provided
AB 601
Page 7
in RCFEs under special care plans. RCFE residents require
varying levels of care and services, and RCFEs can vary widely
in the services offered. Costs can range widely as well; in
California, the monthly cost for a one-bedroom single occupancy
unit can range from $700 to $10,650, with the median monthly
cost at $3,750.
As of June 30, 2014, there were 7,474 RCFEs licensed in
California, with the capacity to serve 146,955 residents. RCFEs
can range in size from six beds to over 100 beds, and are
licensed by DSS's Community Care Licensing Division (CCLD).
Licensing and oversight of community care facilities: The CCLD
within DSS licenses a variety of facilities for individuals
unable to live alone, but who do not require extensive medical
services. These facilities include: child care centers, family
child care homes, adult day care facilities, foster family care
homes, other children's residential facilities, and adult and
senior residential facilities, including RCFEs. There are
approximately 65,000 licensed care facilities in the state, with
the capacity to serve 1.3 million Californians.
The CCLD conducts random inspections of 30% of facilities
annually, and each facility must be visited at least once every
five years. Some exceptions triggering more frequent
inspections exist, and federal funding requires approximately10%
of facilities to be inspected annually. Approximately 500
licensing analysts are employed by CCLD to conduct inspections
and complaint investigations.
Prior to 2004, annual inspections were required for most
facilities; the 2003-04 state Budget Act reduced this to once
every five years. The 2014-15 Budget Act included a 10%
increase in annual licensing and application fees, and
investments in quality enhancement, including increased staff,
AB 601
Page 8
training, a quality assurance unit, and centralization of
application and complaint processes.
Health and safety concerns in RCFEs: Events in recent years
have drawn increased public attention to health and safety
issues in RCFEs. A 2013 series by ProPublica and Frontline
profiled experiences with Emeritus Corp., an assisted living
company based in Seattle that, at the time, ran approximately
500 facilities in 45 states. The series chronicled persistent
understaffing, substandard care, and a lack of required
assessments.
Another example drawing significant media and public attention
was an incident occurring in Castro Valley: there, in October
of 2013, after DSS began license revocation proceedings for the
Valley Springs Manor RCFE, 19 seniors in need of care were
abandoned by the licensee and all staff, save two. Those two
service staff stayed on over the weekend to provide care for the
residents until, eventually, sheriff's deputies and paramedics
sent the residents to local hospitals. A news article
documenting the events at the Castro Valley facility stated
that, "?records showed the owners of the facility had a
disastrous history running both nursing homes and other RCFEs
over the past several years, including facilities in Modesto,
Oakland and Castro Valley."
Need for this bill: The author states that, "Currently, if
consumers want detailed information about an RCFE, they must
drive to one of the 13 regional or district offices located
throughout the state. Having to drive to obtain public
information is not in the best interest of consumers because
they may live hours away from a regional or district office or
may not be able to drive at all. Additionally, complex
ownership structures of RCFEs can lead a consumer to unknowingly
transfer their loved one from one troubled facility to another
without knowing the facilities are part of the same chain.
AB 601
Page 9
[This bill] will increase accountability and transparency of
RCFE licensees, as well as make facility information more
accessible to the public so consumers can make more informed
decisions when choosing a facility for a loved one."
According to the author, in recent years, there has been notable
increase in corporate ownership of RCFEs. Ownership of a
facility by one business and operation of it by another, along
with other complex ownership structures, can be confusing for
consumers and their families. This bill could assist consumers
by requiring RCFE license applicants to disclose their
operational history under facility licenses, and by requiring
DSS to cross-check applicant, licensee, and owner information
with the Department of Public Health, which is responsible for
licensing Skilled Nursing Facilities, Intermediate Care
Facilities, and others.
Confusion about RCFEs can be compounded by the relative lack of
facility and licensing information made available online by DSS.
This bill will assist consumers by requiring DSS, to the extent
possible using its computer system, to post the number of
nonambulatory beds, whether a facility is permitted to provide
hospice care services, whether a facility has a special care
unit or program for people with Alzheimer's disease or other
dementias and has a delayed egress or secured perimeter system
in place, along with more detailed ownership and licensee
information.
In support of this bill, California Advocates for Nursing Home
Reform (CANHR) states that, "Background information that would
inform the Department [of Social Services] of important
historical information on new applicants is not crosschecked
with other licensing agencies. For example, the owner of Valley
Springs Manor in Castro Valley, who abandoned 19 RCFE residents
to the care of a part-time cook and janitor, and who was just
indicted by the Attorney General on numerous felony charges
including elder abuse, had a previous history of hundreds of
thousands of dollars in fines owed to the federal and state
licensing agencies for deficiencies and citations when she owned
AB 601
Page 10
four California nursing homes. Yet, she was able, ten years
later, to apply for and be granted licenses to run RCFEs. Had
Community Care Licensing known of her history with the
Department of Public Health, her RCFE application would not have
been approved. [This bill] will provide the Department of
Social Services with the information necessary to make more
appropriate decisions as to what applicants are suitable to
operate RCFEs in California, and will also allow consumers to
make better informed choices regarding placement in an RCFE."
PRIOR AND RELATED LEGISLATION:
AB 927 (McCarty), 2015, would expand certain requirements
regarding disclosure of ownership and governance information by
SNF and Intermediate Care Facility license applicants, and adopt
related provisions. This bill is currently in the Assembly
Health Committee.
AB 2236 (Maienschein), Chapter 813, Statutes of 2014, increased
the amount of civil penalties for violations that DSS determines
resulted in death of, or serious bodily injury or physical
injury to, a resident or child at a licensed facility. Further,
it required DSS to adopt regulations setting forth appeals
procedures for deficiencies, as specified.
SB 855, (Committee on Budget and Fiscal Review), Chapter 29,
Statutes of 2014, among other things, adopted a number of
provisions related to the care and treatment of residents in the
event of a suspension or revocation of an RCFE license or the
closure of an RCFE facility.
SB 895 (Corbett), Chapter 704, Statutes of 2014, added
additional requirements to the RCFE Act and increased reporting
and notification requirements of DSS, including requiring the
AB 601
Page 11
department to post certain licensing information on its Internet
Web site, as specified.
SB 1153 (Leno), Chapter 706, Statutes of 2014, authorized DSS to
suspend new admissions to an RCFE if it has failed to pay a
fine, or is found to be in violation of laws and regulations and
presenting a direct or immediate risk to residents, as
specified. Further, it directed DSS to adopt regulations
specifying the appeal process related to this suspension.
AB 1571 (Eggman), 2014, was similar to this bill, and also would
have required DSS to provide information on RCFE facilities on
it Internet Web site, as specified. It died in the Senate
Appropriations Committee.
AB 1436 (Waldron), 2014, would have required DSS to post all
inspection reports, consultation reports, violations, plans of
correction, and the number, nature, and status of complaints
filed against a facility on its Internet Web site. It died in
the Assembly Appropriations Committee.
AB 1899 (Brown), Chapter 700, Statutes of 2014, expanded
allowable causes for DSS to exclude individuals from RCFE
licensure to include abandonment of facilities and residents, as
specified, and further forbade the right to petition for
reinstatement.
AB 2066 (Monning), Chapter 643, Statutes of 2012, required DSS
to make every effort to minimize trauma for residents in the
event of the revocation of an RCFE's license, required DSS to
notify residents and their responsible persons of licensure
revocation, as specified, and permitted licensees to secure
alternative managers, as specified.
AB 601
Page 12
AB 313 (Monning), Chapter 313, Statutes of 2011, required
licensed RCFEs to provide residents and other parties with a
written notice, as specified, whenever a substantiated violation
posing a serious threat to health and safety has occurred and
resulted in assessment of a penalty or pursuit of licensure
revocation.
SB 897 (Leno), Chapter 376, Statutes of 2011, enacted the RCFE
Residents Foreclosure Protection Act of 2011, requiring RCFE
licensees to notify DSS, the State Long-Term Care Ombudsman, and
all residents, applicants, and their legal representatives when
the property is subject to foreclosure, the licensee files for
bankruptcy, or other similar events, as specified, occur.
REGISTERED SUPPORT / OPPOSITION:
Support
Asian Law Alliance
Battaglia & Waltari
California Advocates for Nursing Home Reform (CANHR)
California Commission on Aging
California Long-Term Care Ombudsman Association (CLTCOA)
AB 601
Page 13
Coalition of California Welfare Rights Organizations Inc.
Consumer Attorneys of California
Consumer Federation of California (CFC)
County of San Diego Board of Supervisors
Evans Law Firm, Inc.
Jewish Family Service of Los Angeles
National Association of Social Workers, CA Chapter (NASW-CA)
Office of State Long-Term Ombudsman
6 individuals
Opposition
None on file.
Analysis Prepared by:Daphne Hunt / HUM. S. / (916) 319-2089
AB 601
Page 14