BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 601 (Eggman) - Residential care facilities for the elderly: licensing and regulation ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: June 29, 2015 |Policy Vote: HUMAN S. 5 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: July 13, 2015 |Consultant: Jolie Onodera | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 601 would expand the scope of information that prospective residential care facility for the elderly (RCFE) licensees must provide to the Department of Social Services (DSS). Additionally, this bill would require the DSS to cross-check RCFE licensee applicant information with the Department of Public Health (DPH) and post specified information on the DSS website to the extent the automated system can electronically accommodate additional information. Fiscal Impact: Increase in DSS workload, potentially in excess of $150,000 (General Fund), to cross-check information electronically against DPH information and to compile and analyze the additional information provided by all RCFE licensees. Ongoing AB 601 (Eggman) Page 1 of ? workload to post and update the RCFE information on the DSS website is estimated to be minor and absorbable. Potential future cost pressure (General Fund) to update the automation system to accommodate all of the specified RCFE profile information. Likely minor ongoing enforcement costs (General Fund), offset to a degree by penalty revenue, to the extent DSS assesses civil penalties for material violations of the provisions of this measure. Background: The Community Care Licensing Division (CCLD) of the DSS administers the licensure and oversight of over 7,500 assisted living, board and care, and continuing care retirement homes that are licensed as RCFEs in California. These residences are designed to provide home-like environment housing options to elderly residents who need assistance with activities of daily living but otherwise do not require continuous, 24-hour assistance or nursing care. The RCFE licensure category includes facilities with as few as six beds to facilities with hundreds of residents whose needs may vary widely. In response to numerous health and safety issues discovered at facilities licensed by the CCLD, the 2014 and 2015 Budget Acts include funding for a comprehensive plan to reform the CCLD program. The 2014 Budget Act included an increase of $7.5 million ($5.8 million General Fund) and 71.5 positions to improve the timeliness of investigations, ensure the CCLD inspects all facilities at least once every five years, increase staff training, and establish clear fiscal, program, and corporate accountability. The 2014 Budget also increased licensing and application fees by 10 percent. The recently enacted 2015 Budget Act additionally includes $3 million General Fund and 28.5 positions to address a backlog of complaint cases and expand training and technical assistance. Beginning in January 2017, DSS will begin increasing inspection frequency to every three years for all facilities, every two years by 2018 for all facility types except child care, and annually by 2019 for adult day care and RCFEs. This bill seeks to provide consumers with greater transparency related to RCFEs to enable a more informed choice when selecting a facility. This bill also seeks to improve communication AB 601 (Eggman) Page 2 of ? between the DSS and DPH with respect to information about the management and operation of the facilities that each department licenses. Proposed Law: This bill would require prospective RCFE licensees to provide the following information to DSS: If the applicant is a firm, association, organization, partnership, business trust, corporation, or company, like evidence must be submitted as to the individuals or entities holding a beneficial ownership interest of 10 percent or more, and the person who has operational control of the RCFE for which the application for issuance of license or special permit is made. An applicant or licensee is not required to disclose the names of investors in a publicly traded company or investment fund if those investors are silent investors who do not have influence or control over operations of the company, fund, or facility. If applicable, the following information: o Whether it is a for-profit or not-for-profit provider. o The name, address, license number, and licensing agency name of other health, residential, or community care facilities owned, managed, or operated by the same applicant or by any parent organization of the applicant. o The name and business address of any person or entity that controls, as defined, the applicant. o If part of a chain, as defined, a diagram indicating the relationship between the applicant and the persons or entities that are part of the chain, including those that are controlled by the same parties, and in a separate list, the name, address, and license number, if applicable, for each person or entity in the diagram. o The name and address of any persons, organizations, or entities that own the real property on which the facility seeking licensure and the licensed facilities are located. o The name and address of any management company serving the facility and the same information required of applicants for the management company. The name of the person with operational control of the AB 601 (Eggman) Page 3 of ? applicant, such as the chief executive officer, general partner, owner or like party, and state that person's prior or present service as an administrator, chief executive officer, general partner, director like role of, or as a person who has held or holds a beneficial ownership interest of 10 percent or more in any RCFE, outpatient health clinic, health facility (including a hospital, skilled nursing facility, or intermediate care facility), or a similarly licensed community care facility in California or any other state within the past 10 years. Any revocation, suspension, probation, exclusion order, or other similar administrative disciplinary action that was filed and sustained in California or any other state, or in the process of being adjudicated, against a facility associated with a person so identified or by any authority responsible for the licensing of health, residential, or community care facilities within the past 10 years. o Copies of final findings, orders, or both, issued by any health, residential, or community care licensing agency or any court relevant to the actions described. o Any petition for bankruptcy relief filed within five years of the date of application involving operation or closure of a health, residential, or community care facility licensed in California or any other state, the court, date, and case number of the filing, and whether a discharge was granted. If a discharge was not granted, the applicant shall provide copies of any court findings supporting denial of discharge. o Evidence of the right of possession of the facility prior to the time the license is granted, which may be satisfied by the submission of a copy of the entire lease agreement or deed. This bill requires the DSS to cross-check all applicant information disclosed pertaining to operational control of other facilities within the past 10 years, if electronically available, with the DPH to determine if the applicant has a prior history of operating, holding a position in, or having ownership in, any entity specified. Additionally, this bill: Requires the information to be provided to the DSS upon initial application for licensure, and any change in the information is to be provided to the DSS within 30 calendar AB 601 (Eggman) Page 4 of ? days of that change unless a shorter timeframe is required by the DSS. A licensee of multiple facilities may provide a single notice of changes to the DSS on behalf of all licensed facilities within the chain. Information pertaining to facilities operated in other states may be updated on an annual basis, except as specified. In addition to the remedies provided under existing law, authorizes DSS, subsequent to licensure, to assess a civil penalty of $1,000 for a material violation of this section. Provides that to the extent that DSS's computer system can "electronically accommodate" additional RCFE profile information, requires DSS to post on its website the current name, business address, and telephone number of the licensee, the name of the RCFE owner, if not the same as the licensee, the name of any parent organization, the licensed capacity of the facility, including the capacity for nonambulatory residents, whether the facility is permitted to accept and retain residents receiving hospice care services, whether the facility has a special care unit or program for people with Alzheimer's disease and other dementias and has a delayed egress or secured perimeter system in place, or both, and the name, address, license number, and licensing agency name of other health, residential, or community care facilities owned, managed, or operated by the same applicant or by any parent organization of the applicant. Prior Legislation: AB 1571 (Eggman) 2014 would have expanded the scope of information that prospective RCFE licensee applicants must provide as a condition of licensure. This bill also required the DSS to develop an RCFE ratings system and cross-check all RCFE licensee applicant information against DPH data. This bill was held on the Suspense File of this Committee. SB 895 (Corbett) Chapter 704/2014 requires RCFEs to correct licensing violations within 10 days of notification, except as AB 601 (Eggman) Page 5 of ? specified. This bill additionally requires DSS to make facility inspection reports available on its internet website by January 1, 2020. -- END --