BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 601|
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THIRD READING
Bill No: AB 601
Author: Eggman (D), et al.
Amended: 8/31/15 in Senate
Vote: 21
SENATE HUMAN SERVICES COMMITTEE: 5-0, 6/23/15
AYES: McGuire, Berryhill, Hancock, Liu, Nguyen
SENATE APPROPRIATIONS COMMITTEE: 6-1, 8/27/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza
NOES: Nielsen
ASSEMBLY FLOOR: 66-7, 5/18/15 - See last page for vote
SUBJECT: Residential care facilities for the elderly:
licensing and regulation
SOURCE: Author
DIGEST: This bill requires an applicant for licensure of a
residential care facility for the elderly (RCFE) to disclose
specified additional information related to other facilities
owned, managed or operated by the licensee or a parent
organization of the licensee, as well as information related to
individuals or entities holding a beneficial ownership interest
of 10 percent or more in the licensed facility. Additionally
requires licensees to disclose individuals or entities who have
control of the facility, as defined, and other information.
Further requires the California Department of Social Services
(CDSS) to cross-check all disclosed applicant information with
the California Department of Public Health (CDPH), as specified
and, to the extent the department's computer system can
accommodate the information, to post specified information on
its Internet website. Requires licensees to report any changes
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to the disclosed information within specified timeframes.
ANALYSIS:
Existing law:
1)Establishes the Residential Care Facilities for the Elderly
Act, which provides for CDSS to license and regulate RCFEs as
a separate category within the department's existing
residential care licensing structure. (HSC 1569 et seq.)
2)Requires applicants for an RCFE license to submit a criminal
record clearance, employment history, character references,
evidence of certification, and disclosure of previous service
in other RCFEs, outpatient health clinics, health facilities
(including hospitals, skilled nursing facilities or
intermediate care facilities), or a community care facility,
among other requirements. (HSC 1569.15)
3)Requires, if the licensee applicant is a firm, association,
organization, partnership, business trust, corporation, or
company, like evidence to be submitted regarding the members
or shareholders and for the person in charge of the facility.
(HSC 1569.15)
This bill:
1)Specifies that an applicant for an RCFE license who is a firm,
association, organization, partnership, business trust,
corporation, or company shall file evidence that individuals
or entities holding a beneficial ownership interest of 10
percent or more, and the person who has operational control of
the facility are of reputable and responsible character.
2)Provides that an applicant or licensee is not required to
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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.
3)Requires applicants for an RCFE license to disclose specified
additional information including disclosure of others
facilities owned, managed or operated by the applicant or a
parent organization; persons or entities that control the
applicant; the relationships of persons or entities that are
part of a chain; and persons, organizations or entities that
own real property associated with facilities owned, managed or
operated by the applicant or parents organization; and
specified petitions for bankruptcy relief involving operating
or closure of a health, residential or community care and
other information.
4)Requires CDSS to cross-check information pertaining to the
prior service of a person with operational control in another
RCFE or health related facility with the CDPH, if
electronically available.
5)Provides that the required information shall be provided upon
initial application for licensure, that changes be updated
within 30 calendar days, except as specified.
6)Permits the department, subsequent to licensure, to assess a
civil penalty of one thousand dollars for a material violation
of the above licensure disclosure requirements.
7)Provides that the department shall post specified information
on its Internet website including the licensee's name,
business address, and telephone number, the name of the owner
and any parent organization, the licensed capacity of the
facility, the capacity for nonambulatory residents, whether
the facility is permitted to accept residents receiving
hospice care, whether the facility has a special care unit or
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program for people with Alzheimer's disease, the name,
address, license number and licensing agency of other health,
residential or community care facilities owned, managed or
operated by the applicant or by any parent organization.
8)Permits CDSS to prohibit any person from being a licensee,
owning a beneficial ownership interest of 10 percent or more
in a licensed facility, or being an administrator, officer,
member or manager of a licensee or entity controlling a
licensee under specified conditions.
Background
According to the author, there has been a marked increase in
corporate ownership of RCFEs. Facilities may be operated by one
business but owned by another. The author states that complex
ownership structures make it difficult for consumers to
determine who in fact is the owner and/or licensee and 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.
The author further states that current law does not require new
RCFE license applicants to disclose their history of operating
other licensed facilities. Therefore, CDSS is often unaware of
other facilities that may be owned and operated by the same
licensee. The author cites the example last year of Valley
Springs Manor in Castro Valley, where 19 RCFE residents were
abandoned by the owner and staff to the care of a part-time cook
and janitor. The owner had a history of hundreds of thousands of
dollars in fines owed to the federal and state licensing
agencies for deficiencies and citations when she owned four
California nursing homes. The author states that had CDSS known
of her prior regulatory history, her RCFE licenses would not
have been granted.
Additionally, the author states that consumers of RCFEs are
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currently only able to obtain very basic information online
about an RCFE, including the facility name, address, a contact
person, the facility's license status, and a district office
number that a consumer may call if they have a question about a
particular facility. However, the author states that a consumer
does not have access to more substantive public information that
may help them make a more informed choice when selecting a
facility. According to the author, the additional information
required to be disclosed to the CDSS and the public will
increase accountability and transparency, and allow the public
to make more informed decisions when choosing an RCFE facility
for a loved one.
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 seniors and other adults
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 the need for oxygen tanks,
catheters or colostomies.
Financial Structure
More than 90 percent of RCFE licenses in California are held by
for-profit providers, and the majority of those facilities 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
(SSI/SSP) or Medicare, and fees can range from $2,500 to more
than $8,000 per month. Increasingly, complex corporate mergers
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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 Community Care Licensing citations and other
licensing reports are facility-specific, and management problems
common to multiple RCFEs with the same owner may easily go
unnoticed.
Licensee and administrator requirements
California statute differentiates between facility licensees,
who often are the business owners and may be property owners,
and administrators, who are charged with overseeing the quality
of the day-to-day operations and are generally required to be
present at the facility during normal working hours.
State law requires RCFE licensees to provide evidence of
"reputable and responsible character" including a criminal
background clearance, employment history and character
references. Licensees must document sufficient financial
resources to maintain the standard of care required by law, must
disclose any prior role as an administrator or owner of any
community care facility and any prior disciplinary action.
Licensees must receive a one-time department-approved
certification involving 40 hours of classroom instruction
covering relevant laws and regulations, staff management, the
needs of elderly residents, and other issues. Facility
administrators are also required to hold a department-approved
certificate, similar to the licensee certificate, which must be
renewed every two years.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee, this bill will
incur workload costs to CDSS, potentially in excess of $150,000
(General Fund), to cross-check information electronically
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against CDPH information and to compile and analyze the
additional information provided by all RCFE licensees.
Additionally, this bill will incur minor and absorbable workload
costs to post and update the RCFE information on the CDSS
website. Additionally, Senate Appropriations states there is
potential future cost pressure (General Fund) to update the
automation system to accommodate all of the specified RCFE
profile information and likely minor ongoing enforcement costs
(General Fund), offset to a degree by penalty revenue, to the
extent CDSS assesses civil penalties for material violations of
the provisions of this bill.
SUPPORT: (Verified8/28/15)
Asian Law Alliance
California Advocates for Nursing Home Reform
California Alliance for Retired Americans
California Commission on Aging
California Elder Justice Coalition
California Long-Term Care Ombudsman Association
California Senior Legislature
California State Retirees
Consumer Attorneys of California
Consumer Federation of California
County of San Diego
Disability Rights California
Formation Capitol
Jewish Family Service of Los Angeles
National Association of Social Workers, California Chapter
10 individuals
OPPOSITION: (Verified8/28/15)
None received
ASSEMBLY FLOOR: 66-7, 5/18/15
AYES: Achadjian, Alejo, Baker, Bloom, Bonilla, Bonta, Brown,
Burke, Calderon, Campos, Chau, Chávez, Chiu, Chu, Cooley,
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Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier,
Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Gray, Hadley, Roger Hernández,
Holden, Irwin, Jones-Sawyer, Lackey, Levine, Linder, Lopez,
Low, Maienschein, McCarty, Medina, Mullin, Nazarian,
Obernolte, O'Donnell, Olsen, Perea, Quirk, Rendon,
Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark
Stone, Thurmond, Ting, Waldron, Weber, Wilk, Williams, Wood,
Atkins
NOES: Travis Allen, Beth Gaines, Grove, Harper, Mayes,
Patterson, Wagner
NO VOTE RECORDED: Bigelow, Brough, Chang, Jones, Kim, Mathis,
Melendez
Prepared by:Sara Rogers / HUMAN S. / (916) 651-1524
8/31/15 12:47:55
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