BILL ANALYSIS                                                                                                                                                                                                    

                          Senator Ed Hernandez, O.D., Chair

          BILL NO:                    AB 848    
          |AUTHOR:        |Mark Stone                                     |
          |VERSION:       |July 2, 2015                                   |
          |HEARING DATE:  |July 15, 2015  |               |               |
          |CONSULTANT:    |Reyes Diaz                                     |
           SUBJECT  :  Alcoholism and drug abuse treatment facilities.

           SUMMARY  :  Allows alcoholism or drug abuse recovery or treatment  
          facilities licensed by the Department of Health Care Services to  
          provide incidental medical services, as specified, upon  
          receiving a license to provide those services. Requires  
          incidental medical services to be provided by a physician and  
          surgeon or other health care practitioner who are knowledgeable  
          about addiction medicine, as specified.
          Existing law:
          1)Requires the Department of Health Care Services (DHCS) to  
            license nonmedical adult alcoholism or drug abuse recovery or  
            treatment facilities (RTFs), and specifies that a license is  
            valid for two years. 
          2)Defines an RTF as a facility that provides 24-hour  
            residential, nonmedical services, defined as recovery  
            services, treatment services, and detoxification services, to  
            adults who are recovering from problems related to alcohol,  
            drug, or alcohol and drug misuse or abuse. 

          3)Prohibits a licensee from operating an RTF beyond the  
            conditions of the license, and if it does, the RTF is subject  
            to civil penalties, suspension, or revocation of the license. 

          4)Allows DHCS's director to suspend or revoke any license, or  
            deny an application for licensure, for extension of the  
            licensing period, or to modify the terms and conditions of a  
            license for specified reasons, including repeated violations  
            of licensing laws or misrepresentation of any material fact in  
            obtaining a license.


          AB 848 (Mark Stone)                                Page 2 of ?
          5)Provides for the licensure of physicians and surgeons, and the  
            enforcement of the disciplinary and criminal provisions of the  
            Medical Practice Act, by the Medical Board of California (MBC)  
            within the Department of Consumer Affairs.  
          This bill:
          1)Allows RTFs to apply to DHCS to obtain a license to provide  
            "incidental medical services (IMS)." Defines IMS as services,  
            to be specified by DHCS in regulations, to address physical  
            and mental health issues associated with either detoxification  
            from alcohol or drugs or the provision of alcoholism or drug  
            abuse recovery or treatment services that in the opinion of a  
            physician are not required to be performed in a licensed  
            clinic or acute care hospital, as specified, or in a medically  
            managed inpatient treatment program.

          2)Requires, as a condition of providing IMS, an RTF to obtain  
            from an applicant (a prospective resident) a signed  
            certification from a health care practitioner that includes,  
            but is not limited to, a description of the recovery or  
            treatment services that the applicant needs.

          3)Allows RTFs to permit IMS to a resident of the RTF on the  
            premises by one or more independent physicians licensed by MBC  
            or the Osteopathic Medical Board of California (OMBC) who are  
            knowledgeable about addiction medicine, or one or more other  
            health care practitioners acting within the scope of their  
            license and under the direction of a physician, who are also  
            knowledgeable about addiction medicine, when all of the  
            following conditions are met:

                  a)        The RTF, in the judgment of DHCS, has the  
                    ability to comply with the licensing requirements and  
                    provide any level of care between Level 3.1 and Level  
                    3.7 of the American Society of Addiction Medicine  
                    (ASAM) criteria;
                  b)        The physician and any other health care  
                    practitioner has signed and acknowledged on a form  
                    provided by DHCS that he or she has been advised of  
                    and understands the statutory and regulatory  
                    limitations on the IMS services allowed at the RTF;
                  c)        There is an agreed-upon written protocol  
                    between the physician and the RTF signed by the  
                    physician and the RTF that addresses, at a minimum,  
                    the respective areas of responsibility of the  


          AB 848 (Mark Stone)                                Page 3 of ?
                    physician and RTF and the need for communicating and  
                    sharing resident information related to IMS services;
                  d)        The RTF, in its admission agreement with a  
                    resident, clearly identifies the individual  
                    financially responsible for IMS and the manner in  
                    which those services are billed;
                  e)        There is ongoing communication between the  
                    physician and RTF about services provided to the  
                    resident, and the frequency and duration of IMS to be  
                    provided, pursuant to the Confidentiality of Medical  
                    Information Act;
                  f)        There is initial and ongoing communication  
                    between the physician or other health care  
                    practitioner and the resident's health plan or health  
                    insurer prior to the provision of IMS, to the extent  
                    allowable by state and federal privacy and  
                    confidentiality laws, to ensure coordination of care;
                  g)        The RTF does not interfere with the physician  
                    or other health care practitioner providing IMS;
                  h)        The RTF resident is authorized by a physician  
                    as medically appropriate to received IMS on the  
                    premises of the RTF;
                  i)        Before a resident received IMS, the resident  
                    acknowledges and consents to receiving IMS on a form  
                    provided by DHCS. Requires the form, at a minimum, to  
                    describe the IMS that the RTF may permit to be  
                    provided and states that the permitted IMS will be  
                    provided by a physician or other health care  
                    practitioner working under the direction of a  
                  j)        Once IMS are initiated for a resident, the  
                    physician continuously monitors the resident to ensure  
                    that the resident remains appropriate to receive IMS.  
                    Requires, if the physician determines a change in the  
                    resident's medical or psychiatric condition requires  
                    other medical or psychiatric services or a higher  
                    level of care than what an RTF may provide, the  
                    physician to immediately notify the RTF and to assist  
                    the RTF in initiating emergency care, urgent care, or  
                    other higher level of care, as appropriate. Requires  
                    an RTF to notify a physician or DHCS when the RTF  
                    believes a resident requires a higher level of care;
                  aa)       The RTF maintains in its files the physician's  
                    license or other written evidence of licensure to  
                    practice medicine in the state; and,


          AB 848 (Mark Stone)                                Page 4 of ?
                  bb)       The physician and RTF comply with DHCS's  
                    regulations for providing IMS

          4)Requires an RTF to report to DHCS in a timely manner any  
            violation of regulations related to IMS or the signed  
            protocol. Requires DHCS to specify in regulations, at a  
            minimum, the steps required to be taken when DHCS  
            substantiates this information provided by the RTF.

          5)Specifies that DHCS is not responsible for evaluating and does  
            not have liability with respect to evaluating IMS. 

          6)Specifies that an RTF providing IMS is not considered a clinic  
            or health facility, as specified.

          7)Specifies that a license to provide IMS does not authorize an  
            RTF to provide on the premises any medical or health care  
            services or any other services that require a higher level of  
            care than what the RTF can provide.

          8)Requires an RTF that intends to apply to provide IMS to submit  
            a copy of the written protocol, evidence of a physician's  
            license who will provide the services, and any other  
            information DHCS deems appropriate, including, but not limited  
            to, a copy of the RTF's accreditation by a nationally  
            recognized accrediting organization.

          9)Requires DHCS to establish and collect an additional licensure  
            fee for an RTF that includes a request to provide  
            detoxification services or IMS. Requires the fee to be in an  
            amount sufficient to cover DHCS's reasonable costs of  
            regulating detoxification services and IMS.

          10)Broadens DHCS's director's authority to suspend or revoke a  
            license, or deny an application for licensure, extension of  
            licensure period, or to modify the terms and conditions of a  
            license to include the following:

                  a)        An RTF providing false information or  
                    documentation to DHCS;
                  b)        An RTF's refusal to allow DHCS to enter an RTF  
                    to determine compliance with licensing laws; and
                  c)        Violation by the RTF of any IMS regulations  
                    adopted by DHCS.


          AB 848 (Mark Stone)                                Page 5 of ?
          11)Requires DHCS to adopt regulations to implement the  
            provisions of this bill on or before July 1, 2017, and allows  
            DHCS to implement, interpret, or make specific these  
            provisions by means of provider bulletins, written guidelines,  
            or similar instructions until regulations are adopted.

          EFFECT  :  According to the Assembly Appropriations Committee:
          1)Costs to adopt regulations, likely in the range of $200,000  
            over two years (licensing fees and Substance Abuse Prevention  
            and Treatment Block Grant).

          2)Unknown ongoing costs to oversee this new requirement as a  
            component of licensure, possibly in the range of $100,000  
            annually (licensing fees).

          VOTES  :  
          |Assembly Floor:                     |74 - 3                      |
          |Assembly Appropriations Committee:  |12 - 0                      |
          |Assembly Business and Professions   |12 - 2                      |
          |Committee:                          |                            |

          COMMENTS  :
          1)Author's statement. According to the author, many patients  
            seeking treatment at RTFs have physical and mental health  
            needs related to their addictions when they arrive at these  
            facilities, yet the state has barred RTFs from having medical  
            personnel onsite to provide medical treatment related to  
            addiction. Facility staff may provide basic first aid or  
            emergency care, but these are the only exceptions to medical  
            care. Instead, patients who have medical needs related to  
            their addictions must be transported to a doctor's office or  
            health care facility to receive care. This requirement to  
            transport patients who could receive care in their RTFs is  
            burdensome to patients, facilities, and physicians alike. RTFs  
            should be able to provide the best possible care for  


          AB 848 (Mark Stone)                                Page 6 of ?
            vulnerable people struggling to overcome addictions.  
            Sometimes, the best possible care can include medical  
            treatment related to addiction and recovery if that care has  
            been determined in the view of a physician to be able to be  
            provided onsite rather than in a health care facility. By  
            allowing such care to be provided onsite, AB 848 allows  
            thousands of vulnerable people to recover from addiction  
          2)Background. RTFs licensed by DHCS, based on what is commonly  
            referred to as the social model, are currently allowed to  
            provide recovery, treatment, and detoxification services. (The  
            Department of Public Health licenses medical model RTFs known  
            as chemical dependency recovery hospitals.) Social model RTFs  
            range in size from six-bed facilities in residential  
            neighborhoods to centers that accommodate hundreds of beds.  
            According to DHCS, there are 298 licensed social model RTFs  
            that serve six or fewer people, and the largest RTF that DHCS  
            licenses has a capacity of 309 beds. The services provided by  
            these RTFs include group and individual counseling,  
            educational sessions, and alcoholism or drug abuse recovery  
            and treatment planning. Social model RTFs are allowed to  
            provide clients first aid and emergency care. However, if a  
            resident needs medical care (defined by DHCS as a service  
            provided by a professional required to hold a professional  
            license from the MBC, the OMBC, the Board of Registered  
            Nursing, etc.), the resident must be referred to the proper  
            facility to receive care from a medical professional, and the  
            resident must pay the medical professional directly for  

            According to the MBC and DHCS, nothing in current law  
            prohibits a medical professional from conducting a house call  
            at an RTF for a resident. MBC also states that social model  
            RTFs can contract with a physician or a physician group to  
            provide medical services, as long as the RTF contracts with,  
            not employs, the medical professional. The contract also  
            should contain language that makes it clear that the RTF  
            cannot interfere with, control, or otherwise direct the  
            medical professional and that the medical professional has  
            decision-making authority. The contract should also specify  


          AB 848 (Mark Stone)                                Page 7 of ?
            that the medical professional is paid a flat or hourly fee,  
            not fees based on the kinds or amounts of services provided.

          3)Facility Licensing and Oversight. Prior to July 1, 2013, the  
            Department of Alcohol and Drug Programs (ADP) was responsible  
            for oversight of RTFs. Effective with the passage of the  
            2013-2014 Budget Act and associated legislation, all ADP  
            programs and staff, except the Office of Problem Gambling,  
            transferred to DHCS. As part of their licensing function, DHCS  
            conducts reviews of social model RTF operations every two  
            years, or as necessary. As part of the review process, DHCS  
            checks for compliance with a variety of requirements,  
            including whether staff has passed tuberculosis tests, that  
            residents have completed health questionnaires prior to  
            admission at an RTF, and if at least one staff member is  
            certified in first aid and CPR.  

            DHCS's Substance Use Disorder (SUD) Compliance Division  
            investigates all complaints related to social model RTFs,  
            including deaths, complaints against staff, and allegations of  
            operating without a license. The SUD Compliance Division also  
            investigates violations of the code of conduct of registered  
            or certified alcohol and drug counselors. Additionally, RTFs  
            licensed by DHCS are required to report counselor misconduct  
            to DHCS within 24 hours of the violation. RTFs that do not  
            comply with existing requirements are subject to civil  
            penalties and license suspension or revocation. 
          4)Facility Accreditation. Two national organizations, the Joint  
            Commission on Accreditation of Healthcare Organizations  
            (JCAHO) and the Joint Commission on Accreditation of  
            Rehabilitation Facilities (CARF), accredit facilities that  
            provide behavioral health care services, such as addiction  
            treatment, opioid treatment, and maintenance programs, crisis  
            stabilization, case management and care coordination,  
            employment services, and vocational rehabilitation. JCAHO and  
            CARF each require facilities to demonstrate that their  
            programs meet the accrediting organizations' quality standards  
            in order to obtain accreditation. These quality standards  
            evaluate functions relating to client care and program  
            management, including administrative requirements, financial  
            management, personnel qualifications, client services,  
            performance outcomes, client safety and information privacy,  


          AB 848 (Mark Stone)                                Page 8 of ?
            and security. JCAHO requires accredited organizations to  
            reapply for accreditation every three years while CARF  
            accreditation ranges from one to five years, depending on the  
            type of facility.

          5)Reports about RTFs. In 2012, the Senate Office of Oversight  
            and Outcomes (SOOO) published a report, Rogue Rehabs: State  
            failed to police drug and alcohol homes, with deadly results.  
            The report focused on gaps in ADP's regulation of residential  
            programs, as well as a review of the state's ban on medical  
            care at RTFs. SOOO advised that state law be changed to better  
            reflect current treatment practices and stated that there is a  
            mismatch between ADP's regulation and the industry's prevalent  
            practices. SOOO recommended lifting the ban on medical care as  
            long as it is accompanied with more extensive oversight.

            An article published in Mother Jones in the May/June 2015  
            issue, "The Rehab Racket: The Way We Treat Addiction is a  
            Costly, Dangerous Mess," written by the same author of the  
            SOOO report, notes that deaths sometimes occur at RTFs not  
            just because of the effects caused by a person's addiction but  
            also from the treatment they receive at the RTF. The article  
            cites a case at one RTF in California where a physician, who  
            had been repeatedly investigated by and had several actions  
            taken against his license over several years by the MBC,  
            excessively prescribed medications to residents of the RTF  
            with no regard for their health or safety, and despite the  
            physician's history, he was allowed to continue to treat  
            residents of the RTF. The article points out that the vast  
            majority of people in need of treatment do not receive  
            anything that approximates evidence-based care.

            The article further notes that while 18.7 million Americans  
            needed alcohol treatment in 2010 only 1.7 million (or 8.8%)  
            received it in specialized facilities. Issues that compound  
            the problem include: a) out of 14,148 addiction treatment  
            facilities in the U.S., only 26% are RTFs; b) only 15% of  
            costs of addiction treatment are covered by private insurance  
            (treatment can range from $1,800 a month at a  
            government-subsidized RTF to $60,000 a month at an RTF that  
            treats celebrities and other high-profile clients); and c) for  
            every federal and state government dollar spent, 95.6 cents  
            went to pay for consequences of substance abuse while only 1.9  
            cents were spent on any type of prevention or treatment.


          AB 848 (Mark Stone)                                Page 9 of ?
          6)Other States. As part of its investigation, SOOO contacted  
            nine other highly populous states and found that California is  
            unusual in prohibiting medical care at social model RTFs.  
            Eight of the nine states (IL, IN, NY, NC, OH, PA, TX, and WA)  
            allowed physicians and other medical professionals to work in  
            social model RTFs. One state, MA, refers RTF clients to local  
            doctors, but nurses are available at the RTFs.

          7)Prior legislation. AB 395 (Fox, 2013), would have expanded the  
            types of facilities licensed by the ADP to include any  
            facility that has a nationally accredited program that uses a  
            multidisciplinary team to provide 24-hour residential medical  
            services to adults recovering from alcohol and drug abuse  
            problems. AB 395 died on the Senate Appropriations Committee  
            suspense file.

            AB 972 (Butler and Beall, 2011), would have expanded, until  
            January 1, 2017, the category of residential treatment  
            facilities licensed by the ADP to include facilities that  
            provide limited medical services to adults recovering from  
            alcohol and drug abuse, provided that the facility is not  
            otherwise required to have a separate health facility license.  
            Would have established a fee for facilities that provide  
            limited medical services and makes other changes to the  
            licensing fees for residential treatment facilities. AB 972  
            was held in the Senate Appropriations Committee.  

            AB 2221 (Beall, 2010), would have permitted 24-hour  
            residential treatment facilities that provide services to  
            adults recovering from alcohol and drug abuse that are  
            licensed by the ADP to provide unspecified medical services  
            and would have provided that such a facility would not require  
            a health facility license. AB 2221 died on the Senate  
            Appropriations Committee suspense file.

            AB 1055 (Chesbro, 2009), would have expanded the ADP licensure  
            authority for alcohol and drug treatment facilities to include  
            24-hour facilities that do not require a health facility  
            license.  AB 1055 died on the Assembly Appropriations  
            Committee suspense file.
          8)Support. The cosponsors and other supporters, comprised of  
            RTFs and behavioral health advocates, argue that for too long  
            the RTF licensing authority has prohibited RTFs from having  
            onsite medical personnel to evaluate or provide medical care  


          AB 848 (Mark Stone)                                Page 10 of ?
            to residents, which precludes RTFs from meeting residents'  
            medical needs that could easily and efficiently be provided  
            onsite. Supporters further argue that, currently, residents  
            who need medical care have to be transported to a doctor's  
            office or emergency room, which is inefficient, costly, and  
            sometimes dangerous, and also disrupts a resident's recovery  

          9) Technical amendments. 
               a)     This bill provides that DHCS is not responsible for  
                 evaluating and does not have liability with respect to  
                 evaluating IMS. Although the bill does require a facility  
                                                                     that opts to provide IMS to provide DHCS proof of  
                 accreditation by a nationally recognized accrediting  
                 organization, it is not clear who the entity responsible  
                 for evaluating the IMS provided at an RTF will be. The  
                 author may wish to clarify who the responsible entity for  
                 evaluating the IMS will be.

               b)     This bill requires DHCS to establish an additional  
                 fee for RTFs that provide detoxification services and  
                 IMS. However, RTFs are already allowed to provide  
                 detoxification services. The author may wish to clarify  
                 if the intent it so establish an additional fee for a  
                 service that is already allowed.
               c)     This bill references the American Society of  
                 Addiction Medicine by acronym only (ASAM). For clarity,  
                 the author may wish to amend to spell out ASAM where it  
                 is referenced.
          Support:  California Society of Addiction Medicine (co-sponsor)
                    Elements of Behavioral Health/Promises Treatment  
                    Centers (co-sponsor)
                    Janus of Santa Cruz (co-sponsor)
                    Alkermes, Inc.
                    California Narcotic Officers' Association
                    County Behavioral Health Directors Association of  
                    San Francisco Department of Public Health
          Oppose:   None received.


          AB 848 (Mark Stone)                                Page 11 of ?

                                      -- END --