BILL ANALYSIS Ó AB 2341 Page 1 Date of Hearing: March 29, 2016 ASSEMBLY COMMITTEE ON HEALTH Jim Wood, Chair AB 2341 (Lackey) - As Introduced February 18, 2016 SUBJECT: Health facilities: special services. SUMMARY: Authorizes licensees of nursing facilities (NFs) and skilled nursing facilities (SNFs) to provide special services under specified conditions without regulatory authorization by the Department of Public Health (DPH). Specifically, this bill: 1)Authorizes licensees of NFs and SNFs to seek approval from DPH to provide special services without the need for the development of regulations by DPH, if the licensee can demonstrate that the special service will operate in accordance with a minimum standard of quality of care, as specified. Requires all approved special services to be listed on the facility license. 2)Requires DPH to revoke approval for a NF or SNF to provide a special service if the facility fails to meet a minimum standard of quality of care. 3)Requires a NF or SNF licensee applying for DPH approval to provide a special service to submit the following information AB 2341 Page 2 to DPH: a) A completed DPH application form, and any additional information requested by DPH, which clearly defines the scope of the special service proposed to be provided; b) The hours of operation for the special service; c) Information on the population to be served by the special service, i.e., solely to the residents of the facility or also on an outpatient basis; d) A copy of the special service policies and procedures for review and approval; e) The minimum staffing levels and qualifications for the proposed special service, sufficient to meet the needs of the residents and patients; f) Information on the equipment and supplies necessary to meet the needs of residents and patients receiving the special service care; g) Information regarding the space within the facility in which the special service will be provided and prohibits outpatient special services to be provided in a space that would require outpatients to pass through areas where AB 2341 Page 3 resident sleeping rooms are located; and, h) Confirmation of compliance with relevant building, zoning, and fire safety standards. EXISTING LAW: 1)Establishes DPH, which, among other things is responsible for licensing, regulating and inspecting certain health facilities. 2)Defines "special service" as part of a health facility that is organized, staffed, and equipped to provide a specific type of patient care for which DPH has developed regulations and established special standards for quality for care. 3)Specifies that "special service" does not include a part of a NF that provides inpatient physical therapy services, occupational therapy services, or speech pathology and audiology services to residents of the facility if the AB 2341 Page 4 services are provided solely to meet federal Centers for Medicare and Medicaid Services (CMS) certification requirements. 4)Authorizes NFs to provide physical therapy, occupational therapy, speech pathology, and audiology services to outpatients as special services. 5)Authorizes DPH to evaluate a NF and SNF's compliance with state and federal therapy requirements during inspections. 6)Requires a health facility to apply to DPH for a special permit, in addition to a license, in order to be authorized to provide one or more special services, including radiation therapy department, burn center, emergency center, hemodialysis center or unit, psychiatric, intensive care newborn nursery, cardiac surgery, cardiac catheterization laboratory, renal transplant, and other special services as DPH has established by regulation. 7)Requires DPH to only approve a special permit after it has determined that the health facility has met the standards of quality of care established via regulation by DPH. FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee. COMMENTS: AB 2341 Page 5 1)PURPOSE OF THIS BILL. According to the author, with the aging of the baby boomer population, there will be a significant increase in the number of individuals who require long-term care (LTC) services, including skilled nursing. The author points to a recent report by the California HealthCare Foundation which suggests that the demand for LTC beds in SNFs and NFs may exceed supply by 2030. The author contends that the increase in population will be a particular challenge for SNFs and NFs in rural areas, and those rural communities would benefit from the ability to have SNFs and NFs transition to be a focal point for health care services. The author concludes that this bill provides SNFs and NFs with the flexibility necessary to be innovative in their provision of care to residents and increases access to care. 2)BACKGROUND. a) Nursing Home Services. There are existing certified NFs in California which provide services to 350,000 residents annually. NFs and SNFs typically provide the next highest level of care to patients outside of a hospital, including physical therapy, intravenous injections, and speech language pathology services. LTC facilities in California are licensed, regulated, inspected, and/or certified by a number of public and private agencies at the state and federal levels, including the DPH Licensing and Certification Program and CMS. These agencies have separate, yet sometimes overlapping, jurisdictions. DPH is responsible for ensuring health care facilities comply with state laws and regulations. In addition, DPH cooperates with CMS to ensure that LTC facilities accepting Medicare and Medi-Cal (California's Medicaid program) payments meet federal requirements. AB 2341 Page 6 In 1987 the federal Omnibus Budget Reconciliation Act was implemented, under which to be federally certified and meet Medicare and Medicaid requirements, a SNF must offer physical therapy, occupational therapy, and speech pathology. Medicare certification surveyors annually review facilities for compliance with these requirements. California's Title 22 regulations relating to optional services have not been updated by DPH since the federal changes were made, and specify that physical therapy, occupational therapy, speech therapy, speech pathology, audiology, social work services, and special treatment program services are "special," or "optional services," and as such must be listed on a facilities licensing application. The regulations also specify that outpatient services that are provided for the special services mentioned above must meet certain operational conditions, such as ensuring that the special service units do not traverse a nursing unit, and providing waiting areas with sufficient space for patients. b) Special Rules for Special Services. In order to be able to provide special services, all SNFs must receive approval from DPH. DPH evaluates applications and either approves or denies the request on a case-by-case basis, using all relevant state and federal requirements for the special service. For any SNF that does not employ qualified persons to provide special services, DPH regulations require the SNF to make arrangements through a written agreement with outside resources to meet the standards for providing special services. DPH regulations require SNFs to comply with all licensing requirements. However, these regulations also allow SNFs to use alternate procedures, equipment, personnel qualifications, or conduct pilot projects, as long as these additional activities are carried out to the same standards of safety and care listed in statute and through AB 2341 Page 7 regulation. These exceptions are only authorized with prior written approval of DPH and must be accompanied with substantiating evidence supporting the request. In August of 2007, DPH published a memo stating that peritoneal and hemodialysis services may be provided in SNFs, and that the services will be delivered in compliance with DPH regulations on optional or special services. However, neither the regulations nor the memo waived the statutory requirements for the development of regulations for these services to be provided by SNFs. Despite the lack of specific regulations, DPH has authorized a number of SNFs to operate with special services not explicitly listed as a special or optional service in statute, according to figures provided by DPH in response to a public records request by LeadingAge California. Four facilities provide peritoneal dialysis (a procedure to remove waste products from a person's blood when the kidneys malfunction); seven offer hemodialysis services; and, two provide nursing care services. In addition, the data show that 212 SNFs provide at least one type of outpatient service. While the data indicate that many of them provide occupational therapy, physical therapy, and other services allowable under existing statute, several of the outpatient services were unspecified, and thus several SNFs could be providing outpatient services for care that does not have regulations for SNF services, as required under existing law. c) Saving State Costs and Improving Access to Rural Areas. This bill allows DPH to authorize SNFs and NFs to provide special services not listed in statute without the need for the development of regulations. Establishment of regulations is a very time and cost-intensive process. Based on the data from the public records request previously described, there are a very limited number of SNFs that may request this type of authorization, should AB 2341 Page 8 this bill become law. Provided that the standards for quality of care agreed to by the SNF and DPH for the new special services provided at SNFs are the same as those provided at other health care facilities, waiving the requirement for DPH to establish regulations could be an efficient use of state resources. In addition, this bill is consistent with the goals of the Patient Protection and Affordable Care Act, which in part is intended to eliminate inequities in the availability of health care services in rural areas by increasing access to quality, affordable health coverage, and support care coordination. Multiple peer-reviewed studies have found that rural communities have less access to specialized services such as peritoneal and hemodialysis, and as a result have a higher mortality rate. By allowing DPH to authorize select facilities to provide such services in very controlled environments, this bill could increase access to care in communities and increased coordination between hospitals and LTC facilities for some special services. 3)SUPPORT. LeadingAge California, the sponsor of this bill, states there is a clear individual preference within California's health care system for receiving long-term care in the least restrictive environment, preferably in home and community-based settings. The sponsor contends that by allowing SNFs and NFs to provide special services as authorized by this measure, the continuity of care for residents could be enhanced. Specifically, the sponsor contends that SNFs seeking approval for special services other than physical therapy, occupational therapy, speech therapy, speech pathology, audiology, social work services, and AB 2341 Page 9 specialty treatment program services will alleviate the burden on DPH to create new regulations. The sponsor maintains that the inability of DPH to adopt or update regulations has been a barrier to the expansion of services that can be provided by SNFs and NFs to residents and members of the community-at-large and forces residents to obtain services outside the SNF and NF community. 4)OPPOSITION. The California Advocates for Nursing Home Reform (CANHR) contends that this bill would allow SNF and NFs to create special services of their own design and establish the standards of care for their delivery. CANHR also states that DPH would be required to approve these special services without any regulatory or statutory standards to guide its determinations. 5)PREVIOUS LEGISLATION. a) AB 1974 (Quirk), Chapter 288, Statutes of 2014, specifies that a "special service" does not include a functional division, department, or unit of a nursing facility that is organized, staffed, and equipped to provide inpatient physical therapy services, occupational therapy services, or speech pathology and audiology services to residents of the facility if these services are provided solely to meet CMS certification requirements. b) SB 276 (Corbett) of 2011 would have required DPH to promulgate regulations regarding the type of medical procedures which can be performed in the cardiac catheterization laboratory of a hospital that also has on-site cardiac surgery services, and allowed hospitals to perform certain specified procedures until such regulations are adopted. SB 276 died on the Assembly Floor. AB 2341 Page 10 6)SUGGESTED AMENDMENTS. a) Flexibility for DPH. This bill requires a NF or SNF licensee to provide DPH with specific information to review when applying to add a special service to the facility license; however it does not provide DPH with any flexibility to request any additional information. The Committee may wish to consider amending this bill to include a provision that would require the applicant to provide any other relevant information DPH deems necessary for review. b) Standard for Quality of Care. This bill authorizes a NF or SNF licensee to request to provide additional special services if certain minimum standards for quality of care is met. However this measure does not specify a baseline for the minimum standard for quality of care. To ensure the safety and protection of SNF and NF residents, the author is proposing to define the minimum standard for quality of care. While this bill does not identify the types of special services and relevant standards for quality of care for each of the identified special services, CMS appears to set forth requirements for acceptable quality in the operation of health care entities through its Medicare Conditions of Participation, Conditions for Coverage and Requirements for SNFs and NFs. The author may wish to explore identifying these special services to define the minimum standard for quality of care. AB 2341 Page 11 REGISTERED SUPPORT / OPPOSITION: Support LeadingAge California (sponsor) Opposition California Advocates for Nursing Home Reform Analysis Prepared by:Kristene Mapile / HEALTH / (916) 319-2097