BILL ANALYSIS �
AB 641
Page 1
Date of Hearing: May 3, 2011
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 641 (Feuer) - As Amended: April 14, 2011
As Proposed to Be Amended
SUBJECT : LONG-TERM HEALTH CARE FACILITIES: CIVIL PENALTIES
KEY ISSUE : TO BETTER PROTECT RESIDENTS OF LONG-TERM HEALTH CARE
FACILITIES, SHOULD THE LEGISLATURE ADOPT INTO LAW
RECOMMENDATIONS OF THE DEPARTMENT OF PUBLIC HEALTH AND THE
BUREAU OF STATE AUDITS TO STREAMLINE THE CITATION APPEALS
PROCESS FOR THESE FACILITIES AND INCREASE AMOUNTS OF CERTAIN
CITATION PENALTIES?
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
SYNOPSIS
This bill seeks to adopt a set of three recent Department of
Public Health recommendations to amend sections of state law
relating to citations and civil penalties imposed on long-term
health care facilities. First, the bill helpfully streamlines
the citation appeals process for LTC facilities by eliminating
the citation review conference (CRC) process. As proposed to be
amended, the bill will also increase the maximum fine imposed on
LTC facilities for Class "B" citations from $1000 to $2000.
Finally, the bill will prudently give statutory authority to DPH
to recommend that the federal Centers for Medicare and Medicaid
Services impose a federal civil money penalty when DPH
determines that a LTC facility is not in compliance with both
state and federal requirements. The bill is supported by many
advocates for senior citizens and the disabled, who contend that
the measure will increase needed oversight of LTC facilities and
better protect facility residents by ensuring that violations
are handled in a timelier manner and with a proper level of
response. The California Association of Health Facilities,
representing the majority of the state's licensed LTC
facilities, opposes unless the bill is amended so that only the
recommendation to remove the CRC process is retained in the
bill. This bill was approved by the Assembly Health Committee
by a 13-4 vote.
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SUMMARY : Enacts recommendations by the Department of Public
Health (DPH) and the Bureau of State Audits (BSA) regarding
appeals of and penalties for citations issued to long-term
health care facilities. Specifically, this bill :
1)Eliminates the citation review conference (CRC) appeals
process for all levels of state citations.
2)Increases the maximum penalty amount for Class "B" citations
for LTC facilities from $1,000 to $2,000.
3)Revises state law to enable DPH to recommend that the federal
Centers for Medicare and Medicaid Services (CMS) impose a
federal civil monetary penalty when DPH's Licensing and
Certification Division determines that a LTC facility is out
of compliance with both state and federal requirements.
4)Repeals existing law requesting DPH to develop recommendations
to address findings by the BSA contained in a specified June
2010 report.
EXISTING LAW :
1)Provides for the inspection and licensure of LTC facilities by
DPH. (Health and Safety Code Section 1254. Unless stated
otherwise, all further statutory references are to this code.)
2)Establishes the Long-term Care, Health, Safety, and Security
Act of 1973 (LTC Safety Act), which allows DPH to assess
penalties against LTC facilities for violation of state laws
and regulations and applicable federal law and regulations
pertaining to patient care. (Chapter 2.4 of Division 2,
commencing with Section 1417.)
3)Provides that if DPH determines that a violation warrants the
issuing of a citation to a LTC facility, it shall either (a)
recommend the imposition of a federal enforcement remedy in
accordance with federal law; or (b) issue a citation pursuant
to state licensing laws, and may recommend the imposition of a
federal enforcement remedy other than a federal civil monetary
penalty for a federal violation. (Section 1423(a).)
4)Prohibits the issuance of both a citation pursuant to state
laws and the recommendation that a federal civil monetary
penalty be imposed for the same action. (Section 1423(a).)
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5)Defines three classifications of citations, as follows:
a) Class "AA" violations are violations that meet the
criteria for a class "A" violation and that DPH determines
to have been a direct proximate cause of death of a patient
or resident of a LTC facility.
b) Class "A" violations are violations which DPH determines
present either (1) imminent danger that death or serious
harm to the patients or residents of the LTC facility would
result therefrom, or (2) substantial probability that death
or serious physical harm to patients or residents of the
LTC facility would result therefrom.
c) Class "B" violations are violations that the state
department determines have a direct or immediate
relationship to the health, safety, or security of
long-term health care facility patients or residents, other
than class "AA" or "A" violations. (Section 1424.)
6)Requires monies collected as a result of the penalties imposed
pursuant to the LTC Safety Act to be deposited into either the
State Health Facilities Citation Penalties Account or the
Federal Health Facilities Citation Penalties Account (State
and Federal Accounts), and used, upon appropriation by the
Legislature, for the protection of health or property of
residents of LTC facilities. (Section 1417.2.)
COMMENTS : This bill seeks to adopt a set of three recent
Department of Public Health recommendations to amend sections of
state law relating to citations and civil penalties imposed on
long-term health care facilities. First, this bill would
streamline the citation appeals process for LTC facilities by
eliminating the citation review conference (CRC) process. As
proposed to be amended, this bill would also increase the
maximum fine imposed on LTC facilities for Class "B" citations
from $1000 to $2000. Finally, the bill would also give
statutory authority to DPH to recommend that the federal Centers
for Medicare and Medicaid Services impose a federal civil money
penalty when DPH determines that a LTC facility is not in
compliance with both state and federal requirements.
This bill enacts recommendations arising from an audit requested
by the Legislature in 2010 . On January 20, 2010, a bipartisan
group of ten legislators (including the chair of this Committee)
requested the Joint Legislative Audit Committee to approve
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audits of two Special Deposit Fund accounts maintained by DPH
for the protection of nursing home residents. In June 2010, the
California State Auditor, Bureau of State Audits (BSA) presented
report 2010-108 to the Joint Legislative Audit Committee,
reporting the results of its review of DPH management of the
State and Federal Health Facilities Citation Penalties Accounts
and making 21 key recommendations. According to DPH, it was
able to implement many of the recommendations, but some require
legislative changes to statute.
In October 2010, the Legislature passed and the Governor signed
SB 853 (Ch. 717, Stats. 2010) which, among other things,
required DPH, in consultation with stakeholders, to develop
recommendations to address the findings published in the June
2010 report by BSA, and provide the recommendations to the
Legislature no later than March 1, 2011. In January 2011, DPH
solicited input from stakeholders with respect to four key
issues identified in Section 1417.5, and in March 2011 issued
its recommendations. Revised recommendations were issued in
April 2011, but not in time to amend this bill appropriately in
the Assembly Health Committee. As proposed to be amended, this
bill seeks to enact the revised recommendations of DPH in three
key areas first identified by BSA in June 2010.
Author's Proposed Amendment to Adjust the Maximum Penalty Amount
for Class "B" Citations : In consideration of the revised DPH
recommendations, the author proposes to set the maximum penalty
amount for class "B" citations at $2000, rather than $5000 as
reflected in the bill as currently in print. The amendment is:
On page 6, line 12, strike "five thousand dollars ($5000)"
and replace with "two thousand dollars ($2000)"
Section 1424(e) defines a class "B" violation as a violation
that DPH determines has a direct or immediate relationship to
the health, safety, or security of long-term health care
facility patients or residents, other than class "AA" or "A"
violations. The author contends that class "B" penalties do not
reflect the level of severity of the violations in this
category, and cites as an example a class "B" citation in a case
where two medications were administered to the wrong nursing
home resident, causing the resident to be hospitalized for 3
days due to unresponsiveness. Under this bill, DPH maintains
its discretion to provide appropriate fines, but as proposed to
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be amended, the maximum fine is set at $2000 because, in the
words of the author, "$1,000 is simply too little of a fine for
such egregious violations."
The California Association of Health Facilities (CAHF) opposes
the bill generally and this provision specifically because it
contends that an amount of $2000 represents "an excessive
penalty for a regulatory violation that by definition does not
result in harm." The DPH report making this recommendation,
however, concludes that "increasing the maximum penalty for a
'B' citation would emphasize to facilities the seriousness of
patients' rights," and also notes that the citation penalty
amount of $1000 has not been adjusted since the statute was
first written.
This bill adopts the recommendation to eliminate the citation
review conference process. This bill seeks to delete the
voluntary citation review conference (CRC) process for all
levels of citations, which would result in all appeals for all
levels of citations going directly to an administrative law
judge or to Superior Court. According to the author, LTC
facilities are unable to resolve citations they feel are
unwarranted and their residents, who may have been violated, do
not receive justice in a timely manner due to the prolonged CRC
process which can take years. The author maintains that it
makes sense to eliminate the CRC process as an available option
to LTC facilities, in favor of the more trusted appeals
processes before an administrative law judge or a California
Superior Court. This view is also shared by CAHF, who state
support for sending all citation appeals to an administrative
law judge.
The DPH report of recommendations cites data indicating that
elimination of the CRC process will also produce additional cost
savings and efficiencies to the Department:
Since 2004, 15 cases have been dismissed out of 955
citation actions for a rate of 1.6% dismissals, or
taking into account that 11 citations were related to a
single case, the rate would be 0.52%. The Department's
costs to conduct CRCs are large and the CRCs rarely
result in overturning the citation. Eliminating the CRC
process would result in a savings to both the
Department and to the facilities who choose to appeal
and go straight to an Administrative Law Judge or
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Superior Court. In 2009 and 2010, only 7.8% and 6.22%
respectively of all LTC facilities requested a CRC.
This means that over 92% of LTC facilities help bear
the cost for a service used by few facilities and that
rarely changes the outcome of a citation action at this
administrative level.
This bill adopts the recommendation to provide statutory
authority to DPH to make a specified recommendation to the
federal Centers for Medicare and Medicaid Services regarding
federal penalties. Under current law, DPH is responsible for
licensing and monitoring more than 2,500 LTC facilities. Teams
of evaluators from DPH inspect LTC facilities to ensure that
they meet applicable federal and state requirements, and that
they investigate any complaints made against a LTC facility.
Generally, if a team finds during a survey or complaint
investigation that a LTC facility is not in compliance with a
state requirement, DPH may impose a civil monetary penalty, and
if the team finds noncompliance with a federal requirement, it
may make a recommendation to CMS that it impose a monetary
penalty. Under California law, however, only one entity can
levy a fine for the violation, making us one of the few states
which prohibit federal and state agencies from acting
concurrently when their respective laws have been violated.
(Section 1423.) Monetary penalties collected from LTC
facilities are deposited into either the State or Federal
Accounts. Monies from these accounts are to be used, upon
appropriation by the Legislature, in accordance with state and
federal law for the protection of residents of LTC facilities.
This bill would adopt the report recommendation to amend state
law to authorize DPH to recommend that the federal CMS impose a
federal civil money penalty, in addition to the penalty imposed
by the state, when the Department determines that a facility is
out of compliance with both the state and federal requirements.
The author asserts that it makes sense to allow both entities to
act if the laws of either were violated, while CAHF opposes this
provision on the basis that imposing both state and federal
monetary penalties for a single incident of non-compliance
constitutes dual enforcement and is fundamentally unfair to
facilities.
The DPH report of recommendations states that (1) allowing DPH
this option does not mean that CMS is required to impose a civil
monetary penalty and does not in any way change CMS's
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enforcement power or actions; (2) there is no prohibition for
CMS imposing a federal civil monetary penalty when it determines
that a facility is out of compliance with a federal requirement
as a result of a state investigation resulting in a state
citation; and (3) California will have an additional line of
communication to CMS regarding problems that have been
identified at a particular LTC facility.
REGISTERED SUPPORT / OPPOSITION :
Support
Catholic Charities of California
California Long-Term Care Ombudsman Association
California Senior Legislature
Foundation Aiding the Elderly
Advocacy, Inc.
California Alliance for Retired Americans
Ombudsman and HICAP Services of Northern California
Alzheimer's Association
National Senior Citizens Law Center
Congress of California Seniors
California Advocate for Nursing Home Reform (CANHR)
Council on Aging- Orange County
Disability Rights California
Bet Tzedek Legal Services
Oppose (Unless Amended)
California Association of Health Facilities
Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334