BILL ANALYSIS �
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 641
A
AUTHOR: Feuer
B
AMENDED: June 28, 2011
HEARING DATE: July 6, 2011
6
CONSULTANT:
4
Trueworthy
1
SUBJECT
Long-term health care facilities: civil penalties
SUMMARY
Eliminates the citation review conference (CRC) process
from the citation appeals process for long-term care (LTC)
facilities, and allows fines to be levied from both state
and federal agencies when an incident violates both state
and federal laws.
CHANGES TO EXISTING LAW
Existing law:
Provides for the inspection and licensure of LTC facilities
by the California Department of Public Health (DPH).
Establishes the Long-Term Care, Health, Safety, and
Security Act of 1973 (Act), which permits DPH to assess
penalties against LTC facilities for violation of
prescribed state statutes, regulations, and federal
standards pertaining to patient care.
Prohibits the issuance of both a citation pursuant to state
laws and the recommendation that a federal civil monetary
Continued---
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penalty be imposed for the same action.
Establishes a citation and appeals process that includes a
CRC.
This bill:
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 (L&C) determines that
a LTC facility is out of compliance with both state and
federal requirements.
Eliminates the CRC appeals process for all levels of state
citations.
Repeals existing law requesting DPH to develop
recommendations to address the findings published in the
June 2010 State Auditor report entitled, "Department of
Public Health: It Reported Inaccurate Financial Information
and Can Likely Increase Revenues for the State and Federal
Health Facilities Citation Penalties Accounts."
FISCAL IMPACT
According to the Assembly Appropriations committee
analysis, AB 641 would likely have a minimal fiscal impact
on DPH operations. DPH indicates the total annual costs
for CRCs are $470,000, but staff is redirected from other
priority assignments in order to complete work for CRCs.
Eliminating CRCs would free up staff resources within the
L&C program to focus on other activities, some of which
currently have a backlog.
BACKGROUND AND DISCUSSION
According to the author, this bill eliminates the CRC
process which has proven to be redundant evidenced by the
fact that most resolutions of citations are made in later
administrative or legal appeals. AB 641 also allows for
fines to be levied from both state and federal agencies
when laws of both bodies are violated simultaneously in an
incident.
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The author states that as of February 2010, more than 600
citations were backlogged awaiting CRCs; some of the
appeals were made 8 years prior. This backlog is due in
part by insufficient staffing which has led to delays in
setting CRC hearings. LTC facilities are then unable to
resolve citations they feel were unwarranted, and facility
residents who may have experienced violations do not
receive justice when these violations are stuck in appeal
for years. There have also been instances where a
settlement did not reflect the level of violation. The
author cites an example where one appeal upheld a Class AA
violation, but the settlement reduced the monetary penalty
from $100,000 to $1,000 falling well below the Class AA
monetary penalty amount (minimum $10,000). The author
argues that it makes sense to eliminate the CRC process in
favor of the more trusted appeals processes before an
administrative law judge or a California Superior Court.
California is one of a few states that bar a monetary
penalty from both a state and federal agency when a
citation involves noncompliance with both a state and
federal law. It makes sense to allow both entities to act
if the laws of either were violated. By removing this
prohibition, it allows the DPH to make a recommendation to
CMS to levy a monetary penalty. The author argues there
are no requirements for this to occur on each and every
citation but rather gives DPH this option for the most
egregious violations.
State auditor report
At the request of the Joint Legislative Audit Committee,
the California State Auditor produced an audit report in
June of 2010, examining DPH. According to the State
Auditor report, state law specifies that LTC facilities are
not required to pay monetary penalties on contested
citations that have not been resolved. LTC facilities may
contest a monetary penalty by requesting an appeal through
the CRC process in which an independent hearing officer
from DPH's Office of Legal Services makes a determination
on whether to uphold, modify, or dismiss the citation.
Because of DPH's staffing issues and workload priorities,
more than 600 citations - with corresponding monetary
penalties amounting to nearly $5 million - were awaiting a
CRC as of February 2010. According to DPH, delays in the
CRC process may encourage LTC facilities to appeal
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citations and request CRCs as a way to delay paying their
monetary penalties.
SB 853 (Budget and Fiscal Review Committee), Chapter 717,
Statutes of 2010, required DPH, in consultation with
stakeholders, to develop recommendations to address this
report, and provide recommendations to the Legislature no
later than March 1, 2011. In January 2011, DPH solicited
input from stakeholders and issued recommendations in April
2011. AB 641 reflects the revised recommendations of DPH.
Prior legislation
SB 853 (Budget and Fiscal Review Committee), Chapter 717,
Statutes of 2010, requires DPH, in consultation with
stakeholders, to develop recommendations to address the
findings published in the June 2010 State Auditor report
and to provide the recommendations to the fiscal and policy
committees of the Legislature no later than March 1, 2011.
AB 2555 (Feuer) of 2010, would make a one-time
appropriation of $1.6 million from the State Health
Facilities Citation Penalties Account to the California
Department of Aging for local LTC Ombudsman Programs. AB
2555 was held on the Senate Appropriations Suspense File.
AB 392 (Feuer), Chapter 102, Statutes of 2009, requires
that at least one-half of the funds in the State Health
Facilities Citation Penalties Account be used to restore
funding for local LTC Ombudsman Programs.
AB 935 (Feuer) of 2009 was substantially similar to AB 392.
AB 935 was held on the Assembly Appropriations Suspense
File.
Arguments in support
Supporters write AB 641 allows for both state and federal
penalties to be levied when both state and federal
violations occur and gives DPH the necessary discretion
when finding serious and blatant violations. Supporters
argue the CRC process is inefficient and redundant and by
removing the CRC process, nursing home oversight will be
streamlined. Supporters write AB 641 will strengthen the
oversight protection for the vulnerable residents in
skilled nursing facilities.
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PRIOR ACTIONS
Assembly Health: 13- 4
Assembly Judiciary: 7- 2
Assembly Appropriations:12- 5
Assembly Floor: 52- 24
POSITIONS
Support: Advocacy, Inc.
Alzheimer's Association, California Council
Bet Tzedek Legal Services
California Advocates of Nursing Home Reform
California Alliance of Retired Americans
California Long-Term Care Ombudsman Association
California Senior Legislature
Catholic Charities of California United
Congress of California Seniors
Council on Aging - Orange County
Disability Rights California
Foundation Aiding the Elderly
National Senior Citizens Law Center
Ombudsman and HICAP Services of Northern
California
Oppose:None received.
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