BILL ANALYSIS �
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 641
A
AUTHOR: Feuer
B
AMENDED: August 23, 2011
HEARING DATE: August 29, 2011
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CONSULTANT:
4
Trueworthy
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PURSUANT TO S.R. 29.10
SUBJECT
Long-term care
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. Requires the Department of Health Care
Services (DHCS) to consider, at the initial application or
upon redetermination for the Medi-Cal long-term care
benefit, whether an undue hardship exists for an applicant
for home and facility care under specified circumstances
relating to the transfer of assets.
CHANGES TO EXISTING LAW
Existing law:
Provides for the inspection and licensure of LTC facilities
by the California Department of Public Health (DPH).
Continued---
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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
penalty be imposed for the same action.
Establishes a citation and appeals process that includes a
CRC.
Establishes the Medi-Cal program, under DHCS, to provide
comprehensive health benefits to low-income children, their
parents or caretaker relatives, pregnant women, elderly,
blind or disabled persons, nursing home residents, and
refugees who meet specified eligibility criteria.
Establishes LTC as a benefit provided under Medi-Cal.
Defines home and facility care services that are
reimbursable under Medi-Cal.
Requires DHCS to consider whether an undue hardship exists
prior to finding a person ineligible for medical assistance
for home and facility care services.
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."
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Requires DHCS to consider, at the initial application or
upon redetermination for the Medi-Cal long-term care
benefit, whether an undue hardship exists prior to finding
a person ineligible for medical assistance for home and
facility care services.
Defines an undue hardship to exist under the following
conditions:
1) The applicant has transferred all or any portion of
ownership interest in the shared principal residence
to his or her same-sex spouse or registered domestic
partner.
2) The applicant has transferred interest in resources
other than the shared principal residence to his or
her same-sex spouse or registered domestic partner to
the extent the value of those resources do not exceed
the community spouse resource allowance that would be
available to that person if he or she was an
opposite-sex spouse.
3) The applicant has transferred his or her right to
receive income to his or her same-sex spouse or
registered domestic partner and the amount of that
income does not exceed the maximum monthly spousal
income allowance that would be available to that
person if he or she was an opposite-sex spouse.
Requires DHCS to request federal approval and receive
federal financial participation prior to implementation.
Authorizes DHCS to implement this provision by all-county
letter or similar instructions, without regulatory action.
Contains a severability clause to ensure that if any
provision of this act is found to be unconstitutional, the
remaining provisions will continue in force as law.
Defines specified terms.
FISCAL IMPACT
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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.
The undue hardship provisions included in AB 641 have not
been analyzed by a fiscal committee.
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.
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 to 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 state and federal
laws. It makes sense to allow both entities to act if the
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laws of either were violated. By removing this
prohibition, it allows 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.
According to the author, this bill will extend financial
protections provided to opposite-sex spouses to same-sex spouses
and registered domestic partners for the LTC benefit under
Medi-Cal. In June 2011, CMS issued guidance on same-sex spouse
and registered domestic partner spousal asset protections. The
author states that, currently a same-sex spouse or registered
domestic partner of submitting a nursing home applicant may face
impoverishment if access to shared assets, such as bank accounts
or stock, is denied as a result of a nursing home application.
The author argues now that the federal government has clarified
a state's flexibility in administering this benefit, California
should ensure that same sex-sex spouses and registered domestic
partners are afforded the same financial protections provided to
opposite-sex couples.
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
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
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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.
CMS guidance on same-sex spouses and transfer of assets
In June 2011, CMS issued guidance to advise states of
existing choices and options regarding spousal and domestic
partner protections related to liens, transfer of assets
and estate recovery.
The guidance from CMS states, "because of the flexibility
afforded to States in determining undue hardship, we
believe that States may adopt criteria, or even
presumptions, that recognize that imposing transfer of
assets penalties on the basis of the transfer of ownership
interests in a shared home to a same-sex spouse or domestic
partner would constitute an undue hardship."
Prior legislation
SB 853 (Budget and Fiscal Review Committee), Chapter 717,
Statutes of 2010, requires DPH 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 have made 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
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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.
California Advocates for Nursing Home Reform (CANHR) writes
AB 641 would provide equal treatment under the law to
same-sex spouses and registered domestic partners by
providing them the same financial protections afforded to
opposite-sex married couples when eligibility for Medi-Cal
nursing home coverage is determined. The added protections
contained in AB 641 will ensure that same-sex spouses+ are
treated fairly during one of the most difficult times of
life. CANHR argues these changes are long overdue and are
consistent with guidance issued by CMS.
Supporters write California should once again take the lead
in ensuring full and equal treatment for all Californians,
particularly older adults.
COMMENTS
1. Undue hardship definitions. AB 641 defines an undue
hardship to exist when an applicant has transferred all or
any portion of ownership interest in the shared principal
residence to his or her same-sex spouse or registered
domestic partner as clarified by the June 2011 CMS
guidance.
AB 641 also includes two additional definitions for an
undue hardship that are not specified in the CMS guidance.
AB 641 defines an undue hardship to exist when the
applicant has transferred interest in other resources,
other than principal residence, that do not exceed the
community spouse resource allowance. AB 641 also defines
an undue hardship to exist when the applicant transfers his
or her right to receive income to his or her same-sex
spouse or registered domestic partner. AB 641 states these
additional definitions cannot exceed what would be
available to the individual if he or she was an
opposite-sex spouse.
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While it is not certain if these two additional definitions
will be approved, implementation of AB 641 is contingent
upon federal approval and receiving federal financial
participation.
PRIOR ACTIONS
Assembly Health: 13- 4
Assembly Judiciary: 7- 2
Assembly Appropriations:12- 5
Assembly Floor: 52- 24
Senate Health: 6- 3
POSITIONS
Current version:
Support: Alzheimer's Association
Bet Tzedek Legal Services
California Advocates for Nursing Home Reform
Disability Rights California
Equality California
National Center for Lesbian Rights
National Senior Citizens Law Center
Prior version:
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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