BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          SB 558 (Simitian)
          
          Hearing Date: 5/23/2011         Amended: 5/3/2011
          Consultant: Katie Johnson       Policy Vote: Judiciary 3-2
          _________________________________________________________________
          ____
          BILL SUMMARY: SB 558 lowers the burden of proof from "clear and 
          convincing" to a "preponderance of evidence" in cases involving 
          an instance of abuse or neglect of an elder or dependent adult, 
          as specified.
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2011-12      2012-13       2013-14     Fund
           
          Cost pressure on       low hundreds of thousands to     
          General/*
          Medi-Cal SNF rates     millions of dollars              Federal

          *Medi-Cal costs shared 50 percent General Fund, 50 percent 
          federal funds. 
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          ____

          STAFF COMMENTS: This bill meets the criteria for referral to the 
          Suspense File.
          
          This bill lowers the burden of proof from "clear and convincing" 
          to a "preponderance of evidence" in cases involving an instance 
          of abuse or neglect of an elder or dependent adult. While 
          plaintiffs (employees and their employers) would be permitted to 
          recoup reasonable attorney's fees and costs and damages up to 
          $250,000, at this standard, the "clear and convincing" standard 
          would remain in place for any punitive damages found against an 
          employer. This would increase the likelihood of the filing of 
          more liability insurance claims than prior to this legislation.

          Skilled nursing facilities (SNFs) generally carry liability 
          insurance against this type of litigation; Medi-Cal reimburses 
          SNFs based on their costs pursuant to AB 1629 (Frommer), Chapter 
          875, Statutes of 2004, including costs for liability insurance 
          and legal fees. The current liability insurance Medi-Cal rate is 








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          $2.13 per patient day and is capped at the 75th percentile of 
          costs. AB 97, Chapter 3, Statutes of 2011, the 2011 health 
          budget trailer bill, imposed a 10 percent provider rate cut on 
          Medi-Cal providers, including AB 1629 SNFs.

          This bill could result in increased litigation and therefore 
          higher liability insurance rates, if an insurer applies for a 
          rate increase, proves that an increase is warranted, and 
          receives approval from the California Department of Insurance. 
          This increase in rates could result in cost pressure in the 
          hundreds of thousands to millions of dollars, depending on the 
          assumptions, on Medi-Cal to increase liability insurance rates. 
          However, this bill could also act as a deterrent to SNFs and 
          decrease the incidence of elder abuse.