BILL ANALYSIS �
SB 1246
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Date of Hearing: August 8, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1246 (Hern�ndez) - As Amended: July 5, 2012
Policy Committee: HealthVote:13-5
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill requires the California Department of Public Health to
enforce certain licensing requirements for hospitals. It also
removes a requirement that DPH adopt regulations to define what
constitutes non-immediate jeopardy violations, and instead
requires DPH to use criteria in existing law to assess the
penalties. Specifically, this bill:
1)Requires DPH to review compliance with state requirements for
staffing and patient classification systems during periodic
inspections of hospitals.
2)Codifies existing regulations that:
a) Require a patient classification system.
b) Require a committee review the patient classification
system as part of an annual update.
c) Specify the appointment and makeup of the committee.
3)Requires the registered nurses appointed to the committee
shall be selected by the collective bargaining agent, if the
nurses are represented by an agent.
4)Eliminates the requirement that DPH promulgate regulations
further defining criteria for assessing administrative
penalties of up to $25,000 for non-immediate jeopardy
violations.
5)Eliminates the requirement that DPH promulgate regulations
related to immediate jeopardy violations, thereby activating
existing law that increases maximum penalty levels by $25,000
for each violation type.
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6)Adds compliance with staffing requirements, including, but not
limited to, patient classification systems and
nurse-to-patient ratios, to the existing criteria by which DPH
is required to consider to determine the amount of an
administrative penalty.
FISCAL EFFECT
1)Increased staff costs for DPH's Licensing and Certification
division to check compliance with staffing standards would
likely cost $50,000 to $100,000 annually. Costs could be
higher if more complicated methods are necessary to check
compliance with staffing standards. These costs would be
fully offset by increased licensure fees, which are updated
annually to reflect actual workload.
2)Unknown, potentially significant fee-supported special fund
costs associated with appeals for non-immediate jeopardy
penalties. If 100 non-immediate jeopardy deficiencies
resulted in fines that resulted in appeals, increased costs to
the Licensing and Certification Fund of $1.8 million annually.
The actual number of appeals depends on the number of
deficiencies, the number of fines, and the likelihood of
hospitals appealing the fines. These variables are unknown
given a lack of history of assessing fines for this type of
violations. Hospitals indicate they would be more likely to
appeal if this bill were enacted, than if the protocols for
assessing non-immediate jeopardy fine levels were developed
through regulation.
3)Potential increased penalty revenue in the millions, or
potentially tens of millions of dollars. Penalty revenue may
be increased for two reasons: immediate jeopardy violations
will have higher maximum penalty levels under this bill as
compared to the status quo, and DPH may begin assessing
penalties for other (non-immediate jeopardy) violations under
this bill sooner than they would otherwise.
The issuance of regulations by DPH as required by current law
would also lead to similar increases in penalty revenue. By
removing the requirement for regulations, this bill may
accelerate enforcement and assessment of penalties by six
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months to several years, depending on when regulations would
otherwise be finalized.
Penalty revenues collected for violations of state law are
deposited into the Internal Departmental Quality Improvement
Account, and may be expended for internal quality improvement
activities in the Licensing and Certification Program.
COMMENTS
1)Rationale . According to the author, under existing law, there
is no enforcement mechanism to ensure that hospitals comply
with nurse staffing ratios or patient classification systems.
Moreover, hospitals face no penalties for failure to comply
with these laws and regulations. The author believes this
bill will strengthen the existing nurse-to-patient staffing
ratio requirements in California hospitals by requiring DPH to
check for compliance during regular periodic inspections, and
by putting into effect existing statutory penalty authority
for DPH by removing the requirement that DPH issue
regulations. This bill is sponsored by the United Nurses
Associations of California (UNAC).
2)Background . DPH regulates and licenses California health
facilities. Periodic inspections are required by state
licensure law and federal standards for participation in the
Medicare program. During these inspections, DPH reviews
compliance with numerous statutory and regulatory provisions.
Patient classification systems, which assist in establishing
staffing needs, as well as minimum nurse staffing ratios, are
required under current California law and regulation.
However, DPH does not systematically review compliance with
these standards during periodic inspections.
3)Monetary Penalties for Violation of State Law . SB 1312
(Alquist), Chapter 895, Statutes of 2006, provided DPH the
authority to assess administrative penalties for hospital
licensure violations and to promulgate regulations further
specifying penalties. SB 1312 created two categories of
violations: those that constitute immediate jeopardy to
patient health and safety, and other violations (non-immediate
jeopardy).
Immediate jeopardy violations are now subject to a fine of up
to $50,000 for the first administrative penalty, $75,000 for
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the second penalty, and up to $100,000 for the third and every
subsequent violation. Once regulations are adopted by DPH,
these immediate jeopardy penalties will increase to up to
$75,000 for the first penalty, $100,000 for the second
penalty, and $125,000 for the third and subsequent penalties.
This bill removes the requirement to adopt regulations, but
activates the higher maximum penalty levels.
All other violations (except minor violations, for which DPH
is prohibited from assessing a violation) are subject to a
fine of up to $25,000. Current law has no provision to allow
DPH to issue these penalties prior to the adoption of
regulations. DPH responds to complaints of non-compliance
with standards and can require hospitals to submit a
corrective plan if deficiencies are identified, but given that
they have not promulgated regulations, they cannot issue
administrative penalties unless the deficiency results in
immediate jeopardy. Violation of staffing ratios without
direct evidence of immediate jeopardy would therefore not be
punishable by fines until regulations are promulgated, or
unless this bill is enacted.
4)Related and Prior Legislation . SB 554 (Yee) in 2011 required
DPH to inspect for compliance with nurse-to-patient staffing
ratios during periodic inspections of hospitals, similar to
this bill. SB 554 would also have required DPH to inspect
hospitals that have been cited for deficiencies related to
nurse-to-patient staffing ratios for their compliance with the
plan of correction. SB 554 was referred to Senate Health and
never heard.
AB 394 (Kuehl), Chapter 945, Statutes of 1999 required DPH to
adopt regulations that establish licensed nurse-to-patient
ratios for hospitals.
5)Opposition . The California Hospital Association and individual
hospitals believe this bill is unnecessary and that mandatory
review of compliance with staffing ratios, as outlined in this
bill, is unreasonable.
The California Nurses Association (CNA) believes this bill is
ineffective because it does not adequately strengthen current
law. CNA also argues that they sponsored SB 554 in 2011 but
agreed to drop the push for a legislative solution to this
issue, in response to a request from the Administration to
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allow newly appointed administrative leadership to address
concerns through its administrative and regulatory authority.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081