BILL ANALYSIS �
SB 1382
Page A
Date of Hearing: June 17, 2014
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Mark Stone, Chair
SB 1382 (Block) - As Amended: March 25, 2014
SENATE VOTE : 23-8
SUBJECT : Residential Care Facilities for the Elderly
SUMMARY : Increases Residential Care Facilities for the Elderly
(RCFE) licensing fees by 30%.
EXISTING LAW
1)Establishes the California RCFE Act, which requires facilities
that provide personal care and supervision, protective
supervision or health related services for persons 60 years of
age or older who voluntarily choose to reside in that facility
to be licensed by DSS. (H&S Code 1569 and 1569.1)
2)Requires DSS to collect and initial and annual licensing fee
from RCFE licensees based upon the capacity size of the
facility as follows: (H&S Code 1569.185)
------------------------------------------
| Fee Schedule |
------------------------------------------
|------------+----------------+------------|
|Capacity |Initial |Annual |
| |Application | |
|------------+----------------+------------|
| 1-3 |$413 |$413 |
|------------+----------------+------------|
| 4-6 |$825 |$413 |
|------------+----------------+------------|
| 7-15 |$1,239 |$619 |
|------------+----------------+------------|
| 16-30 |$1,650 |$825 |
|------------+----------------+------------|
| 31-49 |$2,064 |$1,032 |
|------------+----------------+------------|
| 50-74 |$2,477 |$1,239 |
|------------+----------------+------------|
| 75-100 |$2,891 |$1,445 |
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|------------+----------------+------------|
|101-150 |$3,304 |$1,652 |
|------------+----------------+------------|
|151-200 |$3,852 |$1,926 |
|------------+----------------+------------|
|201-250 |$4,400 |$2,200 |
|------------+----------------+------------|
|251-300 |$4,950 |$2,475 |
|------------+----------------+------------|
|301-350 |$5,500 |$2,750 |
|------------+----------------+------------|
|351-400 |$6,050 |$3,025 |
|------------+----------------+------------|
|401-500 |$7,150 |$3,575 |
|------------+----------------+------------|
|501-600 |$8,250 |$4,125 |
|------------+----------------+------------|
|601-700 |$9,350 |$4,675 |
|------------+----------------+------------|
|701+ |$11,000 |$5,500 |
------------------------------------------
3)Requires revenues collected from licensing fees to be utilized
by DSS for the purpose of ensuring the health and safety of
all individuals provided care or supervision by RCFEs and
support the activities of licensing programs, including, but
not limited to, monitoring facilities for compliance with
licensing laws and regulations and other administrative
activities in support of the licensing program, when
appropriated for these purposes. (H&S Code 1569.185)
4)Specified that revenues collected be used in addition to any
other funds appropriated in the annual Budget Act in support
of the licensing program. (H&S Code 1569.185)
5)Requires DSS to submit a budget change proposal to justify any
positions or any other related support costs on an ongoing
basis. (H&S Code 1569.185)
6)Provides that the failure of an applicant for licensure or a
licensee to pay all applicable and accrued fees and civil
penalties shall constitute grounds for denial or forfeiture of
a license. (H&S Code 1569.185)
FISCAL EFFECT : This bill has been keyed non-fiscal by the
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Office of Legislative Counsel.
COMMENTS :
Background : It is the intent of the Legislature, in
establishing the RCFE Act, to help provide a system of
residential care to allow older persons be able to voluntarily
live independently in a homelike environment as opposed to being
forced to live in an institutionalized facility, such as a
nursing home, or having to move between medical and nonmedical
environments. RCFEs, commonly referred to as assisted living
facilities, are licensed retirement residential homes and board
and care homes that accommodate and provide services to meet the
varying, and at times, fluctuating health care needs of
individuals who are 60 years of age and over, and persons under
the age of 60 with compatible needs. Licensed by DSS Community
Care Licensing Division (CCLD), they can range in size from
residential homes with six or less beds to more formal
residential facilities with 100 beds or more.
There is also no uniform common care model; rather the types of
assistive services can vary widely, which can include differing
levels of personal care and protective supervision, based upon
the needs of the resident.
If a resident needs medical care in his or her residence in
order to maintain an independent lifestyle, incidental medical
services are permitted to be provided by a licensed or otherwise
approved external provider, such as a home healthcare agency
(HHA), which is licensed by the California Department of Public
Health. Additionally, some RCFEs, upon approval of DSS and
after having met specified orientation and training
requirements, may provide assistive memory care services to
individuals with dementia or Alzheimer's disease.
Existing regulations also lay out the circumstances under which
an individual may be allowed to reside in RCFEs. Specifically,
they include persons:<1>
1)Capable of administering their own medications;
2)Receiving medical care and treatment outside the facility or
who are receiving needed medical care from a visiting nurse;
---------------------------
<1> Section 87455(b) of Title 22, California Code of
Regulations.
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3)Who because of forgetfulness or physical limitations need only
be reminded or to be assisted to take medication usually
prescribed for self-administration;
4)With problems including, but not limited to, forgetfulness,
wandering, confusion, irritability, and inability to manage
money;
5)With mild temporary emotional disturbance resulting from
personal loss or change in living arrangement;
6)Who are temporarily bedridden, as specified; and
7)Who are under 60 years of age whose needs are compatible with
other residents in care, if they require the same amount of
care and supervision as the other residents in the facility.
Regulations also provide specific prohibitions on individuals
who are allowed to reside in a RCFE, which includes whether the
resident has active communicable tuberculosis, requires 24-hour
skilled nursing or intermediate care, has an ongoing behavioral
or mental disorder, or has dementia, unless he or she is
otherwise permitted to be cared for in a RCFE by CCLD.
Growing demand : Over the past thirty years, the demand for
RCFEs has grown substantially. Although RCFEs have been
generally available, they experienced explosive growth in the
1990s, more than doubling the number of beds between 1990 and
2002,<2> and continued to grow 16 percent between 2001 and
2010.<3> Nationwide, states reported 1.2 million beds in
licensed RCFEs in 2010.<4> That same year, the national Centers
for Disease Control reported that 40% of RCFE residents needed
help with three or more activities of daily living and
three-fourths of residents had at least two of the 10 most
---------------------------
---------------------------
<2> Flores and Newcomer, "Monitoring Quality of Care in
Residential Care for the Elderly: The Information Challenge".
Journal of Aging and Social Policy, 21:225-242, 2009.
<3> SCAN Foundation. "Long Term Care Fundamentals: Residential
Care Facilities for the Elderly." March 2011.
http://thescanfoundation.org/sites/thescanfoundation.org/files/LT
C_Fundamental_7_0.pdf
<4> "Assisted Living and Residential Care in the States in
2010," Mollica, Robert, AARP Public Policy Institute
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common chronic conditions.<5>
According to DSS, as of March 5, 2014 there are 7,589 licensed
RCFEs in California with a capacity to serve 176,317 residents.
Financial Structure : More than 90% of RCFE licenses in
California are held by for-profit providers, the majority of
which have six or fewer beds. Most residents pay privately or
with long-term care insurance since there is very little public
funding available through Medi-Cal, Supplemental Security Income
(SSI/SSP) or Medicare, and fees can range from $1,500 to more
than $8,000 per month. Very few beds are available to seniors
who use their entire SSI/SSP checks to pay rent. In 2013, the
maximum SSI/SSP grant was $866.40. Residents who rely solely on
Social Security Income may have a maximum payment of $2,642 per
month in 2014,<6> although that amount varies widely based on
the recipient's prior income while working.
As a result, low-income seniors and middle-income seniors who do
not have long term care insurance are largely unable to afford
to reside in a RCFE. Most low-income seniors may receive
services through In Home Supportive Services (IHSS) or a skilled
nursing facility if they are Medi-Cal eligible. A small number
of Medi-Cal patients who are eligible for nursing home care may
be placed in an RCFE through the state's Assisted Living Waiver,
which began in 2006. According to state data, 172 RCFEs
currently participate in the waiver program benefitting 2,200
residents. There are an additional 3,700 slots available.
Increasingly, complex corporate mergers and acquisitions have
meant that many RCFEs are owned by national corporate chains
that control more than one facility. Administrators employed by
these chains may also oversee multiple facilities. This
development has led to regulatory challenges since CCLD
citations and other licensing reports are facility specific, and
management problems common to multiple RCFEs with the same owner
may easily go unnoticed.
Capacity of CCLD and unannounced licensing inspection visits :
Prior to 2003, the required frequency of unannounced licensing
visits was annually for most facility types (and tri-annually
---------------------------
<5> "Residents Living in Residential Care Facilities: United
States, 2010, Caffrey, Christine, et al., US Centers for
Disease Control, April 2012
<6> http://www.ssa.gov/pressoffice/factsheets/colafacts2014.pdf
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for family child care). However, due to the state's ongoing
budget deficit and declining revenues, it was deemed necessary
to find ways to reduce costs. As a result, the operational
budget for DSS' Community Care Licensing Division (CCLD) is now
required to do unannounced visits annually only when a facility
has a history of compliance problems, which has resulted in
annual visits for approximately 10% of facilities. For all
other facilities not subject to annual inspections, CCLD is
currently required to conduct comprehensive compliance
inspections of a 30% random sample of facilities each year, with
no facility being visited less than once every 5 years. There
are additional inspection requirements for new facilities or
when changes occur to the license, which helps to ensure that a
new licensee starts off correctly. However, in most cases five
years could pass before a residential facility is inspected by
CCLD.
Five years has created a tenuous situation for California's
infrastructure of community care facilities. In a Spring
Finance Letter from February, 2010, DSS stated that "[a]s the
result of several consecutive years of unallocated reductions
and position sweeps, CCLD is no longer able to sustain the
required inspection frequency." The letter went on to note that
"CCLD's experience with the random sample inspection protocol
and fluctuations in resources have put client health and safety
at risk." Additionally, adding to CCLD's responsibilities, the
2012-13 budget included the elimination of the California
Department of Mental Health (DMH) and transferred its
programmatic and administrative responsibilities to other state
agencies and departments, including DSS, as deemed appropriate.
Today, according to DSS, there are approximately 462 licensing
analysts responsible for the more than 75,000 licensed
facilities and the nearly 1.4 million individuals they serve,
ranging from the earliest stages of life to the end of life
care. This comes to a ratio of one licensing analyst per 162
facilities and 3,030 individuals in care.
It is clear that the ongoing budget deficit of the last ten
years has had a significant impact on DSS' ability to monitor
the health and safety of residents and clients of community care
facilities throughout the state. An increase in oversight
responsibility of mental health facilities combined with staff
reductions and unfilled staff positions, and on-again off-again
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work furloughs and hiring freezes have severely reduced its
administrative capacity. Although this does not clear the state
of its responsibility to ensure that RCFEs comply with state
law, it has created significant challenges in ensuring that
adults and seniors in need of care and supervision are not put
at risk.
The Governor's 2014-15 CCLD budget proposal : In response to a
growing number of highly publicized incidents at licensed
community care facilities throughout the state, most notably the
abandonment of Valley Springs Manor, a licensed RCFE in Castro
Valley, CA, by its owner and licensee, the Governor has proposed
an increase of $7.5 million for CCLD. The proposal includes a
request to increase licensing and application fees by ten
percent, which would generate an additional $2 million in
revenues to support activities to comply with implementation of
the RCFE Act. It would additionally include adjusting the fees
in accordance with the Consumer Price Index.
Need for the bill : Stating the need for the bill, the author
states:
Recent scrutiny of RCFEs has sparked multiple legislative
changes to address deficiencies and improve regulation and
supervision of assisted living facilities in order to
better protect our seniors. Among these proposals is the
need to inspect RCFEs every year instead of every five
years, require more training of direct care staff and
administrators, and require the Community Care Licensing
division, charged with investigating complaints, to begin
investigating certain complaints within 24 hours and to
complete these investigations within 30 days.
These important changes that will help uplift the entire
RCFE system cost money and the Department of Social
Services is barely keeping up with its current regulatory
programs. Increasing the RCFE licensing fees by a moderate
30% will improve the department's oversight and regulation
and allow for new measures to be fully implemented.
Staff comments: The last time licensing fees for RCFEs were
increased was four years ago by SB 4 X4 (Evans), Chapter 4,
Statutes of 2009 4th Extraordinary Session, which raised fees by
10%. The purpose of that increase was to provide additional
revenues for DSS to comply with existing statutory licensing
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inspection visits. This bill proposes to increase licensing
fees by another 30%, which are intended to "improve the
department's (DSS) oversight and regulation and allow new
measures to be fully implemented." Although current licensing
revenues and current budget efforts are intended to address the
oversight of RCFEs, the state is still required to only visit a
community care facility once every five years, which includes
RCFEs. In order for the bill to meet its stated intent, any
additional revenue should be used to assist DSS to provide
additional oversight, which includes increased licensing
inspection visits of RCFEs.
This bill is part of a package of bills that make up the 2014
RCFE Reform Act, which aim to increase oversight, training and
accountability of RCFEs. This package includes requiring RCFEs
to carry liability insurance, comply with significantly
increased initial and ongoing training requirements, and
substantially increased civil penalties. If signed into law,
these measures will place significant costs upon RCFEs,
especially those that serve fixed-income seniors, which could
ultimately be passed on to residents. This can result in
additional financial burdens placed on seniors with limited
resources; especially those who live on fixed incomes, such as
seniors whose only income is SSI/SSP.
RECOMMENDED AMENDMENTS:
Amendment #1
The costs associated with the increase in licensing fees,
especially taken into account with the other measure that make
up the 2014 RCFE Reform Act are likely to place significant
costs on the operation of RCFEs, especially smaller bed
facilities of six beds or fewer. Recognizing that an increase in
fees will help to support oversight and implementation of the
RCFE Act, it is unclear why an increase in licensing fees of 30%
is necessary at this time. Rather, in order to lessen the
impact on RCFE residents and the operational costs of RCFEs, the
increase on licensing fees should be reduced to a 20% increase.
Specifically, committee staff recommends the licensing fee
schedule be increased by 20% rather than 30%.
Amendment #2
Although current law states that licensing fees be utilized to
ensure the health and safety of all individuals provided care or
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supervision by licensees, this bill does not specifically
require that increased revenues generated as a result of the
licensing fee increase be used for oversight of licensed
facilities. In order to ensure that increased licensing fees
support efforts to increase inspection of licensed facilities,
this bill should be amended to ensure licensing fee revenues are
used to support the inspection of licensed facilities.
Specifically, committee staff recommends that the language on
page four, lines 19 through 29 be amended to read:
The revenues collected from licensing fees pursuant to this
section shall be utilized by the department for the purpose
of ensuring the health and safety of all individuals
provided care or supervision by licensees and to support
the activities of the licensing programs, including, but
not limited to, the regular inspection of monitoring
facilities for compliance with licensing laws and
regulations pursuant to this chapter Section 1569.33 , and
other administrative activities in support of the licensing
program, when appropriated for these purposes. The
revenues collected shall be used in addition to any other
funds appropriated in the annual Budget Act in support of
the licensing program.
2013-14 RELATED LEGISLATION:
SB 895 (Corbett) Would require CDSS to conduct annual
unannounced comprehensive inspections for all facilities,
requires CDSS to verify compliance following deficiencies within
10 days, and requires results of inspections to be available on
the CDSS website.
SB 1153 (Leno) Would permit CDSS to order a suspension of new
admissions for an RCFE when the facility has violated applicable
laws and regulations that present a direct risk to the health
and safety or residents, is not providing adequate care and
supervision, has been cited for subsequent violations of the
same law within 12 months, or has failed to pay existing fines.
SB 911 (Block) Would increase certification training
requirements for RCFE licensees, and staff who care for
residents, increases training requirements for staff providing
dementia care.
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SB 1382 (Block) Would increase the annual licensure fees by 30%
and make related findings and declarations.
AB 1571 (Eggman) Would increase disclosure requirements for RCFE
licensee applicants and require applicant information to be
cross-referenced with the State Department of Public Health.
Would require, by 2015, CDSS to create an online inquiry system
posting detailed information about RCFE facilities including
complaints, deficiencies and enforcement actions resulting in
fines. In subsequent years, would require CDSS to post
additional information, as specified.
AB 1572 (Eggman) Would require RCFEs, at the request of two or
more residents, to assist the residents in establishing and
maintaining a single resident council, as specified, and would
require the facility to interact with the council in specified
ways.
AB 1523 (Atkins and Weber) Would require RCFEs to maintain
liability insurance covering injury to residents and guests in
the amount of $1 million per occurrence and $3 million annually.
AB 1436 (Waldron) Would require the results of all reports of
inspections, evaluations or consultations and lists of
deficiencies to be posted on the department's Internet Web site.
AB 1454 (Calderon) Would require all licensed community care
facilities, RCFEs, and child day care centers to be subject to
an annual unannounced visits visit by CDSS.
AB 1570 (Chesbro) Would increase the certification training
requirements for RCFE administrators, training requirements for
RCFE staff that care for residents, and training requirements
for staff providing dementia care.
AB 1554 (Skinner) Would make various changes to existing RCFE
complaint procedures including requiring the department to make
an onsite inspection within 24 hours of a complaint alleging
abuse, neglect or a threat of imminent danger. Additionally
would require the department to complete its investigation
within 90 days of receiving a complaint. Would permit a
complainant to file an appeal of departmental findings.
AB 1899 (Brown) Would make a person whose license is revoked or
forfeited for abandonment of the facility ineligible for
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reinstatement of the license for a period of 10 years following
the revocation or forfeiture. Additionally would require CDSS
to establish and maintain a telephone hotline and an Internet
Web site dedicated to receiving complaints.
AB 2171 (Wieckowski) Would establish specified RCFE resident's
rights and require facilities to inform residents of these
rights as specified.
AB 2044 (Rodriguez) Would require every licensed residential
care facility to be subject to an annual unannounced visit by
the department, as specified. Additionally, would require
complaints to be inspected within three days if the complaint
involves alleged abuse or serious neglect, or within 10 days for
all other complaints and would require investigations to be
completed within 30 days. Would provide a complainant with the
right to request an informal conference and subsequent appeal,
as specified. Also would require certain staff to be present in
the facility for specified times.
REGISTERED SUPPORT / OPPOSITION :
Support
California Advocates for Nursing Home Reform (CANHR)
California Long-Term Care Ombudsman Association (CLTCOA)
California Senior Legislature
Johnson Moore
Stanislaus County Commission on Aging
Opposition
None on file.
Analysis Prepared by : Chris Reefe / HUM. S. / (916) 319-2089