Existing law provides for the licensure and regulation of alcoholism or drug abuse recovery or treatment facilities serving adults by the State Department of Health Care Services, as prescribed. Existing law makes a violation of these provisions punishable by a civil penalty of not less than $25 or more than $50 per day for each violation, with additional penalties for repeat violations, as specified.

This bill would make an initial license for a new facility issued by the department to a provider provisional for one year and revocable for good cause, as defined. The bill would require licensed services offered or provided by a licensed alcoholism or drug abuse recovery or treatment facility to be specified on the license and provided exclusively within either the licensed facility or any facility identified on a single license by street address. The bill would increase the penalties for a violation of the licensing and regulatory provisions to not less than $250 or more than $500 per day for each violation, except as specified, and increase the additional penalties for repeat violations, as specified. The bill would prohibit a person or entity found to be in violation of the licensing provisions described above from applying for initial licensure for 5 years, as specified. The bill would require the department to adopt regulations to implement specified provisions on or before July 1, 2022, and would authorize the department to issue provider bulletins, written guidelines, or similar instructions, as specified.

Existing law provides for the licensure and regulation of alcoholism or drug abuse recovery or treatment facilities serving adults by the State Department of Health Care Services, as prescribed. Existing law makes a violation of these provisions punishable by a civil penalty of not less than $25 or more than $50 per day for each violation, with additional penalties for repeat violations, as specified.

This bill would make an initial license for a new facility issued by the department to a provider provisional for one year and revocable for good cause, as defined. The bill would require licensed services offered or provided by a licensed alcoholism or drug abuse recovery or treatment facility to be specified on the license and provided exclusively within either the licensed facility or any facility identified on a single license by street address. The bill would increase the penalties for a violation of the licensing and regulatory provisions to not less than $250 or more than $500 per day for each violation, except as specified, and increase the additional penalties for repeat violations, as specified. The bill would prohibit a person or entity found to be in violation of the licensing provisions described above from applying for initial licensure for 5 years, as specified. The bill would require the department to adopt regulations to implement specified provisions on or before July 1, 2022, and would authorize the department to issue provider bulletins, written guidelines, or similar instructions, as specified.

Existing law provides for the licensure and regulation of alcoholism or drug abuse recovery or treatment facilities serving adults by the State Department of Health Care Services, as prescribed. Existing law makes a violation of these provisions punishable by a civil penalty of not less than $25 or more than $50 per day for each violation, with additional penalties for repeat violations, as specified.

This bill would make an initial license for a new facility issued by the department to a provider provisional for one year and revocable for good cause, as defined. The bill would require licensed services offered or provided by a licensed alcoholism or drug abuse recovery or treatment facility to be specified on the license and provided exclusively within either the licensed facility for the benefit of the residents. or any facility identified on a single license by street address. The bill would increase the penalties for a violation of the licensing and regulatory provisions to not less than $250 or more than $500 per day for each violation, except as specified, and increase the additional penalties for repeat violations, as specified. The bill would prohibit a person or entity found to be in violation of the licensing provisions described above from applying for initial licensure for 5 years, as specified. The bill would require the department to adopt regulations to implement specified provisions on or before July 1, 2022, and would authorize the department to issue provider bulletins, written guidelines, or similar instructions, as specified.

Existing law provides for the licensure and regulation of alcoholism or drug abuse recovery or treatment facilities serving adults by the State Department of Health Care Services, as prescribed. Existing law makes a violation of these provisions punishable by a civil penalty of not less than $25 or more than $50 per day for each violation, with additional penalties for repeat violations, as specified.

This bill would make an initial license for a new facility issued by the department to a provider provisional for one year and revocable for good cause, as defined. The bill would require all programs and medical licensed services offered or provided by a licensed alcoholism or drug abuse recovery or treatment facility to be specified in on the license application and provided exclusively within the licensed facility on the licensed property and for the benefit of the residents. The bill would increase the penalties for a violation of the licensing and regulatory provisions to not less than $250 or more than $500 per day for each violation, except as specified, and increase the additional penalties for repeat violations, as specified. The bill would prohibit a person or entity found to be in violation of the licensing provisions described above from applying for initial licensure for 2 5 years, as specified. The bill would require the department to adopt regulations to implement these specified provisions on or before July 1, 2022, and would authorize the department to issue provider bulletins, written guidelines, or similar instructions until regulations are adopted, instructions, as specified.

Existing law provides for the licensure and regulation of alcoholism or drug abuse recovery or treatment facilities serving adults by the State Department of Health Care Services, as prescribed. Existing law makes a violation of these provisions punishable by a civil penalty of not less than $25 or more than $50 per day for each violation, with additional penalties for repeat violations, as specified.

This bill would require the department, at least 45 days prior to approving any application for any new facility, to post on its Internet Web site the address of the proposed new facility. The bill would additionally make an initial licenses license for a new facility issued by the department to providers a provider provisional for one year and revocable for good cause, as defined. The bill would require all programs and medical services offered or provided by a licensed alcoholism or drug abuse recovery or treatment facility to be specified in the license application and provided exclusively within the licensed facility on the licensed property and for the benefit of the residents. The bill would increase the penalties for a violation of the licensing and regulatory provisions to not less than $250 or more than $500 per day for each violation, except as specified, and increase the additional penalties for repeat violations, as specified. The bill would prohibit a person or entity found to be in violation of the licensing provisions described above from applying for initial licensure for 2 years, as specified. The bill would require the department to adopt regulations to implement these provisions on or before July 1, 2022, and would authorize the department to issue provider bulletins, written guidelines, or similar instructions until regulations are adopted, as specified.

Existing law provides for the licensure and regulation of alcoholism or drug abuse recovery or treatment facilities serving adults by the State Department of Health Care Services, as prescribed. Existing law makes a violation of these provisions punishable by a civil penalty of not less than $25 or more than $50 per day for each violation, with additional penalties for repeat violations, as specified.

This bill would require the department, at least 45 days prior to approving any application for any new facility, to post on its Internet Web site the address of the proposed new facility. The bill would additionally make initial licenses issued to providers provisional for one year and revokable revocable for good cause, as defined. The bill would require all programs and medical services offered or provided by a licensed alcoholism or drug abuse recovery or treatment facility to be specified in the license application and provided exclusively within the licensed facility on the licensed property and for the benefit of the residents. The bill would increase the penalties for a violation of the licensing and regulatory provisions to not less than $1,000 $250 or more than $15,000 $500 per day for each violation, except as specified, and increase the additional penalties for repeat violations, as specified. The bill would prohibit a person or entity found to be in violation of the licensing provisions described above from applying for initial licensure for 2 years, as specified. The bill would require the department to adopt regulations to implement these provisions on or before July 1, 2022, and would authorize the department to issue provider bulletins, written guidelines, or similar instructions until regulations are adopted, as specified.

Existing law provides for the licensure and regulation of alcoholism or drug abuse recovery or treatment facilities serving adults by the State Department of Health Care Services, as prescribed. Existing law makes a violation of these provisions punishable by a civil penalty of not less than $25 or more than $50 per day for each violation, with additional penalties for repeat violations, as specified.

This bill would require, for any licensing application submitted on or after January 1, 2019, the department to deny an application for a new facility license, if the proposed location is in proximity to an existing facility that would result in overconcentration, as defined. The bill would prohibit the expansion or intensification of licensed existing facilities, as defined. The bill would require the department, at least 45 days prior to approving any application for any new facility, to post on its Internet Web site the address of the proposed new facility.

This facility. The bill would additionally make initial licenses issued to providers provisional for one year and revokable for good cause, as defined. The bill would require all programs and medical services offered or provided by a licensed alcoholism or drug abuse recovery or treatment facility to be specified in the license application and provided exclusively within the licensed facility on the licensed property and for the benefit of the residents. The bill would increase the penalties for a violation of the licensing and regulatory provisions to not less than $1,000 or more than $15,000 per day for each violation, and increase the additional penalties for repeat violations, as specified. The bill would prohibit a person or entity found to be in violation of the licensing provisions described above from applying for initial licensure for 2 years, as specified. The bill would require the department to adopt regulations to implement these provisions on or before July 1, 2022, and would authorize the department to issue provider bulletins, written guidelines, or similar instructions until regulations are adopted, as specified.

Existing law provides for the licensure and regulation of alcoholism or drug abuse recovery or treatment facilities serving adults by the State Department of Health Care Services, as prescribed. Existing law makes a violation of these provisions punishable by a civil penalty of not less than $25 or more than $50 per day for each violation, with additional penalties for repeat violations, as specified.

This bill would require, for any licensing application submitted on or after January 1, 2019, the department to deny an application for a new facility license, if the proposed location is in proximity to an existing facility that would result in overconcentration, as defined. The bill would prohibit the expansion or intensification of licensed existing facilities, as defined. The bill would require the department, at least 45 days prior to approving any application for any new facility, to post on its Internet Web site the address of the proposed new facility.

This bill would additionally make initial licenses to providers provisional for one year and revokable for good cause, as defined. The bill would require all programs and medical services offered or provided by a licensed alcoholism or drug abuse recovery or treatment facility to be specified in the license application and provided exclusively within the licensed facility on the licensed property and for the benefit of the residents. The bill would increase the penalties for a violation of the licensing and regulatory provisions to not less than $1,000 or more than $15,000 per day for each violation, and increase the additional penalties for repeat violations, as specified. The bill would prohibit a person or entity found to be in violation of the licensing provisions described above from applying for initial licensure for 2 years, as specified. The bill would require the department to adopt regulations to implement these provisions on or before July 1, 2022, and would authorize the department to issue provider bulletins, written guidelines, or similar instructions until regulations are adopted, as specified.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 3162

Author:(Friedman)

As Amended Ver:August 20, 2018

Majority vote

Original Committee Reference: HEALTH

SUMMARY: Requires new single licenses to operate an alcoholism or drug abuse recovery or treatment facility (treatment facility) to be provisional for one year, as specified, and increases the civil penalties for license suspensions, revocations, and violations, as specified. Specifically, this bill:

1. Permits the Department of Health Care Services (DHCS) to issue a single license to operate a treatment facility upon the receipt of a completed written application, fire clearance, and licensing fee subject to a review and making a determination that the applicant can comply with necessary statutes and regulations.
2. Requires DHCS to terminate the review of a licensure if an applicant fails to submit a completed written application, fire clearance, and payment of the required licensing fee in a timely manner and requires an applicant to submit a new application.
3. Requires DHCS to deny an application for licensure if the applicant fails to demonstrate the ability to comply with this bill.
4. Requires that initial licenses for a new treatment facility to be provisional for one year.
5. Permits, during the term of the provisional license, DHCS to revoke the license for good cause, where "good cause" means failure to operate in compliance with statutes and regulations regarding treatment facilities.
6. Prohibits a licensee from reapplying for an initial license for two years following a revocation of a provisional license.
7. Prohibits a licensee from operating a treatment facility beyond the conditions and limitations specified on the license.
8. Requires that all programs and services offered or provided by a treatment facility to be specified in the license application and provided exclusively within the licensed facility or within any facilities identified on a single license by street address, and only to residents of the licensed alcoholism or drug abuse recovery or treatment facility.
9. Permits a treatment facility with a current license to continue to operate subject to the terms and conditions of their existing licenses. Expansion or intensification of an existing treatment facility is prohibited and subjects the treatment facility to the new requirements of this bill.
10. Requires DHCS to post the address of a new proposed treatment facility at least 45 days prior to approving any new applications.
11. Permits an increase in the civil penalty assessed by DHCS when a treatment facility is operating without a license to a limit of $2,000, as determined by DHCS, for every day the treatment facility continues to provide services beyond the date that the license was revoked by DHCS.
12. Prohibits a person or entity that is found operating a treatment facility without a license or in violation of the terms of their license from applying for a new license for two years.
13. Allows DHCS to assess the amount of a civil penalty for violating licensing requirements between $1,000 and $15,000 per day for each violation, except where the nature or seriousness of the violation of the frequency of the violation warrants a higher penalty or an immediate civil penalty assessment as determined by DHCS.
14. Levies an immediate civil penalty of up to $1,500 and $1,000 for each day until the deficiency is remedied for a licensee that is cited for repeating the same violation within 24 months of the first violation, as determined by DHCS.
15. Requires DHCS to provide the licensee with notice requiring the licensee to correct the deficiency within a specified time period prior to the assessment of any civil penalty.
16. Requires DHCS, on or before July 1, 2022, to adopt regulations to implement this bill in accordance with the Administrative Procedure Act.
17. Permits DHCS, if it deems appropriate, to implement, interpret, or make specific the requirements of this bill by means of provider bulletins, written guidelines, or similar instructions from DHCS, until regulations are adopted.

The Senate amendments:

1. Delete provisions requiring DHCS to post notice on its Internet Website of the address and the proposed facility at least 45 days prior to DHCS's issuance of a license or denial of the application;
2. Prohibits a licensee from reapplying for an initial license for five years, instead of two years, following a revocation of a provisional license;
3. Remove DHCS discretion to determine the amount of a civil penalty assessed by DHCS when a treatment facility is operating without a license for every day the treatment facility continues to provide services beyond the date that the license was revoked by DHCS and for repeating the same violation within 24 months of the first violation; and,
4. Permit, instead of require, DHCS to adopt regulations necessary for implementation.

FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.

COMMENTS: According to the author, state licensed residential alcohol and drug abuse treatment facilities with capacities of six or less persons are an important treatment model that are integrated into communities throughout the state. State-licensed facilities that appropriately house six or less beds serve an important need that benefits patients and communities. However, due to the high profit margins from economies of scale, six-bed facilities often expand into adjacent neighboring residences, which create multi-structure, campus-style facilities that detract from the benefits to the patients of being integrated into a low density neighborhood. The author argues that there is a need for legislative clarification that services under a residential license must be provided at the specific residence where the state license is issued and a need to increase fines to help prevent bad actors from exploiting loopholes that hinder the therapeutic benefits of a residential neighborhood and limit the ability of patients to integrate with the fabric of a community. This bill would enable the future distribution of legally licensed residential alcohol and drug abuse recovery or treatment facilities to provide valuable rehabilitation and support services in a therapeutic residential neighborhood environment. The author concludes that this bill will provide consistency with most other State licensed group homes to benefit all categories of protected individuals recovering in State-licensed group homes.

Alcohol and drug dependency are treatable conditions, requiring extensive treatment and customized care. As individual problems, needs, and resources vary from individual to individual, a variety of treatment strategies must also be available if the needs of citizens are to be met. The increased demand for substance use disorder (SUD) treatment as a result of the expansion of individuals having insurance as a result of health care reform has placed a growing burden on the existing SUD treatment community. Currently, California has approximately 36,000 registered or certified counselors working in more than 2,500 private and publicly funded drug and alcohol programs, ranging from residential rehabs to driving under the influence and outpatient programs.

1. Treatment facilities. Alcoholism or drug abuse recovery or treatment facilities provide 24-hour non-medical care and specialize in providing services to chemically dependent adults who do not require treatment in an acute-care medical facility on an inpatient, intensive outpatient, outpatient, and partial hospitalization basis. These facilities range in size from six-bed facilities in residential neighborhoods to centers that accommodate more than 100 beds. The basic services provided by facilities include group, individual and educational sessions, alcoholism or drug abuse recovery and treatment planning. Detoxification services are also provided and are defined by the DHCS as services to support and assist an individual in the alcohol and/or drug withdrawal process and to explore plans for continued treatment. These services can be provided by a variety of health care providers such as alcohol and drug counselors, mental health therapists, social workers, psychologists, nurses and physicians.
2. Siting Difficulties. A technical assistance publication published by the United States Department of Health and Human Services (DHHS) entitled "Siting Drug and Alcohol Treatment Programs: Legal Challenges to the NIMBY Syndrome" states that community opposition, 'not in my backyard' (NIMBY), prevents or delays the siting of treatment programs, even when an already existing program tries to relocate. NIMBY is often targeted toward other types of health and social service facilities, like shelters for the homeless, group homes for the mentally ill, halfway houses for ex-offenders, and health-related facilities for those with Acquired Immunodeficiency Syndrome (AIDS). According to DHHS, many discriminatory zoning ordinances and practices may be unlawful under the Federal Housing Administration and the Americans with Disabilities Act. It is also noted that communities often fear the decline of property values and increased crime because of residential treatment facilities in the neighborhood. However, the DHHS document states that in almost every instance a community's fears are unfounded, as residential treatment facilities pose no danger to the health and welfare of neighbors nor draw substance abusers or pushers to the area.

The League of Cities and numerous individual cities state in support of this bill that it clarifies existing law and enables DHCS to enforce its policies by specifying that all services under a license must be carried out at the specific physical location of the license and allows DHCS to deny a new license application if a facility is located within 300 feet of an existing facility, establishes a one-year provisional license to serve as a probationary period for new licenses so that DHCS has time to analyze and determine compliance with regulations, and updates fines for non-compliance to be more commensurate with similar licensing fines. The League of Cities argues that due to abundant profits and the current fines and penalty structure, many operators continue to operate multistructure facilities and pay minimal fines. Increasing the fines and penalties to be more commensurate with similar licensing fines will help provide an additional incentive for companies to comply with the law and provide the needed care for the patients.

The California Access Coalition states in opposition that the use of overconcentration arguments to reduce the number of facilities available to help those with behavioral health issues would have the unintended consequences of leaving thousands of behavioral health patients without access to care.

The California Chapter of the American College of Emergency Physicians (Cal ACEP) states in opposition that this bill would require DHCS to deny an application for a new licensed treatment facility of the proposed location would result in overconcentration. Cal ACEP argues that this measure only furthers the stigma of addiction at a time when more addiction treatment services are needed. Cal ACEP notes that between 1997 and 2010, sales of prescription opioids more than quadrupled. Similarly, overdose deaths significantly increased for the 16th consecutive year in 2015. Cal ACEP requests that this bill be amended to remove the provision requiring DHCS to deny licenses for overconcentration and argues that the focus should be on encouraging individuals to seek treatment, rather than restrict new treatment facilities from being built.

Analysis Prepared by: Paula Villescaz / HEALTH / (916) 319-2097 FN: 0004936

 THIRD READING  

Bill No: AB 3162

Author:

:

Vote:

SENATE HEALTH COMMITTEE: 8-0, 6/13/18

AYES: Pan, Nguyen, Hernandez, Leyva, Mitchell, Monning, Nielsen, Roth

NO VOTE RECORDED: Newman

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 71-0, 5/25/18 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill makes various changes to current law regarding licensed residential alcoholism or drug abuse recovery or treatment facilities (RTFs) licensed by the Department of Health Care Services (DHCS), including: making initial licenses provisional for one year; requiring services offered by the RTF to be specified on the license and provided within the licensed RTF, as specified; and, increasing civil penalties for the violation of licensing law.

Senate Floor Amendments of 8/20/18 clarify that licensed services at an RTF are required to be provided exclusively within the licensed facility or within any facilities identified on the RTF’s license by street address. The amendments make other technical, nonsubstantive changes.

ANALYSIS:

Existing law:

1. Requires DHCS to license RTFs that provide 24-hour residential non-medical services to adults who are recovering from problems related to alcohol, drug, or alcohol and drug misuse or abuse, and who need alcohol, drug, or alcohol and drug recovery, treatment, or detoxification services. [HSC §11834.01, et seq.]
2. Permits DHCS to issue a single license to an RTF or to a facility wherein separate buildings or portions of an RTF are integral components of a single RTF and all of the components of the RTF are managed by the same licensee. [HSC §11834.09]
3. Requires DHCS to terminate review of an RTF license application, and to deny an application, when a prospective licensee fails to meet specified criteria, such as failing to submit a completed application and other documents and failure to demonstrate the ability to comply with licensing law. [HSC §11834.09]
4. Prohibits a licensee from operating an RTF beyond the conditions and limitation specified on the license. [HSC §11834.10]
5. Requires DHCS to conduct a site visit to investigate an allegation that a facility is providing recovery, treatment, or detoxification services without a license. Requires DHCS, if the facility is found to be operating without a license, to issue a notice to the facility that includes notice that DHCS will assess a civil penalty of $200 per day for every day the facility continues to operate without a license beyond the date specified in the notice. [HSC §11834.31]
6. Permits DHCS, in addition to suspending or revoking the license of an RTF, to levy a civil penalty for the violation of licensing law as follows:
   1. A civil penalty of not less than $25 or more than $50 per day for each violation, except where the nature or seriousness of the violation or the frequency of the violation warrants a higher penalty or an immediate civil penalty assessment, or both, as determined by DHCS. Prohibits this civil penalty assessment from exceeding $150 per day;
   2. An immediate civil penalty of $150, and $50 per day for each day a violation continues, until the deficiency is corrected, for a RTF that is cited for repeating the same violation within 24 months of the first violation; and,
   3. An immediate civil penalty of $150 for each day a violation continues, until the deficiency is corrected, for a RTF that has been assessed the civil penalty in b) above and repeats the same violation within 24 months of the violation. [HSC §11834.34]

This bill:

1. Repeals DHCS’s authority to issue a single license to an RTF wherein separate buildings or portions of a residential building are integral components of a single RTF.
2. Requires initial licenses for new RTFs to be provisional for one year and permits DHCS to revoke the license for “good cause” during the term of the provisional license. Defines “good cause” as failure to operate in compliance with licensing law. Prohibits an RTF from reapplying for an initial license for five years following the revocation of a provisional license.
3. Requires licensed services offered or provided by an RTF to be specified on the license and provided exclusively within the licensed RTF or within any facilities identified on a single license by street address. Requires licensed services to be received by residents of the licensed RTF only.
4. Raises the civil penalty assessed to a facility that operates without a license from $200 to $2,000 per day for every day the facility continues to operate without a license.
5. Raises the civil penalties in existing law assessed to RTFs that violate licensing law as follows:
   1. Not less than $250 or more than $500 per day for each violation, except when a higher penalty is warranted as determined by DHCS, per existing law. Prohibits a civil penalty assessment from exceeding $1,000 per day;
   2. An immediate civil penalty of $500, and $700 for each day a violation continues, until the deficiency is corrected, for RTFs that repeat the same violation within 24 months of the first violation; and,
   3. An immediate civil penalty of $500, and $1,000 for each day the violation continues, until the deficiency is corrected, for RTFs that have been assessed the penalty in b) above and repeat the same violation within 24 months of the violation.

Comments

1. Author’s statement. According to the author, state licensed RTFs with capacities of six or fewer persons are an important treatment model that is integrated into communities throughout the state. RTFs that appropriately house six or less beds serve an important need that benefits patients and communities. However, due to the high profit margins from economies of scale, six-bed RTFs often expand into adjacent neighboring residences, which create multi-structure, campus-style facilities that detract from the benefits to the patients of being integrated into a low density neighborhood. There is a need for legislative clarification that services under a residential license must be provided at the specific residence where the license is issued and a need to increase fines to help prevent bad actors from exploiting loopholes that hinder the therapeutic benefits of a residential neighborhood and limit the ability of patients to integrate with the fabric of a community. AB 3162 enables the future distribution of legally licensed RTFs to provide valuable rehabilitation and support services in a therapeutic residential neighborhood environment. AB 3162 provides consistency with most other state licensed group homes to benefit all categories of protected individuals recovering in state-licensed group homes.
2. RTFs. RTFs licensed by DHCS, based on what is commonly referred to as the social model, provide recovery, treatment, or detoxification services. (The Department of Public Health licenses medical model RTFs, known as chemical dependency recovery hospitals.) The services provided by social model RTFs include group and individual counseling, educational sessions, and alcoholism or drug abuse recovery and treatment planning. Social model RTFs are allowed to provide clients first aid and emergency care, and since the passage of AB 848 (Stone, Chapter 744, Statutes of 2015), RTFs can apply to DHCS for an additional license to provide incidental medical services by a licensed physician or other health care practitioner, as specified. DHCS licenses about 1,020 RTFs. As part of their licensing functions, DHCS conducts reviews of licensed RTFs at least once every two years, or as necessary; checks for compliance with statute and regulations to ensure the health and safety of clients; investigates all complaints; and, has the authority to suspend or revoke an RTF’s license for a violation of statute or regulations. DHCS states that it currently does not have a specific license for integral facilities; however, DHCS permits facilities to be licensed as integral facilities where services are provided in one building and housing is provided in another building, as long as they are under the same management and licensed as a single facility. DHCS further states that this bill will not impact the number of residential treatment beds available, as programs would be required to move any treatment services not located onsite to the residential location where the beds are located. RTFs would not be required to reduce the number of treatment beds.
3. Senate Health Committee informational hearing. On January 31, 2018, the Senate Health Committee held an informational hearing to examine the substance use disorder (SUD) treatment system with a focus on treatment and services provided in RTFs; insurance coverage; patient referrals; and the state’s regulation and oversight of the system. The hearing provided an overview of recent issues that have affected the state regarding unscrupulous facility operators, and gave an opportunity for state regulators to highlight efforts they have undertaken to combat the exploitation of the SUD system. The goal of the hearing was to examine the issues and to seek strategies and policies that will prevent unscrupulous individuals from exploiting the various industries that are supposed to help treat those with SUDs, as well as to recognize federal and state protections for those with disabilities, and to ensure that policies are not enacted, either at the local or state level, that will limit the number of treatment options for those who need them.
4. Emerging issues in the SUD field. Various media reports have documented how unscrupulous individuals have found ways to exploit the SUD treatment system. The Senate Health Committee staff has received reports of emerging trends and reached out to DHCS to confirm that some issues do occur in both unregulated sober living homes and licensed RTFs, including denying admission to RTFs for individuals with valid prescriptions from health care professionals for medications to aid in their recovery; RTF operators who hold various licenses and are found to endanger the health and safety of residents in one RTF may continue to operate the other RTFs while DHCS works to suspend or revoke all of the licenses; and RTF licensees who have had a license suspended or revoked may reapply for licensure just after only two years. Some of the bad actors in the industry operate multiple residences and claim that they do not require licensure by DHCS because they provide less than 24 hours of a service, particularly detoxification. These operators shuffle clients among the various residences as a means to skirt licensing laws.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 8/21/18)

Advocates for Responsible Treatment

Association of California Cities-Orange County

California Access Coalition

California Association of Alcohol and Drug Program Executives, Inc.

California Contract Cities Association

California Council of Community Behavioral Health Agencies

City of Agoura Hills

City of Aliso Viejo

City of Calabasas Mayor Fred Gaines

City of Costa Mesa

City of Dana Point

City of Diamond Bar

City of Garden Grove

City of Huntington Beach

City of La Mesa

City of Laguna Nigel

City of Lake Forest

City of Malibu

City of Mission Viejo

City of Moorpark

City of Morgan Hill

City of Norwalk

City of Oceanside

City of Palmdale

City of Palos Verdes Estates

City of Riverside

City of San Marcos

City of Santa Clarita

City of Sunnyvale

City of Vista

County Behavioral Health Directors Association of California

Las Virgenes-Malibu Council of Governments

League of California Cities

Los Angeles City Councilmember Mitchell Englander

Los Angeles County Division of the League of California Cities

Marin County Council of Mayors and Councilmembers

OPPOSITION: (Verified 8/21/18)

None received

ARGUMENTS IN SUPPORT: Supporters of this bill, largely representing individual cities, argue that this bill reforms outdated regulations for RTFs and enables DHCS to ensure compliance with existing licensing laws. Supporters state that RTFs provide valuable rehabilitation and supportive services in a therapeutic environment, which can benefit both individual patients and the greater community. However, many RTF operators continue to operate multi-structure facilities and pay minimal fines because of the existing penalty structure. Supporters state that this bill updates fines for noncompliance to be more commensurate with similar licensing fines, which will help provide an additional incentive for companies to comply with the law and provide the needed care for patients. Supporters further argue that this bill clarifies existing law and enables DHCS to enforce its policies by specifying that all licensed services must be carried out at the specific physical location of the license. The California Association of Alcohol and Drug Program Executives, Inc. states that addiction is a treatable condition, sometimes requiring extensive treatment and customized care, and that this bill recognizes the state’s infrastructure must offer a variety of treatment options.

ASSEMBLY FLOOR: 71-0, 5/25/18

AYES: Acosta, Aguiar-Curry, Baker, Berman, Bigelow, Bloom, Bonta, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rodriguez, Rubio, Salas, Santiago, Mark Stone, Thurmond, Ting, Voepel, Weber, Wood, Rendon

NO VOTE RECORDED: Travis Allen, Arambula, Brough, Levine, Mullin, Steinorth, Waldron

Prepared by:

8/21/18 19:02:52

**** END ****

 THIRD READING  

Bill No: AB 3162

Author:

:

Vote:

SENATE HEALTH COMMITTEE: 8-0, 6/13/18

AYES: Pan, Nguyen, Hernandez, Leyva, Mitchell, Monning, Nielsen, Roth

NO VOTE RECORDED: Newman

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 71-0, 5/25/18 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill makes various changes to current law regarding licensed residential alcoholism or drug abuse recovery or treatment facilities (RTFs) licensed by the Department of Health Care Services (DHCS), including: making initial licenses provisional for one year; requiring services offered by the RTF to be specified on the license and provided within the licensed RTF; and, increasing civil penalties for the violation of licensing law.

Senate Floor Amendments of 8/6/18 correct a reference to existing law regarding incidental medical services at licensed RTFs, and expand from two years to five years during which a person or entity found to be in violation of licensing law is prohibited from applying for licensure.

ANALYSIS:

Existing law:

1. Requires DHCS to license RTFs that provide 24-hour residential non-medical services to adults who are recovering from problems related to alcohol, drug, or alcohol and drug misuse or abuse, and who need alcohol, drug, or alcohol and drug recovery, treatment, or detoxification services. [HSC §11834.01, et seq.]
2. Permits DHCS to issue a single license to an RTF or to a facility wherein separate buildings or portions of an RTF are integral components of a single RTF and all of the components of the RTF are managed by the same licensee. [HSC §11834.09]
3. Requires DHCS to terminate review of an RTF license application, and to deny an application, when a prospective licensee fails to meet specified criteria, such as failing to submit a completed application and other documents and failure to demonstrate the ability to comply with licensing law. [HSC §11834.09]
4. Prohibits a licensee from operating an RTF beyond the conditions and limitation specified on the license. [HSC §11834.10]
5. Requires DHCS to conduct a site visit to investigate an allegation that a facility is providing recovery, treatment, or detoxification services without a license. Requires DHCS, if the facility is found to be operating without a license, to issue a notice to the facility that includes notice that DHCS will assess a civil penalty of $200 per day for every day the facility continues to operate without a license beyond the date specified in the notice. [HSC §11834.31]
6. Permits DHCS, in addition to suspending or revoking the license of an RTF, to levy a civil penalty for the violation of licensing law as follows:
   1. A civil penalty of not less than $25 or more than $50 per day for each violation, except where the nature or seriousness of the violation or the frequency of the violation warrants a higher penalty or an immediate civil penalty assessment, or both, as determined by DHCS. Prohibits this civil penalty assessment from exceeding $150 per day;
   2. An immediate civil penalty of $150, and $50 per day for each day a violation continues, until the deficiency is corrected, for a RTF that is cited for repeating the same violation within 24 months of the first violation; and,
   3. An immediate civil penalty of $150 for each day a violation continues, until the deficiency is corrected, for a RTF that has been assessed the civil penalty in b) above and repeats the same violation within 24 months of the violation. [HSC §11834.34]

This bill:

1. Repeals DHCS’s authority to issue a single license to an RTF wherein separate buildings or portions of a residential building are integral components of a single RTF.
2. Requires initial licenses for new RTFs to be provisional for one year and permits DHCS to revoke the license for “good cause” during the term of the provisional license. Defines “good cause” as failure to operate in compliance with licensing law. Prohibits an RTF from reapplying for an initial license for five years following the revocation of a provisional license.
3. Requires licensed services offered or provided by an RTF to be specified on the license and provided exclusively within the licensed RTF for the benefit of the residents of the RTF.
4. Raises the civil penalty assessed to a facility that operates without a license from $200 to $2,000 per day for every day the facility continues to operate without a license.
5. Raises the civil penalties in existing law assessed to RTFs that violate licensing law as follows:
   1. Not less than $250 or more than $500 per day for each violation, except when a higher penalty is warranted as determined by DHCS, per existing law. Prohibits a civil penalty assessment from exceeding $1,000 per day;
   2. An immediate civil penalty of $500, and $700 for each day a violation continues, until the deficiency is corrected, for RTFs that repeat the same violation within 24 months of the first violation; and,
   3. An immediate civil penalty of $500, and $1,000 for each day the violation continues, until the deficiency is corrected, for RTFs that have been assessed the penalty in b) above and repeat the same violation within 24 months of the violation.

Comments

1. Author’s statement. According to the author, state licensed RTFs with capacities of six or fewer persons are an important treatment model that is integrated into communities throughout the state. RTFs that appropriately house six or less beds serve an important need that benefits patients and communities. However, due to the high profit margins from economies of scale, six-bed RTFs often expand into adjacent neighboring residences, which create multi-structure, campus-style facilities that detract from the benefits to the patients of being integrated into a low density neighborhood. There is a need for legislative clarification that services under a residential license must be provided at the specific residence where the license is issued and a need to increase fines to help prevent bad actors from exploiting loopholes that hinder the therapeutic benefits of a residential neighborhood and limit the ability of patients to integrate with the fabric of a community. AB 3162 enables the future distribution of legally licensed RTFs to provide valuable rehabilitation and support services in a therapeutic residential neighborhood environment. AB 3162 provides consistency with most other state licensed group homes to benefit all categories of protected individuals recovering in state-licensed group homes.
2. RTFs. RTFs licensed by DHCS, based on what is commonly referred to as the social model, provide recovery, treatment, or detoxification services. (The Department of Public Health licenses medical model RTFs, known as chemical dependency recovery hospitals.) The services provided by social model RTFs include group and individual counseling, educational sessions, and alcoholism or drug abuse recovery and treatment planning. Social model RTFs are allowed to provide clients first aid and emergency care, and since the passage of AB 848 (Stone, Chapter 744, Statutes of 2015), RTFs can apply to DHCS for an additional license to provide incidental medical services by a licensed physician or other health care practitioner, as specified. DHCS licenses about 1,020 RTFs. As part of their licensing functions, DHCS conducts reviews of licensed RTFs at least once every two years, or as necessary; checks for compliance with statute and regulations to ensure the health and safety of clients; investigates all complaints; and, has the authority to suspend or revoke an RTF’s license for a violation of statute or regulations. DHCS states that it currently does not have a specific license for integral facilities; however, DHCS permits facilities to be licensed as integral facilities where services are provided in one building and housing is provided in another building, as long as they are under the same management and licensed as a single facility. DHCS further states that this bill will not impact the number of residential treatment beds available, as programs would be required to move any treatment services not located onsite to the residential location where the beds are located. RTFs would not be required to reduce the number of treatment beds.
3. Senate Health Committee informational hearing. On January 31, 2018, the Senate Health Committee held an informational hearing to examine the substance use disorder (SUD) treatment system with a focus on treatment and services provided in RTFs; insurance coverage; patient referrals; and the state’s regulation and oversight of the system. The hearing provided an overview of recent issues that have affected the state regarding unscrupulous facility operators, and gave an opportunity for state regulators to highlight efforts they have undertaken to combat the exploitation of the SUD system. The goal of the hearing was to examine the issues and to seek strategies and policies that will prevent unscrupulous individuals from exploiting the various industries that are supposed to help treat those with SUDs, as well as to recognize federal and state protections for those with disabilities, and to ensure that policies are not enacted, either at the local or state level, that will limit the number of treatment options for those who need them.
4. Emerging issues in the SUD field. Various media reports have documented how unscrupulous individuals have found ways to exploit the SUD treatment system. The Senate Health Committee staff has received reports of emerging trends and reached out to DHCS to confirm that some issues do occur in both unregulated sober living homes and licensed RTFs, including denying admission to RTFs for individuals with valid prescriptions from health care professionals for medications to aid in their recovery; RTF operators who hold various licenses and are found to endanger the health and safety of residents in one RTF may continue to operate the other RTFs while DHCS works to suspend or revoke all of the licenses; and RTF licensees who have had a license suspended or revoked may reapply for licensure just after only two years. Some of the bad actors in the industry operate multiple residences and claim that they do not require licensure by DHCS because they provide less than 24 hours of a service, particularly detoxification. These operators shuffle clients among the various residences as a means to skirt licensing laws.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 8/7/18)

Advocates for Responsible Treatment

Association of California Cities-Orange County

California Access Coalition

California Association of Alcohol and Drug Program Executives, Inc.

California Contract Cities Association

California Council of Community Behavioral Health Agencies

City of Agoura Hills

City of Aliso Viejo

City of Calabasas Mayor Fred Gaines

City of Costa Mesa

City of Dana Point

City of Diamond Bar

City of Garden Grove

City of Huntington Beach

City of La Mesa

City of Laguna Nigel

City of Lake Forest

City of Malibu

City of Mission Viejo

City of Moorpark

City of Morgan Hill

City of Norwalk

City of Oceanside

City of Palmdale

City of Palos Verdes Estates

City of Riverside

City of San Marcos

City of Santa Clarita

City of Sunnyvale

City of Vista

County Behavioral Health Directors Association of California

Las Virgenes-Malibu Council of Governments

League of California Cities

Los Angeles City Councilmember Mitchell Englander

Los Angeles County Division of the League of California Cities

Marin County Council of Mayors and Councilmembers

OPPOSITION: (Verified 8/7/18)

None received

ARGUMENTS IN SUPPORT: Supporters of this bill, largely representing individual cities, argue that this bill reforms outdated regulations for RTFs and enables DHCS to ensure compliance with existing licensing laws. Supporters state that RTFs provide valuable rehabilitation and supportive services in a therapeutic environment, which can benefit both individual patients and the greater community. However, many RTF operators continue to operate multi-structure facilities and pay minimal fines because of the existing penalty structure. Supporters state that this bill updates fines for noncompliance to be more commensurate with similar licensing fines, which will help provide an additional incentive for companies to comply with the law and provide the needed care for patients. Supporters further argue that this bill clarifies existing law and enables DHCS to enforce its policies by specifying that all licensed services must be carried out at the specific physical location of the license. The California Association of Alcohol and Drug Program Executives, Inc. states that addiction is a treatable condition, sometimes requiring extensive treatment and customized care, and that this bill recognizes the state’s infrastructure must offer a variety of treatment options.

ASSEMBLY FLOOR: 71-0, 5/25/18

AYES: Acosta, Aguiar-Curry, Baker, Berman, Bigelow, Bloom, Bonta, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rodriguez, Rubio, Salas, Santiago, Mark Stone, Thurmond, Ting, Voepel, Weber, Wood, Rendon

NO VOTE RECORDED: Travis Allen, Arambula, Brough, Levine, Mullin, Steinorth, Waldron

Prepared by:

8/7/18 17:18:38

**** END ****

 THIRD READING  

Bill No: AB 3162

Author:

:

Vote:

SENATE HEALTH COMMITTEE: 8-0, 6/13/18

AYES: Pan, Nguyen, Hernandez, Leyva, Mitchell, Monning, Nielsen, Roth

NO VOTE RECORDED: Newman

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 71-0, 5/25/18 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill makes various changes to current law regarding residential alcoholism or drug abuse recovery or treatment facilities (RTFs) licensed by the Department of Health Care Services (DHCS), including: making initial licenses provisional for one year; requiring services offered by the RTF to be specified on the license and provided within the licensed RTF; and, increasing civil penalties for the violation of licensing law.

ANALYSIS:

Existing law:

1. Requires DHCS to license RTFs that provide 24-hour residential non-medical services to adults who are recovering from problems related to alcohol, drug, or alcohol and drug misuse or abuse, and who need alcohol, drug, or alcohol and drug recovery, treatment, or detoxification services. [HSC §11834.01, et seq.]
2. Permits DHCS to issue a single license to an RTF or to a facility wherein separate buildings or portions of an RTF are integral components of a single RTF and all of the components of the RTF are managed by the same licensee. [HSC §11834.09]
3. Requires DHCS to terminate review of an RTF license application, and to deny an application, when a prospective licensee fails to meet specified criteria, such as failing to submit a completed application and other documents and failure to demonstrate the ability to comply with licensing law. [HSC §11834.09]
4. Prohibits a licensee from operating an RTF beyond the conditions and limitation specified on the license. [HSC §11834.10]
5. Requires DHCS to conduct a site visit to investigate an allegation that a facility is providing recovery, treatment, or detoxification services without a license. Requires DHCS, if the facility is found to be operating without a license, to issue a notice to the facility that includes notice that DHCS will assess a civil penalty of $200 per day for every day the facility continues to operate without a license beyond the date specified in the notice. [HSC §11834.31]
6. Permits DHCS, in addition to suspending or revoking the license of an RTF, to levy a civil penalty for the violation of licensing law as follows:
   1. A civil penalty of not less than $25 or more than $50 per day for each violation, except where the nature or seriousness of the violation or the frequency of the violation warrants a higher penalty or an immediate civil penalty assessment, or both, as determined by DHCS. Prohibits this civil penalty assessment from exceeding $150 per day;
   2. An immediate civil penalty of $150, and $50 per day for each day a violation continues, until the deficiency is corrected, for a RTF that is cited for repeating the same violation within 24 months of the first violation; and,
   3. An immediate civil penalty of $150 for each day a violation continues, until the deficiency is corrected, for a RTF that has been assessed the civil penalty in b) above and repeats the same violation within 24 months of the violation. [HSC §11834.34]

This bill:

1. Repeals DHCS’ authority to issue a single license to an RTF wherein separate buildings or portions of a residential building are integral components of a single RTF.
2. Requires initial licenses for new RTFs to be provisional for one year and permits DHCS to revoke the license for “good cause” during the term of the provisional license. Defines “good cause” as failure to operate in compliance with licensing law. Prohibits an RTF from reapplying for an initial license for two years following the revocation of a provisional license.
3. Requires all programs and services offered or provided by an RTF to be specified in the license application and provided exclusively within the licensed RTF on the licensed property and for the benefit of the residents of the RTF.
4. Raises the civil penalty assessed to a facility that operates without a license from $200 to an amount determined by DHCS and not to exceed $2,000 per day for every day the facility continues to operate without a license.
5. Raises the civil penalties in existing law assessed to RTFs that violate licensing law as follows:
   1. Not less than $250 or more than $500 per day for each violation, except when a higher penalty is warranted as determined by DHCS, per existing law. Prohibits a civil penalty assessment from exceeding $1,000 per day;
   2. An immediate civil penalty, as determined by DHCS, not to exceed $500, and $700 for each day a violation continues, until the deficiency is corrected, for RTFs that repeat the same violation within 24 months of the first violation; and,
   3. An immediate civil penalty of $500, and $1,000 for each day the violation continues, until the deficiency is corrected, for RTFs that have been assessed the penalty in b) above and repeat the same violation within 24 months of the violation.

Comments

1. Author’s statement. According to the author, state licensed RTFs with capacities of six or fewer persons are an important treatment model that is integrated into communities throughout the state. RTFs that appropriately house six or less beds serve an important need that benefits patients and communities. However, due to the high profit margins from economies of scale, six-bed RTFs often expand into adjacent neighboring residences, which create multi-structure, campus-style facilities that detract from the benefits to the patients of being integrated into a low density neighborhood. There is a need for legislative clarification that services under a residential license must be provided at the specific residence where the license is issued and a need to increase fines to help prevent bad actors from exploiting loopholes that hinder the therapeutic benefits of a residential neighborhood and limit the ability of patients to integrate with the fabric of a community. AB 3162 enables the future distribution of legally licensed RTFs to provide valuable rehabilitation and support services in a therapeutic residential neighborhood environment. AB 3162 provides consistency with most other state licensed group homes to benefit all categories of protected individuals recovering in state-licensed group homes.
2. RTFs. RTFs licensed by DHCS, based on what is commonly referred to as the social model, provide recovery, treatment, or detoxification services. (The Department of Public Health licenses medical model RTFs, known as chemical dependency recovery hospitals.) The services provided by social model RTFs include group and individual counseling, educational sessions, and alcoholism or drug abuse recovery and treatment planning. Social model RTFs are allowed to provide clients first aid and emergency care, and since the passage of AB 848 (Stone, Chapter 744, Statutes of 2015), RTFs can apply to DHCS for an additional license to provide incidental medical services by a licensed physician or other health care practitioner, as specified. DHCS licenses about 1,020 RTFs. As part of their licensing functions, DHCS conducts reviews of licensed RTFs at least once every two years, or as necessary; checks for compliance with statute and regulations to ensure the health and safety of clients; investigates all complaints; and, has the authority to suspend or revoke an RTF’s license for a violation of statute or regulations. DHCS states that it currently does not have a specific license for integral facilities; however, DHCS permits facilities to be licensed as integral facilities where services are provided in one building and housing is provided in another building, as long as they are under the same management and licensed as a single facility. DHCS further states that this bill would not impact the number of residential treatment beds available, as programs would be required to move any treatment services not located onsite to the residential location where the beds are located. RTFs would not be required to reduce the number of treatment beds.
3. Senate Health Committee informational hearing. On January 31, 2018, the Senate Health Committee held an informational hearing to examine the substance use disorder (SUD) treatment system with a focus on treatment and services provided in RTFs; insurance coverage; patient referrals; and the state’s regulation and oversight of the system. The hearing provided an overview of recent issues that have affected the state regarding unscrupulous facility operators, and gave an opportunity for state regulators to highlight efforts they have undertaken to combat the exploitation of the SUD system. The goal of the hearing was to examine the issues and to seek strategies and policies that will prevent unscrupulous individuals from exploiting the various industries that are supposed to help treat those with SUDs, as well as to recognize federal and state protections for those with disabilities, and to ensure that policies are not enacted, either at the local or state level, that will limit the number of treatment options for those who need them.
4. Emerging issues in the SUD field. Various media reports have documented how unscrupulous individuals have found ways to exploit the SUD treatment system. The Senate Health Committee staff has received reports of emerging trends and reached out to DHCS to confirm that some issues do occur in both unregulated sober living homes and licensed RTFs, including denying admission to RTFs for individuals with valid prescriptions from health care professionals for medications to aid in their recovery; RTF operators who hold various licenses and are found to endanger the health and safety of residents in one RTF may continue to operate the other RTFs while DHCS works to suspend or revoke all of the licenses; and RTF licensees who have had a license suspended or revoked may reapply for licensure just after only two years. Some of the bad actors in the industry operate multiple residences and claim that they do not require licensure by DHCS because they provide less than 24 hours of a service, particularly detoxification. These operators shuffle clients among the various residences as a means to skirt licensing laws.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 7/3/18)

Advocates for Responsible Treatment

Association of California Cities-Orange County

California Access Coalition

California Association of Alcohol and Drug Program Executives, Inc.

California Contract Cities Association

California Council of Community Behavioral Health Agencies

City of Agoura Hills

City of Aliso Viejo

City of Calabasas Mayor Fred Gaines

City of Costa Mesa

City of Dana Point

City of Diamond Bar

City of Garden Grove

City of Huntington Beach

City of La Mesa

City of Laguna Nigel

City of Lake Forest

City of Malibu

City of Mission Viejo

City of Moorpark

City of Norwalk

City of Oceanside

City of Palmdale

City of Palos Verdes Estates

City of Riverside

City of San Marcos

City of Santa Clarita

City of Sunnyvale

City of Vista

Las Virgenes-Malibu Council of Governments

League of California Cities

Los Angeles City Councilmember Mitchell Englander

Los Angeles County Division of the League of California Cities

Marin County Council of Mayors and Council Members

OPPOSITION: (Verified 7/2/18)

None received

ARGUMENTS IN SUPPORT: Supporters of this bill, largely representing individual cities, argue that this bill reforms outdated regulations for RTFs and enables DHCS to ensure compliance with existing licensing laws. Supporters state that RTFs provide valuable rehabilitation and supportive services in a therapeutic environment, which can benefit both individual patients and the greater community. However, many RTF operators continue to operate multi-structure facilities and pay minimal fines because of the existing penalty structure. Supporters state that this bill updates fines for noncompliance to be more commensurate with similar licensing fines, which will help provide an additional incentive for companies to comply with the law and provide the needed care for patients. Supporters further argue that this bill clarifies existing law and enables DHCS to enforce its policies by specifying that all services under a license must be carried out at the specific physical location of the license. The California Association of Alcohol and Drug Program Executives, Inc. states that addiction is a treatable condition, sometimes requiring extensive treatment and customized care, and that this bill recognizes the state’s infrastructure must offer a variety of treatment options.

ASSEMBLY FLOOR: 71-0, 5/25/18

AYES: Acosta, Aguiar-Curry, Baker, Berman, Bigelow, Bloom, Bonta, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rodriguez, Rubio, Salas, Santiago, Mark Stone, Thurmond, Ting, Voepel, Weber, Wood, Rendon

NO VOTE RECORDED: Travis Allen, Arambula, Brough, Levine, Mullin, Steinorth, Waldron

Prepared by:

7/3/18 15:23:11

**** END ****

SENATE COMMITTEE ON HEALTH

Senator Dr. Richard Pan, Chair

BILL NO: AB 3162

SUBJECT: Alcoholism or drug abuse treatment facilities.

SUMMARY:

Makes various changes to current law regarding residential alcoholism or drug abuse recovery or treatment facilities (RTFs) licensed by the Department of Health Care Services, including: making initial licenses provisional for one year; requiring services offered by the RTF to be specified on the license and provided within the licensed RTF; and, increasing civil penalties for the violation of licensing law.

Existing law:

1. Requires the Department of Health Care Services (DHCS) to license RTFs that provide 24-hour residential non-medical services to adults who are recovering from problems related to alcohol, drug, or alcohol and drug misuse or abuse, and who need alcohol, drug, or alcohol and drug recovery, treatment, or detoxification services. [HSC §11834.01, et seq.]
2. Permits DHCS to issue a single license to a residential facility or to a facility wherein separate buildings or portions of a residential facility are integral components of a single RTF and all of the components of the RTF are managed by the same licensee. [HSC §11834.09]
3. Requires DHCS to terminate review of an RTF license application, and to deny an application, when a prospective licensee fails to meet specified criteria, such as failing to submit a completed application and other documents and failure to demonstrate the ability to comply with licensing law. [HSC §11834.09]
4. Prohibits a licensee from operating an RTF beyond the conditions and limitation specified on the license. [HSC §11834.10]
5. Requires DHCS to conduct a site visit to investigate an allegation that a facility is providing recovery, treatment, or detoxification services without a license. Requires DHCS, if the facility is found to be operating without a license, to issue a notice to the facility that includes notice that DHCS will assess a civil penalty of $200 per day for every day the facility continues to operate without a license beyond the date specified in the notice. [HSC §11834.31]
6. Permits DHCS, in addition to suspending or revoking the license of an RTF, to levy a civil penalty for the violation of licensing law as follows:
7. A civil penalty of not less than $25 or more than $50 per day for each violation, except where the nature or seriousness of the violation or the frequency of the violation warrants a higher penalty or an immediate civil penalty assessment, or both, as determined by DHCS. Prohibits this civil penalty assessment from exceeding $150 per day;
8. An immediate civil penalty of $150, and $50 per day for each day a violation continues, until the deficiency is corrected, for a RTF that is cited for repeating the same violation within 24 months of the first violation; and,
9. An immediate civil penalty of $150 for each day a violation continues, until the deficiency is corrected, for a RTF that has been assessed the civil penalty in b) above and repeats the same violation within 24 months of the violation. [HSC §11834.34]

This bill:

1. Repeals DHCS’ authority to issue a single license to a facility wherein separate buildings or portions of a residential building are integral components of a single RTF, pursuant to current law.
2. Requires DHCS to post notice on its Web site of the address of a proposed facility at least 45 days prior to issuing a license or denial of the application, as specified.
3. Requires initial licenses for new RTFs to be provisional for one year and permits DHCS to revoke the license for “good cause” during the term of the provisional license. Defines “good cause” as failure to operate in compliance with licensing law. Prohibits a RTF from reapplying for an initial license for two years following the revocation of a provisional license.
4. Requires all programs and services offered or provided by an RTF to be specified in the license application and provided exclusively within the licensed RTF on the licensed property and for the benefit of the residents of the RTF.
5. Raises the civil penalty assessed to a facility that operates without a license from $200 to an amount determined by DHCS and not to exceed $2,000 per day for every day the facility continues to operate without a license.
6. Raises the civil penalties in existing law assessed to RTFs that violate licensing law as follows:
7. Not less than $250 or more than $500 per day for each violation, except when a higher penalty is warranted as determined by DHCS, per existing law. Prohibits a civil penalty assessment from exceeding $1,000 per day;
8. An immediate civil penalty, as determined by DHCS, not to exceed $500, and $700 for each day a violation continues, until the deficiency is corrected, for RTFs that repeat the same violation within 24 months of the first violation; and,
9. An immediate civil penalty of $500, and $1,000 for each day the violation continues, until the deficiency is corrected, for RTFs that have been assessed the penalty in b) above and repeat the same violation within 24 months of the violation.

FISCAL EFFECT:

According to the Assembly Appropriations Committee, costs to DHCS to adopt regulations in the range of $100,000 per year for two years (Residential and Outpatient Program Licensing Fund) and potential increased penalty revenues, depending how DHCS wields its newly enhanced fine authority.

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, state licensed RTFs with capacities of six or fewer persons are an important treatment model that is integrated into communities throughout the state. RTFs that appropriately house six or less beds serve an important need that benefits patients and communities. However, due to the high profit margins from economies of scale, six-bed RTFs often expand into adjacent neighboring residences, which create multi-structure, campus-style facilities that detract from the benefits to the patients of being integrated into a low density neighborhood. There is a need for legislative clarification that services under a residential license must be provided at the specific residence where the license is issued and a need to increase fines to help prevent bad actors from exploiting loopholes that hinder the therapeutic benefits of a residential neighborhood and limit the ability of patients to integrate with the fabric of a community. AB 3162 would enable the future distribution of legally licensed RTFs to provide valuable rehabilitation and support services in a therapeutic residential neighborhood environment. AB 3162 will provide consistency with most other state licensed group homes to benefit all categories of protected individuals recovering in state-licensed group homes.
2. RTFs. RTFs licensed by DHCS, based on what is commonly referred to as the social model, provide recovery, treatment, or detoxification services. (The Department of Public Health licenses medical model RTFs, known as chemical dependency recovery hospitals.) The services provided by social model RTFs include group and individual counseling, educational sessions, and alcoholism or drug abuse recovery and treatment planning. Social model RTFs are allowed to provide clients first aid and emergency care, and since the passage of AB 848 (Stone, Chapter 744, Statutes of 2015), RTFs can apply to DHCS for an additional license to provide incidental medical services by a licensed physician or other health care practitioner, as specified. DHCS licenses about 1,020 RTFs. As part of their licensing functions, DHCS conducts reviews of licensed RTFs at least once every two years, or as necessary; checks for compliance with statute and regulations to ensure the health and safety of clients; investigates all complaints; and, has the authority to suspend or revoke an RTF’s license for a violation of statute or regulations. DHCS states that it currently does not have a specific license for integral facilities; however, DHCS permits facilities to be licensed as integral facilities where services are provided in one building and housing is provided in another building, as long as they are under the same management and licensed as a single facility. DHCS further states that this bill would not impact the number of residential treatment beds available, as programs would be required to move any treatment services not located onsite to the residential location where the beds are located. RTFs would not be required to reduce the number of treatment beds.
3. Senate Health Committee informational hearing. On January 31, 2018, this Committee held an informational hearing to examine the substance use disorder (SUD) treatment system with a focus on treatment and services provided in RTFs; insurance coverage; patient referrals; and the state’s regulation and oversight of the system. The hearing provided an overview of recent issues that have affected the state regarding unscrupulous facility operators, and gave an opportunity for state regulators to highlight efforts they have undertaken to combat the exploitation of the SUD system. The goal of the hearing was to examine the issues and to seek strategies and policies that will prevent unscrupulous individuals from exploiting the various industries that are supposed to help treat those with SUDs, as well as to recognize federal and state protections for those with disabilities, and to ensure that policies are not enacted, either at the local or state level, that will limit the number of treatment options for those who need them.
4. Emerging issues in the SUD field. Various media reports have documented how unscrupulous individuals have found ways to exploit the SUD treatment system. Committee staff has received reports of emerging trends and reached out to DHCS to confirm that some issues do occur in both unregulated sober living homes and licensed RTFs, including denying admission to RTFs for individuals with valid prescriptions from health care professionals for medications to aid in their recovery; RTF operators who hold various licenses and are found to endanger the health and safety of residents in one RTF may continue to operate the other RTFs while DHCS works to suspend or revoke all of the licenses; and RTF licensees who have had a license suspended or revoked may reapply for licensure just after only two years. Some of the bad actors in the industry operate multiple residences and claim that they do not require licensure by DHCS because they provide less than 24-hours of a service, particularly detoxification. These operators shuffle clients among the various residences as a means to skirt licensing laws.
5. Related legislation. SB 992 (Hernandez) requires programs licensed or certified by DHCS to disclose certain business relationships, including with recovery residences. Makes changes to current law for RTFs to improve client treatment and provide DHCS more oversight authority over RTFs. SB 992 is pending in the Assembly Health Committee.

SB 1228 (Lara) prohibits a licensed RTF or an employee of a RTF from referring a patient to a facility, residence, or dwelling that is not either licensed or certified, or engaging in patient brokering, as defined. Requires DHCS to establish a program to approve organizations that certify facilities, residences, or dwellings that provide SUD continuum of care, are not licensed, and meet specified requirements that include a ban on patient brokering. SB 1228 is pending in the Assembly.

SB 1268 (Bradford) prohibits certain persons, programs, or entities, including a licensed RTF and persons employed by, or working for, that program, from giving or receiving remuneration or anything of value for the referral of a person who is seeking alcoholism or drug abuse recovery and treatment services, as specified. SB 1268 is pending in the Assembly Health Committee.

AB 572 (Quirk-Silva) requires DHCS to establish a pilot program, if the City of Costa Mesa elects to participate, whereby DHCS assigns a compliance analyst to investigate complaints against licensed RTFs within the City of Costa Mesa or other local governments within Orange County, as specified. AB 572 is pending in this Committee.

1. Prior legislation. SB 902 (Bates of 2018) would have required DHCS to secure state and federal level criminal history information (CHI), as specified, for an applicant prior to issuing a license for an RTF. Would have prohibited applicants from being issued an RTF license based on the results of the CHI unless DHCS granted a waiver, as specified. SB 902 was held on the Senate Appropriations suspense file.

SB 1290 (Bates of 2018) would have deemed it unlawful for specified individuals at a RTF to benefit financially for referring another individual to SUD treatment services, as specified. SB 1290 would have established the Commission on Substance Abuse and Recovery to provide comprehensive recommendations to the Legislature to create a coordinated and unified effort among specified entities to confront the statewide addiction and substance abuse crisis, as specified. SB 1290 was held on the Senate Appropriations suspense file.

SB 1317 (Portantino of 2018) would have required DHCS to develop guidelines, in consultation with specified entities, on how to report to the Legislature about facilities alleged to be operating without a license and other specified information. SB 1317 would have Required DHCS to submit a report to the Legislature and to post the report and other information on its Web site. SB 1317 was held on the Senate Appropriations suspense file.

AB 2214 (Rodriguez of 2018) would have established a voluntary certification process for RRs by an organization approved by DHCS to certify a residence as a RR. AB 2214 was held on the Assembly Appropriations suspense file.

SB 636 (Bradford of 2017) contained provisions substantially similar to SB 1268 and would have prohibited specified entities from using runners, cappers, steerers, or other persons to procure clients, patients, or customers for any form of medical care or treatment provided by an alcohol-related or narcotic-related program, facility, or dispensary. SB 636 was never heard in this Committee.

AB 285 (Melendez of 2017) and AB 2255 (Melendez of 2016) were substantially similar to AB 2214. AB 285 and AB 2255 were held on the Assembly Appropriations Committee suspense file.

AB 848 (Stone, Chapter 744, Statutes of 2015) permits RTFs to apply for an additional license issued by DHCS to provide incidental medical services by a licensed physician or other health care practitioner, as specified.

1. Support. Supporters of this bill, largely representing individual cities, argue that this bill reforms outdated regulations for RTFs and enables DHCS to ensure compliance with existing licensing laws. Supporters state that RTFs provide valuable rehabilitation and supportive services in a therapeutic environment, which can benefit both individual patients and the greater community. However, many RTF operators continue to operate multi-structure facilities and pay minimal fines because of the existing penalty structure. Supporters state that this bill updates fines for noncompliance to be more commensurate with similar licensing fines, which will help provide an additional incentive for companies to comply with the law and provide the needed care for patients. Supporters further argue that this bill clarifies existing law and enables DHCS to enforce its policies by specifying that all services under a license must be carried out at the specific physical location of the license. The California Association of Alcohol and Drug Program Executives, Inc. states that addiction is a treatable condition, sometimes requiring extensive treatment and customized care, and that this bill recognizes the state’s infrastructure must offer a variety of treatment options.
2. Support if amended. The County Behavioral Health Directors Association of California (CBHDAC) and the California Consortium of Addiction Programs and Professionals (CCAPP) write in appreciation of amendments previously taken by the author on this bill and state they would support this bill contingent upon additional amendments. CBHDAC requests an amendment that clarifies that RTFs with provisional licenses would not be required to pay additional licensing fees after one year. CBHDAC also requests an amendment for DHCS to post notice of an RTF’s address on its Web site after the license has been issued by DHCS instead of 45 days before. CBHDAC argues that prior notice could lead to “not in my backyard” (NIMBY) types of actions by some communities that have historically been opposed to RTFs. CCAPP shares CBHDAC’s concerns about the prior notification requirement intensifying NIMBY sentiments and urges the provision be amended out of the bill. CCAPP also expresses concerns about the bill requiring treatment services to be exclusively for the benefit of RTF residents. CCAPP argues that this provision constricts the availability of treatment services for spouses, partners, family members, and alumni who are not residents of the RTF.

SUPPORT AND OPPOSITION:

Support: Advocates for Responsible Treatment

Association of California Cities-Orange County

California Access Coalition

California Association of Alcohol and Drug Program Executives, Inc.

California Contract Cities Association

California Council of Community Behavioral Health Agencies

City of Agoura Hills

City of Aliso Viejo

City of Calabasas Mayor Fred Gaines

City of Costa Mesa

City of Dana Point

City of Diamond Bar

City of Garden Grove

City of Huntington Beach

City of La Mesa

City of Laguna Nigel

City of Malibu

City of Mission Viejo

City of Moorpark

City of Oceanside

City of Palmdale

City of Palos Verdes Estates

City of Riverside

City of San Marcos

City of Sunnyvale

City of Vista

Las Virgenes-Malibu Council of Governments

League of California Cities

Los Angeles City Councilmember Mitchell Englander

Los Angeles County Division of the League of California Cities

Marin County Council of Mayors and Council Members

Oppose: None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 3162

Author:(Friedman)

As Amended Ver:May 14, 2018

Majority vote

SUMMARY: Requires new single licenses to operate an alcoholism or drug abuse recovery or treatment facility (treatment facility) to be provisional for one year, as specified, and increases the civil penalties for license suspensions, revocations, and violations, as specified. Specifically, this bill:

1. Permits the Department of Health Care Services (DHCS) to issue a single license to operate a treatment facility upon the receipt of a completed written application, fire clearance, and licensing fee subject to a review and making a determination that the applicant can comply with necessary statutes and regulations.
2. Requires DHCS to terminate the review of a licensure if an applicant fails to submit a completed written application, fire clearance, and payment of the required licensing fee in a timely manner and requires an applicant to submit a new application.
3. Requires DHCS to deny an application for licensure if the applicant fails to demonstrate the ability to comply with this bill.
4. Requires that initial licenses for a new treatment facility to be provisional for one year.
5. Permits, during the term of the provisional license, DHCS to revoke the license for good cause, where "good cause" means failure to operate in compliance with statutes and regulations regarding treatment facilities.
6. Prohibits a licensee from reapplying for an initial license for two years following a revocation of a provisional license.
7. Prohibits a licensee from operating a treatment facility beyond the conditions and limitations specified on the license. Requires that all programs and services offered or provided by a treatment facility to be specified in the license application and provided exclusively within the licensed facility on the licensed property and for the benefit of the residents.
8. Permits a treatment facility with a current license to continue to operate subject to the terms and conditions of their existing licenses. Expansion or intensification of an existing treatment facility is prohibited and subjects the treatment facility to the new requirements of this bill.
9. Requires DHCS to post the address of a new proposed treatment facility at least 45 days prior to approving any new applications.
10. Permits an increase in the civil penalty assessed by DHCS when a treatment facility is operating without a license to a limit of $2,000, as determined by DHCS, for every day the treatment facility continues to provide services beyond the date that the license was revoked by DHCS.
11. Prohibits a person or entity that is found operating a treatment facility without a license or in violation of the terms of their license from applying for a new license for two years.
12. Allows DHCS to assess the amount of a civil penalty for violating licensing requirements between $1,000 and $15,000 per day for each violation, except where the nature or seriousness of the violation of the frequency of the violation warrants a higher penalty or an immediate civil penalty assessment as determined by DHCS.
13. Levies an immediate civil penalty of up to $1,500 and $1,000 for each day until the deficiency is remedied for a licensee that is cited for repeating the same violation within 24 months of the first violation, as determined by DHCS.
14. Requires DHCS to provide the licensee with notice requiring the licensee to correct the deficiency within a specified time period prior to the assessment of any civil penalty.
15. Requires DHCS, on or before July 1, 2022, to adopt regulations to implement this bill in accordance with the Administrative Procedure Act.
16. Permits DHCS, if it deems appropriate, to implement, interpret, or make specific the requirements of this bill by means of provider bulletins, written guidelines, or similar instructions from DHCS, until regulations are adopted.

FISCAL EFFECT: According to the Assembly Appropriations Committee, costs to DHCS to adopt regulations in the range of $100,000 per year for two years (Residential and Outpatient Program Licensing Fund) and potential increased penalty revenues, depending how DHCS wields its newly enhanced fine authority.

COMMENTS: According to the author, state licensed residential alcohol and drug abuse treatment facilities with capacities of six or less persons are an important treatment model that are integrated into communities throughout the state. State-licensed facilities that appropriately house six or less beds serve an important need that benefits patients and communities. However, due to the high profit margins from economies of scale, six-bed facilities often expand into adjacent neighboring residences, which create multi-structure, campus-style facilities that detract from the benefits to the patients of being integrated into a low density neighborhood. The author argues that there is a need for legislative clarification that services under a residential license must be provided at the specific residence where the state license is issued and a need to increase fines to help prevent bad actors from exploiting loopholes that hinder the therapeutic benefits of a residential neighborhood and limit the ability of patients to integrate with the fabric of a community. This bill would enable the future distribution of legally licensed residential alcohol and drug abuse recovery or treatment facilities to provide valuable rehabilitation and support services in a therapeutic residential neighborhood environment. The author concludes that this bill will provide consistency with most other State licensed group homes to benefit all categories of protected individuals recovering in State-licensed group homes.

Alcohol and drug dependency are treatable conditions, requiring extensive treatment and customized care. As individual problems, needs, and resources vary from individual to individual, a variety of treatment strategies must also be available if the needs of citizens are to be met. The increased demand for substance use disorder (SUD) treatment as a result of the expansion of individuals having insurance as a result of health care reform has placed a growing burden on the existing SUD treatment community. Currently, California has approximately 36,000 registered or certified counselors working in more than 2,500 private and publicly funded drug and alcohol programs, ranging from residential rehabs to driving under the influence and outpatient programs.

1. Treatment facilities. Alcoholism or drug abuse recovery or treatment facilities provide 24-hour non-medical care and specialize in providing services to chemically dependent adults who do not require treatment in an acute-care medical facility on an inpatient, intensive outpatient, outpatient, and partial hospitalization basis. These facilities range in size from six-bed facilities in residential neighborhoods to centers that accommodate more than 100 beds. The basic services provided by facilities include group, individual and educational sessions, alcoholism or drug abuse recovery and treatment planning. Detoxification services are also provided and are defined by the DHCS as services to support and assist an individual in the alcohol and/or drug withdrawal process and to explore plans for continued treatment. These services can be provided by a variety of health care providers such as alcohol and drug counselors, mental health therapists, social workers, psychologists, nurses and physicians.
2. Siting Difficulties. A technical assistance publication published by the United States Department of Health and Human Services (DHHS) entitled "Siting Drug and Alcohol Treatment Programs: Legal Challenges to the NIMBY Syndrome" states that community opposition, 'not in my backyard' (NIMBY), prevents or delays the siting of treatment programs, even when an already existing program tries to relocate. NIMBY is often targeted toward other types of health and social service facilities, like shelters for the homeless, group homes for the mentally ill, halfway houses for ex-offenders, and health-related facilities for those with Acquired Immunodeficiency Syndrome (AIDS). According to DHHS, many discriminatory zoning ordinances and practices may be unlawful under the Federal Housing Administration (FHA) and the Americans with Disabilities Act (ADA). It is also noted that communities often fear the decline of property values and increased crime because of residential treatment facilities in the neighborhood. However, the DHHS document states that in almost every instance a community's fears are unfounded, as residential treatment facilities pose no danger to the health and welfare of neighbors nor draw substance abusers or pushers to the area.

The League of Cities and numerous individual cities state in support of this bill that it clarifies existing law and enables DHCS to enforce its policies by specifying that all services under a license must be carried out at the specific physical location of the license and allows DHCS to deny a new license application if a facility is located within 300 feet of an existing facility, establishes a one-year provisional license to serve as a probationary period for new licenses so that DHCS has time to analyze and determine compliance with regulations, and updates fines for non-compliance to be more commensurate with similar licensing fines. The League of Cities argues that due to abundant profits and the current fines and penalty structure, many operators continue to operate multistructure facilities and pay minimal fines. Increasing the fines and penalties to be more commensurate with similar licensing fines will help provide an additional incentive for companies to comply with the law and provide the needed care for the patients.

The California Access Coalition states in opposition that the use of overconcentration arguments to reduce the number of facilities available to help those with behavioral health issues would have the unintended consequences of leaving thousands of behavioral health patients without access to care.

The California Chapter of the American College of Emergency Physicians (Cal ACEP) states in opposition that this bill would require DHCS to deny an application for a new licensed treatment facility of the proposed location would result in overconcentration. Cal ACEP argues that this measure only furthers the stigma of addiction at a time when more addiction treatment services are needed. Cal ACEP notes that between 1997 and 2010, sales of prescription opioids more than quadrupled. Similarly, overdose deaths significantly increased for the 16th consecutive year in 2015. Cal ACEP requests that the bill be amended to remove the provision requiring DHCS to deny licenses for overconcentration and argues that the focus should be on encouraging individuals to seek treatment, rather than restrict new treatment facilities from being built.

Analysis Prepared by: Paula Villescaz / HEALTH / (916) 319-2097 FN: 0002901

Date of Hearing: May 9, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 3162

Author:(Friedman) – As Amended Ver:April 19, 2018

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill makes minor changes to the licensure process for residential treatment facilities (RTFs) and increases fines for violations or unlicensed activity. Specifically, this bill:

1. Establishes a one-year, provisional license for new residential treatment facilities (RTFs) that can be revoked for good cause.
2. Requires DHCS to post the address of proposed new RTFs on its website at least 45 days prior to approving their application.
3. Increases the civil penalties amounts imposed upon RTFs for violations, and increases fines for unlicensed treatment facilities. Specifically, fines are increased as follows:
   1. Minimum fines on RTFs: from $25 per day to $1,000 per day.
   2. Maximum fines on RTFs: from $50 per day to $15,000 per day.
   3. Repeat violations for RTFs: from $150 per day to $2,000 per day.
   4. Fine for unlicensed activity: from $200 per day to $2,000 per day.
4. Requires all programs and services offered or provided by a licensed alcoholism or drug abuse recovery or treatment facility to be on the premises.
5. Requires DHCS to adopt regulations and authorizes DHCS to issue provider bulletins, written guidelines, or similar instructions, until new regulations are adopted.

FISCAL EFFECT:

1. Costs to DHCS to adopt regulations in the range of $100,000 per year for two years (Residential and Outpatient Program Licensing Fund).
2. Potential increased penalty revenues, depending how DHCS wields its newly enhanced fine authority.

COMMENTS:

1. Purpose. This bill is intended to crack down on bad actors among residential drug treatment program providers licensed by DHCS.
2. Background. Residential drug treatment facilities range in size from six-bed facilities in residential neighborhoods to centers that accommodate more than 100 beds. The basic services provided by facilities include group, individual and educational sessions, alcoholism or drug abuse recovery, and treatment planning. In recent years, there have been significant expansions of coverage for residential drug treatment, but treatment facilities face difficulties locating sites or expanding in the face of opposition from local communities. There is high demand for drug treatment. The state is in the midst of an opioid addiction epidemic, with over 2,000 people dying in 2016 from opioid overdoses. At the same time, many communities offer anecdotal information about neighborhoods transformed into multi-site treatment communities by residential treatment operators who exploit existing laws designed to protect six-bed treatment facilities from local zoning laws.
3. Related Legislation. AB 2214 (Rodriguez and Waldron), pending on this committee's Suspense File, establishes a voluntary certification process for recovery residences or sober living homes.
4. Prior Legislation. A litany of bills similar to this bill has addressed issues related to residential treatment facilities and sober living homes over the past decade.
5. Support and Opposition. This bill is supported by cities. The California Access Coalition and the Depression and Bipolar Support Alliance opposed a prior version of the bill, which contained provisions related to "overconcentration" of facilities. Current opposition is unknown.
6. Staff Comment. It is unclear whether the steep fines established in the bill are relevant to the egregiousness of the violation. If fines are too high, it could reduce the effectiveness of regulation by not offering appropriate options to the department to remedy violations.

Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081

Date of Hearing: April 17, 2018

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 3162

Author:(Friedman) – As Introduced Ver:February 16, 2018

SUBJECT: Alcoholism or drug abuse recovery or treatment facilities.

SUMMARY: Requires new single licenses to operate an alcoholism or drug abuse recovery or treatment facility (treatment facility) to be provisional for one year, as specified; prohibits new applications for a facility license if the proposed location is within a distance of 300 feet or less of an existing facility, and increases the civil penalties for license suspensions, revocations, and violations, as specified. Specifically, this bill:

1. Permits the Department of Health Care Services (DHCS) to issue a single license to operate a treatment facility upon the receipt of a completed written application, fire clearance, and licensing fee subject to a review and making a determination that the applicant can comply with necessary statutes and regulations.
2. Requires DHCS to terminate the review of a licensure if an applicant fails to submit a completed written application, fire clearance, and payment of the required licensing fee in a timely manner and requires an applicant to submit a new application.
3. Requires DHCS to deny an application for licensure if the applicant fails to demonstrate the ability to comply with this bill.
4. Requires that initial licenses for a new treatment facility to be provisional for one year.
5. Permits, during the term of the provisional license, DHCS to revoke the license for good cause, where “good cause” means failure to operate in compliance with statutes and regulations regarding treatment facilities.
6. Prohibits a licensee from reapplying for an initial license for two years following a revocation of a provisional license.
7. Prohibits a licensee from operating a treatment facility beyond the conditions and limitations specified on the license. Requires that all programs and services offered or provided by a treatment facility to be specified in the license application and provided exclusively within the licensed facility on the licensed property and for the benefit of the residents.
8. Requires DHCS to deny an application for a new facility license if the proposed location is in proximity to an existing facility that would result in overconcentration in an area zoned for residential use for any license application submitted on or after January 1, 2019.
9. Defines “overconcentration” to mean a new license issued in a location with two or more treatment facility within a distance of 300 feet or less, as measured from the nearest property line on which an existing facility is located to the nearest property line of the proposed facility in an area zoned residential.
10. Defines a "licensed existing facility" as a licensed facility that is operating in compliance with all state laws on or before December 1, 2018, located within 300 feet or less of another licensed facility, as measured from the nearest property lines on which the existing facilities are located, as long as they are in continuous operation with no lapse in licensure.
11. Permits a treatment facility with a current license to continue to operate subject to the terms and conditions of their existing licenses. Expansion or intensification of an existing treatment facility is prohibited and subjects the treatment facility to the new requirements of this bill.
12. Requires DHCS to post the address of a new proposed treatment facility at least 45 days prior to approving any new applications.
13. Increases the civil penalty assessed by DHCS when a treatment facility is operating without a license from $200 to $2,000 for every day the treatment facility continues to provide services beyond the date that the license was revoked by DHCS.
14. Prohibits a person or entity that is found operating a treatment facility without a license or in violation of the terms of their license from applying for a new license for two years.
15. Increases the civil penalty DHCS is permitted to assess for violating licensing requirements to no less than $1,000 and no more than $15,000 per day for each violation, except where the nature or seriousness of the violation of the frequency of the violation warrants a higher penalty or an immediate civil penalty assessment as determined by DHCS.
16. Levies an immediate civil penalty of $1,500 and $1,000 for each day until the deficiency is remedied for a licensee that is cited for repeating the same violation within 24 months of the first violation.
17. Requires DHCS to provide the licensee with notice requiring the licensee to correct the deficiency within a specified time period prior to the assessment of any civil penalty.
18. Requires DHCS, on or before July 1, 2022, to adopt regulations to implement this bill in accordance with the Administrative Procedure Act.
19. Permits DHCS, if it deems appropriate, to implement, interpret, or make specific the requirements of this bill by means of provider bulletins, written guidelines, or similar instructions from DHCS, until regulations are adopted.

EXISTING LAW:

1. Establishes DHCS as the sole licensing authority for adult alcoholism or drug abuse recovery or treatment facilities. Permits new licenses to be issued for a period of two years, and requires DHCS to conduct onsite program visits for compliance at least once during the two year licensing period.
2. Defines “alcoholism or drug abuse recovery or treatment facility” (treatment facility) as any premise, place, or building that provides 24-hour residential nonmedical services to adults who are recovering from problems related to alcohol, drug, or alcohol and drug misuse or abuse, and who need alcohol, drug, or alcohol and drug recovery treatment or detoxification services.
3. Establishes licensing application requirements for licensure of a facility, requires DHCS to terminate licensure if these requirements are not met, and authorizes DHCS to deny applicants that do not demonstrate an ability to comply with specified requirements.
4. Requires, if an applicant intends to provide incidental medical services, such as obtaining medical histories, monitoring health status, testing associated with detoxification from alcohol or drugs, and overseeing patient self-administered medications, evidence of a valid license of a physician and surgeon who will provide or oversee those services, and any other information deemed appropriate by DHCS, as specified.
5. Permits DHCS to issue single licenses to residential facilities and a facility where separate buildings or portions of a residential facility are integral components of a single treatment facility and all of the components of the facility are managed by the same licensee.
6. Authorizes DHCS to assess civil penalties on facilities that provide alcoholism or drug abuse recovery, treatment, or detoxification services without a license.
7. Requires a treatment facility that serves six or fewer persons to be considered a residential use of property whether or not unrelated persons are living together. Requires the residents and operators of the facility to be considered a family for the purposes of any law or zoning ordinance that relates to the residential use of property.
8. Excludes, for the purposes of local ordinances, a treatment facility that serves six or fewer persons from the definition of a boarding house, rooming house, institution or home for the care of minors, the aged, or persons with mental health disorders, foster care home, guest home, rest home, community residence, or other similar term that implies that the alcoholism or drug abuse recovery or treatment home is a business run for profit or differs in any other way from a single-family residence.
9. Authorizes a city, county, or other local public entity from placing restrictions on building heights, setback, lot dimensions, or placement of signs of a treatment facility that serves six or fewer persons as long as the restrictions are identical to those applied to other single-family residences.
10. Specifies that any local ordinance that deals with health and safety, building standards, environmental impact standards, or any other matter within the jurisdiction of a local public entity also applies to a treatment facility, however, local ordinances cannot distinguish treatment facilities that serve six or fewer persons from other single-family dwellings or distinguish residents of treatment facilities from persons who reside in other single-family dwellings.
11. Prohibits a conditional use permit, zoning variance, or other zoning clearance from being required of an alcoholism or drug abuse recovery or treatment facility that serves six or fewer persons that is not required of a single-family residence in the same zone.
12. Prohibits, under the California Fair Employment and Housing Act (FEHA), discrimination against any person in any housing accommodation on the basis of race, color, religion, sex, marital status, national origin, ancestry, familial status, or disability. Specifies that discriminatory land use regulations, zoning laws, and restrictive covenants are unlawful acts.
13. Prohibits under the federal Americans with Disabilities Act of 1990 (ADA), prohibits discrimination by any public entity by reason of an individual’s disability. Makes it unlawful, under the federal Fair Housing Act, to make unavailable or deny, a dwelling to any buyer or renter because of a disability.

FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, state licensed residential alcohol and drug abuse treatment facilities with capacities of six or less persons are an important treatment model that are integrated into communities throughout the state. State-licensed facilities that appropriately house six or less beds serve an important need that benefits patients and communities. However, due to the high profit margins from economies of scale, six-bed facilities often expand into adjacent neighboring residences, which create multi-structure, campus-style facilities that detract from the benefits to the patients of being integrated into a low density neighborhood. The author argues that there is a need for legislative clarification that services under a residential license must be provided at the specific residence where the state license is issued and a need to increase fines to help prevent bad actors from exploiting loopholes that hinder the therapeutic benefits of a residential neighborhood and limit the ability of patients to integrate with the fabric of a community. This bill would enable the future distribution of legally licensed residential alcohol and drug abuse recovery or treatment facilities to provide valuable rehabilitation and support services in a therapeutic residential neighborhood environment. The author concludes that this bill will provide consistency with most other State licensed group homes to benefit all categories of protected individuals recovering in State-licensed group homes.
2. BACKGROUND. Alcohol and drug dependency are treatable conditions, requiring extensive treatment and customized care. As individual problems, needs, and resources vary from individual to individual, a variety of treatment strategies must also be available if the needs of citizens are to be met. The increased demand for substance use disorder (SUD) treatment as a result of the expansion of individuals having insurance as a result of health care reform has placed a growing burden on the existing SUD treatment community. Currently, California has approximately 36,000 registered or certified counselors working in more than 2,500 private and publicly funded drug and alcohol programs, ranging from residential rehabs to driving under the influence and outpatient programs.
   1. Treatment facilities. Alcoholism or drug abuse recovery or treatment facilities provide 24-hour non-medical care and specialize in providing services to chemically dependent adults who do not require treatment in an acute-care medical facility on an inpatient, intensive outpatient, outpatient, and partial hospitalization basis. These facilities range in size from six-bed facilities in residential neighborhoods to centers that accommodate more than 100 beds. The basic services provided by facilities include group, individual and educational sessions, alcoholism or drug abuse recovery and treatment planning. Detoxification services are also provided and are defined by the DHCS as services to support and assist an individual in the alcohol and/or drug withdrawal process and to explore plans for continued treatment. These services can be provided by a variety of health care providers such as alcohol and drug counselors, mental health therapists, social workers, psychologists, nurses and physicians.
   2. ADA, Fair Housing and, Equal Protection. The FEHA makes it illegal to engage in various discriminatory practices relating to the sale and rental of housing based on race, color, religion, sex, marital status, national origin, ancestry, familial status, or disability. The definition of a disability includes individuals recovering from substance abuse. The FEHA also prohibits land use regulations, zoning ordinances, and restrictive covenants from discriminating in housing on the basis of the aforementioned categories.
      
      Additionally, the ADA gives civil rights protection to individuals with disabilities, similar to the protection accorded to individuals on the basis of race, sex, national origin, and religion. Under these Federal laws, an individual with a “disability” is someone who has a current “physical or mental impairment” that “substantially limits” one or more of that person’s “major life activities,” such as caring for one’s self, working, etc., or as a record of such a substantially limiting impairment, or is regarded as having such an impairment. Specifically, the ADA applies to those who have successfully completed a drug rehabilitation program, or who are currently enrolled in such programs. A document published by the federal Substance Abuse and Mental Health Services Administration entitled, "Know your Rights" explains the Federal laws that prohibit discrimination against individuals with disabilities and how they protect people receiving addiction detoxification or maintenance treatment. The document discusses discrimination as treating someone less favorably than someone else because he or she has a disability, once had a disability, or is regarded as having a disability and states that because addiction is a chronic disease, employers, landlords, government agencies, and health care and treatment providers must comply with anti-discrimination laws that protect people with disabilities when working with individuals recovering from addiction.
   3. Siting Difficulties. A technical assistance publication published by the U.S. Department of Health and Human Services (DHHS) entitled “Siting Drug and Alcohol Treatment Programs: Legal Challenges to the NIMBY Syndrome” states that community opposition, ‘not in my backyard’ (NIMBY), prevents or delays the siting of treatment programs, even when an already existing program tries to relocate. NIMBY is often targeted toward other types of health and social service facilities, like shelters for the homeless, group homes for the mentally ill, halfway houses for ex-offenders, and health-related facilities for those with AIDS. According to DHHS, many discriminatory zoning ordinances and practices may be unlawful under the FHA and the ADA. It is also noted that communities often fear the decline of property values and increased crime because of residential treatment facilities in the neighborhood. However, the DHHS document states that in almost every instance a community’s fears are unfounded, as residential treatment facilities pose no danger to the health and welfare of neighbors nor draw substance abusers or pushers to the area.
   4. Recent substance use treatment reforms. Medicaid is playing an increasingly important role as a payor for services provided to individuals with substance use disorders in the United States. The federal Patient Protection and Affordable Care Act (ACA) includes one of the largest expansions of mental health and substance use disorder coverage in a generation by adding mental health and substance use disorder services as an Essential Health Benefit category. In July of 2015, in response to this growing need, the Centers for Medicare and Medicaid Services(CMS) notified states of opportunities to design service delivery systems for individuals with substance use disorders, including a new opportunity for demonstration projects approved under Section 1115 of the Social Security Act to ensure that a continuum of care is available. Participating states are eligible to receive federal financial participation in limited geographic areas, or in settings that are not otherwise covered under the Medicaid program. On August 13, 2015, DHCS announced that CMS approved California's Drug Medi-Cal Organized Delivery System (DMC-ODS) Waiver. Counties participating in the DMC-ODS waiver program will administer, or arrange for, substance use disorder (SUD) treatment for Medi-Cal beneficiaries. The DMC-ODS demonstration will be elective for five years.

The DMC-ODS waiver provides a continuum of care modeled after the American Society of Addiction Medicine (ASAM) Criteria for SUD treatment services.  As part of their participation in the DMC-ODS, CMS requires all residential providers to meet the ASAM requirements and obtain a DHCS-issued ASAM designation.  The ASAM criterion is a nationally accepted set of treatment criteria for SUD care and is being adopted beyond Medi-Cal beneficiaries as the SUD industry standard. As of March 14, 2017, DHCS has designated 168 residential alcohol and/or other drug treatment facilities with the appropriate ASAM level of care. DHCS has initiated a phased-in implementation of the DMC-ODS waiver and established five regions throughout the state. DHCS determined the order of implementation based on location, population, and county and provider readiness, in five phases.

1. SUPPORT. The League of Cities and numerous individual cities state in support of the bill that it clarifies existing law and enables DHCS to enforce its policies by specifying that all services under a license must be carried out at the specific physical location of the license and allows DHCS to deny a new license application if a facility is located within 300 feet of an existing facility, establishes a one-year provisional license to serve as a probationary period for new licenses so that DHCS has time to analyze and determine compliance with regulations, and updates fines for non-compliance to be more commensurate with similar licensing fines. The League of Cities argues that due to abundant profits and the current fines and penalty structure, many operators continue to operate multistructure facilities and pay minimal fines. Increasing the fines and penalties to be more commensurate with similar licensing fines will help provide an additional incentive for companies to comply with the law and provide the needed care for the patients.
2. OPPOSITION. The California Access Coalition states in opposition that the use of overconcentration arguments to reduce the number of facilities available to help those with behavioral health issues would have the unintended consequences of leaving thousands of behavioral health patients without access to care.
3. OPPOSE UNLESS AMENDED. The California Chapter of the American College of Emergency Physicians (Cal ACEP) states in opposition that this bill would require DHCS to deny an application for a new licensed treatment facility of the proposed location would result in overconcentration. Cal ACEP argues that this measure only furthers the stigma of addiction at a time when more addiction treatment services are needed. Cal ACEP notes that between 1997 and 2010, sales of prescription opioids more than quadrupled. Similarly, overdose deaths significantly increased for the 16^th consecutive year in 2015. Cal ACEP requests that the bill be amended to remove the provision requiring DHCS to deny licenses for overconcentration and argues that the focus should be on encouraging individuals to seek treatment, rather than restrict new treatment facilities from being built.
4. RELATED LEGISLATION. AB 2214 (Rodriguez and Waldron) establishes a voluntary certification process for recovery residences. AB 2214 is pending in the Assembly Appropriations Committee.
5. PREVIOUS LEGISLATION.
   1. AB 2255 (Waldron) of 2016 was a substantially similar bill that would have established state oversight of “drug and alcohol free residences” or sober living homes. AB 2255 was held in the Assembly Appropriations Committee.
   2. AB 2403 (Bloom) of 2016 would have established a new definition of "integral facility" for licensure purposes, and a prohibition on licensure approval for facilities whose siting would result in overconcentration, as defined. AB 2403 was held in the Assembly Appropriations Committee.
   3. SB 1283 (Bates) of 2016 would have allowed a city, county, or city and county to adopt, by ordinance, health and safety standards and enforcement mechanisms for structured sober living homes, as defined. SB 1283 failed passage in the Senate Health Committee.
   4. AB 2491 (Nestande) of 2014 would have exempted sober living homes from licensure as an adult alcoholism or drug abuse recovery or treatment facility and required sober living homes to meet specified requirements, including the active participation of residents in legitimate recovery programs and the maintenance of records of meeting attendance. AB 2491 was held under submission in the Senate Appropriations Committee.
   5. AB 1983 (Mansoor) of 2012 would have defined integral alcohol and drug abuse treatment facilities for purposes of licensure by the Department of Alcohol and Drug Programs (DADP) and excluded integral facilities from being considered a residential use of property. AB 1983 failed passage in the Assembly Health Committee.
   6. AB 1284 (Huffman) of 2009 would have required DADP to notify the appropriate city or county planning agency of a proposed facility's application for licensure as a residential treatment facility if it operates as an integral component of an existing licensed facility managed by the same licensee and is located within 300 feet of the existing facility. AB 1284 died on the Assembly Appropriations Committee Suspense File.
      
   7. SB 1000 (Harman) of 2008 would have required applicants seeking a treatment facility license from DADP to certify that the facility is consistent with local zoning ordinances and would have required DADP to verify the certification. SB 1000 failed passage in the Senate Health Committee.
6. SUGGESTED AMENDMENTS.
   1. This bill, as currently drafted, requires DHCS to automatically deny an application for a new facility license if the proposed location is within 300 feet of an existing facility that would result in overconcentration in an area zoned for residential use for any license application submitted on or after January 1, 2019. There is currently a shortage of treatment beds in behavioral health, and a significant expansion in eligibility for individuals with substance use disorders to seek treatment. This limitation would prohibit any consideration of local need. The Committee may wish to consider striking the overconcentration provisions of this bill.
   2. This bill, as currently drafted, significantly increases existing penalties for violating a license, operating without a license, and for repeated violations. The author may wish to consider giving DHCS the discretion of determining an appropriate fine based on the nature of the violation, and setting a daily and incident maximum where appropriate.

REGISTERED SUPPORT / OPPOSITION:

Support

Association of California Cities – Orange County

Advocates for Responsible Treatment

California Contract Cities Association

City of Agoura Hills

City of Calabasas

City of Costa Mesa

City of Diamond Bar

City of Dana Point

City of Garden Grove

City of Laguna Beach

City of La Mesa

City of Malibu

City of Moorpark

City of Oceanside

City of Palos Verdes Estates

City of Sunnyvale

City of Thousand Oaks

City of Vista

League of California Cities

Los Angeles County Division of the League of California Cities

Opposition

California Access Coalition

Depression and Bipolar Support Alliance

Analysis Prepared by: Paula Villescaz / HEALTH / (916) 319-2097