GOVERNOR'S VETO

GV Bill Id:AB 920

Author:(Petrie-Norris)

As Enrolled Ver:September 20, 2019

2/3 vote

SUMMARY:

Requires the Department of Health Care Services (DHCS), beginning January 1, 2021, to license an outpatient alcoholism or drug abuse recovery or treatment program that provides those services to the public and is not otherwise licensed.

The Senate Amendments:

1. Require the DHCS in consultation with the county alcohol and drug program administrators, the California Society of Addiction Medicine, and other interested organizations and individuals to develop programs standards for licensure
2. Change all references to "certification standards" in existing law to "licensure standards" in regard to outpatient programs.
3. Require DHCS to include in its licensure standards for programs the following:
   1. Reference the needs of youth up to 26 years of age, elderly individuals, women, pregnant women, mothers and their children, lesbian, gay, bisexual, transgender, and nonbinary individuals, the disabled, and special populations with recognition of innovative solutions to the problems of those specified populations;
   2. Evidence-based standards that are equivalent to the American Society of Addiction Medicine (ASAM) treatment criteria, as specified;
   3. Provide for any Drug Medi-Cal (DMC) certified treatment program operating under DHCS's DMC Organized Delivery System (DMC-ODS) Waiver, under the Section 1115 Bridge to Reform Demonstration Waiver, to be deemed in compliance with the requirements in this bill as long as the DMC-ODS Waiver is in place and the program remains DMC certified by DHCS and is therefore exempted from the requirements of this bill;
   4. Exempt an entity that contracts with a county for purposes of this program for the provision of alcohol and drug use services exclusively to clients within a county service area that does not have a DMC-ODS Waiver and who would otherwise be subject to this bill until January 1, 2023, or until the county obtains a DMC-ODS Waiver, whichever comes first;
   5. Prohibit a program from banning the use of medication-assisted treatment by any enrollee of its program, as specified;
   6. Require a program to keep accurate records, as specified; and,
4. Authorize the department to conduct site visits to investigate allegations against programs with authority to asses both monetary and licensure penalties.

Governor's Veto Message:

This bill would eliminate an existing voluntary outpatient certification program. Beginning January 1, 2021, it would attempt to require an outpatient substance use disorder (SUD) recovery or treatment services facility which is not licensed under existing law, to obtain licensure from the DHCS to provide SUD services. The bill attempts to do this by replacing references to program certification in existing Health and Safety Code references to program licensure.

I am supportive of the Legislature's intent to license all SUD recovery and treatment services. However, developing a new licensing schema is a significant undertaking, and would require a significant departure from the bill as enrolled. This bill would need to be revised to provide adequate statutory authority for DHCS to effectively monitor and ensure compliance with outpatient licensure requirements. In addition, establishing the associated administrative oversight is not without significant cost. After reviewing this bill, it is clear that a substantial amount of work is still needed to develop a program that my administration can implement.

As such, I recommend the Legislature and sponsors of this bill work closely with DHCS on a more robust proposal for my consideration. Costs for implementation of such a bill would need to be considered in the budget process.

COMMENTS:

Current Licensing and Certification programs under DHCS. Residential Treatment Facilities (RTFs) are licensed by DHCS, and are based on what is commonly referred to as the social model, provide recovery, treatment, or detoxification services. DHCS now requires RTFs to adopt ASAM treatment criteria, as specified, as the minimum standard of care for licensed RTFs. DHCS offers a voluntary facility certification to those programs that provide the following services: day treatment, outpatient, and nonresidential detoxification. The certification is granted to programs that exceed minimum levels of service quality and are in substantial compliance with state program certification standards. Certification is available to both residential and nonresidential programs.

According to the Author:

Under current law those seeking substance abuse treatment need to know that any provider they select meets an evidence-based treatment standard, and that those standards are being enforced by the state. Outpatient programs providing substance abuse treatment do not currently require licensure. This bill fills a regulation gap on the substance abuse treatment industry and empowers patients with more information and protections.

Arguments in Support:

The California Society of Addiction Medicine, a co-sponsor, states that outpatient/aftercare is a critical component of SUD treatment. Yet, California has abdicated its responsibility to oversee and regulate these services. Indeed, California only provided voluntary Certification of out-patient services. This abdication of State oversight has resulted in a Wild West scenario wherein there are no rules and third-party payers and family members have no idea of the kind or quality of treatment that individuals suffering with SUD will receive when they enter a "program". CSAM concludes that this situation would not be allowed to occur in the case of any other form of treatment for a chronic disease of condition.

Arguments in Opposition:

There is no opposition on this version of the bill.

FISCAL COMMENTS:

According to the Assembly Appropriations Committee, fee-supported special fund or General Fund (GF) costs, likely in the low millions of dollars ongoing, to DHCS for staff to review applications, conduct site visits for initial and periodic enforcement reviews and investigate complaints, as well as for travel costs and overall program development. The authority to support the regulatory program through fees in somewhat unclear. This bill includes fee authority but makes reference to a section of law that would require conforming changes in order to make it applicable to the new licensure scheme established by the bill. Unknown, likely minor GF penalty revenue.

VOTES:

ASM HEALTH: 13-0-2

YES: Mayes, Aguiar-Curry, Bigelow, Bonta, Burke, Carrillo, Flora, McCarty, Nazarian, Ramos, Rodriguez, Santiago, Waldron

ABS, ABST OR NV: Wood, Limón

ASSEMBLY FLOOR: 67-1-12

YES: Aguiar-Curry, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Burke, Calderon, Carrillo, Cervantes, Chau, Chiu, Choi, Chu, Cooper, Cunningham, Dahle, Daly, Diep, Eggman, Flora, Fong, Friedman, Gabriel, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Lackey, Levine, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, O'Donnell, Obernolte, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Santiago, Smith, Ting, Voepel, Waldron, Weber, Rendon

NO: Mark Stone

ABS, ABST OR NV: Arambula, Chen, Cooley, Frazier, Kalra, Kamlager-Dove, Kiley, Limón, Muratsuchi, Salas, Wicks, Wood

ASM APPROPRIATIONS: 15-0-3

YES: Gonzalez, Bigelow, Bloom, Bonta, Calderon, Carrillo, Diep, Eggman, Fong, Gabriel, Maienschein, Obernolte, Petrie-Norris, Quirk, Robert Rivas

ABS, ABST OR NV: Brough, Chau, Eduardo Garcia

SENATE FLOOR: 40-0-0

YES: Allen, Archuleta, Atkins, Bates, Beall, Borgeas, Bradford, Caballero, Chang, Dahle, Dodd, Durazo, Galgiani, Glazer, Lena Gonzalez, Grove, Hertzberg, Hill, Hueso, Hurtado, Jackson, Jones, Leyva, McGuire, Mitchell, Monning, Moorlach, Morrell, Nielsen, Pan, Portantino, Roth, Rubio, Skinner, Stern, Stone, Umberg, Wieckowski, Wiener, Wilk

ASSEMBLY FLOOR: 78-0-1

YES: Aguiar-Curry, Arambula, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Burke, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Daly, Diep, Eggman, Flora, Fong, Frazier, Friedman, Gabriel, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Waldron, Weber, Wicks, Wood, Rendon

ABS, ABST OR NV: Voepel

UPDATED:

VERSION: September 20, 2019

CONSULTANT: Judith Babcock / HEALTH / (916) 319-2097 FN: 0002568

Date of Hearing: September 13, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 920

Author:(Petrie-Norris) – As Amended Ver:September 6, 2019

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

SUMMARY:

This bill increases oversight of outpatient substance use disorder (SUD) programs, replacing voluntary certification standards with a licensure and regulatory program. Specifically, this bill:

1. Requires the Department of Health Care Services (DHCS) to license an outpatient alcoholism or drug abuse recovery or treatment program (which currently may be certified by DHCS on a voluntary basis), strengthens and enhances applicable standards, and requires licensure to be implemented in a way that provides sufficient time for programs to become licensed without significant displacement of clients.
2. Beginning January 1, 2021, requires an outpatient alcoholism or drug abuse recovery or treatment program that provides those services to the public for compensation and is not otherwise licensed to be licensed by DHCS.
3. Requires DHCS to charge a fee that accounts for the size and caseload of the program and that does not exceed the department’s reasonable regulatory costs.
4. Authorizes DHCS to:
   1. Assess a civil penalty of $2,000 per day on unlicensed programs and assess civil penalties for violations.
   2. Bring an action in superior court to enjoin unlicensed activities.
5. Contains other minor and conforming changes.

FISCAL EFFECT:

1. Fee-supported special fund or GF costs, likely in the low millions of dollars ongoing, to DHCS for staff to review applications, conduct site visits for initial and periodic enforcement reviews and investigate complaints, as well as for travel costs and overall program development.

The authority to support the regulatory program through fees in somewhat unclear. This bill includes fee authority but makes reference to a section of law that would require conforming changes in order to make it applicable to the new licensure scheme established by the bill.

1. Unknown, likely minor GF penalty revenue.

COMMENTS:

1. Purpose. According to the author, patients seeking SUD treatment need to know their providers meet an evidence-based treatment standard and that those standards are enforced by the state. Existing law does not require licensing of outpatient programs providing SUD treatment. This bill will ensure quality standards are enforced across all outpatient SUD programs. This bill is co-sponsored by California Society of Addiction Medicine and Shatterproof, and is supported by California Consortium of Addiction Programs and Professionals and SEIU California. It has no opposition.
2. Concerns About Quality and Regulation of SUD Care. Unlike medical care, SUD treatment has evolved from a “social model” and some aspects of care delivery have been lightly regulated or unregulated. In recent years, stakeholders have expressed concerns about aspects of the SUD treatment continuum that remain unregulated, such as sober living homes and outpatient services, as well as unscrupulous operators that take advantage of clients. These issues have been examined in an informational hearing held by the Senate Health Committee in January 2018. Enacted legislation described below addresses some of the concerns about “patient brokering,” or referring clients for financial gain, while this bill tightens quality standards that apply to outpatient SUD services.
3. Current Standards. Nonresidential SUD programs are not currently licensed. Residential SUD treatment facilities (RTFs) licensed by DHCS provide recovery, treatment or detoxification services. RTFs can apply to DHCS for an additional license to provide incidental medical services by a licensed physician and surgeon or other health care practitioner, as specified.

DHCS offers a voluntary facility certification to both residential and nonresidential SUD programs, including outpatient programs. To be certified, a program must meet minimum levels of service quality and be in substantial compliance with certification standards. The majority of facilities licensed by DHCS are also certified.

1. Related Legislation. AB 1031 (Nazarian)  requires DHCS to establish community-based nonresidential and residential treatment and recovery programs to intervene and treat the problems of alcohol and drug use among youth under 21 years of age. The bill also requires DHCS to update its Medi-Cal billing codes to include specified services, based on whether those services are medically necessary. AB 1031 was held on the Senate Appropriations Committee suspense file.

SB 325 (Hill) is substantially similar to this bill and is pending in the Assembly Business and Professions Committee.

SB 445 (Portantino) establishes the Children, Adolescents and Young Adults Substance Use Disorder Treatment Act, and requires DHCS to convene an expert panel to advise DHCS solely on the development of youth SUD treatment quality standards, as specified. SB 445 is enrolled, awaiting action by the Governor.

1. Prior Legislation. SB 1228 (Lara, Chapter 792, Statutes of 2018) prohibited facilities that are licensed or certified by DHCS, and anyone associated with them, from gaining financially for referring a person to treatment,P known as “patient brokering.”

SB 992 (Hernandez, Chapter 784, Statutes of 2018) and AB 3162 (Friedman, Chapter 775, Statutes of 2018) made several changes to licensing statute for RTFs, particularly requiring RTFs and other facilities under DHCS’s purview to disclose certain business relationships, including with unlicensed sober living homes, and requiring all RTF-licensed services to be provided within the structures notated on an RTF’s license.

1. Staff Comment. If this bill becomes law, language in HSC 11833.01 should be adjusted to conform to the new licensure requirements and clarify the department’s authority to collect fees.

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

CONCURRENCE IN SENATE AMENDMENTS

CSA2 Bill Id:AB 920

Author:(Petrie-Norris)

As Amended Ver:September 6, 2019

Majority vote

SUMMARY:

Requires the Department of Health Care Services (DHCS), beginning January 1, 2021, to license an outpatient alcoholism or drug abuse recovery or treatment program that provides those services to the public and is not otherwise licensed.

The Senate Amendments:

1. Require the DHCS in consultation with the county alcohol and drug program administrators, the California Society of Addiction Medicine, and other interested organizations and individuals to develop programs standards for licensure
2. Change all references to "certification standards" in existing law to "licensure standards" in regard to outpatient programs.
3. Require DHCS to include in its licensure standards for programs the following:
   1. Reference the needs of youth up to 26 years of age, elderly individuals, women, pregnant women, mothers and their children, lesbian, gay, bisexual, transgender, and nonbinary individuals, the disabled, and special populations with recognition of innovative solutions to the problems of those specified populations;
   2. Evidence-based standards that are equivalent to the American Society of Addiction Medicine (ASAM) treatment criteria, as specified;
   3. Provide for any Drug Medi-Cal (DMC) certified treatment program operating under DHCS's DMC Organized Delivery System (DMC-ODS) Waiver, under the Section 1115 Bridge to Reform Demonstration Waiver, to be deemed in compliance with the requirements in this bill as long as the DMC-ODS Waiver is in place and the program remains DMC certified by DHCS and is therefore exempted from the requirements of this bill;
   4. Exempt an entity that contracts with a county for purposes of this program for the provision of alcohol and drug use services exclusively to clients within a county service area that does not have a DMC-ODS Waiver and who would otherwise be subject to this bill until January 1, 2023, or until the county obtains a DMC-ODS Waiver, whichever comes first;
   5. Prohibit a program from banning the use of medication-assisted treatment by any enrollee of its program, as specified;
   6. Require a program to keep accurate records, as specified; and,
   7. Authorize the department to conduct site visits to investigate allegations against programs with authority to asses both monetary and licensure penalties.
   8. Make other technical and conforming amendments.
   9. Make the enactment of portions of this bill contingent upon enactment of AB 919 (Petri-Norris).

COMMENTS:

Current Licensing and Certification programs under DHCS. Residential Treatment Facilities (RTFs) are licensed by DHCS, and are 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. DHCS now requires RTFs to adopt ASAM treatment criteria, as specified, as the minimum standard of care for licensed RTFs. DHCS also offers a voluntary facility certification to those programs that provide the following services: day treatment, outpatient, and nonresidential detoxification. The certification is granted to programs that exceed minimum levels of service quality and are in substantial compliance with state program certification standards. Certification is available to both residential and nonresidential programs. The majority of facilities licensed by DHCS are also certified. DHCS also provides program certification for facilities that are licensed by the Department of Social Services that serve adolescents. DHCS licenses about 1,000 RTFs and certifies approximately 900 facilities. As part of their licensing and certification functions, DHCS conducts reviews of licensed and certified programs every two years, or as necessary; checks for compliance with statute, regulations, and certification standards to ensure the health and safety of clients; investigates all complaints; and has the authority to suspend or revoke a program's license or certification for a violation of statute, regulations, and certification standards.

According to the Author:

Under current law those seeking substance abuse treatment need to know that any provider they select meets an evidence-based treatment standard, and that those standards are being enforced by the state. Outpatient programs providing substance abuse treatment do not currently require licensure. This bill fills a regulation gap on the substance abuse treatment industry and empowers patients with more information and protections.

Arguments in Support:

Shatterproof, a co-sponsor of this bill, states the bill addresses a disparity among treatment programs being offered to the residents of California. While RTFs are licensed and their programs regulated by DHCS, outpatient programs have no such requirements. Those seeking treatment, their families, and those paying for the treatment need to know that the State has a minimum set of standards that include evidence-based treatment and that the programs are required to comply with those standards. The California Society of Addiction Medicine, also a co-sponsor, states that outpatient/aftercare is a critical component of SUD treatment. Yet, California has abdicated its responsibility to oversee and regulate these services. Indeed, California only provided voluntary Certification of out-patient services. This abdication of State oversight has resulted in a wild west scenario wherein there are no rules and third-party payers and family members have no idea of the kind or quality of treatment that individuals suffering with SUD will receive when they enter a "program". CSAM concludes that this situation would not be allowed to occur in the case of any other form of treatment for a chronic disease of condition.

Arguments in Opposition:

There is no opposition on this version of the bill.

FISCAL COMMENTS:

According to the Assembly Appropriations Committee:

1. Fee-supported special fund or General Fund (GF) costs, likely in the low millions of dollars ongoing, to DHCS for staff to review applications, conduct site visits for initial and periodic enforcement reviews and investigate complaints, as well as for travel costs and overall program development.

The authority to support the regulatory program through fees in somewhat unclear. This bill includes fee authority but makes reference to a section of law that would require conforming changes in order to make it applicable to the new licensure scheme established by the bill.

1. Unknown, likely minor GF penalty revenue.

VOTES:

ASM HEALTH: 13-0-2

YES: Mayes, Aguiar-Curry, Bigelow, Bonta, Burke, Carrillo, Flora, McCarty, Nazarian, Ramos, Rodriguez, Santiago, Waldron

ABS, ABST OR NV: Wood, Limón

ASSEMBLY FLOOR: 67-1-12

YES: Aguiar-Curry, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Burke, Calderon, Carrillo, Cervantes, Chau, Chiu, Choi, Chu, Cooper, Cunningham, Dahle, Daly, Diep, Eggman, Flora, Fong, Friedman, Gabriel, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Lackey, Levine, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, O'Donnell, Obernolte, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Santiago, Smith, Ting, Voepel, Waldron, Weber, Rendon

NO: Mark Stone

ABS, ABST OR NV: Arambula, Chen, Cooley, Frazier, Kalra, Kamlager-Dove, Kiley, Limón, Muratsuchi, Salas, Wicks, Wood

ASM APPROPRIATIONS: 15-0-3

YES: Gonzalez, Bigelow, Bloom, Bonta, Calderon, Carrillo, Diep, Eggman, Fong, Gabriel, Maienschein, Obernolte, Petrie-Norris, Quirk, Robert Rivas

ABS, ABST OR NV: Brough, Chau, Eduardo Garcia

UPDATED:

VERSION: September 6, 2019

CONSULTANT: Judy Babcock / HEALTH / (916) 319-2097 FN: 0002478

 THIRD READING  

Bill No: AB 920

Author: Petrie-Norris (D), et al.

Amended: 9/6/19 in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 8-0, 7/3/19

AYES: Pan, Stone, Lena Gonzalez, Hurtado, Leyva, Mitchell, Monning, Rubio

NO VOTE RECORDED: Grove

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/30/19

AYES: Portantino, Bates, Bradford, Durazo, Hill, Jones, Wieckowski

SENATE HEALTH COMMITTEE: 8-0, 9/11/19 (Pursuant to Senate Rule 29.10)

AYES: Pan, Stone, Lena Gonzalez, Hurtado, Leyva, Mitchell, Monning, Rubio

NO VOTE RECORDED: Grove

SENATE APPROPRIATIONS COMMITTEE: 7-0, 9/12/19 (Pursuant to Senate Rule 29.10)

AYES: Portantino, Bates, Bradford, Durazo, Hill, Jones, Wieckowski

ASSEMBLY FLOOR: 67-1, 5/6/19 - See last page for vote

SUBJECT: Substance abuse recovery or treatment providers

SOURCE: Author

DIGEST:

This bill requires the Department of Health Care Services, beginning January 1, 2021, to license an outpatient alcohol or other substance use disorder recovery or treatment services program that provides those services to the public, as specified; and makes other technical, nonsubstantive changes.

Senate Floor Amendments of 9/6/19 delete the provisions requiring DHCS to convene an advisory workgroup for substance use disorder services and amend in provisions from SB 325 (Hill) requiring outpatient recovery or treatment providers to obtain a license from DHCS.

ANALYSIS:

Existing state law:

1. Requires the Department of Health Care Services (DHCS) to license residential alcoholism or drug abuse recovery or treatment facilities (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. Requires RTF licensees to provide at least one of the following: recovery, treatment, or detoxification services. Requires DHCS to adopt regulations requiring records and procedures appropriate for the type of service provided. Provides that the records and procedures can include all of the following: admission criteria; intake process; assessments; recovery, treatment, or detoxification planning; referral; documentation of provision of recovery, treatment, or detoxification services; discharge and continuing care planning; or indicators of recovery, treatment, or detoxification outcomes. [HSC §11834.26]
3. Grants DHCS the authority to implement a program certification procedure for alcohol and other drug treatment recovery services and to develop standards and regulations, after consultation with specified groups, for the alcohol and other drug treatment recovery services describing the minimal level of service quality required of the service providers to qualify for and obtain state certification. Requires certification and compliance with standards to be voluntary on the part of the programs. [HSC §11830.1]
4. Grants DHCS the sole authority in state government to determine the qualifications, including the appropriate skills, education, training, and experience of personnel working within alcoholism or drug abuse recovery and treatment programs under DHCS’s purview. [HSC §11833]
5. Requires DHCS, in consultation with county alcohol and drug program administrators and other interested organizations and individuals, to develop program standards specified to each type of residential and nonresidential program to be used during its certification process. Requires program standards to include, but not be limited to, both of the following:
   1. Recognition and characterization of different approaches and solutions to the alcohol and drug problems that DHCS determines have sufficient merit for a separate standard; and,
   2. Reference to the needs of youth, the elderly, women, pregnant women, mothers and their children, gays, lesbians, the disabled, and special populations, with recognition of innovative solutions to the problems of those special populations. [HSC §11830.5]
6. Requires substance use disorder (SUD) counselors that work in a facility licensed or certified by DHCS to be registered with or certified by a counselor certification organization (CO) recognized by DHCS. [HSC §11833]
7. Prohibits a DHCS licensed or certified program, and specified individuals associated with or employed by those programs, 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. Permits DHCS to investigate allegations of violations and take action, such as revocation of licensure or certification, or assessment of penalties. [HSC §11831.6 and 11831.7]

This bill:

1. Requires DHCS, beginning January 1, 2021, to license an outpatient alcohol or other substance use disorder recovery or treatment program (outpatient SUD program) that provides those services to the public for compensation and is not otherwise licensed by DHCS, as specified. Prohibits the provisions in this bill from applying to peer-to-peer groups, as specified, that are peer-led and do not provide or bill for outpatient services.
2. Changes all references to “certification standards” in existing law to “licensure standards” in regard to outpatient SUD programs.
3. Adds criteria, in addition to the requirements in 5) above in existing law, for DHCS to include the following standards for licensure:
   1. Reference to the needs of youth up to the age of 26, and lesbian, gay, bisexual, transgender, and nonbinary individuals;
   2. Evidence-based standards that are equivalent to the American Society of Addiction Medicine (ASAM) treatment criteria, as specified;
   3. Requiring any Drug Medi-Cal (DMC) certified treatment program operating under DHCS’s DMC Organized Delivery System (DMC-ODS) Waiver, under the Section 1115 Bridge to Reform Demonstration Waiver, to be deemed in compliance with the requirements in this bill as long as the DMC-ODS is in place and the program remains DMC certified by DHCS;
   4. Requiring a county that contracts with DHCS under the Drug Medi-Cal program, and any entity that contracts with a county, as specified, to be exempt from the provisions in this bill until January 1, 2023, or until the county operates a DMC-ODS, or whichever is earlier;
   5. Prohibiting an outpatient SUD program from banning the use of medication-assisted treatment by any enrollee of its program, as specified;
   6. Requiring a program to keep accurate records, as specified; and,
   7. Requiring licensure standards to be implemented in a way that provides for sufficient time for programs and individual providers to comply without significant displacement of program clients.
4. Requires DHCS to charge a fee not to exceed the reasonable regulatory costs of administering the provisions in this bill and licensing a program or individual practitioner, as specified.
5. Changes existing law to require, instead of permit, DHCS to investigate upon finding a violation and take action, such as revocation of licensure or certification, or assessment of penalties, for violations of giving or receiving remuneration in exchange for referring a person to recovery or treatment services as specified in existing law.
6. Prohibits an entity from operating, establishing, managing, conducting, or maintaining an outpatient SUD program within this state without first obtaining a license. Requires DHCS to conduct a site visit to investigate allegations of a violation of this provision. Requires DHCS to issue specified notices to anyone in violation of this provision and prohibits an entity that violates this provision from obtaining licensure for a specified time. Permits DHCS to levy specified civil penalties for a violation of the provisions in this bill.
7. Requires DHCS to adopt regulations by December 31, 2021, to implement the provision in this bill.
8. Makes other technical, nonsubstantive changes.

Comments

1. Author’s statement. According to the author, while there are good actors that are doing positive work for those seeking addiction recovery, a number of unscrupulous SUD treatment facilities have been exploiting patients to reap high profits. In most cases, very little can be done since these facilities are not regulated or well-regulated. When fraud is identified at these facilities, and law enforcement intervenes, the facilities have closed, moved, and reappeared elsewhere with a new name, starting the cycle over again. Often, patients are left untreated and are being curbed to the streets after their insurance runs out. As stories of abuse in the system continue, it is clear that the current framework for how the state handles addiction recovery services has not caught up with how unscrupulous actors have been exploiting loopholes in the law. This bill, known as Jarrod’s Law, takes a positive step towards improving and updating California’s framework for SUD services by directing DHCS to convene a working group of stakeholders to develop a proposal for updating and cleaning up California law pertaining to SUD services.
2. Licensed and certified programs. 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 and surgeon or other health care practitioner, as specified. SB 823 (Hill, Chapter 781, Statutes of 2018) now requires DHCS to adopt ASAM treatment criteria, as specified, as the minimum standard of care for licensed RTFs. DHCS also offers a voluntary facility certification to those programs that provide the following services: day treatment, outpatient, and nonresidential detoxification. The certification is granted to programs that exceed minimum levels of service quality and are in substantial compliance with state program certification standards. Certification is available to both residential and nonresidential programs. The majority of facilities licensed by DHCS are also certified. DHCS also provides program certification for facilities that are licensed by the Department of Social Services that serve adolescents. DHCS licenses about 1,000 RTFs and certifies approximately 900 facilities. As part of their licensing and certification functions, DHCS conducts reviews of licensed and certified programs every two years, or as necessary; checks for compliance with statute, regulations, and certification standards to ensure the health and safety of clients; investigates all complaints; and has the authority to suspend or revoke a program’s license or certification for a violation of statute, regulations, and certification standards.
3. Reports about “patient brokering.” Several news articles (“How Some Southern California drug rehab centers exploit addiction,” Orange County Register, May 21, 2017; “A Choice for Recovering Addicts: Relapse or Homelessness, New York Times, May 30, 2015; “California’s Rehab System is in Crisis … ” CityWatch Los Angeles, June 23, 2016; and “Special Report: Two states with an ocean view, and an ethical cloud,” Addiction Professional, March 18, 2013) highlight the issue of “patient brokering,” whereby unscrupulous individuals (sometimes called “interventionists”) lure clients seeking SUD treatment services, buy insurance policies for the clients or offer to pay their deductibles, and “sell” them to facility operators that do not provide any type of treatment services or regular monitoring (typically unregulated sober living homes and outpatient facilities that are not certified by DHCS), all the while billing the insurance plan. Some individuals involved in this practice have been quoted in news articles as acknowledging that the practice may be wrong; however, they also claim that the practice is so ubiquitous in California that they would have no clients at all if they did not engage. As a result, some facility operators keep interventionists on retainer, often for $5000 to $10,000 a month, regardless of how many clients an interventionist refers to them, in order to remain in business. After clients’ insurance coverage is exhausted, unscrupulous facility operators have been allegedly dumping them in the streets where they continue their addictions. In many news articles, the issue is largely attributed to facilities that do not require state licensure or oversight, including what New York refers to as “three-quarter houses,” which are New York’s equivalent to California’s recovery residences.
4. Senate Health Committee informational hearing and subsequent legislation. On January 31, 2018, the Senate Health Committee held an informational hearing to examine the SUD treatment system with a focus on treatment and services provided in licensed alcoholism or drug abuse recovery or treatment facilities (RTFs); insurance coverage; patient referrals; and the state’s regulation and oversight of the system, including the inability to impose restrictions on SLHs. 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, including enforcement of SLHs that have been unlawfully providing services. The goal of the hearing was to examine the issues and to seek strategies and policies that would prevent unscrupulous individuals from exploiting the various industries that are supposed to help treat those with SUDs; to recognize federal and state protections for those with disabilities, including their housing rights and options; and to ensure that policies are not enacted, either at the local or state level, that will limit the number of recovery or treatment options for those who need them.

The Legislature passed, and Governor Brown signed, a package of bills that aimed to address the emerging issues in the SUD treatment and recovery realm. SB 1228 (Lara, Chapter 792, Statutes of 2018) prohibited facilities that are licensed or certified by DHCS, and anyone associated with them, from gaining financially for referring a person to treatment, also known as “patient brokering.” SB 992 (Hernandez, Chapter 784, Statutes of 2018) and AB 3162 (Friedman, Chapter 775, Statutes of 2018) made several changes to licensing statute for RTFs, particularly requiring RTFs and other facilities under DHCS’s purview to disclose certain business relationships, including with unlicensed sober living homes, and requiring all RTF-licensed services to be provided within the structures notated on an RTF’s license.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee’s analysis of SB 325 (Hill):

• DHCS. $4.8 million General Fund in the first year, and $4.5 million General Fund, and ongoing, for DHCS to hire up to 30 positions. The positions would include 21 Associate Governmental Program Analysts, 4.0 Staff Services Manager (SSM) I, 2.0 SSM IIs, 1 SSM III, and 2.0 attorneys. The positions would include licensing analysts and complaint analysts that would review applications, conduct site-visits for initial and periodic enforcement reviews, travel costs, and overall, program development. Staff notes this estimate is based on the known number of facilities the currently opt-in to voluntary certification, and costs could be higher depending on the number of facilities that must now be licensed.
• Court Costs. Unknown cost pressures to the court if DHCS brings an action to enjoin an entity’s specified violation. While the superior courts are not funded on a workload basis, an increase in workload could result in delayed court services and would put pressure on the General Fund to fund additional staff and resources. It is unknown the volume of cases that the DHCS will bring forth. For example, the 2018 Budget Act appropriated $64 million from the General Fund to backfill continued reduction in fine and penalty revenue for trial court operations.

SUPPORT: (Verified 9/6/19)

California Society of Addiction Medicine

California Consortium of Addiction Programs and Professionals

SEIU California

Shatter Proof

OPPOSITION: (Verified 9/6/19)

None received

ARGUMENTS IN SUPPORT: The California Society of Addiction Medicine, Shatterproof, and other supporters argue that the unregulated system in the state has caused devastation as treatment providers abuse clients, operate with no consequences for incompetent care, and drain payment from both the public and private payment systems through fraud and deceit. Supporters argue that this lack of oversight does not exist currently for any other medical condition. Supporters state that thousands of dollars have been paid out for poor or non-existent services with no requirements for staff, outcomes reporting, or even health and safety standards. Supporters argue that currently if a certified provider is found to not be abiding by certification standards, they can simply choose not to continue to be voluntarily certified.

ASSEMBLY FLOOR: 67-1, 5/6/19

AYES: Aguiar-Curry, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Burke, Calderon, Carrillo, Cervantes, Chau, Chiu, Choi, Chu, Cooper, Cunningham, Dahle, Daly, Diep, Eggman, Flora, Fong, Friedman, Gabriel, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Lackey, Levine, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Santiago, Smith, Ting, Voepel, Waldron, Weber, Rendon

NOES: Mark Stone

NO VOTE RECORDED: Arambula, Chen, Cooley, Frazier, Kalra, Kamlager-Dove, Kiley, Limón, Muratsuchi, Salas, Wicks, Wood

Prepared by: Reyes Diaz / HEALTH / (916) 651-4111

9/12/19 12:44:22

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

AB 920 (Petrie-Norris) - Substance use disorder services: advisory workgroup

Bill Summary:

AB 920 would require, effective January 1, 2021, the Department of Health Care Services (DHCS) to license an outpatient alcohol or other substance use disorder recovery or treatment services program, as specified.

Fiscal Impact:

• DHCS. $4.8 million General Fund in the first year, and $4.5 million General Fund, and ongoing, for DHCS to hire up to 30 positions. The positions would include 21 Associate Governmental Program Analysts, 4.0 Staff Services Manager (SSM) I, 2.0 SSM IIs, 1 SSM III, and 2.0 attorneys. The positions would include licensing analysts and complaint analysts that would review applications, conduct site-visits for initial and periodic enforcement reviews, travel costs, and overall, program development. Staff notes this estimate is based on the known number of facilities the currently opt-in to voluntary certification, and costs could be higher depending on the number of facilities that must now be licensed.
• Court Costs. Unknown cost pressures to the court if DHCS brings an action to enjoin an entity’s specified violation. While the superior courts are not funded on a workload basis, an increase in workload could result in delayed court services and would put pressure on the General Fund to fund additional staff and resources. It is unknown the volume of cases that the DHCS will bring forth. For example, the 2018 Budget Act appropriated $64 million from the General Fund to backfill continued reduction in fine and penalty revenue for trial court operations.

Background:

The DHCS is the sole licensing authority for over 2,300 SUD programs, including narcotic treatment programs, Driving Under the Influence (DUI) programs, and alcohol and other drug treatment programs. The DHCS licenses recovery or treatment facilities (RTF) 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. The DHCS must determine the qualifications, including the appropriate skills, education, training, and experience of personnel working within licensed or certified alcoholism or drug abuse recovery and treatment programs.

The DHCS also offers a voluntary facility certification to those programs that provide the following services: day treatment, outpatient, and nonresidential detoxification. The certification is granted to programs that exceed minimum levels of service quality and are in substantial compliance with state program certification standards. Certification is available to both residential and nonresidential programs. The majority of facilities licensed by DHCS are also certified. DHCS also provides program certification for facilities that are licensed by the Department of Social Services that serve adolescents. DHCS licenses about 1,000 RTFs and certifies approximately 900 facilities.

RTFs licensed by the DHCS provide recovery, treatment, or detoxification services. Since the passage of AB 848 (Stone, Chapter 744, Statutes of 2015), RTFs can apply to the DHCS for an additional license to provide incidental medical services by a licensed physician and surgeon or other health care practitioner, as specified. SB 823 (Hill, Chapter 781, Statutes of 2018) also requires DHCS to adopt American Society of Addiction Medicine (ASAM) treatment criteria, as specified, as the minimum standard of care for licensed RTFs. According to the CHHS Open Data Portal, from September 9, 2019 data, the DHCS currently licenses about 1,790 non-medical alcoholism and drug abuse recovery or treatment facilities. As part of their licensing functions, the 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.

Proposed Law:

This bill would require, effective January 1, 2021, DHCS to license an outpatient alcoholism or drug abuse recovery or treatment program, as specified, and would include the following provisions, among others:

• Exempts peer-to-peer support groups, such as Narcotics Anonymous, Alcoholics Anonymous, or other religious or nonreligious recovery groups and do not bill for outpatient services, from the bill’s requirements.
• Adds specified criteria for DHCS to include as standards for licensure, such as a program is prohibited from banning the use of medication-assisted treatment; a program must keep accurate records, as specified; and, a county Drug-Medi-Cal organized delivery system is deemed to be compliant with the bill.
• Requires, instead of permits, DHCS to investigate upon finding of a violation and to take action, such as revocation of licensure or certification, or assessment of penalties, for violations of giving or receiving remuneration in exchange for referring a person to recovery or treatment services, as specified in existing law.
• Prohibits an entity from operating, establishing, managing, conducting, or maintaining an outpatient SUD program within this state without first obtaining a license. Requires DHCS to conduct a site visit to investigate allegations of a violation of this provision. Requires DHCS to issue specified notices to anyone in violation of this provision and prohibits an entity that violates this provision from obtaining licensure for a specified time. Permits DHCS to levy specified civil penalties for violations.
• Requires DHCS to charge a fee not to exceed the reasonable regulatory costs of administering the provisions in this bill.
• Requires DHCS, after consultation with specified entities, to develop regulations for alcoholism and drug abuse treatment or recovery programs. Requires DHCS to adopt regulations by December 31, 2021 to implement this bill.
• Makes other conforming changes when recasting existing program certification provisions into licensing provisions.

Related Legislation:

• SB 325 (Hill) in substantially similar to this bill and is in the Assembly Business and Professions Committee.
• SB 445 (Portantino) establishes the Children, Adolescents, and Young Adults Substance Use Disorder Treatment Act, and requires DHCS to convene an expert panel to advise DHCS solely on the development of youth SUD treatment quality standards, as specified. SB 445 is on the Assembly Floor.
• SB 589 (Bates) would prohibit a certified alcohol or other drug program, recovery residence, as defined, or third party that provides any form of advertising or marketing to one or more of those entities, from making false or misleading statements or receiving remuneration for referring a person to a recovery or treatment service, as specified. The bill was held on the Senate Appropriations Committee suspense file.
• AB 615 (Brough) would make a willful violation of the prohibition against referrals for remuneration a crime punishable by a fine of not more than $10,000, imprisonment in a county jail for 16 months, or two or three years, or both fine and imprisonment. AB 615 failed passage in the Assembly Public Safety Committee and was granted reconsideration.
• AB 940 (Melendez) would prohibit a recovery residence, as specified, from giving or receiving remuneration or anything of value for the referral of a person who is seeking recovery and treatment services, and would require DHCS to impose a minimum fine of $50,000 for each violation. AB 940 is in the Assembly Health Committee.

Staff Comments:

Fee recovery. Staff notes, as currently written, the bill’s costs would be borne by the General Fund. Although the bill would require DHCS to charge a fee to cover program administration costs, the cross-reference to HSC §11833.01 refers to certification, while the subsequent HSC §11833.02 could be interpreted broadly to refer to licensing and certification. The ambiguity may need to be addresses in future discussions.

Senate Rule 29.10 (c). This bill was previously heard in a different form on July 5, 2019 and sent to the suspense file, and approved on a 7-0 vote at the committee’s suspense hearing on August 12, 2019. Recent September 6, 2019, amendments gut and amended the bill, and inserted similar provisions from Senate Bill 325 (Hill, 2019). On September 10, 2019, Joint Rules 61 and 62 were suspended in order to approve policy and fiscal committees consider a bill during the blackout period. This committee is considering the bill on a Senate Rule 29.10 (c).

-- END --

SENATE COMMITTEE ON HEALTH

Senator Dr. Richard Pan, Chair

BILL NO: AB 920

PURSUANT TO SENATE RULE 29.10

SUBJECT: Substance abuse recovery or treatment providers

SUMMARY:

Requires the Department of Health Care Services, beginning January 1, 2021, to license outpatient alcohol or other substance use disorder recovery or treatment programs that provide those services to the public, as specified.

Existing law:

1. Requires the Department of Health Care Services (DHCS) to license residential alcoholism or drug abuse recovery or treatment facilities (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. Requires RTF licensees to provide at least one of the following: recovery, treatment, or detoxification services. Requires DHCS to adopt regulations requiring records and procedures appropriate for the type of service provided. Provides that the records and procedures can include all of the following: admission criteria; intake process; assessments; recovery, treatment, or detoxification planning; referral; documentation of provision of recovery, treatment, or detoxification services; discharge and continuing care planning; or indicators of recovery, treatment, or detoxification outcomes. [HSC §11834.26]
3. Grants DHCS the authority to implement a program certification procedure for alcohol and other drug treatment recovery services and to develop standards and regulations, after consultation with specified groups, for the alcohol and other drug treatment recovery services describing the minimal level of service quality required of the service providers to qualify for and obtain state certification. Requires certification and compliance with standards to be voluntary on the part of the programs. [HSC §11830.1]
4. Grants DHCS the sole authority in state government to determine the qualifications, including the appropriate skills, education, training, and experience of personnel working within alcoholism or drug abuse recovery and treatment programs under DHCS’s purview. [HSC §11833]
5. Requires DHCS, in consultation with county alcohol and drug program administrators and other interested organizations and individuals, to develop program standards specified to each type of residential and nonresidential program to be used during its certification process. Requires program standards to include, but not be limited to, both of the following:
   1. Recognition and characterization of different approaches and solutions to the alcohol and drug problems that DHCS determines have sufficient merit for a separate standard; and,
   2. Reference to the needs of youth, the elderly, women, pregnant women, mothers and their children, gays, lesbians, the disabled, and special populations, with recognition of innovative solutions to the problems of those special populations. [HSC §11830.5]
6. Prohibits a DHCS licensed or certified program, and specified individuals associated with or employed by those programs, 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. Permits DHCS to investigate allegations of violations and take action, such as revocation of licensure or certification, or assessment of penalties. [HSC §11831.6 and 11831.7]

This bill:

1. Requires DHCS, beginning January 1, 2021, to license an outpatient alcohol or other substance use disorder recovery or treatment program (outpatient SUD program) that provides those services to the public for compensation and is not otherwise licensed by DHCS, as specified. Prohibits the provisions in this bill from applying to peer-to-peer groups, as specified, that are peer-led and do not provide or bill for outpatient services.
2. Adds criteria, in addition to the requirements in 5) of existing law above, for DHCS to include as standards for licensure:
   1. Requiring reference to the needs of youth up to the age of 26, and lesbian, gay, bisexual, transgender, and nonbinary individuals;
   2. Requiring evidence-based standards that are equivalent to the American Society of Addiction Medicine (ASAM) treatment criteria, as specified;
   3. Requiring any Drug Medi-Cal (DMC) certified treatment program operating under DHCS’s DMC Organized Delivery System (DMC-ODS) Waiver, under the Section 1115 Bridge to Reform Demonstration Waiver, to be deemed in compliance with the requirements in this bill as long as the DMC-ODS is in place and the program remains DMC certified by DHCS;
   4. Requiring a county that contracts with DHCS under the Drug Medi-Cal program, and any entity that contracts with a county, as specified, to be exempt from the provisions in this bill until January 1, 2023, or until the county operates a DMC-ODS, or whichever is earlier;
   5. Prohibiting an outpatient SUD program from banning the use of medication-assisted treatment by any enrollee of its program, as specified;
   6. Requiring a program to keep accurate records, as specified; and,
   7. Requiring licensure standards to be implemented in a way that provides for sufficient time for programs and individual providers to comply without significant displacement of program clients.
3. Changes all references to “certification standards” in existing law to “licensure standards” in regard to outpatient SUD programs.
4. Requires DHCS to charge a fee not to exceed the reasonable regulatory costs of administering the provisions in this bill and licensing a program, as specified.
5. Requires, instead of permits, DHCS to investigate upon finding a violation and to take action, such as revocation of licensure or certification, or assessment of penalties, for violations of giving or receiving remuneration in exchange for referring a person to recovery or treatment services, as specified in existing law.
6. Prohibits an entity from operating, establishing, managing, conducting, or maintaining an outpatient SUD program within this state without first obtaining a license. Requires DHCS to conduct a site visit to investigate allegations of a violation of this provision. Requires DHCS to issue specified notices to anyone in violation of this provision and prohibits an entity that violates this provision from obtaining licensure for a specified time. Permits DHCS to levy specified civil penalties for a violation of the provisions in this bill.
7. Requires DHCS to adopt regulations by December 31, 2021 to implement this bill.
8. Makes other technical, nonsubstantive changes.

FISCAL EFFECT:

This bill has not been analyzed by a fiscal committee.

COMMENTS:

1. Author’s statement. According to the author, patients seeking SUD treatment need to know that any provider they select meets an evidence-based treatment standard and that those standards are being enforced by the state. Outpatient programs providing SUD treatment do not currently require any licensing in the state. Today, if you wanted to open your own outpatient treatment facility, you could do so immediately, no license, training, or prior experience required. This bill fills a regulation gap in the SUD treatment industry and empowers patients with more information and protections. Specifically, this bill requires outpatient SUD treatment programs to be licensed by DHCS, allowing the state to know how many treatment providers exist and where they are located, information that currently is unknown. Additionally, licensed providers will be required to keep records of admissions, withdrawals, transfers, and discharges and the reason for each, and they would be prohibited from engaging in patient selling and recruiting for monetary gain.
2. Licensed and certified programs. 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 and surgeon or other health care practitioner, as specified. SB 823 (Hill, Chapter 781, Statutes of 2018) now requires DHCS to adopt ASAM treatment criteria as the minimum standard of care for licensed RTFs. DHCS also offers a voluntary facility certification to those programs that provide the following services: day treatment, outpatient, and nonresidential detoxification. The certification is granted to programs that exceed minimum levels of service quality and are in substantial compliance with state program certification standards. Certification is available to both residential and nonresidential programs. The majority of facilities licensed by DHCS are also certified. DHCS also provides program certification for facilities that are licensed by the Department of Social Services that serve adolescents. DHCS licenses about 1,000 RTFs and certifies approximately 900 facilities. As part of their licensing and certification functions, DHCS conducts reviews of licensed and certified programs every two years, or as necessary; checks for compliance with statute, regulations, and certification standards to ensure the health and safety of clients; investigates all complaints; and has the authority to suspend or revoke a program’s license or certification for a violation of statute, regulations, and certification standards.
3. DMC-ODS and ASAM. According to DHCS, the DMC-ODS is a five-year pilot program approved by the Centers for Medicare and Medicaid Services (CMS) in 2015 under the Section 1115 Bridge to Reform Demonstration Waiver to test a new method for the organized delivery of health care services for Medi-Cal-eligible individuals with an SUD. Elements of the DMC-ODS include providing a continuum of care modeled after ASAM criteria for SUD treatment services; increased control and accountability; greater administrative oversight; utilization controls to improve care and efficient use of resources; evidence-based practices in SUD treatment; and, increased coordination with other systems of care. “Continuum of care” refers to a treatment system in which clients enter treatment at a level appropriate to their needs and then step up to more intense treatment, or down to less intense treatment, as needed. These levels should be thought of not as discrete levels of care but rather as points in a continuum of treatment services. ASAM criteria established five main levels in a continuum of care for SUD treatment:
   1. Level 0.5: Early intervention services;
   2. Level 1: Outpatient services;
   3. Level 2: Intensive outpatient/partial hospitalization services (Level 2 is subdivided into levels 2.1 and 2.5);
   4. Level 3: Residential/Inpatient services (Level 3 is subdivided into levels 3.1, 3.3, 3.5, and 3.7); and,
   5. Level 4: Medically managed intensive inpatient services.

In addition to the levels of care described by ASAM, outpatient treatment can be broken down into four sequential stages that clients work through, regardless of the level of care at which they enter treatment: 1) treatment engagement; 2) early recovery; 3) maintenance; and, 4) community support.

After the initial approval of the five-year pilot program, which expires in 2020, counties could opt in to the DMC-ODS by submitting an implementation plan for approval by DHCS and CMS. After approval of a plan, a county contracts with DMC-certified providers or offers county-operated services to provide all services available through the DMC-ODS. Counties are also permitted to contract with managed care plans to offer services to beneficiaries. In addition to standard DMC benefits available to all Medi-Cal-eligible individuals who have an SUD diagnosis (which include narcotic treatment program services; outpatient drug-free treatment services; individual and group counseling; day care habilitative services; perinatal residential SUD services; and naltrexone treatment services), counties that opt into the program are required to provide, among other requirements: recovery services to support an individual’s recovery efforts, including counseling, education and job skills, and linkages to housing, transportation, and case management services; comprehensive assessment and periodic reassessment, referral services, and patient advocacy, such as linkages to physical and mental health care; and, physician consultation services, which are provided to DMC-certified physicians who seek expert advice on designing treatment plans for complex cases involving DMC-ODS beneficiaries.

According to the California Health Care Foundation (CHCF), as of December 2018, 40 of California’s 58 counties had submitted implementation plans to participate in the DMC-ODS. The following 22 counties are now providing services: Alameda, Contra Costa, Imperial, Los Angeles, Marin, Merced, Monterey, Napa, Nevada, Orange, Placer, Riverside, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Ventura, and Yolo. CHCF states that currently participating counties represent 75% of the state’s Medi-Cal population, and that once all 40 counties begin providing services, nearly 97% of Medi-Cal beneficiaries will have access to DMC-ODS services.

1. Senate Health Committee informational hearing and subsequent legislation. On January 31, 2018, the Senate Health Committee held an informational hearing to examine the SUD treatment system with a focus on treatment and services provided in licensed RTFs; insurance coverage; patient referrals; and the state’s regulation and oversight of the system, including the inability to impose restrictions on Sober Living Homes (SLHs). 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, including enforcement of SLHs that have been unlawfully providing services. The goal of the hearing was to examine the issues and to seek strategies and policies that would prevent unscrupulous individuals from exploiting the various industries that are supposed to help treat those with SUDs; to recognize federal and state protections for those with disabilities, including their housing rights and options; and to ensure that policies are not enacted, either at the local or state level, that will limit the number of recovery or treatment options for those who need them.

The Legislature passed, and Governor Brown signed, a package of bills that aimed to address the emerging issues in the SUD treatment and recovery realm. SB 1228 (Lara, Chapter 792, Statutes of 2018) prohibited facilities that are licensed or certified by DHCS, and anyone associated with them, from gaining financially for referring a person to treatment, also known as “patient brokering.” SB 992 (Hernandez, Chapter 784, Statutes of 2018) and AB 3162 (Friedman, Chapter 775, Statutes of 2018) made several changes to licensing statute for RTFs, particularly requiring RTFs and other facilities under DHCS’s purview to disclose certain business relationships, including with unlicensed sober living homes, and requiring all RTF-licensed services to be provided within the structures notated on an RTF’s license.

1. Related legislation. AB 1031 (Nazarian) enacts the Youth SUD Treatment and Recovery Program Act of 2019 and requires DHCS to establish community-based nonresidential and residential treatment and recovery programs to intervene and treat the problems of alcohol and drug use among youth under 21 years of age. Requires DHCS to update its Medi-Cal billing codes to include specified services, based on whether those services are medically necessary. AB 1031 was held on the Senate Appropriations Committee suspense file.

SB 325 (Hill) is substantially similar to this bill. SB 325 is pending in the Assembly Business and Professions Committee.

SB 445 (Portantino) establishes the Children, Adolescents, and Young Adults Substance Use Disorder Treatment Act, and requires DHCS to convene an expert panel to advise DHCS solely on the development of youth SUD treatment quality standards, as specified. SB 445 is pending on the Assembly Floor.

1. Prior legislation. AB 3162 (Friedman) makes various changes to current law regarding RTFs licensed by 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.

SB 275 (Portantino of 2018) was identical to SB 445. SB 275 was vetoed by Governor Brown who stated not every problem with Medi-Cal needs or deserves a public stakeholder process, and DHCS regularly collaborates with stakeholders, including interested organizations, experts, partners, and colleagues. Governor Brown stated he was confident DHCS would continue to do so.

SB 823 (Hill, Chapter 781, Statutes of 2018) requires DHCS to adopt ASAM treatment criteria, as specified, as the minimum standard of care for licensed RTFs.

SB 992 (Hernandez) requires programs licensed or certified by DHCS to disclose certain business relationships, as specified, including with recovery residences (SLHs), and makes changes to current law for licensed RTFs to improve client treatment and provide DHCS more oversight authority over RTFs.

SB 1228 (Lara) 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 (Bradford of 2018) and SB 636 (Bradford of 2017) were substantially similar to SB 1228. SB 1268 was held on the Assembly Appropriations suspense file. SB 636 was never heard in this Committee.

1. Support. The California Society of Addiction Medicine, Shatterproof, and other supporters argue that the unregulated system in the state has caused devastation as treatment providers abuse clients, operate with no consequences for incompetent care, and drain payment from both the public and private payment systems through fraud and deceit. Supporters argue that this lack of oversight does not exist currently for any other medical condition. Supporters state that thousands of dollars have been paid out for poor or non-existent services with no requirements for staff, outcomes reporting, or even health and safety standards. Supporters argue that currently if a certified provider is found to not be abiding by certification standards, they can simply choose not to continue to be voluntarily certified.

SUPPORT AND OPPOSITION:

Support: California Society of Addiction Medicine (co-sponsor)

Shatterproof (co-sponsor)

California Consortium of Addiction Programs and Professionals

SEIU California

Oppose: None received

-- END --

 THIRD READING  

Bill No: AB 920

Author: Petrie-Norris (D), et al.

Amended: 6/25/19 in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 8-0, 7/3/19

AYES: Pan, Stone, Lena Gonzalez, Hurtado, Leyva, Mitchell, Monning, Rubio

NO VOTE RECORDED: Grove

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/30/19

AYES: Portantino, Bates, Bradford, Durazo, Hill, Jones, Wieckowski

ASSEMBLY FLOOR: 67-1, 5/6/19 - See last page for vote

SUBJECT: Substance use disorder services: advisory workgroup

SOURCE: Author

DIGEST:

This bill requires the Department of Health Care Services to convene a technical advisory workgroup, as specified, to make recommendations on potential changes to current laws and regulations relevant to substance use disorder services, and requires a report to the Legislature, as specified.

ANALYSIS:

Existing state law:

1. Grants the Department of Health Care Services (DHCS) the sole authority in state government to administer, license, certify, and regulate all substance use disorder (SUD) functions and programs. [HSC §11750, et seq.]
2. Requires DHCS to perform various duties, including, but not limited to:
   1. Providing technical assistance and training to local alcohol and other drug programs to assist in the planning and implementation of quality services;
   2. Review research in, and serve as a resource to provide information relating to, alcohol and other drug programs;
   3. Develop standards for ensuring minimal statewide levels of service quality; and,
   4. Develop and implement, in partnership with counties, alcohol and other drug prevention strategies especially designed for youth. [HSC §11755]

This bill:

1. Requires DHCS to convene a technical advisory workgroup (TAW) composed of relevant stakeholders, including, but not limited to, experts in addiction treatment, consumer and patient protection advocates, and counties to review and prepare recommendations regarding potential changes to current laws and regulations relevant to SUD services.
2. Requires DHCS, on or before June 1, 2020, to report its progress and the recommendations of the TAW to the Legislature and the chairs of the health committees of the Senate and the Assembly.
3. Sunsets the requirement to submit a report on January 1, 2024, as specified.

Comments

1. Author’s statement. According to the author, while there are good actors that are doing positive work for those seeking addiction recovery, a number of unscrupulous SUD treatment facilities have been exploiting patients to reap high profits. In most cases, very little can be done since these facilities are not regulated or well-regulated. When fraud is identified at these facilities, and law enforcement intervenes, the facilities have closed, moved, and reappeared elsewhere with a new name, starting the cycle over again. Often, patients are left untreated and are being curbed to the streets after their insurance runs out. As stories of abuse in the system continue, it is clear that the current framework for how the state handles addiction recovery services has not caught up with how unscrupulous actors have been exploiting loopholes in the law. This bill, known as Jarrod’s Law, takes a positive step towards improving and updating California’s framework for SUD services by directing DHCS to convene a working group of stakeholders to develop a proposal for updating and cleaning up California law pertaining to SUD services.
2. DHCS stakeholder groups. In previous years, DHCS (and the former Department of Alcohol and Drug Programs) convened various stakeholder workgroups to advise on its various programs, including counselor certification, driving under the influence programs, narcotic treatment programs, youth treatment standards, and licensure and certification of programs. In early 2019, however, DHCS established the Behavioral Health Stakeholder Advisory Committee (BH-SAC) to disseminate information and receive coordinated input regarding DHCS behavioral health activities. It was created as part of the ongoing DHCS effort to integrate behavioral health with the rest of the health care system. DHCS folded all advisory groups into the BH-SAC that had separately advised DHCS on behavioral health topics.
3. Senate Health Committee informational hearing and subsequent legislation. On January 31, 2018, the Senate Health Committee held an informational hearing to examine the SUD treatment system with a focus on treatment and services provided in licensed alcoholism or drug abuse recovery or treatment facilities (RTFs); insurance coverage; patient referrals; and the state’s regulation and oversight of the system, including the inability to impose restrictions on SLHs. 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, including enforcement of SLHs that have been unlawfully providing services. The goal of the hearing was to examine the issues and to seek strategies and policies that would prevent unscrupulous individuals from exploiting the various industries that are supposed to help treat those with SUDs; to recognize federal and state protections for those with disabilities, including their housing rights and options; and to ensure that policies are not enacted, either at the local or state level, that will limit the number of recovery or treatment options for those who need them.

The Legislature passed, and Governor Brown signed, a package of bills that aimed to address the emerging issues in the SUD treatment and recovery realm. SB 1228 (Lara, Chapter 792, Statutes of 2018) prohibited facilities that are licensed or certified by DHCS, and anyone associated with them, from gaining financially for referring a person to treatment, also known as “patient brokering.” SB 992 (Hernandez, Chapter 784, Statutes of 2018) and AB 3162 (Friedman, Chapter 775, Statutes of 2018) made several changes to licensing statute for RTFs, particularly requiring RTFs and other facilities under DHCS’s purview to disclose certain business relationships, including with unlicensed sober living homes, and requiring all RTF-licensed services to be provided within the structures notated on an RTF’s license.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, $455,000 (General Fund [GF]) in FY 2020-21, $428,000 (GF) in FY 2021-22, and ongoing, for 3.0 positions, assuming the positions are effective July 1, 2020:

• 1.0 Staff Services Manager I to supervise positions and manage the advisory workgroup technical advisory workgroup.
• 1.0 Health Program Specialist II to coordinate participating stakeholders and complete the legislative report by June 1, 2020.
• 1.0 Associate Governmental Program Analyst to provide support and assistance to the convening of the technical advisory workgroup.

SUPPORT: (Verified 8/29/19)

California Consortium of Addiction Programs and Professionals

California Society of Addiction Medicine

OPPOSITION: (Verified 8/29/19)

Department of Health Care Services

ARGUMENTS IN SUPPORT: The California Consortium of Addiction Programs and Professionals states that from what to call treatment (chemical dependency, alcohol and drug abuse, SUD) to who may provide services and where, current law is vague, contradictory, and generally out-of-date. Wide definitions of “treatment” and “recovery” leave open the possibility for scam artists and incompetent or abusive entities to enter the treatment system as providers and wreak havoc on local communities. For the safety of persons with a diagnosis of an SUD, or who are in recovery from an SUD, and for proper enforcement activities to take place when bad operators take advantage of confusing and conflicting laws and regulations, it is imperative that an analytical process take place to provide necessary updates to the laws that are meant to create secure environments for treatment and recovery to take place.

ARGUMENTS IN OPPOSITION: DHCS states that although it values stakeholder feedback, this bill is duplicative of its BH-SAC, which could be utilized to obtain recommendations regarding potential changes to current laws and regulations relevant to SUD services. DHCS argues this bill is unnecessary.

ASSEMBLY FLOOR: 67-1, 5/6/19

AYES: Aguiar-Curry, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Burke, Calderon, Carrillo, Cervantes, Chau, Chiu, Choi, Chu, Cooper, Cunningham, Dahle, Daly, Diep, Eggman, Flora, Fong, Friedman, Gabriel, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Lackey, Levine, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Santiago, Smith, Ting, Voepel, Waldron, Weber, Rendon

NOES: Mark Stone

NO VOTE RECORDED: Arambula, Chen, Cooley, Frazier, Kalra, Kamlager-Dove, Kiley, Limón, Muratsuchi, Salas, Wicks, Wood

Prepared by: Reyes Diaz / HEALTH / (916) 651-4111

8/31/19 13:43:39

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

AB 920 (Petrie-Norris) - Substance use disorder services: advisory workgroup

Bill Summary:

Assembly Bill 920 would establish Jarrod’s Law and require the Department of Health Care Services (DHCS) to convene a technical workgroup, as specified, and provide a legislative report, on or before June 1, 2020, on recommended statutory and regulatory changes related to substance use disorders. Would sunset the bill’s provisions on January 1, 2024.

Fiscal Impact:

$455,000 (General Fund [GF]) in FY 2020-21, $428,000 (GF) in FY 2021-22, and ongoing, for 3.0 positions, assuming the positions are effective July 1, 2020:

• 1.0 Staff Services Manager I to supervise positions and manage the advisory workgroup technical advisory workgroup.
• 1.0 Health Program Specialist II to coordinate participating stakeholders and complete the legislative report by June 1, 2020.
• 1.0 Associate Governmental Program Analyst to provide support and assistance to the convening of the technical advisory workgroup.

Background:

The DHCS licenses, regulates, and certifies all substance use disorder programs, including providing technical assistance and training to local alcohol and other drug programs and developing, in partnership with counties, alcohol and other drug youth prevention strategies. The DHCS combined several stakeholder workgroups this year to form the Behavioral Health-Stakeholder Advisory Committee, whose identified purpose is to advise the DCHS Director on the behavioral health delivery system, including prevention, treatment, recovery services, and related waivers for substance use disorder services and mental health. The committee convenes a broad-based group of representatives, including clients and families, counties, providers and plans, and policy organizations, to provide feedback and guidance to DHCS. The committee meets four times per year. The July 10, 2019, meeting discussed waiver planning for 1915(b) mental health services and behavioral health financing.

Proposed Law:

Assembly Bill 920 would require the Department of Health Care Services (DHCS) to convene a technical workgroup, comprised of experts in addiction treatment, consumer and patient protection advocates, and counties, to review and prepare recommendations regarding potential changes to current laws and regulations relevant to substance use disorder services, and provide a legislative report, on or before June 1, 2020, on recommended statutory and regulatory changes related to substance use disorders.

The bill would sunset on January 1, 2024.

Staff Comments:

The Legislature has contemplated several proposals related to substance use disorders, including alcohol and recovery treatment facilities, and mental and behavioral health. In addition, on January 31, 2018, the Senate Health Committee held an informational hearing on the substance use disorder treatment system. Last year, Governor Brown signed a package of bills aimed to address substance use disorder treatment and recovery, including SB 1228 (Lara, 2018), SB 992 (Hernandez, 2018), and AB 3162 (Friedman, 2018).

-- END --

SENATE COMMITTEE ON HEALTH

Senator Dr. Richard Pan, Chair

BILL NO: AB 920

SUBJECT: Substance use disorder services: advisory workgroup.

SUMMARY:

Requires the Department of Health Care Services to convene a technical advisory workgroup, as specified, to make recommendations on potential changes to current laws and regulations relevant to substance use disorder services. Requires a report to the Legislature, as specified.

Existing state law:

1. Grants the Department of Health Care Services (DHCS) the sole authority in state government to administer, license, certify, and regulate all substance use disorder (SUD) functions and programs. [HSC §11750, et seq.]
2. Requires DHCS to perform various duties, including, but not limited to:
   1. Providing technical assistance and training to local alcohol and other drug programs to assist in the planning and implementation of quality services;
   2. Review research in, and serve as a resource to provide information relating to, alcohol and other drug programs;
   3. Develop standards for ensuring minimal statewide levels of service quality; and,
   4. Develop and implement, in partnership with counties, alcohol and other drug prevention strategies especially designed for youth. [HSC §11755]

This bill:

1. Requires DHCS to convene a technical advisory workgroup (TAW) composed of relevant stakeholders, including, but not limited to, experts in addiction treatment, consumer and patient protection advocates, and counties to review and prepare recommendations regarding potential changes to current laws and regulations relevant to SUD services.
2. Requires DHCS, on or before June 1, 2020, to report its progress and the recommendations of the TAW to the Legislature and the chairs of the health committees of the Senate and the Assembly.
3. Sunsets the requirement to submit a report on January 1, 2024, as specified.

FISCAL EFFECT:

This bill has not been analyzed by a fiscal committee.

PRIOR VOTES:

Not relevant.

COMMENTS:

1. Author’s statement. According to the author, while there are good actors that are doing positive work for those seeking addiction recovery, a number of unscrupulous SUD treatment facilities have been exploiting patients to reap high profits. In most cases, very little can be done since these facilities are not regulated or well-regulated. When fraud is identified at these facilities, and law enforcement intervenes, the facilities have closed, moved, and reappeared elsewhere with a new name, starting the cycle over again. Often, patients are left untreated and are being curbed to the streets after their insurance runs out. As stories of abuse in the system continue, it is clear that the current framework for how the state handles addiction recovery services has not caught up with how unscrupulous actors have been exploiting loopholes in the law. This bill, known as Jarrod’s Law, takes a positive step towards improving and updating California’s framework for SUD services by directing DHCS to convene a working group of stakeholders to develop a proposal for updating and cleaning up California law pertaining to SUD services.
2. DHCS stakeholder groups. In previous years, DHCS (and the former Department of Alcohol and Drug Programs) convened various stakeholder workgroups to advise on its various programs, including counselor certification, driving under the influence programs, narcotic treatment programs, youth treatment standards, and licensure and certification of programs. In early 2019, however, DHCS established the Behavioral Health Stakeholder Advisory Committee (BH-SAC) to disseminate information and receive coordinated input regarding DHCS behavioral health activities. It was created as part of the ongoing DHCS effort to integrate behavioral health with the rest of the health care system. DHCS folded all advisory groups into the BH-SAC that had separately advised DHCS on behavioral health topics.
3. Senate Health Committee informational hearing and subsequent legislation. On January 31, 2018, the Senate Health Committee held an informational hearing to examine the SUD treatment system with a focus on treatment and services provided in licensed alcoholism or drug abuse recovery or treatment facilities (RTFs); insurance coverage; patient referrals; and the state’s regulation and oversight of the system, including the inability to impose restrictions on SLHs. 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, including enforcement of SLHs that have been unlawfully providing services. The goal of the hearing was to examine the issues and to seek strategies and policies that would prevent unscrupulous individuals from exploiting the various industries that are supposed to help treat those with SUDs; to recognize federal and state protections for those with disabilities, including their housing rights and options; and to ensure that policies are not enacted, either at the local or state level, that will limit the number of recovery or treatment options for those who need them.

The Legislature passed, and Governor Brown signed, a package of bills that aimed to address the emerging issues in the SUD treatment and recovery realm. SB 1228 (Lara, Chapter 792, Statutes of 2018) prohibits facilities that are licensed or certified by DHCS, and anyone associated with them, from gaining financially for referring a person to treatment, also known as “patient brokering.” SB 992 (Hernandez, Chapter 784, Statutes of 2018) and AB 3162 (Friedman, Chapter 775, Statutes of 2018) made several changes to licensing statute for RTFs, particularly requiring RTFs and other facilities under DHCS’s purview to disclose certain business relationships, including with unlicensed sober living homes, and requiring all RTF-licensed services to be provided within the structures notated on an RTF’s license.

1. Related legislation. AB 615 (Brough) makes a willful violation of the prohibition against referrals for remuneration, by facilities licensed or certified by DHCS, a crime punishable by a fine of not more than $10,000, imprisonment in a county jail for 16 months, or two or three years, or both fine and imprisonment. AB 615 was heard in the Assembly Public Safety Committee on April 23, 2019, and failed passage by a 2-6 vote.

AB 919 (Petrie-Norris) adds various provisions to existing law that prohibits “patient brokering” in order to prevent specified entities from inducing an individual to receive recovery or treatment services by providing free housing, transportation, and other related services. Requires DHCS to establish an enforcement program, as specified. AB 919 is set to be heard in this Committee on July 3, 2019.

AB 940 (Melendez) prohibits a recovery residence, as specified, from giving or receiving remuneration or anything of value for the referral of a person who is seeking recovery and treatment services, and requires DHCS to impose a minimum fine of $10,000 for each violation. AB 940 is pending in the Assembly Health Committee.

AB 1031 (Nazarian) requires DHCS to establish community-based nonresidential and residential treatment and recovery programs to intervene and treat the problems of alcohol and drug use among youth under 21 years of age. AB 1031 was heard in this Committee on June 19, 2019, and passed out by a vote of 9-0.

AB 1779 (Daly) establishes and requires DHCS to adopt and implement minimum standards for counties seeking to use state funding to offer recovery residences, as defined. Requires DHCS to report to the Legislature, on or before January 1, 2025, the number and types of complaints received by certifying entities and DHCS, the status of complaints received, and the geographic concentration of reported complaints. AB 1779 is set to be heard in this Committee on July 10, 2019.

SB 445 (Portantino) requires DHCS to convene an expert panel to advise DHCS on the development of youth SUD treatment, early intervention, and prevention quality standards, as specified. SB 445 was heard in the Assembly Health Committee on June 18, 2019, and passed out by a vote of 14-0.

SB 589 (Bates) prohibits specified entities in the SUD treatment or recovery services industry from making false or misleading statements, as specified, and from engaging in conduct involving the unlawful giving or receiving remuneration or anything of value for referring a person to treatment or recovery services, as specified. SB 589 was heard in the Assembly Health Committee on June 18, 2019, and passed out by a vote of 14-0.

1. Prior legislation. AB 3162 (Friedman) makes various changes to current law regarding RTFs licensed by 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.

AB 2328 (Nazarian of 2018) was substantially similar to AB 1031. AB 2328 was held on the Assembly Appropriations Committee suspense file.

SB 275 (Portantino of 2018) was identical to SB 445. SB 275 was vetoed by Governor Brown who stated not every problem with Medi-Cal needs or deserves a public stakeholder process, and DHCS regularly collaborates with stakeholders, including interested organizations, experts, partners, and colleagues. Governor Brown stated he was confident DHCS would continue to do so.

SB 992 (Hernandez) requires programs licensed or certified by DHCS to disclose certain business relationships, as specified, including with recovery residences (SLHs), and makes changes to current law for licensed RTFs to improve client treatment and provide DHCS more oversight authority over RTFs.

SB 1228 (Lara) 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 1290 (Bates of 2018) would have made it unlawful for any licensee, operator, manager, consultant, employee, or patient of a licensed RTF, or any other person to, among other things, offer or pay a commission, benefit, bonus, rebate, kickback, or bribe, or engage in any split-fee arrangement to induce the referral of a patient or patronage to or from an RTF, or to solicit or receive a commission, benefit, bonus, rebate, kickback, or bribe in return for referring a patient or patronage to or from an RTF. 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 state and local agencies to effectively confront the statewide addiction and substance abuse crisis. SB 1290 was held on the Senate Appropriations Committee suspense file.

SB 1268 (Bradford of 2018) and SB 636 (Bradford of 2017) were substantially similar to SB 1228. SB 1268 was held on the Assembly Appropriations suspense file. SB 636 was never heard in this Committee.

1. Support. The California Consortium of Addiction Programs and Professionals states that from what to call treatment (chemical dependency, alcohol and drug abuse, SUD) to who may provide services and where, current law is vague, contradictory, and generally out-of-date. Wide definitions of “treatment” and “recovery” leave open the possibility for scam artists and incompetent or abusive entities to enter the treatment system as providers and wreak havoc on local communities. For the safety of persons with a diagnosis of an SUD, or who are in recovery from an SUD, and for proper enforcement activities to take place when bad operators take advantage of confusing and conflicting laws and regulations, it is imperative that an analytical process take place to provide necessary updates to the laws that are meant to create secure environments for treatment and recovery to take place.
2. Policy comment. DHCS combined its various stakeholder workgroups earlier this year to form the BH-SAC, which is tasked with disseminating information and receiving coordinated input regarding DHCS’s behavioral health (mental health and SUD) activities. It is unclear the tasks that the TAW proposed under this bill will accomplish that DHCS isn’t already performing.

SUPPORT AND OPPOSITION:

Support: California Consortium of Addiction Programs and Professionals

Oppose: None received

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ASSEMBLY THIRD READING

ATR Bill Id:AB 920

Author:(Petrie-Norris)

As Amended Ver:March 25, 2019

Majority vote

SUMMARY:

Exempts alcoholism and drug abuse recovery or treatment facilities (RTF) that serve six or fewer persons and are engaged in an economic relationships with a treatment provider that owns or operates two or more of these facilities from being considered as a residential use of property thus subject to oversight and restrictions.

COMMENTS:

According to the Author:

Under current law, RTFs that are six people and fewer are currently treated as residential homes. As a result, unscrupulous actors have been exploiting this protection and lack of regulations in order to profit off of patients in recovery. Once the patient's insurance runs out and they are no longer profitable, the facility will "curb" the patient to the streets. Instead of a recovery model, these unscrupulous facilities have created a relapse model. This bill aims to address the commercial incentive driving these unscrupulous operators.

Arguments in Support:

Advocates for Responsible Treatment (ART) state it is time for California to crystalize the distinction the Legislature should have made from the beginning: a business simply cannot be a family member in a single-family residentially zoned house. The CEO does not sleep at the residence overnight. A Limited Liability Company (LLC) is not like a sibling. Detoxes with business affiliations are arms of the larger Treatment Center business. Patients of detoxes receive commercial health care services. ART concludes by stating that in the interests of supporting both recovering addicts and the diverse neighborhoods where they wish to reside, the Health Committee should clarify existing law related to residential use of property. Declaring an overtly commercial use of property to be a residential use does not make it anything less than a commercial operation, architected to profit off a vulnerable population by taking advantage of every loophole available to it.

Arguments in Opposition:

Disability Rights California (DRC) states this bill violates state and federal fair housing laws. The Federal Fair Housing Amendments Act (FFHA) prohibits discrimination against individuals with disabilities in housing and housing-related activities. The fundamental purpose of the FFHA is to prohibit practices that "restrict the choices" of people with disabilities to live where they wish or that discourage or obstruct choices in a community, neighborhood, or development. The FFHA protects individuals with disabilities and includes individuals in recovery from drug or alcohol abuse. DRC continues, the fatal flaw with this bill is that it imposes on individuals who reside in a non-licensed recovery residence, which is a residence protected under the FFHA, restrictions that are not imposed on families and groups of similar size of other unrelated people. While state or local governments may have the authority to protect safety and health through regulation they cannot single out persons with disabilities for a particular restriction that is not otherwise imposed on other persons or residences in the community. A household where two or more persons with disabilities choose to live together, as a matter of association, may not be subjected to requirements or conditions that are not imposed on households consisting of persons without disabilities. DRC concludes that casting the exclusion as an "economic relationship" does not exempt the action from the FFHA.

FISCAL COMMENTS:

None.

VOTES:

ASM HEALTH: 13-0-2

YES: Mayes, Aguiar-Curry, Bigelow, Bonta, Burke, Carrillo, Flora, McCarty, Nazarian, Ramos, Rodriguez, Santiago, Waldron

ABS, ABST OR NV: Wood, Limón

UPDATED:

VERSION: March 25, 2019

CONSULTANT: Judith Babcock / HEALTH / (916) 319-2097 FN: 0000246

Date of Hearing: April 23, 2019

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 920

Author:(Petrie-Norris) – As Amended Ver:March 25, 2019

SUBJECT: Alcoholism and drug abuse recovery and treatment programs.

SUMMARY: Exempts alcoholism and drug abuse recovery or treatment facilities (RTF) that serve six or fewer persons and are engaged in an economic relationships with a treatment provider that owns or operates two or more of these facilities from being considered as a residential use of property thus subject to oversight and restrictions.

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.
2. Requires RTF licensees to provide at least one of the following nonmedical services: recovery; treatment; or, detoxification services. Requires DHCS to adopt regulations requiring records and procedures appropriate for the type of service provided. Provides that the records and procedures can include all of the following: admission criteria; intake process; assessments; recovery, treatment, or detoxification planning; referral; documentation of provision of recovery, treatment, or detoxification services; discharge and continuing care planning; or, indicators of recovery, treatment, or detoxification outcomes.
3. 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.
4. 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.
5. Authorizes a city, county, or other local public entity to place 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.
6. 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.
7. 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.
8. 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.
9. Prohibits under the federal Americans with Disabilities Act of 1990 (ADA), discrimination by any public entity by reason of an individual’s disability. Makes it unlawful, under the federal Fair Housing Act (FHA), to make unavailable or deny, a dwelling to any buyer or renter because of a disability.

FISCAL EFFECT: None

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, under current law, RTFs that are six people and fewer are currently treated as residential homes. As a result, unscrupulous actors have been exploiting this protection and lack of regulations in order to profit off of patients in recovery. Once the patient’s insurance runs out and are no longer profitable, the facility will “curb” the patient to the streets. Instead of a recovery model, these unscrupulous facilities have created a relapse model. This bill aims to address the commercial incentive driving these unscrupulous operators.
2. BACKGROUND. Current law provides that a RTF that serves six or fewer persons is exempt from any restrictions or ordinance as their use is considered a residential use of property and the residents and operators of the facility are considered a family for the purposes of any law or zoning ordinance that relates to the residential use of property. This bill will change this by removing the exemption when an RTF is engaged in an economic relationship with a treatment provider that owns or operates two or more RTFs.
   1. Licensed Facilities. Licensed 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 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. Unlicensed recovery residences/sober living homes. A recovery residence/sober living home is a residence for people in recovery from substance abuse. It may serve as support for individuals undergoing treatment but it does not provide treatment or care, whether medical or personal (as in an assisted living facility). The state laws and licensing requirements that govern treatment and care facilities do not currently include sober living homes. Therefore, the state does not keep any list of registered sober living homes, conduct inspections of sober living homes, or perform any of the other activities associated with licensing facilities. A sober living home may be completely self-governed or have formal on-site management, but in the latter case, the managers’ duties relate to the administration of the house rather than the tenants or their recovery (as in “case management”). The tenants of a sober living home pay rent and abide by house rules, which always include maintenance of sobriety and participation in a self-help program. Multiple studies have shown the effectiveness of this kind of environment as a support for people transitioning out of drug or alcohol treatment. The effectiveness of sober living as one component of a person’s successful recovery program is not controversial. The California Research Bureau estimates that there are at least 12,000 sober living beds in the state to serve an eligible population of between 25,000 and 35,000 individuals.
   3. ADA, FHA, and Equal Protection. The FHA 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. FEHA also prohibits land use regulations, zoning ordinances, and restrictive covenants from discriminating in housing on the basis of the aforementioned categories. FEHA also states that groups of people with disabilities living together in a single dwelling unit are considered a family.
      
      In addition, the ADA gives civil rights protection to individuals with disabilities, similar to the protections provided to individuals on the basis of race, sex, national origin, and religion. Under the ADA, 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 has a record of such a substantially limiting impairment, or is regarded as having such an impairment. The protections of the ADA apply to those who have successfully completed a drug rehabilitation program or who are currently enrolled in such programs. Alcoholics and addicts – as long as they are trying to recover and have not been convicted of major drug crimes – constitute a protected class of disabled persons under state and federal law.
   4. Pacific Shores Properties v. City of Newport Beach (Pacific Shores). In the late 1990s, the number of residential facilities for recovering drug and alcohol abusers began to increase in the City of Newport Beach. By April of 2007, 73 homes existed in the city, only 48 of which were licensed. Among these homes were Pacific Shores Properties LLC, Newport Coast Recovery LLC (NCR), and Yellowstone Women’s First Step House, Inc. (collectively, the “Group Homes”). Pacific Shores and Yellowstone were unlicensed, while NCR provided services to more than seven individuals at a time and was therefore a state-licensed facility. As a result of the increasing number of group homes, the City’s residents began voicing hostile complaints and concerns. In 2008, responding to resident discontent, the City of Newport Beach drafted an ordinance that subjected “residential care facilities” to strict zoning requirements and significantly limited both the continued existence of group homes and the creation of new ones. These new restrictions had an almost immediate impact on residential treatment facilities, and by 2009, the number of group housing opportunities was reduced by 40%, and altogether about one-third of group homes were shut down.  In 2010, the Group Homes filed suit against the City alleging discrimination under the FHA, the ADA, FEHA, and the Equal Protection Clause. While the district court ruled in favor of the City of Newport Beach, the Group Homes appealed this decision to the United States Court of Appeals for the Ninth Circuit. In 2013, the Ninth Circuit Court of Appeals reversed the district court’s decision and held that the ordinance enacted by the City of Newport discriminated against RTFs on the basis of disability, and that its enactment and enforcement harmed a protected class and was therefore in violation of federal law.
   5. Siting Difficulties. A report published by the U.S. Department of Health and Human Services (HHS) entitled “Siting Drug and Alcohol Treatment Programs: Legal Challenges to the NIMBY Syndrome,” states that community opposition to alcohol and drug treatment programs also known as ‘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 HHS, 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 HHS 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 to the area.
3. SUPPORT. Advocates for Responsible Treatment (ART) state it is time for California to crystalize the distinction the Legislature should have made from the beginning: a business simply cannot be family member in a single-family residentially zoned house. The CEO does not sleep at the residence overnight. An LLC is not like a sibling. Detoxes with business affiliations are arms of the larger Treatment Center business. Patients of Detoxes receive commercial health care services. ART concludes by stating that in the interests of supporting both recovering addicts and the diverse neighborhoods where they wish to reside, the Health Committee should clarify existing law related to residential use of property. Declaring an overtly commercial use of property to be a residential use does not make it anything less than a commercial operation, architected to profit off a vulnerable population by taking advantage of every loophole available to it.
4. OPPOSITION. Disability Rights California states this bill violates state and federal fair housing laws. The Federal Fair Housing Amendments Act (FFHA) prohibits discrimination against individuals with disabilities in housing and housing-related activities. The fundamental purpose of the FFHA is to prohibit practices that “restrict the choices” of people with disabilities to live where they wish or that discourage or obstruct choices in a community, neighborhood, or development. The FFHA protects individuals with disabilities and includes individuals in recovery from drug or alcohol abuse. DRC continues, the fatal flaw with this bill is that it imposes on individuals who reside in a non-licensed recovery residence, which is a residence protected under the FFHA, restrictions that are not imposed on families and groups of similar size of other unrelated people. While state or local governments may have the authority to protect safety and health through regulation they cannot single out persons with disabilities for a particular restriction that is not otherwise imposed upon on other persons or residences in the community. A household where two or more persons with disabilities choose to live together, as a matter of association, may not be subjected to requirements or conditions that are not imposed on households consisting of persons without disabilities. DRC concludes that casting the exclusion as an “economic relationship” does not exempt the action from the FFHA.
5. RELATED LEGISLATION.
   1. AB 615 (Brough) imposes a fine of not more than $10,000 or imprisonment in a county jail for 16 months, or two or three years, or both for persons who willfully violates the prohibition against giving or receiving remuneration or anything of value for the referral of a person who is seeking alcoholism or drug abuse recovery treatment services. AB 615 is pending in the Assembly Public Safety Committee.
   2. AB 704 (Patterson) requires a person who has frequent contact with clients of an RTF to be subject to a criminal record review. AB 704 is pending in the Assembly Appropriations Committee.
   3. AB 919 (Petrie-Norris) establishes an enforcement program within DHCS to focus on the oversight duties related to patient brokering activities conducted by an RTF or an alcohol and other drug (AOD) program licensed or certified by the DHCS. AB 919 is pending in the Assembly Health Committee.
   4. AB 940 (Melendez) Expands the list of entities and individuals who are prohibited 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 to include a recovery residence, as specified, and an owner, partner, officer, director or shareholder of a recovery residence. AB 940 is pending in the Assembly Health Committee.
   5. SB 589 (Bates) prohibits an operator of a licensed RTF, a certified AOD, a recovery residence, or a third party that provides any form of advertising or marketing services to any of those entities, from engaging in various acts, including making a false or misleading statement about the entity’s products, goods, services, or geographical locations. Authorizes the department to investigate allegations of a violation of these provisions and to sanctions available, as specified. SB 589 is pending in the Senate Appropriations Committee.
6. PREVIOUS LEGISLATION.
   1. AB 285 (Melendez) of 2017 would have established a voluntary certification process for drug and alcohol free residences (recovery residences) and defines "drug and alcohol free residence." AB 285 was held on the Assembly Appropriations Committee suspense file.
   2. AB 2255 (Waldron) of 2016 would have established state oversight of “drug and alcohol free residences” or sober living homes. AB 2255 was held in the Assembly Appropriations Committee.
   3. 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.
   4. 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.
   5. 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 meeting attendance records. AB 2491 was held under submission in the Senate Appropriations Committee.
   6. 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.
   7. 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 was held on the Assembly Appropriations Committee Suspense File.
      
   8. 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.
7. POLICY COMMENTS.
   1. Potential Violation of Federal and State Anti-Discrimination Laws. As discussed above, individuals recovering from alcohol or drug dependency problems are deemed to be a protected class and have been extended civil rights protections under the ADA, FEHA, and other state anti-discriminatory laws. The Ninth Circuit decision in Pacific Shores further strengthened the protections available to this class of individuals by the Court’s nullification of a city ordinance that imposed zoning requirements on these types of treatment facilities similar to what this bill attempts to achieve. The Committee may wish to consider whether this bill potentially violates state and federal anti-discrimination laws.
   2. Increased Need. As noted above, the California Research Bureau estimates that there is significant need for sober living residences, with only 12,000 sober living beds in the state to serve an eligible population of between 25,000 and 35,000 individuals. This bill would make it easier for local governments to place restrictions on sober living homes when there is a demonstrated significant need for more services.

REGISTERED SUPPORT / OPPOSITION

Support

Advocates for Responsible Treatment

Opposition

California Consortium of Addiction Programs and Professionals

Disability Rights California

Analysis Prepared by: Judith Babcock / HEALTH / (916) 319-2097