Existing law generally requires the State Department of Public Health to license, inspect, and regulate health facilities, defined to include, among other types of health facilities, an acute psychiatric hospital. Existing law requires the State Department of Health Care Services to license and establish regulations for psychiatric residential treatment facilities.

Existing law requires the State Department of Health Care Services to license and regulate facilities that provide residential nonmedical services to adults who are recovering from problems related to alcohol, drug, or alcohol and drug misuse or abuse, and who need alcohol, drug, or alcohol and drug recovery treatment or detoxification services. Existing law also requires the department to implement a voluntary certification program for alcohol and other drug treatment recovery services.

Existing law, the California Community Care Facilities Act, generally provides for the licensing and regulation of community care facilities by the State Department of Social Services, to provide 24-hour nonmedical care of persons in need of personal services, supervision, or assistance. Existing regulation includes an adult residential facility as a community care facility for those purposes.

This bill would require the State Department of Health Care Services (department), by January 1, 2027, and in consultation with relevant public agencies and stakeholders, to establish, and provide for the administration of, a voluntary certification program for supportive community residences. The bill would define a supportive community residence as specified residential dwellings providing housing for adults with a substance use disorder, mental health diagnosis, or dual diagnosis seeking a cooperative living arrangement that does not provide medical care or a level of support for activities of daily living that require state licensing. as a transitional or long-term residence during the process of recovery. The bill would require the certification program to include standards and procedures for operation, such as types of certifications needed and services navigation, and procedures and penalties for enforcing laws and regulations governing supportive community residences. The bill also would require the department to create and maintain a searchable online database of certified facilities, which would include specified contact and complaint information for those residences. residences, and would require the database to be updated on a monthly basis.

The bill would prohibit a supportive community residence from providing any licensed services onsite, including, but not limited to, incidental medical services. The bill would authorize the department to charge a fee for certification of supportive community residences in an amount not to exceed the reasonable cost of administering the program, not to exceed $2,000, and would establish the Supportive Community Residence Program Fund for collection of the fee. Under the bill, a certification would be valid for a period of 2 years and the bill would authorize the department to charge a recertification fee not to exceed $500.

By placing new requirements on local agencies acting as referring entities, the bill would impose a state-mandated local program.

Existing law generally requires the State Department of Public Health to license, inspect, and regulate health facilities, defined to include, among other types of health facilities, an acute psychiatric hospital. Existing law requires the State Department of Health Care Services to license and establish regulations for psychiatric residential treatment facilities.

Existing law requires the State Department of Health Care Services to license and regulate facilities that provide residential nonmedical services to adults who are recovering from problems related to alcohol, drug, or alcohol and drug misuse or abuse, and who need alcohol, drug, or alcohol and drug recovery treatment or detoxification services. Existing law also requires the department to implement a voluntary certification program for alcohol and other drug treatment recovery services.

Existing law, the California Community Care Facilities Act, generally provides for the licensing and regulation of community care facilities by the State Department of Social Services, to provide 24-hour nonmedical care of persons in need of personal services, supervision, or assistance. Existing regulation includes an adult residential facility as a community care facility for those purposes.

This bill would require the State Department of Health Care Services (department), by January 1, 2027, and in consultation with relevant public agencies and stakeholders, to establish, and provide for the administration of, a voluntary certification program for supportive community residences. The bill would define a supportive community residence as specified residential dwellings providing housing for adults with a substance use disorder, mental health diagnosis, or dual diagnosis seeking a cooperative living arrangement that does not provide medical care or a level of support for activities of daily living that require state licensing. The bill would require the certification program to include standards and procedures for operation, such as types of certifications needed and services navigation, and procedures and penalties for enforcing laws and regulations governing supportive community residences. The bill also would require the department to create and maintain a searchable online database of certified facilities, which would include specified contact and complaint information for those residences.

The bill would require the department to adopt or amend regulations to require referring entities to provide information relating to the license or certification status of community care facilities and supportive community residences to individuals with a substance use disorder, mental health diagnosis, or dual diagnosis, and to report any suspected fraudulent license or certification identified during verification to the department. The bill would define referring entity to include a state or local entity, or a state-regulated entity that provides adults with substance use disorders or mental health diagnoses with referrals to, or that authorizes health care coverage for, services provided by supportive community residences or licensed community care residential facilities. The bill also would require the regulations to include enforcement methods for willful and repeated violations of those requirements by referring entities.

The bill would prohibit a supportive community residence from providing any licensed services onsite, including, but not limited to, incidental medical services. The bill would authorize the department to charge a fee for certification of supportive community residences in an amount not to exceed the reasonable cost of administering the program, not to exceed $1,000, $2,000, and would establish the Supportive Community Residence Program Fund for collection of the fee. The bill would require the department, by January 1, 2027, in consultation with relevant state agencies and other stakeholders, to submit a report to the Legislature including recommendations for statutory changes needed to improve access to quality community-based and noninstitutional settings for people with substance use disorders or mental health diagnoses. Under the bill, a certification would be valid for a period of 2 years and the bill would authorize the department to charge a recertification fee not to exceed $500.

By placing new requirements on local agencies acting as referring entities, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law generally requires the State Department of Public Health to license, inspect, and regulate health facilities, defined to include, among other types of health facilities, an acute psychiatric hospital. Existing law requires the State Department of Health Care Services to license and establish regulations for psychiatric residential treatment facilities.

Existing law requires the State Department of Health Care Services to license and regulate facilities that provide residential nonmedical services to adults who are recovering from problems related to alcohol, drug, or alcohol and drug misuse or abuse, and who need alcohol, drug, or alcohol and drug recovery treatment or detoxification services. Existing law also requires the department to implement a voluntary certification program for alcohol and other drug treatment recovery services.

Existing law, the California Community Care Facilities Act, generally provides for the licensing and regulation of community care facilities by the State Department of Social Services, to provide 24-hour nonmedical care of persons in need of personal services, supervision, or assistance. Existing regulation includes an adult residential facility as a community care facility for those purposes.

This bill would require the State Department of Health Care Services (department), by January 1, 2027, and in consultation with relevant public agencies and stakeholders, to establish, and provide for the administration of, a voluntary certification program for supportive community residences. The bill would define a supportive community residence as a specified residential home serving dwellings providing housing for adults with a substance use disorder, mental health diagnosis, or dual diagnosis seeking a cooperative living arrangement that does not provide medical care or a level of support for activities of daily living that require state licensing. The bill would require the certification program to include standards and procedures for operation, such as types of certifications needed and supportive services navigation, and procedures and penalties for enforcing laws and regulations governing supportive community residences. The bill also would require the department to create and maintain a searchable online database of certified facilities, which would include specified contact and complaint information for those residences.

The bill would require the department to adopt or amend regulations to require referring entities to provide information relating to the license or certification status of community care facilities and supportive community residences to individuals with a substance use disorder, mental health diagnosis, or dual diagnosis, and to report any suspected fraudulent license or certification identified during verification to the appropriate entity. department. The bill would define referring entity to include a state or local entity, or a state-regulated entity that provides adults with substance use disorders or mental health diagnoses with referrals to, or that authorizes health care coverage for, services provided by supportive community residences or licensed community care residential facilities. The bill also would require the regulations to include enforcement methods for willful and repeated violations of those requirements by referring entities.

The bill would prohibit a supportive community residence from providing any licensed services onsite, including, but not limited to, incidental medical services. The bill would authorize the department to charge a fee for certification of supportive community residences in an amount not to exceed the reasonable cost of administering the program, not to exceed $1,000, and would establish the Supportive Community Residence Program Fund for collection of the fee. The bill would require the department, by January 1, 2027, in consultation with relevant state agencies and other stakeholders, to submit a report to the Legislature including recommendations for statutory changes needed to improve access to quality community-based and noninstitutional settings for people with substance use disorders or mental health diagnoses.

By placing new requirements on local agencies acting as referring entities, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law generally requires the State Department of Public Health to license, inspect, and regulate health facilities, defined to include, among other types of health facilities, an acute psychiatric hospital. Existing law requires the State Department of Health Care Services to license and establish regulations for psychiatric residential treatment facilities.

Existing law requires the State Department of Health Care Services to license and regulate facilities that provide residential nonmedical services to adults who are recovering from problems related to alcohol, drug, or alcohol and drug misuse or abuse, and who need alcohol, drug, or alcohol and drug recovery treatment or detoxification services. Existing law also requires the department to implement a voluntary certification program for alcohol and other drug treatment recovery services.

Existing law, the California Community Care Facilities Act, generally provides for the licensing and regulation of community care facilities by the State Department of Social Services, to provide 24-hour nonmedical care of persons in need of personal services, supervision, or assistance. Existing regulation includes an adult residential facility as a community care facility for those purposes.

This bill would require the State Department of Health Care Services (department), by January 1, 2027, and in consultation with relevant public agencies and stakeholders, to establish, and provide for the administration of, a voluntary certification program for supportive community residences. The bill would define a supportive community residence as a residential facility home serving adults with a substance use disorder or mental health substance use disorder, mental health diagnosis, or dual diagnosis that does not provide medical care or a level of support for activities of daily living that require state licensing. The bill would require the certification program to include standards and procedures for operation, such as levels and types of certifications needed and supportive services navigation, and procedures and penalties for enforcing laws and regulations governing supportive community residences. The bill also would require the department to create and maintain a searchable online database of certified facilities, which would include specified contact and complaint information for those residences.

The bill would require the department to adopt or amend regulations to require referring entities to provide information relating to the license or certification status of community care facilities and supportive community residences to individuals with substance use disorders or mental health diagnoses, a substance use disorder, mental health diagnosis, or dual diagnosis, and to report any suspected fraudulent license or certification identified during verification to the appropriate entity. The bill would define referring entity to include a state or local entity, or a state-regulated entity that provides adults with substance use disorders or mental health diagnoses with referrals to, or that authorizes health care coverage for, services provided by supportive community residences or licensed community care residential facilities. The bill also would require the regulations to include enforcement methods for willful and repeated violations of those requirements by referring entities.

The bill would prohibit a supportive community residence from providing any licensed services onsite, including, but not limited to, incidental medical services. The bill would authorize the department to charge a fee for certification of supportive community residences in an amount not to exceed the reasonable cost of administering the program, not to exceed $1,000, and would establish the Supportive Community Residence Program Fund for collection of the fee. The bill would require the department, by January 1, 2027, in consultation with relevant state agencies and other stakeholders, to submit a report to the Legislature including recommendations for statutory changes needed to improve access to quality community-based and noninstitutional settings for people with substance use disorders or mental health diagnoses.

By placing new requirements on local agencies acting as referring entities, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law generally requires the State Department of Public Health to license, inspect, and regulate health facilities, defined to include, among other types of health facilities, an acute psychiatric hospital. Existing law requires the State Department of Health Care Services to license and establish regulations for psychiatric residential treatment facilities.

Existing law generally requires the State Department of Public Health to license, inspect, and regulate health facilities, defined to include, among other types of health facilities, an acute psychiatric hospital. Existing law requires the State Department of Health Care Services to license and establish regulations for psychiatric residential treatment facilities.

This bill would state the intent of the Legislature to enact legislation to ensure that licensed facilities that receive referred behavioral health patients have their licenses checked to ensure that these licensed facilities are capable of providing the appropriate level of care.

Date of Hearing: June 25, 2024

ASSEMBLY COMMITTEE ON HEALTH

Mia Bonta, Chair

SBPCA Bill Id:SB 1339

Author:(Allen) – As Amended Ver:June 17, 2024

SENATE VOTE: 38-0

SUBJECT: Step-down care.

SUMMARY: Requires the Department of Health Care Services (DHCS), by January 1, 2027, in consultation with relevant state and county agencies and stakeholders to establish a voluntary certification program for “supportive community residences.” Requires a referring entity, as defined, to provide information relating to the license or certification status of a step-down care facility when informing an individual options for step-down care covered by the individual’s health insurance. Specifically, this bill:

1. Requires DHCS, by January 1, 2027, in consultation with relevant state and county agencies and stakeholders to establish a voluntary certification program for “supportive community residences.”
2. Defines “supportive community residence” as a residence providing community-based, nonclinical housing for adults with a substance use disorder (SUD), mental health (MH) diagnosis, or dual diagnosis seeking a cooperative living arrangement as a transitional or long-term residence during the process of recovery. Requires supportive community residences to provide peer supports, services navigation, and physical design features that support an individual in the process of recovery from a SUD, MH diagnosis, or dual diagnosis. Clarifies that supportive community residences include, but are not limited to, “recovery residences,” as defined in existing law, that serve people in recovery for a SUD in an alcohol and drug-free environment.
3. Requires the certification program to include all of the following:
   1. Standards and procedures for operation of the certification program that consider, at a minimum, all of the following:
      1. Types of certifications needed for the various types of supportive community residences;
      2. Nationally recognized standards of operation;
      3. Target populations and diversity of communities served;
      4. Evidence-based, trauma-informed, and culturally sensitive environments;
      5. Tenant rights and protections;
      6. Access to, and security of, residents’ medication;
      7. Services navigation;
      8. Peer supports;
      9. Cleanliness, privacy, physical design, and safety;
      10. Relocation assistance;
      11. Data reporting requirements;
      12. Harm reduction and abstinence models; and,
      13. Screening and intake assessments and procedures.
   2. Methods for filing and investigating complaints within a reasonable timeframe;
   3. Procedures for periodic monitoring, onsite inspections, demonstration of successful outcomes, and enforcement of compliance with laws and regulations governing supportive community residences;
   4. Penalties for supportive community residences that do not remediate deficiencies within a designated timeframe, conditions under which a supportive community residence may be decertified, and the means by which a supportive community residence may regain certification; and,
   5. Technical assistance to assist owners, operators, house managers, and other supportive community residence staff with respect to the following:
      1. Developing an understanding of the applicable regulations and statutes;
      2. Completing the application process for certification;
      3. Answering questions regarding day-to-day operation; and,
      4. Implementation of harm reduction principles, accommodation of medication-assisted treatment, and outcome data tracking and reporting.
4. Requires DHCS to create and maintain a searchable online database of certified facilities that meets the following requirements:
   1. To preserve privacy, does not provide the address or specific location of a supportive community residence other than the city, ZIP Code, or both;
   2. Provides telephone and email contact information;
   3. Provides a record of any substantive and validated complaints filed against a supportive community residence, findings after investigation of those complaints, and the time it took from the date of filing until the complaint is resolve; and,
   4. Updated monthly in order to reflect all new certifications or updated certification status for supportive community residences.
5. Prohibits a supportive community residence from providing any licensable services onsite, including, but not limited to, incidental medical services.
6. Permits DHCS to charge a fee for certification of supportive community residences in an amount not to exceed the reasonable cost of administering the program and not exceeding $2,000. Requires certification to be valid for two years.
7. Permits DHCS to charge a fee for recertification in an amount not to exceed the reasonable cost of administering the program and not exceeding $500.
8. Establishes the Supportive Community Residence Program Fund in the State Treasury. Requires all fees collected in accordance with this program to be deposited into the fund. Requires the moneys in the fund to be available upon appropriation by the Legislature for the purposes of supporting the certification activities of DHCS.
9. Defines a “referring entity” as a state or local entity, or a state-licensed or state-certified entity that discharges, directs, or provides a list of one or more residential or inpatient step-down care options for adults with a SUD or MH diagnosis. A referring entity includes, but is not limited to, an adult treatment facility, a general acute care hospital or acute psychiatric hospital, psychiatric health facilities, a chemical dependency recovery hospital, a licensed community care facility, certified supportive community residences, MH rehabilitation centers, crisis stabilization units, short-term residential therapeutic programs, skilled nursing facilities with special treatment programs, and county behavioral health agencies.
10. Defines a “step-down care facility” as a supportive community residence, any residential or inpatient licensed alcoholism or drug abuse recovery or treatment facility, or any residential or inpatient licensed community care facility serving adults with mental health or SUDs.
11. Requires a referring entity, when informing an individual with a SUD, MH diagnosis, or dual diagnosis of one or more options for a step-down care facility that is covered by the individual’s health insurance, to provide the following information:
    1. The license or certification number of the step-down care facility; and,
    2. The contact information for the licensing or certifying agency.
12. Requires a referring entity, when informing an individual with a SUD, MH diagnosis, or dual diagnosis of one or more options for a step-down care facility that is not covered by the individual’s health insurance, to first verify any license or certification the step-down care facility claims to hold.
13. Requires a referring entity to report to the appropriate state agency any suspected fraudulent license or certification identified during verification.
14. Requires health care service plans and disability insurers that provide coverage for MH and SUDs and that credential step-down care facilities to provide those services for its networks to assess and verify the qualifications of a step-down care facility within 60 days after receiving a completed facility credentialing application. Requires, upon receipt of the application by the credentialing department, the health care service plan or disability insurer to notify the applicant within seven business days to verify receipt and inform the applicant whether the application is complete.
15. Makes legislative findings and declarations about SUD and MH diagnoses, the shortage of treatment beds, the lack of state standards and oversight for residential homes serving people with SUD and MH diagnoses, and the need to improve access to quality community-based and non-institutional settings.

EXISTING LAW:

1. Grants DHCS the sole authority in state government to license alcoholism or drug abuse recovery or treatment facilities (RTFs). [Health and Safety Code (HSC) §11834.01]
2. Defines “alcoholism or drug abuse RTF” as any, place or building that provides 24-hour residential nonmedical services to adults who are recovering from problems related to alcohol, drug, or alcohol and drug misuse or abuse, and who need alcohol, drug, or alcohol and drug recovery treatment or detoxification services. [HSC §11834.02]
3. Defines a “recovery residence” (RR) as a residential dwelling that provides primary housing for individuals who seek a cooperative living arrangement that supports personal recovery from a SUD and that does not require licensure by DHCS or does not provide licensable services, as specified, including residential dwellings commonly referred to as “sober living homes,” “sober living environments,” or “unlicensed alcohol and drug free residences.” [HSC §11833.05]
4. Prohibits any person, firm, partnership, association, corporation, or local governmental entity from operating, establishing, managing, conducting, or maintaining an alcoholism or drug abuse RTF to provide recovery, treatment, or detoxification services without first obtaining a current valid license from DHCS. [HSC §11834.30]
5. Prohibits, under the Fair Employment and Housing Act, 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. [Government Code §12900 et seq.]
6. Establishes the Department of Managed Health Care to regulate health plans and California Department of Insurance to regulate health insurance. [Health and Safety HSC §1340, et seq. and Insurance Code (INS) §106, et seq.]
7. Establishes as California's essential health benefits (EHBs) benchmark under the Patient protection and Affordable Care Act (ACA), the Kaiser Small Group Health Maintenance Organization, existing California health insurance mandates, and the ten ACA mandated benefits, including MH and SUD coverage. [HSC §1367.005 and INS §10112.27]
8. Requires every health plan contract and insurance policy that provides hospital, medical, or surgical coverage to provide coverage for medically necessary treatment of MH and SUDs under the same terms and conditions applied to other medical conditions, as specified. [HSC §1374.72 and INS §10144.5]

FISCAL EFFECT: According to the Senate Appropriations Committee, there are unknown, ongoing costs for DHCS for state administration. Certification fees collected would be deposited into a newly created Supportive Community Residence Program Fund to support DHCS’s costs. Additional unknown, ongoing costs to counties to administer duties as a “referring entity.” Cost to counties for administration would be potentially reimbursable by the state, subject to a determination by the Commission on State Mandates.

COMMENTS:

1. PURPOSE OF THIS BILL. A constituent of the author, a 26 year old aerospace engineer named Brandon Nelson, suffered a psychotic break in January 2018. According to the author, over several weeks Brandon was transferred between facilities as his condition fluctuated between more and less stable. The author continues that the last of those facilities delayed providing Brandon’s prescription and meeting with a psychiatrist, and left him unsupervised and alone in his room. Within 24-hours, Brandon committed suicide. The author states that the facility had been operating fraudulently and without a valid state license, and Brandon’s case is just one example of the MH care system failing to adequately protect vulnerable Californians. The author continues that the number of MH providers and beds are projected to decline over the next decade which has exacerbated the increase in number of people seeking MH support from sober living homes and other non-medical residential facilities. The author argues that the state does not regulate these institutions and reporting reveals a system suffused with fraud, abuse, and neglect. The author concludes that this bill protects patients by creating greater accountability and oversight within the MH system and empowering people with MH diagnoses or SUDs to make more informed decisions about their care.
2. BACKGROUND.
   1. Prevalence of SUD in California. A 2022 publication from the California Health Care Foundation, entitled “Substance Use in California: Prevalence and Treatment,” reported that substance use in California is widespread with over half of Californians over age 12 reporting using alcohol in the past month and 20% reporting using marijuana in the past year. According to the report, 9% of Californians have met the criteria for a SUD within the last year. While the health care system is moving toward acknowledging SUDs as a chronic illness, only about 10% of people with an SUD within the last year received treatment. Overdose deaths from both opioids and psychostimulants (such as amphetamines), are soaring. This issue, compounded by the increased availability of fentanyl, has resulted in a 10-fold increase in fentanyl related deaths between 2015 and 2019. The California Department of Public Health’s Opioid Overdose Dashboard reported 7,385 deaths related to “any” opioid overdose in 2022, with 6,473 (87.7%) of those deaths fentanyl related.
   2. Alcohol and Drug Treatment Facility Licensing and Certification. DHCS has sole authority to license RTFs in the state. Licensure is required when at least one of the following services is provided: detoxification; group sessions; individual sessions; educational sessions; or, alcoholism or other drug abuse recovery or treatment planning. Additionally, facilities may be subject to other types of permits, clearances, business taxes, or local fees that may be required by the cities or counties in which the facilities are located.

As part of their licensing function, DHCS conducts reviews of RTF operations every two years, or as necessary. DHCS's Substance Use Disorder Compliance Division checks for compliance with statute and regulations to ensure the health and safety of RTF residents and investigates all complaints related to RTFs, including deaths, complaints against staff, and allegations of operating without a license. DHCS has the authority to suspend or revoke a license for conduct in the operation of an RTF that is inimical to the health, morals, welfare, or safety of either an individual in, or receiving services from, the facility or to the people of the State of California.

AB 118 (Committee on Budget), Chapter 42, Statutes of 2023, requires other non-residential, outpatient alcohol or other drug programs be certified by DHCS. Certification is required when at least one of the following is provided: outpatient treatment services; recovery services; detoxification; or medications for addiction treatment. DHCS does not license alcohol and drug RRs with six or less beds that don’t provide licensable services, known as RRs.

• 1. RRs. An RR 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 nonmedical. The state laws and licensing requirements that govern treatment and care facilities do not currently include RRs. Therefore, the state does not keep any list of registered RRs, conduct inspections of RRs, or perform any of the other activities associated with licensing facilities. An RR 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 an RR 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. If an RR is providing any licensable services then it must obtain a valid RTF license from DHCS.

DHCS’s Drug Medi-Cal-Organized Delivery System waiver permits counties to use RRs in their continuum of services if they adhere to the following guidelines: the RR does not provide SUD services that would require licensure by DHCS; all residents of an RR are actively engaged in medically necessary recovery support services to be provided off-site; each county develops guidelines for contracted RR entities; and, the county provides monitoring and oversight of the RR.

• 1. Harm Reduction. According to the National Institutes of Health (NIH) website, harm reduction is a strategy that aims to reduce the harms associated with certain behaviors. When applied to SUDs, harm reduction accepts that a continuing level of drug use (both legal and illegal) in society is inevitable and defines objectives as reducing adverse consequences. It emphasizes the measurement of health, social, and economic outcomes, as opposed to the measurement of drug consumption. Harm reduction has evolved over time, from its initial identification in the 1980s, as an alternative to abstinence-only focused interventions for adults with SUDs. At the time, it was recognized that abstinence was not a realistic goal for those with SUDs. In addition, those individuals who were interested in reducing, but not eliminating, their use were excluded from programs that required abstinence. NIH’s website states there is persuasive evidence that harm reduction approaches greatly reduce morbidity and mortality associated with risky health behaviors. For example, areas that have introduced needle-exchange programs have shown mean annual decreases in HIV prevalence compared with those areas that have not introduced needle-exchange programs. Access to and use of methadone maintenance programs are strongly related to decreased mortality, both from natural causes and overdoses, which suggests that these programs have an impact on overall socio-medical health. The most recent addition to the harm reduction continuum is that of safe consumption spaces, which have been successfully implemented in over 100 sites around the world.
  2. MH Parity. The Federal MH Parity law requires, if health plans include services for MH and SUDs as part of their benefits, the provision of MH services under the same terms and conditions as other medical services. The ACA also specified coverage of the 10 EHBs, including MH and SUD treatment services and preventive and wellness services. According to a 2015 Health Affairs Health Policy Brief, the ACA went beyond existing federal law by mandating coverage instead of requiring parity only if coverage is provided.

SB 855 (Wiener), Chapter 151, Statutes of 2020, requires commercial health plans and insurers to provide full coverage for the treatment of all MH conditions and SUDs. SB 855 also establishes specific standards for what constitutes medically necessary treatment and criteria for the use of clinical guidelines. SB 855 applies to all state-regulated health plans and insurers that provide hospital, medical, or surgical coverage, and to any entity acting on the plan or insurer's behalf. A health plan cannot limit benefits or coverage for MH or SUD treatments or services when medically necessary.

1. SUPPORT. Share! Collaborative Housing is sponsoring this bill, stating that this bill seeks to certify supportive community residencies and place them appropriately in the continuum of care. SHARE! Collaborative Housing argues that there is a need for this high-road model to be codified into a legal definition, so as to discourage bad actors from preying on unsuspecting and vulnerable populations
2. OPPOSITION. The California Consortium of Addiction Programs and Professionals (CCAPP) opposes this bill, stating they support many of the bill’s goals but have major structural issues with recent amendments. CCAPP highlights concerns with the definition of “step-down care,” stating that RRs don’t provide care and redefining them as places where people are given care would assuredly lead to its rezoning in all jurisdictions, eliminating this important housing resource for thousands of people. CCAPP also raises various questions to the provisions of this bill regarding referring entities, arguing that this bill poses more questions than it answers.

1. RELATED LEGISLATION.
   1. AB 2479 (Haney) adds requirements for recovery housing to Housing First. AB 2479 is currently pending in the Senate Housing Committee.
   2. AB 2574 (Valencia) requires an organization that operates, conducts, owns, or maintains a certified program or a licensed facility to disclose to the department whether the licensee, or a general partner, director, or officer of the licensee owns or has a financial interest in a recovery residence and whether it has contractual relationships with entities that provide recovery services to clients of certified programs or licensed facilities if the entity is not a part of a certified program or a licensed facility. AB 2574 is currently pending in the Senate Appropriations Committee.
   3. AB 2893 (Ward) Requires DHCS to establish a certification process for recovery homes and adds a standard for recovery homes that meets the state’s Housing First requirements. AB 2893 is currently pending in the Senate Health Committee.
   4. SB 1438 (Niello) changes the core components of Housing First to allow the eviction of a resident for the use of drugs or alcohol if children are housed in the same location, and include “recovery housing” programs, as specified. SB 1438 is currently pending in the Senate Housing Committee.
   5. SB 913 (Umberg) would have permitted a city attorney of a city in which housing units are located or a district attorney, if the units are located in the unincorporated area of the county, to enforce parts of DHCS licensing laws, as specified. Would have required DHCS to adopt a process that permits a city or county to conduct announced and/or unannounced site visits to facilities licensed by DHCS and to sober living homes/RRs that do not require DHCS licensure. SB 913 was held on the Senate Appropriation Committee suspense file.
   6. SB 1334 (Newman) defines an RR, for purposes of licensing RTFs, as a residential dwelling that provides primary housing for individuals who seek a cooperative living arrangement that supports personal recovery from a SUD, does not require DHCS licensure, and does not provide licensable services, and clarifies that an unlicensed RR may provide services to its residents, including, but not limited to, dining, housekeeping, security, transportation, and recreation. Exempts RRs from being required to be licensed RTFs if the facility does not offer recovery services, as defined, and would allow residents of an RR to actively participate in recovery services outside of the home. Requires RRs to be operated as a separate business from a licensed RTF and require RRs to maintain separate agreements with each resident for the housing and services it provides SB 1334 is currently pending in the Senate Health Committee.
2. PREVIOUS LEGISLATION.
   1. AB 1696 (Sanchez) of 2021 would have required any government entity that contracts with a privately owned RR to provide recovery services to require the RR to comply with specified requirements. AB 1696 was vetoed by the Governor.
   2. SB 349 (Umberg), Chapter 15, Statutes of 2022, creates the California Ethical Treatment for Persons with Addiction Act to provide protection for SUD treatment clients and their families. Imposes requirements and proscribed unlawful acts relating to marketing and advertising with respect to treatment provide. Requires treatment providers to adopt a client bill of rights for persons seeking treatment for SUD, and to make the bill of rights available to all clients and prospective clients; a treatment provider to maintain records of referrals to or from a RR, as specified and, provides that acts made unlawful by the bill be subject to a civil fine of up to $20,000 per violation.
   3. AB 1158 (Petrie Norris), Chapter 443, Statutes of 2021, requires an RTF licensed by DHCS serving more than six residents to maintain specified insurance coverages, including commercial general liability insurance and employer’s liability insurance. Requires a licensee serving six or fewer residents to maintain general liability insurance coverage. Requires any government entity that contract with privately owned RR or RTF serving more than six residents to require the contractors to, at all times, maintain specific insurance coverage.
   4. AB 1098 (Daly) of 2021 would have created the Excellence in Recovery Residence Housing Act. Would have required the Secretary of the California Health and Human Services Agency to develop and publish on the DHCS internet website consensus-based guidelines and nationally recognized standards for counties to use to promote the availability of high-quality RR housing for individuals with a SUD and to dissuade the use of contracting with, or referral to, RRs that do not meet these guidelines and standards. AB 1098 was held on the Assembly Appropriations Committee suspense file.
3. POLICY COMMENTS. Recent author’s amendments require insurers to verify licensure or certification status of a step-down care facility before credentialing the facility to provide services in its networks. These amendments also require referring entities, when informing an individual about a step-down care facility, to verify and then provide the individual a facility’s license or certification number. The amendments raise the following questions:
   1. What is step-down care, and is it a covered service? This bill defines “step-down care” as: a supportive community residence, any licensed RTF, or any residential or inpatient licensed community care facility serving adults with MH or SUDs. A supportive community residence, as defined in this bill, is nonclinical housing that is prohibited from providing any licensable services. California’s MH parity laws only mandate the coverage of medically necessary treatment, so it is unlikely that housing in a supportive community residence would be covered and credentialed by insurers in the state. The definition of “step-down care” also includes all licensed RTFs and community care facilities. Licensed facilities are required to identify their level of care as they provide treatment, so it is unclear how these are “step-down care” in nature.

There are significant differences between licensed facilities and supportive community residences. Including these terms in the same definition may be confusing for insurers, consumers, and regulators. The author is encouraged to work with stakeholders and the relevant state departments to ensure that the step-down care provisions of this bill are appropriately tailored to what is actually covered by insurers in the state.

• 1. What does certification mean for referral? The certification program in this bill is completely voluntary and gives DHCS authority to charge up to $2,000 for certification. Given that supportive community residence models, such as RRs, can currently operate without state certification or licensure, there is a likelihood that many won’t pursue certification under this bill. Simultaneously, this bill requires referring entities to verify the licensure or certification of a step-down care facility. The language as drafted leaves a few questions unanswered. What happens if a supportive community residence doesn’t seek voluntary certification, are they excluded from referral by the laundry list of facilities and programs detailed in this bill? What would this mean for individuals seeking a supportive community residence in an area where there are no certified residences or available certified beds? Is the goal to give preferential referral to certified residences? The author may wish to clarify these provisions of the bill to ensure intent is clear and implementation is possible.
  2. Same sponsor, different goals? Lastly, AB 2893 (Ward) shares the same sponsor as this bill and is also aiming to define supportive community residences and create a certification program to enable these residences to be eligible for state funding under housing first requirements. However, neither the definitions of supportive community residences nor the certification processes in these parallel bills are aligned. The authors and sponsor are strongly encouraged to work together to align their bills and avoid unnecessarily directing DHCS to create two separate certification programs for housing with the same name and purpose.

1. DOUBLE REFERRAL. This bill is double referred; upon passage in this Committee, it will be referred to the Assembly Committee on Housing and Community Development.

REGISTERED SUPPORT / OPPOSITION:

Support

Share! Collaborative Housing (sponsor)

California State Association of Psychiatrists

Steinberg Institute

Opposition

California Consortium of Addiction Programs and Professionals

Analysis Prepared by: Riana King / HEALTH / (916) 319-2097

 THIRD READING  

Bill No: SB 1339

Author: Allen (D)

Amended: 5/16/24

Vote: 21

SENATE HEALTH COMMITTEE: 11-0, 4/24/24

AYES: Roth, Nguyen, Glazer, Gonzalez, Grove, Hurtado, Limón, Menjivar, Rubio, Smallwood-Cuevas, Wiener

SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/16/24

AYES: Caballero, Jones, Ashby, Becker, Bradford, Seyarto, Wahab

SUBJECT: Supportive community residences

SOURCE: SHARE! Collaborative Housing

DIGEST:

This bill requires the Department of Health Care Services by January 1, 2027 and in consultation with relevant state and county agencies and other stakeholders, to create a voluntary certification program for “supportive community residences,” as defined.

ANALYSIS:

Existing law:

1. Requires the Department of Health Care Services (DHCS) to license and regulate residential alcoholism or drug abuse (or substance use disorder [SUD]) recovery or treatment facilities (RTFs), and to certify outpatient SUD programs. [HSC §111832 and §11834.02, et seq.]
2. Requires all certified programs and licensed RTFs to disclose to DHCS the following information: ownership or control of, or financial interest in, a recovery residence (RR), and any contractual relationship with an entity that regularly provides professional services or addiction treatment or recovery services to clients of certified programs or licensed RTFs, if the entity is not part of the certified program or licensed RTF. [HSC §11833.05]
3. Defines “recovery residence (RR)” as a residential dwelling that provides primary housing for individuals who seek a cooperative living arrangement that supports personal recovery from a SUD and that does not require licensure by DHCS or does not provide licensable services, as specified. Defines “RRs” as including, but not limited to, residential dwellings commonly referred to as “sober living homes (SLHs),” “sober living environments,” or “unlicensed alcohol and drug free residences.” [HSC §111833.05]

This bill:

1. Requires DHCS, by January 1, 2027 and in consultation with relevant state agencies, county agencies, and other stakeholders, to do all of the following:
   1. Establishes and provide a voluntary certification program for “supportive community residences” (SCRs). Defines “supportive community residence” as a residential home serving adults with a SUD, mental health (MH) diagnosis, or dual diagnosis, that does not provide medical care or a level of support for activities of daily living that require state licensing.
   2. Requires the certification program to include:
      1. Standards and procedures for operation of the certification program that consider, such things as types of certifications needed and nationally recognized standards of operation; and, Housing First principles, as specified, when applicable;
      2. Methods for filing and investigating complaints within a reasonable timeframe;
      3. Procedures and penalties for enforcing laws and regulations governing SCRs that do not remediate deficiencies within the designated timeframe, conditions under which a SCR may be decertified, and the means by which a SCR may regain certification;
      4. Technical assistance to assist owners, operators, house managers, and other SCR staff with such things as developing an understanding of the applicable regulations and statutes and completing the application process for certification.
   3. Creates and maintain a searchable online database of certified facilities that does not provide the address or specific location of a SCR other than the city, ZIP Code, or both, to preserve privacy; provides telephone and email contact information; and, provides a record of any substantive and validated complaints filed against a SCR, findings after investigation of those complaints, and the time it took from the date of filing until the complaint is resolved.
   4. Adopts or amend relevant regulations relating to “referring entity” practices, including requiring referring entities to provide information to individuals with a SUD, MH diagnosis, or dual diagnosis, such as the verified community care facility’s (CCF) or SCR’s license or certification number, and contact information for the licensing or certifying agency. Defines “referring entity” as a state or local entity, or a state-regulated entity that either discharges, directs, or provides a list of one or more SCR or CCF for adults with a SUD or MH diagnosis, or preauthorizes or authorizes the health care coverage of services provided by SCRs or licensed CCFs.
   5. Reports to the DHCS any suspected fraudulent license or certification identified during verification;
   6. Establishes when, and how frequently, a referring entity is required to verify licenses and certifications; and,
   7. Establishes enforcement methods for willful and repeated violations by referring entities, including imposition of administrative penalties, as appropriate.
2. Prohibits a SCR from providing any licensed services onsite, including, but not limited to, incidental medical services, as specified.
3. Permits DHCS to charge a fee for certification of SCRs in an amount not to exceed the reasonable cost of administering the program, not to exceed $2,000. Specifies that certification is valid for a period of two years. Permits DHCS to charge a reasonable fee for recertification, not to exceed $500.
4. Establishes the SCR Program Fund in the State Treasury. Requires all fees collected to be deposited into the fund to be made available upon appropriation by the Legislature to support DHCS’s certification activities.

Comments

Author’s statement. According to the author, in January 2018, Brandon Nelson, a 26-year-old aerospace engineer, suffered a psychotic break. Over several weeks, Brandon was transferred between several facilities as his condition fluctuated between more and less stable. The last of those facilities, Sovereign Health, delayed providing Brandon’s prescription and his meeting with a psychiatrist, and left him unsupervised and alone in his room. Within 24-hours, Brandon died by suicide. Revealed later, Sovereign had been operating fraudulently and without a valid state license. Brandon’s case is just one example of the MH care system failing to adequately protect vulnerable Californians. The number of MH providers and beds are projected to decline over the next decade. Exacerbated by COVID-19, this has contributed to an increase in the number of people seeking MH support from sober living homes (SLH/RRs) and other nonmedical, residential facilities. However, the state does not regulate SLH/RRs, and reporting reveals a system suffused with fraud, abuse, and neglect. This bill protects patients by creating greater accountability and oversight within the MH health care system and empowering people with MH diagnoses or SUDs to make more informed decisions about their care.

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 California Department of Public Health (CDPH) licenses medical model RTFs, known as chemical dependency recovery hospitals (CDRHs).) The services provided by social model RTFs include group and individual counseling, educational sessions, and alcoholism or drug abuse recovery and treatment planning. Social model RTFs are allowed to provide clients first aid and emergency care, and since the passage of AB 848 (Stone, Chapter 744, Statutes of 2015) RTFs can apply to DHCS for an additional license to provide incidental medical services by a licensed physician or other health care practitioner. SB 823 (Hill, Chapter 781, Statutes of 2018) required DHCS to adopt American Society of Addiction Medicine treatment criteria as the minimum standard of care for licensed RTFs. DHCS also is responsible for certification of a business entity with a physical location in the state that provides one or more of the following services to clients: treatment, recovery, or detoxification services, or medications for addiction treatment. DHCS also provides program certification for facilities that are licensed by CDSS that serve adolescents. 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.

SLH/RRs. A 2010 report on the National Institutes of Health (NIH) website, “Sober Living Houses for Alcohol and Drug Dependence: 18-month Outcomes,” states that SLHs are not formal treatment programs and are not obligated to comply with state or local regulations applicable to treatment. However, NIH does not provide a formal definition of an SLH. The report also mentions that it is difficult to determine how many SLHs there are in California because they are outside of the purview of state licensing authorities. The NIH report cites the protection that the federal FHA affords SLHs to be located in residentially zoned areas, personal privacy under the Fourth Amendment, and the right of people with disabilities to live together for a shared purpose, such as mutually assisted recovery and maintenance of an abstinent lifestyle.

According to DHCS’s website, some types of residences do not provide alcohol and other drug services and therefore do not require licensure by DHCS, including cooperative living arrangements with a commitment or requirement to be free from alcohol and other drugs, sometimes referred to as RRs, SLHs, transitional housing, or alcohol- and drug-free housing. DHCS states that while SLHs are not required to be licensed by DHCS, they may be subject to other types of permits, clearances, business taxes, or local fees, which may be required by the cities or counties in which they are located. If an SLH is providing licensable services to adults, then it must obtain a valid RTF license. Licensable services can include, but are not limited to, detoxification services, group sessions, individual sessions, one-on-one counseling, educational sessions, or recovery, treatment, or discharge planning. If an SLH is providing just one of the mentioned services, then it should be classified as an RTF and must obtain a license from DHCS.

DHCS’s Drug Medi-Cal Organized Delivery System waiver allows counties to use SLH/RRs in their continuum of services if they adhere to the following guidelines: do not provide SUD services that would require licensure by DHCS; all residents of an SLH/RR are actively engaged in medically necessary recovery support services to be provided off-site; and, each county develops guidelines for contracted SLH/RR providers, and provides monitoring and oversight.

Referral entities. This bill requires DHCS to promulgate regulations for what the bill defines as “referral entities,” which are entities that currently may refer people to various types of facilities, ranging from licensed SUD treatment services to non-licensed recovery services at an SLH/RR—all based on each individual’s needs. Like in the case of Brandon Nelson referenced by the author of this bill, some people are discharged from hospitals or even licensed treatment entities to a lower-level of service entity that may not require licensure as part of the continuum. However, sometimes the referring entity might not have a way of verifying the services a place actually provides. Following are examples of the different types of entities that this bill envisions would be referral entities:

• 1. General acute care hospitals and acute psychiatric hospitals licensed by the California Department of Public Health (CDPH);
  2. MH rehabilitation centers licensed DHCS;
  3. CDRHs licensed by CDPH;
  4. Psychiatric health facilities licensed by DHCS, which provide 24-hour inpatient care for people with MH disorders; and,
  5. CCFs licensed by the California Department of Social Services (CDSS), including any facility, place, or building that is maintained and operated to provide nonmedical residential care, day treatment, adult day care, or foster family agency services for children, adults, or children and adults, including, but not limited to, the physically handicapped, mentally impaired, incompetent persons, and abused or neglected children, and may include crisis residential services.

Group Home Technical Advisory (GHTA). The California Department of Housing and Community Development (CHCD) Division of Housing Policy Development issued the GHTA in December 2022 and states that group homes are an especially important type of housing for persons with disabilities. By supporting their residents’ individualized needs while providing flexible and affordable housing options, group homes help persons with disabilities live in deinstitutionalized settings that facilitate their integration into local communities. CHCD further states in recent years, some local governments have amended their zoning ordinances to add new regulations for group homes, particularly for SLH/RRs. These amendments have raised concerns that local governments are not complying with their affirmative obligations under state planning and zoning laws to promote more inclusive communities and affirmatively further fair housing (AFFH). These amendments have also generated disputes and confusion over whether local governments are violating fair housing laws by discriminating against persons with disabilities or other protected characteristics. Among other concerns, local land use policies and practices can block new group homes from opening, force existing ones to close, and impose costs, legal fees, and administrative burdens that make it difficult for group homes to operate. These concerns arise in the context of a shortage of adequate housing for persons with disabilities, which is a particularly acute problem within California’s broader housing crisis. CHCD states that with concerns, disputes, and confusion continuing to grow, the GHTA provides guidance on how state planning, zoning, and fair housing laws apply when local governments attempt to regulate group homes through land use policies and practices. It is designed to help local governments comply with their obligations under these state laws, including, for example, the Planning and Zoning Law; Housing Element Law; AFFH provisions; Anti-Discrimination in Land Use Law; and the Fair Employment and Housing Act, collectively “state housing laws.” Taken from the GHTA, local governments can comply with state housing laws regarding group homes, including the following:

1. Discriminatory Purpose or Effect: Ensure that the policy or practice does not discriminate on the basis of disability or other characteristics protected by state law. Apply the GHTA’s analysis on how to determine if a policy or practice has a discriminatory purpose or effect and how to implement flexible reasonable accommodation procedures that promptly and efficiently resolve accommodation requests in compliance with state housing laws and regulations. (pp. 12-20);
2. Supportive and Transitional Housing: Comply with the specific protections for group homes that fall within the definitions of supportive or transitional housing (pp. 20-22);
3. State and Federal Law Distinctions:. Confirm that a policy or practice complies with state housing laws even if it complies with federal law, because California law provides broader and different protections than federal law (pp. 22-23);
4. Definition of Single-Family Residence:. Avoid restrictive definitions of single housekeeping units or single-family homes that impermissibly constrain group homes from locating in single-family zones. This includes, for example, avoiding definitions that equate group homes with boardinghouses, require all residents to share a common deed or lease, overly scrutinize residents’ living arrangements, or automatically exclude group homes that are owned by for-profit businesses or pay staff to help manage a home’s operations (pp. 24-25);
5. Group Homes that Do Not Provide Licensable Services:. Allow group homes that operate as single-family residences and that do not provide licensable services to locate in single-family neighborhoods, subject only to the generally applicable, nondiscriminatory health, safety, and zoning laws that apply to all single-family residences (pp. 25-26) (emphasis added); and,
6. Other Requirements for Group Home Operators and Residents:. Avoid the other examples of special requirements for operators and residents discussed that can overly constrain group homes, conflict with the duty to affirmatively support this housing, and discriminate on the basis of disability and other protected characteristics. Examples discussed include, among other things, parking requirements, restrictions on residents or staff, neighborhood notice requirements, and local law enforcement registration requirements (pp. 30-33).

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

According to the Senate Appropriations Committee:

• Unknown, ongoing costs for DHCS for state administration. Certification fees collected would be deposited into a newly created Supportive Community Residence Program Fund to support DHCS’s costs; and,
• Unknown, ongoing costs to counties to administer duties as a “referring entity.” Cost to counties for administration would be potentially reimbursable by the state, subject to a determination by the Commission on State Mandates.

SUPPORT: (Verified 5/14/24)

SHARE! Collaborative Housing (source)

Steinberg Institute

OPPOSITION: (Verified 5/14/24)

None received

ARGUMENTS IN SUPPORT: SHARE!, the sponsor of this bill, states that it was started by people in recovery from trauma and MH issues and currently operates 35 supportive community residencies assisting Californians in need. SHARE! provides housing for people with disabilities that uses evidence-based, peer-to-peer practices and self-help support groups. The program builds support, resilience, and independence at a fraction of the cost of other housing programs. SHARE! continues to catch those falling through the cracks and accepts everyone who comes through its doors, having never turned anyone away or asked anyone to leave. SHARE! argues that it sees the need for a high-road model of facilities, as outlined in the provisions in this bill, to be codified into a legal definition so as to discourage bad actors from preying on unsuspecting and vulnerable populations. The Steinberg Institutes says that this bill will protect individuals like Brandon and strengthen our MH care system by ensuring that all treatment facilities meet basic standards of care and accountability. This is especially vital in maintaining trust in credible treatment facilities that provide vital care amidst the ongoing opioid and fentanyl epidemics.

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

5/18/24 12:31:15

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

SB 1339 (Allen) - Supportive community residences

Bill Summary:

SB 1339 would establish and provide for the administration of a voluntary certification program for supportive community residences, as specified.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on May 16, 2024

Fiscal Impact:

• Unknown, ongoing costs for the Department of Health Care Services (DHCS) for state administration. Certification fees collected would be deposited into a newly created Supportive Community Residence Program Fund to support the department’s costs.
• Unknown, ongoing costs to counties to administer duties as a “referring entity.” Cost to counties for administration would be potentially reimbursable by the state, subject to a determination by the Commission on State Mandates.

Author Amendments:

Raise the certification fee limit from $1,000 to $2,000; authorize a recertification fee of up to $500; and delete the required report to the Legislature.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

SB 1339 (Allen) - Supportive community residences

Bill Summary:

SB 1339 would establish and provide for the administration of a voluntary certification program for supportive community residences, as specified.

Fiscal Impact:

• Unknown, ongoing costs for the Department of Health Care Services (DHCS) for state administration. Certification fees collected would be deposited into a newly created Supportive Community Residence Program Fund to support the department’s costs.
• Unknown, ongoing costs to counties to administer duties as a “referring entity.” Cost to counties for administration would be potentially reimbursable by the state, subject to a determination by the Commission on State Mandates.

Background:

Residential treatment facilities (RTFs) licensed by DHCS, based on what is commonly referred to as the “social model,” provide recovery, treatment, or detoxification services. 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 can apply to DHCS for an additional license to provide incidental medical services by a licensed physician or other health care practitioner. DHCS also is responsible for certification of a business entity with a physical location in the state that provides one or more of the following services to clients: treatment, recovery, or detoxification services, or medications for addiction treatment. DHCS also provides program certification for facilities that are licensed by the Department of Social Services that serve adolescents. 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 DHCS’s website, some types of residences do not provide alcohol and other drug services and therefore do not require licensure by DHCS, including cooperative living arrangements with a commitment or requirement to be free from alcohol and other drugs, sometimes referred to as recovery residences (RRs), sober living homes (SLHs), transitional housing, or alcohol- and drug-free housing. DHCS states that while SLHs are not required to be licensed by DHCS, they may be subject to other types of permits, clearances, business taxes, or local fees, which may be required by the cities or counties in which they are located. If an SLH is providing licensable services to adults, then it must obtain a valid RTF license. Licensable services can include, but are not limited to, detoxification services, group sessions, individual sessions, one-on-one counseling, educational sessions, or recovery, treatment, or discharge planning. If an SLH is providing just one of the mentioned services, then it should be classified as an RTF and must obtain a license from DHCS.

Proposed Law:

Specific provisions of the bill would:

• Define “referring entity” to mean a state or local entity, or a state-regulated entity that does either of the following:
  • Discharges, directs, or provides a list of one or more supportive community residences or community care-licensed facilities for adults with a substance use disorder or mental health diagnosis.
  • Preauthorizes or authorizes the health care coverage of services provided by supportive community residences or licensed community care residential facilities.
• Define “supportive community residence” as any of the following residential dwellings providing housing for adults with a substance use disorder, mental health diagnosis, or dual diagnosis seeking a cooperative living arrangement that does not provide medical care or a level of support for activities of daily living that require state licensing:
  • Recovery residences, as defined in existing law, that serve people in recovery for a substance use disorder.
  • Mental health recovery residences that serve people in recovery for a mental health diagnosis.
  • Mixed recovery residences that serve people in recovery for a dual diagnosis of both a substance use disorder and a mental health diagnosis.
• Require DHCS to:
  • Establish and provide for the administration of a voluntary certification program for supportive community residences, as specified.
  • Create and maintain a searchable online database of certified facilities, as specified.
  • Adopt or amend relevant regulations relating to referring entity practices, as specified.
  • Submit a report to the Legislature that includes recommendations for statutory changes needed to improve access to quality community-based and noninstitutional settings for people with a substance use disorder, mental health diagnosis, or dual diagnosis.
• Authorize DHCS to charge a fee for certification of supportive community residences in an amount not to exceed the reasonable cost of administering the program, not to exceed $1,000.
• Establish the Supportive Community Residence Program Fund and provide that all fees collected pursuant to the bill’s provisions must be deposited into the fund; and provide that moneys in the fund are available upon appropriation by the Legislature for the purposes of supporting the certification activities of DHCS.

Related Legislation:

SB 913 (Umberg) would revise the process for conducting a site visit to licensed adult alcoholism or drug abuse recovery or treatment facilities for the purpose of reviewing for compliance with statutes and regulations. The bill is scheduled to be heard May 13, 2024 in this committee.

SB 1334 (Newman) would specify that a recovery residence is not required to be licensed, as described. The bill was not heard in the Senate Health Committee.

AB 2893 (Ward) would provide for the certification of recovery houses, as specified. This bill is currently in the Assembly Appropriations Committee.

-- END --

SENATE COMMITTEE ON HEALTH

Senator Richard Roth, Chair

BILL NO: SB 1339

SUBJECT: Supportive community residences

SUMMARY:

Requires the Department of Health Care Services by January 1, 2027 and in consultation with relevant state and county agencies and other stakeholders, to create a voluntary certification program for “supportive community residences,” as defined.

Existing law:

1. Requires the Department of Health Care Services (DHCS) to license and regulate residential alcoholism or drug abuse (or substance use disorder [SUD]) recovery or treatment facilities (RTFs), and to certify outpatient SUD programs. [HSC §111832 and §11834.02, et seq.]
2. Requires all certified programs and licensed RTFs to disclose to DHCS the following information: ownership or control of, or financial interest in, a recovery residence (RR), and any contractual relationship with an entity that regularly provides professional services or addiction treatment or recovery services to clients of certified programs or licensed RTFs, if the entity is not part of the certified program or licensed RTF. [HSC §11833.05]
3. Defines “recovery residence (RR)” as a residential dwelling that provides primary housing for individuals who seek a cooperative living arrangement that supports personal recovery from a SUD and that does not require licensure by DHCS or does not provide licensable services, as specified. Defines “RRs” as including, but not limited to, residential dwellings commonly referred to as “sober living homes (SLHs),” “sober living environments,” or “unlicensed alcohol and drug free residences.” [HSC §111833.05]

This bill:

1. Requires DHCS, by January 1, 2027 and in consultation with relevant state agencies, county agencies, and other stakeholders, to do all of the following:
   1. Establish and provide a voluntary certification program for “supportive community residences” (SCRs). Defines “supportive community residence” as a residential home serving adults with a SUD, mental health (MH) diagnosis, or dual diagnosis, that does not provide medical care or a level of support for activities of daily living that require state licensing.
   2. Requires the certification program to include:
      1. Standards and procedures for operation of the certification program that consider, such things as types of certifications needed and nationally recognized standards of operation; and, Housing First principles, as specified, when applicable;
      2. Methods for filing and investigating complaints within a reasonable timeframe;
      3. Procedures and penalties for enforcing laws and regulations governing SCRs that do not remediate deficiencies within the designated timeframe, conditions under which a SCR may be decertified, and the means by which a SCR may regain certification;
      4. Technical assistance to assist owners, operators, house managers, and other SCR staff with such things as developing an understanding of the applicable regulations and statutes and completing the application process for certification;
   3. Create and maintain a searchable online database of certified facilities that does not provide the address or specific location of a SCR other than the city, ZIP Code, or both, to preserve privacy; provides telephone and email contact information; and, provides a record of any substantive and validated complaints filed against a SCR, findings after investigation of those complaints, and the time it took from the date of filing until the complaint is resolved;
   4. Adopt or amend relevant regulations relating to “referring entity” practices, including requiring referring entities to provide information to individuals with a SUD, MH diagnosis, or dual diagnosis, such as the verified community care facility’s (CCF) or SCR’s license or certification number, and contact information for the licensing or certifying agency. Defines “referring entity” as a state or local entity, or a state-regulated entity that either discharges, directs, or provides a list of one or more SCR or CCF for adults with a SUD or MH diagnosis, or preauthorizes or authorizes the health care coverage of services provided by SCRs or licensed CCFs;
   5. Report to the DHCS any suspected fraudulent license or certification identified during verification;
   6. Establish when, and how frequently, a referring entity is required to verify licenses and certifications; and,
   7. Establish enforcement methods for willful and repeated violations by referring entities, including imposition of administrative penalties, as appropriate.
2. Prohibits a SCR from providing any licensed services onsite, including, but not limited to, incidental medical services, as specified.
3. Permits DHCS to charge a fee for certification of SCRs in an amount not to exceed the reasonable cost of administering the program, not to exceed $1,000. Establishes the SCR Program Fund in the State Treasury. Requires all fees collected to be deposited into the fund to be made available upon appropriation by the Legislature to support DHCS’s certification activities.
4. Requires DHCS to submit a report to the Legislature by January 1, 2027, in consultation with relevant state agencies and other stakeholders, that includes recommendations for statutory changes needed to improve access to quality community-based and noninstitutional settings for people with a SUD, MH diagnosis, or dual diagnosis.

FISCAL EFFECT:

This bill has not been analyzed by a fiscal committee.

COMMENTS:

1. Author’s statement. According to the author, in January 2018, Brandon Nelson, a 26-year-old aerospace engineer, suffered a psychotic break. Over several weeks, Brandon was transferred between several facilities as his condition fluctuated between more and less stable. The last of those facilities, Sovereign Health, delayed providing Brandon’s prescription and his meeting with a psychiatrist, and left him unsupervised and alone in his room. Within 24-hours, Brandon died by suicide. Revealed later, Sovereign had been operating fraudulently and without a valid state license. Brandon’s case is just one example of the MH care system failing to adequately protect vulnerable Californians. The number of MH providers and beds are projected to decline over the next decade. Exacerbated by COVID-19, this has contributed to an increase in the number of people seeking MH support from sober living homes (SLH/RRs) and other nonmedical, residential facilities. However, the state does not regulate SLH/RRs, and reporting reveals a system suffused with fraud, abuse, and neglect. This bill protects patients by creating greater accountability and oversight within the MH health care system and empowering people with MH diagnoses or SUDs to make more informed decisions about their care.
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 California Department of Public Health (CDPH) licenses medical model RTFs, known as chemical dependency recovery hospitals (CDRHs).) The services provided by social model RTFs include group and individual counseling, educational sessions, and alcoholism or drug abuse recovery and treatment planning. Social model RTFs are allowed to provide clients first aid and emergency care, and since the passage of AB 848 (Stone, Chapter 744, Statutes of 2015) RTFs can apply to DHCS for an additional license to provide incidental medical services by a licensed physician or other health care practitioner. SB 823 (Hill, Chapter 781, Statutes of 2018) requires DHCS to adopt American Society of Addiction Medicine treatment criteria as the minimum standard of care for licensed RTFs. DHCS also is responsible for certification of a business entity with a physical location in the state that provides one or more of the following services to clients: treatment, recovery, or detoxification services, or medications for addiction treatment. DHCS also provides program certification for facilities that are licensed by CDSS that serve adolescents. 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. SLH/RRs. A 2010 report on the National Institutes of Health (NIH) website, “Sober Living Houses for Alcohol and Drug Dependence: 18-month Outcomes,” states that SLHs are not formal treatment programs and are not obligated to comply with state or local regulations applicable to treatment. However, NIH does not provide a formal definition of an SLH. The report also mentions that it is difficult to determine how many SLHs there are in California because they are outside of the purview of state licensing authorities. The NIH report cites the protection that the federal FHA affords SLHs to be located in residentially zoned areas, personal privacy under the Fourth Amendment, and the right of people with disabilities to live together for a shared purpose, such as mutually assisted recovery and maintenance of an abstinent lifestyle.

According to DHCS’s website, some types of residences do not provide alcohol and other drug services and therefore do not require licensure by DHCS, including cooperative living arrangements with a commitment or requirement to be free from alcohol and other drugs, sometimes referred to as RRs, SLHs, transitional housing, or alcohol- and drug-free housing. DHCS states that while SLHs are not required to be licensed by DHCS, they may be subject to other types of permits, clearances, business taxes, or local fees, which may be required by the cities or counties in which they are located. If an SLH is providing licensable services to adults, then it must obtain a valid RTF license. Licensable services can include, but are not limited to, detoxification services, group sessions, individual sessions, one-on-one counseling, educational sessions, or recovery, treatment, or discharge planning. If an SLH is providing just one of the mentioned services, then it should be classified as an RTF and must obtain a license from DHCS.

DHCS’s Drug Medi-Cal Organized Delivery System waiver allows counties to use SLH/RRs in their continuum of services if they adhere to the following guidelines: do not provide SUD services that would require licensure by DHCS; all residents of an SLH/RR are actively engaged in medically necessary recovery support services to be provided off-site; and, each county develops guidelines for contracted SLH/RR providers, and provides monitoring and oversight.

1. Referral entities. This bill requires DHCS to promulgate regulations for what the bill defines as “referral entities,” which are entities that currently may refer people to various types of facilities, ranging from licensed SUD treatment services to non-licensed recovery services at an SLH/RR—all based on each individual’s needs. Like in the case of Brandon Nelson referenced by the author of this bill, some people are discharged from hospitals or even licensed treatment entities to a lower-level of service entity that may not require licensure as part of the continuum. However, sometimes the referring entity might not have a way of verifying the services a place actually provides. Following are examples of the different types of entities that this bill envisions would be referral entities:
   1. General acute care hospitals and acute psychiatric hospitals licensed by the California Department of Public Health (CDPH);
   2. MH rehabilitation centers licensed DHCS;
   3. CDRHs licensed by CDPH;
   4. Psychiatric health facilities licensed by DHCS, which provide 24-hour inpatient care for people with MH disorders; and,
   5. CCFs licensed by the California Department of Social Services (CDSS), including any facility, place, or building that is maintained and operated to provide nonmedical residential care, day treatment, adult day care, or foster family agency services for children, adults, or children and adults, including, but not limited to, the physically handicapped, mentally impaired, incompetent persons, and abused or neglected children, and may include crisis residential services.
2. Group Home Technical Advisory (GHTA). The California Department of Housing and Community Development (CHCD) Division of Housing Policy Development issued the GHTA in December 2022 and states that group homes are an especially important type of housing for persons with disabilities. By supporting their residents’ individualized needs while providing flexible and affordable housing options, group homes help persons with disabilities live in deinstitutionalized settings that facilitate their integration into local communities. CHCD further states in recent years, some local governments have amended their zoning ordinances to add new regulations for group homes, particularly for SLH/RRs. These amendments have raised concerns that local governments are not complying with their affirmative obligations under state planning and zoning laws to promote more inclusive communities and affirmatively further fair housing (AFFH). These amendments have also generated disputes and confusion over whether local governments are violating fair housing laws by discriminating against persons with disabilities or other protected characteristics. Among other concerns, local land use policies and practices can block new group homes from opening, force existing ones to close, and impose costs, legal fees, and administrative burdens that make it difficult for group homes to operate. These concerns arise in the context of a shortage of adequate housing for persons with disabilities, which is a particularly acute problem within California’s broader housing crisis. CHCD states that with concerns, disputes, and confusion continuing to grow, the GHTA provides guidance on how state planning, zoning, and fair housing laws apply when local governments attempt to regulate group homes through land use policies and practices. It is designed to help local governments comply with their obligations under these state laws, including, for example, the Planning and Zoning Law; Housing Element Law; AFFH provisions; Anti-Discrimination in Land Use Law; and the Fair Employment and Housing Act, collectively “state housing laws.” Taken from the GHTA, local governments can comply with state housing laws regarding group homes, including the following:
3. Discriminatory Purpose or Effect. Ensure that the policy or practice does not discriminate on the basis of disability or other characteristics protected by state law. Apply the GHTA’s analysis on how to determine if a policy or practice has a discriminatory purpose or effect and how to implement flexible reasonable accommodation procedures that promptly and efficiently resolve accommodation requests in compliance with state housing laws and regulations. (pp. 12-20);
4. Supportive and Transitional Housing. Comply with the specific protections for group homes that fall within the definitions of supportive or transitional housing (pp. 20-22);
5. State and Federal Law Distinctions. Confirm that a policy or practice complies with state housing laws even if it complies with federal law, because California law provides broader and different protections than federal law (pp. 22-23);
6. Definition of Single-Family Residence. Avoid restrictive definitions of single housekeeping units or single-family homes that impermissibly constrain group homes from locating in single-family zones. This includes, for example, avoiding definitions that equate group homes with boardinghouses, require all residents to share a common deed or lease, overly scrutinize residents’ living arrangements, or automatically exclude group homes that are owned by for-profit businesses or pay staff to help manage a home’s operations (pp. 24-25);
7. Group Homes that Do Not Provide Licensable Services. Allow group homes that operate as single-family residences and that do not provide licensable services to locate in single-family neighborhoods, subject only to the generally applicable, nondiscriminatory health, safety, and zoning laws that apply to all single-family residences (pp. 25-26) (emphasis added); and,
8. Other Requirements for Group Home Operators and Residents. Avoid the other examples of special requirements for operators and residents discussed that can overly constrain group homes, conflict with the duty to affirmatively support this housing, and discriminate on the basis of disability and other protected characteristics. Examples discussed include, among other things, parking requirements, restrictions on residents or staff, neighborhood notice requirements, and local law enforcement registration requirements (pp. 30-33).
9. Related legislation. SB 913 (Umberg) permits a city attorney of a city in which housing units are located or a district attorney, if the units are located in the unincorporated area of the county, to enforce parts of DHCS licensing laws, as specified. Requires DHCS to adopt a process that permits a city or county to conduct announced and/or unannounced site visits to DHCS-licensed facilities and to SLH/RRs that do not require DHCS licensure. SB 913 is set for hearing on April 23, 2024 in the Senate Judiciary Committee.

SB 1334 (Newman) prohibits a RR from being required to be licensed if it does not offer recovery services, as specified. Adds RRs that serve six or fewer residents to provisions of existing law related to licensed facilities, such as being deemed a residential use of property and a family residence for purposes of any law or zoning ordinance, except as specified. Permits local jurisdictions to require RTFs and RRs to be at least 1,000 feet from another licensed RTF or RR. SB 1334 is set for hearing on April 24, 2024 in this Committee.

1. Prior legislation. AB 1696 (Sanchez of 2023) would have required any government entity that enters into, renews, or amends a contract, beginning January 1, 2024, with a privately owned RR to require the contracting RR to submit specified information. AB 1696 was vetoed by Governor Newsom who stated that privately owned RRs are not subject to state licensure or certification, and AB 1696 would conflate requirements in existing law for licensed and certified programs providing SUD recovery services with new requirements for privately owned RRs, which DHCS does not oversee or enforce. This may create confusion among people seeking recovery services from licensed or certified programs or treatment facilities.

SB 786 (Mendoza of 2018) would have required DHCS to deny an application for a new RTF if the proposed location of the RTF is in proximity to an existing facility in an area zoned residential that would result in “overconcentration,” defined as, if a new RTF license is issued, two or more RTFs would be separated by a distance of 300 feet or less, as specified. SB 786 was not heard in this Committee.

SB 992 (Hernandez, Chapter 784, Statutes of 2018), in an early version if the bill, would have required, among other things, DHCS to create a registry of SLH/RRs on its website for the purposes of identifying well-run and operated entities for the information of consumers. This provision was amended out of the bill in the Senate Appropriations Committee.

SB 34 (Bates of 2017) would have required DHCS to report to the Legislature regarding the effect of the concentration of RTFs in a community, as specified. SB 34 was held on the Senate Appropriations suspense file.

AB 2403 (Bloom of 2016) and AB 1284 (Huffman of 2009) contained similar provisions as SB 786 and also would have established a definition for integral facilities and permitted integral facilities to be subject to local regulations and ordinances, as specified. AB 2403 was held on the Assembly Appropriations Committee suspense file. AB 1284 was held on the Assembly Appropriations Committee suspense file.

SB 268 (Harman of 2009) and SB 1000 (Harman of 2008) would have required applicants seeking a RTF license from the Department of Alcohol and Drug Programs (ADP, now DHCS) to certify that the RTF is consistent with local zoning ordinances and would have required ADP to verify the certification. SB 268 failed passage in the Assembly Health Committee and was subsequently amended to a different topic. SB 1000 failed passage in the Senate Health Committee.

AB 2903 (Huffman of 2008) would have authorized ADP to require any person or entity applying for licensure for an RTF to provide specified information to ADP before a license is issued. AB 2903 was not heard in this Committee.

1. Support. SHARE!, the sponsor of this bill, states that it was started by people in recovery from trauma and MH issues and currently operates 35 supportive community residencies assisting Californians in need. SHARE! provides housing for people with disabilities that uses evidence-based, peer-to-peer practices and self-help support groups. The program builds support, resilience, and independence at a fraction of the cost of other housing programs. SHARE! continues to catch those falling through the cracks and accepts everyone who comes through its doors, having never turned anyone away or asked anyone to leave. SHARE! argues that it sees the need for a high-road model of facilities, as outlined in the provisions in this bill, to be codified into a legal definition so as to discourage bad actors from preying on unsuspecting and vulnerable populations. The Steinberg Institutes says that this bill will protect individuals like Brandon and strengthen our MH care system by ensuring that all treatment facilities meet basic standards of care and accountability. This is especially vital in maintaining trust in credible treatment facilities that provide vital care amidst the ongoing opioid and fentanyl epidemics.
2. Policy concern. This bill appears to attempt to create a SLH/RR-like equivalent for MH conditions but would also encompass existing RRs under the SCR definition, which have been well-established for decades and for which there already is a definition in state law for the purpose of requiring DHCS licensed and certified entities to disclose information when they own or control SLH/RRs. The Committee may wish to consider whether encompassing existing SLH/RRs in an SCR definition may create unintended consequences.

To address this concern, the author may wish to consider amending this bill to:

1. Delete the definition for SCRs;
2. Reference the existing definition for SLH/RRs; and,
3. Create a definition for SLH/RR-like housing for MH conditions, or dual diagnosis.

SUPPORT AND OPPOSITION:

Support: SHARE! Collaborative Housing (sponsor)

Steinberg Institute

Oppose: None received

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