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Nursing Homes and RCFEs in 2006:
A Year in Review


Nursing Home Reform

2006 was a year of mixed blessings for California nursing home residents. In the months ahead, residents will benefit from important new laws, a hard fought court victory, and a better funded inspection system. On the other hand, far too many residents continue to suffer abuse and neglect despite nursing homes receiving large Medi-Cal funding increases that were supposed to improve care. California’s embattled nursing home inspection agency, the Department of Health Services Licensing and Certification Division, remained in the spotlight due to notorious lax oversight and enforcement.

Lawsuit Secures Timely Complaint Investigation

The court victory came in a lawsuit, CANHR v DHS, filed by CANHR and the daughters of two elder neglect victims against the California Department of Health Services (DHS) due to its routine failure to begin onsite investigations of nursing home complaints within 10 working days, as required by California law. In September 2006, San Francisco Superior Court Judge Peter Busch ordered DHS to comply with the law and to investigate its large backlog of complaints by May 12, 2007. DHS must also file quarterly compliance reports with the Court. If it fails to comply, CANHR can seek further enforcement action from the Court.

New Laws Strengthen Rights and Enforcement

In September, the Governor signed a CANHR supported bill (SB 1312, Alquist) that requires DHS to determine compliance with vital California nursing home reform laws during inspections and complaint investigations. The new law was triggered by legislative hearings that revealed DHS has virtually abandoned California nursing home laws and was not enforcing them. SB 1312, which takes effect on July 1, 2007, will make two decades of California nursing home reforms relevant again. Foremost among the existing laws that DHS must enforce is California’s minimum staffing requirement, which requires nursing homes to provide at least 3.2 hours of nursing care per resident each day.

Nursing home residents scored another victory with the passage of SB 1248, a CANHR sponsored bill. It will guarantee equal rights for California nursing home residents by requiring all California nursing homes to comply with residents’ rights established under federal law. Like SB 1312, it takes effect on July 1, 2007.

At the national level, Congress showed little interest in nursing home reform as it scuttled Representative Waxman’s Nursing Home Staffing Act (H.R. 4293), a bill that would substantially improve nursing home staffing levels. Many CANHR members signed or circulated a petition supporting the bill that was published by the Ladies Home Journal in June 2006. CANHR will be encouraging the new Congress to give the bill more favorable attention in 2007.

Hefty Medi-Cal Rate Increases Benefit Operators, Not Residents

Financially, 2006 proved to be an excellent year for California nursing home operators. Thanks to a 2004 law written and sponsored by the nursing home industry (AB 1629), Medi-Cal is funding an extraordinarily generous new rate system that is increasing average nursing home rates by about 38 percent over a 4-year period. The Medi-Cal program issued large retroactive payments to hundreds of certified nursing homes in 2006, but how the money is being spent is anybody’s guess. In March, the Service Employees International Union (SEIU) — a co-sponsor of the rate reform plan — protested that hundreds of nursing homes had not even begun discussions with workers about increased staffing and wages.

Widespread Abuse and Neglect Continue

Despite Medi-Cal’s spending spree on nursing home care, neglect and abuse are growing concerns in many nursing homes, as documented in a May 2006 CANHR report: Nursing Home Abuse and California’s Broken Enforcement System. In some instances, the degree of abuse and neglect are shocking, as in the case of the Huntington Healthcare Center in Los Angeles. It received 20 separate California citations and fines last summer for appalling conditions that endangered dozens of residents. The facility has since been closed and its residents scattered to other nursing homes while its owner faces charges from the Attorney General that she sought to bribe a health department inspector.

Broken Oversight System Gains Attention, Funds, New Director

The DHS Licensing and Certification Division was in the spotlight throughout 2006 due to its miserable performance in protecting nursing home residents. Its failure to investigate complaints, enforce California laws, conduct effective inspections, and provide public information on nursing home performance are putting the health and safety of over 100,000 nursing home residents at risk.

DHS’s neglect of its duties made it a target of lawsuits from consumers and advocates seeking enforcement of key laws. In addition to its lawsuit on complaint investigations, CANHR secured a settlement agreement from DHS after suing it for not collecting or disclosing required information about nursing home owners. DHS has also been sued for not issuing nursing home staff to patient ratio regulations that are more than three years overdue.

Taking note of these failures, the Legislature took two important steps. First, with CANHR’s full support, it ordered a thorough audit of the Licensing and Certification Division by the California State Auditor. Second, it gave DHS a $20 million funding increase to hire an additional 114 health facility inspectors, increasing its professional inspection staff by almost one-third.

Brenda Klutz, Licensing and Certification’s longtime director, retired in mid-summer, and was replaced by Kathleen Billingsley, a newcomer to California government.

RCFE Trends

In California, there are now over 7,400 Residential Care Facilities for the Elderly (RCFEs) with a capacity to serve over 160,000 residents — a population exceeding the number of persons in nursing homes. Residential care is increasingly recognized as an alternative to nursing home care making it the fastest growing area in long term care.

While the industry has grown at a rapid rate and the health acuity and care needs of residents has dramatically increased, ironically regulatory oversight has been reduced from semi-annual inspections in the 1970s, 1980s and annual inspections in the 1990s and early 2000s to inspections being conducted once every 5 years starting in 2003! Yet this unacceptable "standard" was not even met in 2003 and 2004 by Community Care Licensing (CCL).

During the 2004-2005 fiscal year, CCL investigated about 14,000 complaints against RCFEs and issued over 11,000 citations. In addition, providers filed over 33,000 incident reports on issues ranging from deaths (101 deaths not from natural causes) to elder abuse. Although over 90% of complaints were investigated in a timely manner, few fines were issued and fewer are collected making the civil penalty system ineffective as a deterrent. To make matters worse, information on facility compliance is not electronically available but can only be accessed in hardcopy at district offices scattered throughout the state. Vital public information for consumers to make informed choices is essentially not available.

The Year Ahead In Long Term Care Reform

In 2007, CANHR needs your help to fight for additional reforms in nursing home, residential care and community based care. A top priority is improving the ineffective nursing home complaint investigation system. CANHR will seek legislation that mandates timely completion of investigations, requires DHS to fully inform complainants about the results of investigations, and ensures that incidents of abuseand neglect reported by nursing home are properly investigated.

We also need to pressure the Department of Social Services to make oversight and enforcement information about residential care facilities available and accessible to the public and to advocate for more effective and timely oversight of the growing RCFE industry. We will be asking you to become a "CANHR Advocate" and to work with us over the next few years to advocate for these changes.