Developments in California Health Care Law in 2014

• Publication year: 2015
• Author: H. Thomas Watson, Carol Scott, David Johnson, and Ellin Davtyan

Developments in California Health Care Law in 2014

H. Thomas Watson, Carol Scott, David Johnson, and Ellin Davtyan

The pace of change in California health care law slowed during 2014, allowing health care consumers, providers, payors, and regulators to absorb and react to the sweeping legislative changes enacted at the state and federal levels from 2010 to 2013. In November, California voters rejected two propositions that would have given the State Insurance Commissioner the right to review and reject health insurance rate increases (Proposition 45) and raised the cap on non-economic personal injury damages against health care providers (MICRA) from $250,000 to $1.1 million (Proposition 46). However, the Legislature passed, and the Governor signed, approximately 50 bills that made incremental changes to individual areas of health care law. California appellate courts also handed down important decisions affecting such things as the valuation of services by non-contracted providers and the tort damages and defenses available to health care providers and patients.

2014 Legislation

Residential Care Facilities for the Elderly Reform Act of 2014

The most substantial reform to any one sector of health care law was the passage of ten separate bills that are popularly referred to as the Residential Care Facilities for the Elderly (RCFE) Reform Act of 2014. These bills, which focus on improving RCFE care, empowering residents, and protecting their rights, were passed in response to investigative reports about failures in oversight and enforcement of RCFEs. RCFEs provide 24-hour non-medical care to persons over 60 who need care, supervision, and assistance with the activities of daily living, such as bathing and grooming.¹ These facilities house some of the most medically fragile and impaired elderly in California. Residents in these facilities require varying levels of personal care and protective supervision. RCFEs are licensed and regulated by the Community Licensing Division of the California Department of Social Services (DSS).²

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The most significant provisions of the RCFE Reform Act include:

• Effective July 1, 2015, each RCFE, as a condition of licensure, is required to obtain and maintain liability insurance in the minimum amounts of $1 million per occurrence and $3 million in the aggregate annually, covering injuries to residents or guests (A.B. 1523 2013-2014 Reg. Sess.).³
• The Act amends current laws to enhance the rights of resident councils and family councils in RCFEs. It requires facilities to assist in establishing and to not interfere with such councils and ensures that councils have more input into residents' daily living and the promotion of residents' rights (A.B. 1572 2013-2014 Reg. Sess.)⁴
• The Act provides that a person whose license has been revoked or forfeited for abandonment of a facility is permanently ineligible for reinstatement of a facility license (A.B. 1899 2013-2014 Reg. Sess.)⁵
• Facilities are required to have an administrator or facility manager (as well as sufficient staff) on the premises at all times, as well as at least one staff member with CPR and first aid training. Facility staff must be trained in building safety, fire safety and emergency response procedures (A.B. 2044 2013-2014 Reg. Sess.). The Act increases the qualifications and training requirements for RCFE administrators from 40 to 80 hours, including 60 hours of in-person instruction, adds additional topics to the uniform core of knowledge, including the adverse effects of using psychotropic drugs to control the behavior of dementia clients, and prohibits a licensee, officer, or employee of the licensee from discriminating or retaliating against any resident or employee because they called 911 (S.B. 911 2013-2014 Reg. Sess.)⁶
• The Act includes a comprehensive bill of rights, including, but not limited to, such issues as visitation, privacy, confidentiality, personalized care, autonomy, reasonable personal accommodation, decisions over rooms and roommates, right to send and receive mail and to make phone calls, informed consent, freedom from abuse and restraints (including physical and chemical restraints), and adequate staffing (A.B. 2171 2013-2014 Reg. Sess.).⁷

The RCFE Reform Act also:

• Establishes a tiered civil penalty system for facilities, including a $10,000 fine against RCFEs for physical abuse or serious bodily harm and a $15,000 fine for deaths resulting from statutory violations, and creates four levels of appeal for RCFE providers who wish to appeal their fines (A.B. 2236 2013-2014 Reg. Sess.)⁸;
• Requires RCFEs to correct deficiencies within 10 days, unless otherwise specified, and requires DSS to post online instructions on how to obtain inspection reports offline, how to design informational posters on reporting complaints and emergencies for display in RCFEs, and how to notify the State Ombudsman Office when DSS issues a temporary suspension or revocation of a facility's license (S.B. 895 2013-2014 Reg. Sess.)⁹;
• Creates new penalties for facility non-compliance, including authorizing DSS to suspend the admission of new residents to facilities where there is a substantial probability of harm (S.B. 1153 2013-2014 Reg. Sess.)¹⁰; and
• Increases the licensing fees for RCFEs and makes legislative findings that it is essential that DSS be given adequate resources to support its consumer protection mandate.

Continued Expansion of the Availability of Providers

In past sessions, the California Legislature responded enthusiastically to the federal Affordable Care Act by establishing one of the more effective private insurance exchanges, namely Covered California, and adopting the optional expansion of its Medicaid program (called Medi-Cal in California). While estimates vary, over 2 million Californians appears to have gained health care coverage as a result of these programs. This expansion in coverage, however, is also expected to cause a major expansion in the demand for healthcare services.

One way that California has been addressing the demand is by expanding the scope of practice for medical providers. This trend continued incrementally in 2014. For example, in 2014 the state enacted bills permitting dental assistants to expose x-rays (A.B. 1174 2013-2014 Reg. Sess.), medical assistants to hand prescriptions to patients (A.B. 1841 2013-2014 Reg. Sess.), and

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pharmacy technicians to perform packaging and other manual nondiscretionary tasks while under supervision of a pharmacist (S.B. 1039 2013-2014 Reg. Sess.). The Legislature, however, rejected a bill that would have permitted optometrists to diagnose and treat eye diseases, including by prescribing drugs and performing minor surgery (S.B. 492 2013-2014 Reg. Sess.).

The California Legislature also enacted a bill permitting medical schools to offer accelerated medical degrees. While prior law required 4 years or 32 months of instruction, under Assembly Bill No. 1838, schools can now issue degrees in less time, so long as these programs are accredited by the recognized medical and osteopathic bodies. The State similarly eased licensing requirements for marriage and family therapists and for licensed professional clinical counselors (A.B. 2213 2013-2014 Reg. Sess.).

In a seemingly small, but actually very significant, piece of legislation, California also made it far easier for medical practitioners to serve patients via telehealth. Under prior law¹¹, telehealth could not be delivered unless the health care provider first obtained verbal consent from the patient in person (where the patient was located). Providers complained that this provision made telehealth unworkable because a provider was required to repeatedly visit a patient's home before providing telehealth services. Under the newly enacted law (A.B. 809 2013-2014 Reg. Sess.), a provider may administer telehealth services so long as the provider informs the patient about the use of telehealth and obtains either verbal or...