MPM S.B. 527 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 527 By: Moncrief Human Services 7/9/2001 Committee Report (Amended) BACKGROUND AND PURPOSE Enforcement remedies in state law provide questionable protection of residents in assisted living facilities. Under current law, the state must choose between closing down a facility at the inconvenience of its residents or letting the facility continue to operate without any enforcement action. Senate Bill 527 establishes procedures for assessing and determining violations and penalties for assisted living facilities and provides for an amelioration process. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Health and Human Services Commission in SECTION 13 (Section 247.051, Health and Safety Code) and to the Texas Department of Human Services in SECTION 16 of this bill. ANALYSIS Senate Bill 527 amends the Health and Safety Code to require the Texas Department of Human Services (DHS) to examine DHS employees who inspect or survey assisted living facilities (facilities). In developing the examination, DHS is required to consult with facility operators or their representatives and with consumers of personal care services provided by facilities or consumer representatives. A DHS employee is prohibited from independently inspecting, surveying, or taking administrative action against a facility unless the employee has passed the examination (Sec. 247.0272). The bill authorizes DHS after providing notice and opportunity for a hearing to an applicant or license holder for a facility to deny, suspend, or revoke a license if DHS finds that the applicant, license holder, or controlling person has violated the Assisted Living Facility Licensing Act or a related rule, standard, or order or facility license in either a repeated or substantial manner, or has committed certain acts for which the employee may be charged an administrative penalty. The bill provides that the status of a person as an applicant for a license or as license holder is preserved until final disposition of a contested matter, except as the court having jurisdiction of a judicial review of the matter is authorized to order in the public interest for the welfare and safety of facility residents. The court is prohibited from ordering arbitration to resolve a dispute involving the denial, suspension, or revocation of a license or the conduct with respect to which the denial, suspension, or revocation is sought (Sec. 247.041). The bill requires DHS and the State Office of Administrative Hearings to expedite any hearing or decision involving an emergency suspension or closing order (Sec. 247.042). S.B. 527 authorizes DHS to assess an administrative penalty of no more than $500 per violation against a person who: _violates the Assisted Living Facility Licensing Act or a related rule, standard, order, or term of a license; _makes a false statement, that the person knows or should know is false, of a material fact on an application for issuance or renewal of a license or in an attachment to the application or with respect to a matter under investigation by DHS; _refuses to allow a DHS representative to inspect any portion of the facility premises or a book, record, or file required to be maintained by the facility; _wilfully interferes with the work of a DHS representative or the enforcement of the Assisted Living Facility Licensing Act; _wilfully interferes with a DHS representative preserving evidence of a violation; or _fails to pay an administrative penalty no later than the 30th day after the date the assessment of the penalty becomes final. The Texas Board of Human Services is required to establish gradations of penalties in accordance with the seriousness of the violation. The bill sets forth the circumstances DHS is required to consider in determining the amount of a penalty and requires DHS to make a record of the extent to which each was considered (Sec. 247.0451). The bill prohibits DHS from collecting an administrative penalty from a facility if the facility corrects a violation within 45 days of receiving the notice of the violation unless the violation: _results in serious harm to or death of a resident; _involves making a false statement of material fact that the person knows or should know is false, refusing to allow a DHS representative to inspect certain documents or facility premises, wilfully interfering with the work of a DHS representative or the enforcement of the Assisted Living Facility Licensing Act, wilfully interfering with a DHS representative preserving evidence of a violation, or failing to pay an administrative penalty in a timely manner; _is a second or subsequent violation of a right of the same resident or the same right of all residents; or _involves the inappropriate placement of a resident at a facility. The bill specifies that a facility that corrects a violation must maintain the correction. If the facility fails to maintain the correction for at least one year from the date the correction was made, DHS may assess and collect an administrative penalty for the subsequent violation that is equal to three times the amount of the original penalty amount. DHS is not required to give the facility an opportunity to correct the subsequent violation (Sec. 247.0452). S.B. 527 requires DHS to issue a preliminary report stating the facts on which DHS concludes that a violation has occurred, which may recommend an administrative penalty and the penalty amount. DHS is required to give written notice of the report to the person charged with the violation. The bill sets forth a procedure for the person to consent to the penalty, correct the violation, and request a hearing before an administrative law judge (Secs. 247.0453 and 247.0454). If the commissioner of human services (commissioner) finds that a violation has occurred, the bill requires the commissioner to give to the person charged with the violation written notice of the judge's findings, the administrative penalty amount, the rate of interest payable on the penalty, whether amelioration is required in lieu of all or part of the penalty, and the person's right to judicial review. The bill requires the person charged to pay the penalty in full or file a petition for judicial review. The bill authorizes DHS to permit the person to pay the penalty in installments or to use all or part of the penalty amount to ameliorate the violation. The bill specifies that if the person does not pay the penalty within the specified time period, the penalty is subject to interest and DHS is authorized to refer the matter to the attorney general for collection of the penalty and interest. If the amount of the penalty is reduced or the assessment is not upheld on judicial review, the bill requires the commissioner to remit the appropriate amount and create a release of the supersedeas bond if one has been posted (Sec. 247.0455). S.B. 527 prohibits DHS from assessing a monetary penalty against a facility under the provisions of this bill and a monetary penalty under Medicaid provisions for the same act or failure to act (Sec. 247.0456). The bill authorizes the commissioner to allow a person under the supervision of DHS to use any portion of the penalty to ameliorate a violation or improve services other than administrative services in a facility affected by the violation instead of paying the administrative penalty. DHS is required to offer amelioration to a person for a charged violation if DHS determines that the violation does not constitute immediate jeopardy to the health and safety of a resident of the facility. The bill requires DHS to offer amelioration not later than 10 days after the date the person receives final notification of the recommended assessment of an administrative penalty. The person must file a plan for amelioration within 45 days after receiving the notice and must agree to waive the person's right to an administrative hearing if DHS approves the plan. The bill sets forth the minimum standards for a plan for amelioration. The bill authorizes DHS to require that the plan propose changes that would result in conditions that exceed the requirements imposed on facilities by state law or rules. DHS is required to approve or deny an amelioration plan within 45 days of receipt and on approval to deny a pending request for an administrative hearing. The bill prohibits DHS from offering amelioration to a person more than three times in a two-year period or more than once in a two-year period for the same or a similar violation (Sec. 247.0457). S.B. 527 requires the Health and Human Services Commission (HHSC) to establish by rule an informal dispute resolution process that provides for adjudication by an appropriate disinterested person of disputes relating to a proposed enforcement action or related proceeding. The bill requires HHSC to adopt rules to adjudicate claims in contested cases and prohibits HHSC from delegating responsibility to administer the informal dispute resolution process to another state agency (Sec. 247.051). The bill provides that if a DHS inspector determines that a resident is inappropriately placed at a facility, the facility is not required to move the resident, if no later than the 10th business day after the date the facility is informed of the specific basis of the inspector's determination, the facility: _obtains a written assessment from a physician that the resident is appropriately placed; _obtains a written statement from the resident that the resident wishes to remain in the facility or from a family member of the resident stating that the family member wishes the resident to remain in the facility if the resident lacks capacity to give the statement; and _states in writing that the facility wishes for the resident to remain in the facility. If the DHS inspector determines that a resident is inappropriately placed and the facility agrees or does not obtain the written statements, the facility is required to discharge the resident and DHS is prohibited from assessing an administrative penalty against the facility because of the inappropriate placement. The bill specifies that the resident has 30 days after the discharge date to move from the facility (Sec. 247.066). S.B. 527 repeals the provision requiring a facility to submit an acceptable plan of correction to the regional director with supervisory authority over the DHS inspector not later than the 10th day after the date of completion of a final exit conference (SECTION 15). The bill requires DHS to adopt rules to implement the right to correct provisions and provisions regarding the inappropriate placement of a resident no later than January 1, 2002 (SECTION 16). EFFECTIVE DATE September 1, 2001.