The primary purpose and foundation of hospice is to provide quality end-of-life care to people with life-limiting illnesses. However, recent developments have taken place in the hospice industry which put this purpose into question. Just a few weeks ago, on October 4, 2021, Gavin Newson, California’s Governor, signed into law Senate Bill 664 – the Hospice licensure: moratorium on new licenses. To help you understand how this will affect California-based hospices, we give you the fast facts on this freshly-signed law.

  1. What is Senate Bill 664?

Prior to Gov. Newson signing SB 664, the Bill had first passed the California Assembly and California Senate on September 8 and 9, 2021 respectively. SB 664 basically enforces a moratorium or suspension on the issuance of new hospice licenses by the California Department of Public Health (CDPH) effective January 1, 2022.

  1. Why was it drafted?

You may wonder what led to the drafting and signing of this Bill? SB 664 was drafted by Senator Ben Allen after last year’s investigative series of the Los Angeles Times on the hospice industry. The Times discovered that within the last decade, Los Angeles County’s hospices have multiplied six times, a number which makes up around half of the authorized providers in the state of California. This has then led to the rise in fraudulent and negligent activities including deceptive practices and kickbacks. The Bill’s primary objective then is to identify deficiencies in the California hospice sector and find ways on how the licensure and oversight process could be improved.

  1. How long will the moratorium be?

The moratorium on new hospice licenses will be effective on and after January 1, 2022. It will end on the sooner of these two dates: 365 days after the California State Auditor publishes its report on hospice licensures or on January 1, 2027, when the Bill’s provisions are repealed.

  1. Are there any exceptions to the Bill?

CDPH is allowed to grant licenses to new applicants who have shown to have a demonstrable need for hospice services in their respective areas, as reflected in written findings by the Department. It is worth noting though that the moratorium is not applicable to the renewal of existing hospice licenses by CDPH.

  1. How will this affect the hospice industry?

The statewide audit in California aims to evaluate the growth and underlying factors of hospice providers. It will assess the scope and types of hospice fraud and abuses as well as their effects on Medicare and Medi-Cal programs. In addition, the audit will make an evaluation and assessment of the effectiveness of state systems in granting licenses to new hospice providers as well as in identifying and prosecuting hospice fraud. Given these, the audit may eventually result in reforms of California’s hospice regulations and systems.

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