SB116 - Health omnibus trailer.

Amended IN Assembly June 24, 2025 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Senate Bill No. 116 Introduced by Committee on Budget and Fiscal Review January 23, 2025 An act relating to the Budget Act of 2025. An act to amend Sections 1276.4, 1276.66, 1280.15, 1280.19, 1342.2, 1374.55, 1385.002, 1385.004, 1385.006, 1417.2, 1418.22, 120956, 120960, 127672, 127672.9, 127825, and 150900 of, to amend the heading of Article 6.1 (commencing with Section 1385.001) of Chapter 2.2 of Division 2 of, to amend and repeal Sections 1265.9 and 1385.005 of, to add Sections 1356.3, 1385.008, 1385.009, 1385.0010, 1385.0011, 1385.0012, 1385.0013, 1385.0014, 1385.0015, 1385.0016, 1385.0017, 1385.0018, 1385.0019, 1385.0020, 1385.0021, 1385.0022, 1385.0023, 1385.0024, 1385.0025, 1385.026, and 127673.05 to, and to repeal and add Sections 1385.001 and 127697 of, the Health and Safety Code, to amend Section 10119.6 of, and to add Section 10125.2 to, the Insurance Code, to amend Section 1026 of the Penal Code, and to amend Sections 5961.2, 14006, 14006.01, 14006.15, 14006.2, 14006.5, 14006.6, 14007.5, 14007.65, 14007.8, 14015, 14126.033, 14132, 14132.36, 14132.171, 14165.57, 14184.200, 14197.7, and 14199.128 of, to amend and repeal Sections 14000, 14005.11, 14005.20, 14005.40, 14005.401, 14006.3, 14006.4, 14007.9, 14009.6, 14009.7, 14011, 14013.3, 14051, 14051.5, 14105.33, 14126.024, 14133.85, 14148.5, and 14166.17 of, to amend, repeal, and add Sections 14005.62, 14105.436, and 14132.100 of, to add Sections 14107.115 and 14132.994 to, to repeal Section 14006.1 of, to repeal Chapter 16.5 (commencing with Section 18998) of Part 6 of Division 9 of, and to repeal and add Section 14105.38 of, the Welfare and Institutions Code, and to amend Section 83 of Chapter 40 of the Statutes of 2024, relating to health, and making an appropriation therefor, to take effect immediately, bill related to the budget. LEGISLATIVE COUNSEL'S DIGEST SB 116, as amended, Committee on Budget and Fiscal Review. Budget Act of 2025. Health omnibus trailer. (1) Existing law provides for the licensure and regulation of health facilities, including general acute care hospitals, acute psychiatric hospitals, and special hospitals, by the State Department of Public Health. Existing law requires the department to adopt regulations that establish minimum, specific, and numerical licensed nurse-to-patient ratios by licensed nurse classification and by hospital unit for all general acute care hospitals, acute psychiatric hospitals, and special hospitals. Existing law requires the regulations adopted by the department for acute psychiatric hospitals that are not operated by the State Department of State Hospitals to take into account the special needs of the patients served in the psychiatric units. Existing law generally makes a willful violation of those licensing provisions a crime. Under existing law, on and after July 1, 2015, any acute psychiatric hospital that submits a completed application and is operated by the State Department of State Hospitals may be approved by the State Department of Public Health to offer, as a supplemental service, an Enhanced Treatment Program (ETP) that meets certain conditions, including sufficient and documented evaluation of violence risk of the patient. Existing law requires an ETP to meet certain requirements relating to staffing and patient room features and to implement certain policies and procedures on patient care. Under existing law, those ETP provisions remain in effect for each pilot ETP until January 1 of the 5th calendar year after each pilot ETP site has admitted its first patient, and the provisions are repealed as of January 1 of the 5th calendar year after each pilot ETP site has admitted its first patient. Existing law requires the State Department of State Hospitals to post a declaration on its internet website regarding the timing of that repeal condition. This bill would delete the above-described provisions regarding ETP repeal. The bill would instead repeal those provisions on January 1, 2030, as specified. To the extent that the bill would extend the operation of certain ETP sites, and by extending ETP requirements, the violation of which would be a crime, the bill would impose a state-mandated local program. This bill would specify regulations for acute psychiatric hospitals not operated by the State Department of State Hospitals are deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, and general welfare, and would require the department to adopt emergency regulations for these facilities no later than January 31, 2026, and permanent regulations thereafter, as specified. The bill would authorize the department to readopt the emergency regulations, as specified. The bill would authorize the emergency regulations to include, among other things, staffing standards specific to acute psychiatric hospitals. (2) Existing law requires the State Department of Public Health to use the direct care staffing level data it collects to determine whether a skilled nursing facility has met its nursing hours or direct care service hours per patient per day requirements, as specified. Existing law requires the department to assess specified administrative penalties on skilled nursing facilities that fail to meet these requirements and establishes an administrative process that skilled nursing facilities may use to appeal determinations or assessments made by the department. Existing law continues in the Special Deposit Fund the Skilled Nursing Facility Minimum Staffing Penalty Account and requires the administrative penalties described above to be deposited into that account. Under existing law, the account is continuously appropriated to the department to support the implementation of these provisions. This bill would remove the Skilled Nursing Facility Minimum Staffing Penalty Account from the Special Deposit Fund. The bill would, notwithstanding any other law, authorize the State Controller to use the funds in the Skilled Nursing Facility Minimum Staffing Penalty Account for cash flow loans to the General Fund, as specified. (3) Existing law requires a clinic, health facility, home health agency, or hospice to prevent unlawful or unauthorized access to, and use or disclosure of, patients’ medical information, as defined. Existing law requires the clinic, health facility, home health agency, or hospice to report any unlawful or unauthorized access to, or use or disclosure of, a patient’s medical information to the State Department of Public Health and to the affected patient or the patient’s representative, as specified. Existing law authorizes the department to assess administrative penalties for violation of these provisions and gives the department discretion to consider all factors when determining the amount of a penalty. Existing law requires these and other specified penalty moneys to be deposited into the Internal Departmental Quality Improvement Account, which is established within the Special Deposit Fund. Upon appropriation by the Legislature, existing law requires the moneys in the account to be expended for internal quality improvement activities in the Licensing and Certification Program. This bill would remove the Internal Departmental Quality Improvement Account from the Special Deposit Fund and, notwithstanding specified provisions of law, require all interest earned on the moneys deposited in the account to be retained in the account. The bill would also, notwithstanding any other law, authorize the State Controller to use the funds in the Internal Departmental Quality Improvement Account for cash flow loans to the General Fund, as specified. (4) Existing law also establishes the Internal Health Information Integrity Quality Improvement Account. Existing law requires all administrative fines assessed by the State Department of Public Health for unlawful disclosures of confidential medical information, as specified, to be deposited in that account. Upon appropriation by the Legislature, existing law requires money in the account to be used for purposes of supporting quality improvement activities of the department. The bill would, effective July 1, 2025, abolish the Internal Health Information Integrity Quality Improvement Account and transfer all moneys in the account to the Internal Departmental Quality Improvement Account. The bill would require all remaining balances, assets, liabilities, and encumbrances of the Internal Health Information Integrity Quality Improvement Account as of July 1, 2025, to be transferred to, and become part of, the Internal Departmental Quality Improvement Account. The bill would require the administrative fines assessed for unlawful disclosures of confidential medical information described above to be deposited in the Internal Departmental Quality Improvement Account. The bill would, upon appropriation by the Legislature, require money in the account to be used for purposes of supporting quality improvement activities of the Licensing and Certification Program. The bill would also, notwithstanding any other provision of law, authorize the State Controller to use the funds in the account for cash flow loans to the General Fund, as specified. (5) Existing law provides for the licensure of long-term health care facilities by the State Department of Public Health. Existing law establishes the State Health Facilities Citation Penalties Account and the Federal Health Facilities Citation Penalties Account in the Special Deposit Fund into which moneys from civil penalties for violations of state and federal law, respectively, are deposited. Existing law requires the moneys in those accounts to be used, upon appropriation by the Legislature, in accordance with state and federal law for the protection of health or property of residents of long-term health care facilities, as specified. This bill would remove the State Health Facilities Citation Penalties Account and the Federal Health Facilities Citation Penalties Account from the Special Deposit Fund. (6) Existing law requires a skilled nursing facility, by January 1, 2026, to have an alternative source of power, as defined, to protect resident health and safety, as defined, for no fewer than 96 hours during any type of power outage. Existing law imposes specific compliance requirements based on whether a skilled nursing facility uses a generator as its alternative source of power, or batteries or a combination of batteries in tandem with a renewable electrical generation facility. This bill would instead require a skilled nursing facility to comply with these provisions on or after January 1, 2026, commencing on the first day of the Medi-Cal skilled nursing facility rate year for which the State Department of Health Care Services publishes a written notice on its internet website that the Legislature has appropriated sufficient funds for the express purpose of providing an add-on to the Medi-Cal skilled nursing facility per diem rate for the projected Medi-Cal cost compliance, as specified. The bill would authorize the State Department of Health Care Services to implement these requirements by means of provider bulletins, policy letters, or other similar instructions, without taking regulatory action. (7) Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care, and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires a pharmacy benefit manager under contract with a health care service plan to, among other things, register with the Department of Managed Health Care. This bill would instead require a pharmacy benefit manager contracting with a health care service plan or health insurer to secure a license from the Department of Managed Health Care on or after January 1, 2027, or the date on which the department has established the licensure process, whichever is later. The bill would establish application requirements, and would require a pharmacy benefit manager applying for licensure to reimburse the Director of the Department of Managed Health Care for the actual cost of processing the application, including overhead, up to an amount not to exceed $25,000. The bill would require a pharmacy benefit manager to submit financial statements to the department at specified intervals, and would require those statements and other proprietary information to be kept confidential, as specified. The bill would authorize the director to suspend or revoke a pharmacy benefit manager license, but would provide that, once issued, a license remains in effect until revoked or suspended. The bill would authorize a pharmacy benefit manager whose license has been revoked, or suspended for more than one year to petition the director to reinstate the license, and would authorize the director to prescribe a fee, not to exceed $500, for the actual cost of processing the petition. The bill would create the Pharmacy Benefit Manager Fund in the State Treasury, into which fees, fines, penalties, and reimbursements collected from pharmacy benefit managers would be deposited, except fines and administrative penalties for specified acts or omissions would be deposited into the newly created Pharmacy Benefit Manager Administrative Fines and Penalties Fund in the State Treasury. Because a violation of these provisions would be a crime, the bill would impose a state-mandated local program. Existing law requires the Department of Health Care Access and Information to implement and administer the Health Care Payments Data System to learn about and seek to improve public health, population health, social determinants of health, and the health care system. This bill would require a pharmacy benefit manager to provide specified data to the Department of Health Care Access and Information regarding drug pricing, fees, and other information. The bill would require a licensed health care service plan to pay an annual fee for the 2025–26 and 2026–27 fiscal years for the reasonably necessary expenses of the Department of Health Care Access and Information to fund the Health Care Payments Data Program. The bill would also require a licensed pharmacy benefit manager to pay amounts twice per year to fund the actual and reasonably necessary expenses of the department to implement pharmacy benefit manager licensing and the actual and reasonably necessary expenses of the Department of Health Care Access and Information pertaining to data reporting by pharmacy benefit managers. The bill would require the Health Care Payments Data Program advisory committee to include pharmacy benefit managers. (8) Existing law requires large group health care service plan contracts and disability insurance policies issued, [Text truncated for display. Full text available on Congress.gov.]