State health officials are preparing to impose new licensing fees on long-term care facilities.

For decades, the industry has beaten back such efforts, leaving it one of few business segments that doesn’t pay for licensing in Hawaii.

The head of the Health Department’s Office of Health Care Assurance says the new revenue stream will help the agency improve systems for collecting and analyzing information, letting it better regulate the more than 1,700 facilities it oversees.

“We need to catch up,” said Keith Ridley, who heads the Office of Health Care Assurance.

Lilia Fajotina, who heads a group of care home operators. I have an inspection report for this home too. So even a street shot would work. 94-438 Hoaeae St., Waipahu. Nathan story. 7 feb 2015. photograph Cory Lum/Civil Beat
Lilia Fajotina, who heads a group of care home operators, owns this care home in Waipahu. Cory Lum/Civil Beat

Though the size of the fees hasn’t been set, care-home operators already are pushing back.

“If they do that, I’m pretty sure that a lot of care homes are going to close down,” said Lilia Fajotina, president of the Alliance of Residential Care Administrators, an industry trade group.

“It’s a big problem,” she said. “Where are they going to put the clients?”

Fajotina, who runs one of the many adult residential-care homes in Waipahu, said care-home operators have been discussing the fees with state health officials.

She said if there are going to be annual or biannual licensing fees, the industry has proposed setting them at $50 — a far cry from the $3,300 that she said health officials have put forward.

Ridley declined to say how much the state may charge, only asserting that the department has the statutory authority to do so and that now is the time.

Making Rules

The agency plans to set the rates for the fees through an administrative rule-making process, which is expected to take months and include public hearings.

The proposed rules are currently being reviewed by a deputy attorney general, Ridley said.

If the draft comes back without a need for major revisions, he said, the department can move forward with the public-hearing process.

1 may 2015. photograph by Cory Lum/Civil Beat
Keith Ridley, who heads the state Health Department’s Office of Health Care Assurance. Cory Lum/Civil Beat

After that, the rules may be revised again based on the input and eventually sent to Gov. David Ige for his approval.

Unlike restaurants, professional contractors and many other industries, none of the long-term care facilities the department oversees are required to pay a licensing fee.

Ridley said that the information-management system the fees would fund would do a lot more than just make it easier for his office to post inspection reports online, a state mandate the department has struggled to meet.

The system also would allow the office to analyze deficiencies that inspectors find, identify widespread problems and — armed with data instead of anecdotal evidence — force the industry as a whole to fix them, he said.

“So really, the bigger piece of it is: How are we going to improve the provision of care to the community and safeguard the population better?” Ridley said.

Joining The 21st Century

The Legislature passed a law in mid-2013 requiring the Office of Health Care Assurance to start posting inspection reports online by the start of this year.

Advocates for the elderly and nonprofits that support government transparency heralded the new law. They said it signaled an end to the practice of forcing the public to submit written requests to see the inspection reports, then wait, often for weeks, for the department to find the records and redact them. Anyone asking for reports had to pay both for the copies and for whatever time it took to produce them. 

After blowing the January deadline, the office uploaded an initial batch of 79 inspection reports in March.

House Finance Chair Sylvia Luke, right, asks the mayor a question as Sen. Jill Tokuda listens.
House Finance Chair Sylvia Luke, right, asks a question during a legislative hearing last year as Sen. Jill Tokuda listens. Cory Lum/Civil beat

The postings resumed last month, at least intermittently, after media attention and a letter from lawmakers to the governor demanding he address the lack of compliance and the backlog of roughly 500 inspections yet to be posted.

As of Tuesday, the department had posted 195 reports on its website.

Ridley maintains that his office is “unable to absorb this work on an ongoing basis with our current resources.”

Health officials said they will ask for money in next year’s budget to hire more inspectors and support staff, including a full-time position responsible for posting inspection reports online.

Lawmakers said the Office of Health Care Assurance, which falls under one of the state’s largest departments, needs to find a way to get the work done and comply with the law.

“The easiest thing is to just come to us and ask for more and ask for more.” — Sen. Jill Tokuda

Sen. Jill Tokuda, who chairs the Ways and Means Committee, said the office should look at best practices around the country and find ways to avoid the unnecessary time spent redacting confidential information, like the names of clients, before uploading the inspection reports online.

This can be done by changing the inspection form to one that effectively self-redacts by not requiring sensitive personal information in the first place.

“The easiest thing is to just come to us and ask for more and ask for more,” Tokuda said.

Still, she recognized the challenge of doing more with less.

“Safety nets are only as strong as the boots on the ground,” she said, noting the limited number of inspectors the department has not just for care homes but also for harbors and food safety.

Lawmakers look at what actions the department takes to help sustain itself, as Ridley is doing with the plan to implement fees as a new revenue stream.

“It’s appreciated when departments are looking for ways in which a blend of resources can be used to meet the mandate,” Tokuda said. “It’s not always 100 percent possible, but a good-faith effort is something we want to see.”

Automation And More

Ridley said that while posting inspection reports is important, he’s more focused on the broader efforts to take advantage of technology.

“We’ve really got to look at our entire operation and automate much more,” he said. “Much more.”

His office is working with Hawaii Information Consortium on a management information system that would help distribute work more evenly among inspectors, and create a paperless system for reports to be submitted and redacted electronically. The consortium is a company that provides fee-based information services to government agencies. 

“We’re still in the process of trying to figure out what all we want this thing to accomplish and what it’s going to cost.” — Keith Ridley, OHCA chief

The project is still at least a couple years away, Ridley said, and may grow piecemeal. 

“We’re still in the process of trying to figure out what all we want this thing to accomplish and what it’s going to cost,” he said.

The IT system also would allow the department to analyze data in a way that improves the care of residents in long-term facilities, he said.

His office currently relies on anecdotal evidence to identify problems within the industry. With the new system, he could identify widespread areas of concern by looking for spikes in the number of certain types of deficiencies, for instance.

Rep. Sylvia Luke, who chairs the Finance Committee, was supportive of the idea but raised doubts about implementation and whether it’d end up worth however much the IT upgrade might cost.

“In theory, that might make perfect sense, but the state does not have a good track record,” she said, referring to IT projects on which the state has wasted taxpayer dollars.

In September, the state auditor blasted the Hawaii Health Connector’s management for blowing more than $11 million in public funds, in part on awarding lucrative IT contracts based on personal recommendations instead of qualifications and cost.

John McDermott, the state’s long-term care ombudsman, said the care-home industry should be able to bear the fees.

“Every other business that I can think of has to pay some type of licensing fee,” he said. “These homes are a business and they’re compensated and it does cost money for the state to have inspectors.”

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