Hawaii caregivers could see improvements in their financial bottom line in exchange for concessions that consumer advocates have long sought under a broad “compromise” bill that House Vice Speaker John Mizuno is pushing this legislative session.

It’s the first time the Kalihi Democrat has taken an omnibus approach to reforms in the adult care home industry that an increasing number of elderly residents are relying upon for health services.

Historically, Mizuno has introduced legislation on a piecemeal basis — generally aimed at benefiting care home operators. Now, he and 22 co-sponsors have introduced House Bill 2005 to change how the state regulates the industry, which includes 12,340 beds at 1,702 facilities covering a wide range of needs.

The proposed law would:

• Require inspectors to conduct annual unannounced “visits” to all state-licensed facilities
• Require care home operators to pay licensing and certification fees
• Require care home operators to be fairly compensated
• Allow the Department of Health to post care home vacancy information online
• Allow two private-pay clients in community care foster family homes instead of one

Most long-term care facilities are inside modified residential homes, which follows a nationwide trend of the elderly wanting to age in neighborhood settings instead of the larger and more institutionalized nursing homes. There are 493 adult residential care homes with 2,703 beds, and 1,145 community care foster family homes providing 2,897 beds.

Adult residential care homes generally can serve up to five clients but can have more with an expanded certification, all of whom can pay privately — which can be an amount many times higher than what Medicaid clients pay.

Community care foster family homes can have up to three clients, but only one can pay out of their own pocket. This type of facility was created to cater to Medicaid clients.

The proposed legislation includes a provision that would let the Department of Health allow two private-pay clients in a community care foster family home as long as those clients are married or in a civil union.

Mizuno attempted to pass a bill last year that would have established such an exemption, but lawmakers killed it at the last minute over concerns of displacing Medicaid clients and because the ARCH option already gives married couples a place to live together and pay out of their own pocket.

Packaging it in with other measures that are considered concessions to advocates for the elderly may improve its odds this year. But lawmakers can always dissect broad bills to just pass the parts they want.

Long-term care ombudsman John McDermott said he could support allowing two private-pay clients in a community care foster family home under certain conditions.

But he was concerned with the potential loopholes created in the part of the legislation that mandates unannounced visits for all types of long-term care facilities instead of just the adult residential care homes.

Mizuno said the goal here, as in other places in the bill, is to level the playing field among the various types of care facilities.

The law currently says the Department of Health “shall conduct unannounced visits, other than the inspection for relicensing, to every licensed adult residential care home and expanded adult residential care home on an annual basis and at such intervals as determined by the department to ensure the health, safety, and welfare of each resident.”

The law carves out an exception for the annual inspections for licensing, which are far more stringent than a “visit.” The law says the licensing inspections “shall be conducted with notice, unless otherwise determined by the department.”

The bill doesn’t touch that part, but it does add language to include “any other community care home or day care center licensed or certified and under the purview of the department” to the list of those subject to mandatory annual unannounced visits.

McDermott’s concern is what happens to the reports after those visits. Are they made public? And if so, how?

A 2013 law requires the department to post on its website the inspections that are part of the licensing and certification process. The department has struggled to comply with this mandate — flat-out not doing it for months at a time — but has become more consistent at posting the reports lately after media attention and pressure from lawmakers.

Because the law says “inspections” must be posted, McDermott worries that the department could skip posting “visits.”

The records are public. But the current process requires asking the department for them in writing, then waiting up to two weeks for the agency to say how much it will cost to find those records, redact them and make copies, then waiting again after giving the department a green light to produce them.

Advocates for the elderly have said for years that this is far too long of a process, not to mention potentially costly, for people who need that information to determine what care home to place a loved one in.

The motive for unannounced inspections is making those reports worthwhile. The vast majority of care home operators are currently found to have little to no deficiencies, and the ombudsman and others say that’s because they have a heads up that the inspectors are coming.

“That’s when you actually find things wrong because they didn’t know you were coming,” McDermott said.

Some care home operators have said they are OK with the state doing unannounced visits. But for decades, industry groups have fought moves to require unannounced inspections for licensing.

The operators have said they need to know when the inspectors are coming so they can get their paperwork in order and make sure they are home with their clients and not out running errands like picking up pills. They’ve also cited privacy concerns.

Mizuno said it’s his intention with the bill that the unannounced “visits” would similarly be posted to the department’s website within five working days.

In addition to the inspection reports, the bill would let the department maintain a forum on its website where state-licensed care facilities may post vacancy information to facilitate the placement of individuals.

What’s A ‘Fair’ Licensing Fee?

Blanks were left in the fee section of the legislation. Mizuno is expecting backlash over this part from representatives of the care home industry, who he has already met with to go over the contents.

The section would establish, for the first time, licensing and certification fees for adult residential care homes, community care foster family homes, adult day care centers, adult foster homes for developmentally disabled individuals, case managers and others.

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.

Mizuno said he’s hoping for a robust dialogue over what a “fair fee” is between the care home operators and Keith Ridley, who heads the department’s Office of Health Care Assurance, which oversee the vast majority of care homes.

“Some caregivers are not going to be happy with that,” Mizuno said.

Lilia Fajotina, president of the Alliance of Residential Care Administrators, an industry trade group, has said that fees may force some operators to close, creating a shortage of beds.

But Mizuno said the fees are a way to generate revenue to beef up oversight.

“The majority of the industry, probably 95 percent, does a great job,” he said. “But we have to remove the bad apples that are giving the industry a black eye.”

Nona Mosman died in 2013 after social workers discovered the 88-year-old with softball-sized bed sores at a three-bed community care foster family home in Waipahu.

Her primary caregiver, Jennifer Polintan, was working another full-time job and leaving Mosman in the care of her father, who was unqualified to tend to the client’s needs.

Routine announced inspections failed to uncover this problem. It took a complaint to trigger an unannounced visit, but by that time, it was too late.

Polintan is now in prison after being convicted of manslaughter, and the business has been shut down.

Ridley has said that the state is already preparing to impose new licensing fees on long-term care facilities through an administrative rule-making process that doesn’t need legislative approval.

He said the new revenue stream would help the agency improve systems for collecting and analyzing information, allowing it to better regulate the facilities.

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

McDermott raised concerns about the bill directing the money generated by the licensing fees straight into the state general fund. Instead, he said this new revenue should stay in the Department of Health so it can better regulate the industry.

Mizuno has yet to talk to Ridley about the bill, but the department has had fees in mind for some time as well as mandating unannounced inspections. Ridley could not be reached for comment last week.

Many states require unannounced inspections. Hawaii officials have said it’s something that should be done, but they have not made it a priority.

Asked in November about the chances of getting a bill through the Legislature to require unannounced inspections, Ridley said, “We won’t know until we ask. Unfortunately, we don’t have any plans to ask, at least for the ARCHs.”

And so Mizuno, with early signs of support from nearly half the House, has taken it upon himself to do so.

“It’s the right thing to do,” he said. “Consumer protection is No. 1.”

The omnibus bill’s first stop is the Human Services Committee, chaired by Rep. Dee Morikawa, who co-sponsored the legislation. No hearing has been scheduled yet.

From there, it’s got two more committees — Consumer Protection and Commerce, chaired by Rep. Angus McKelvey, and Health, chaired by Della Au Belatti, neither of whom are co-sponsors — to get through before a vote by the full House. Triple referrals, as they’re called in the Legislature, make it more difficult for proposed legislation to succeed.

What Does ‘Fairly Compensated’ Mean?

The bill contains a section to ensure caregivers are “fairly compensated. While the amounts are blank at this point, the way the legislation is worded sets a limit on how much they are paid annually rather than a minimum.

There’s also a section that would require the state to pay interest on late payments (overdue by at least 30 days) to facilities and care managers, which has been an issue in the past.

“It’s a compromise bill,” Mizuno said. “I’m going to go for it.”

While the omnibus bill is the broadest piece of care home legislation that’s been introduced this session, which started Jan. 20, there are a few others of significance.

House Bill 1884, and its counterpart in the Senate, would appropriate $300,000 to the office of the long-term care ombudsman for three full-time ombudsman specialist positions — one each on Kauai, Maui and Big Island.

The legislation is part of the Kupuna Caucus package of bills, and 29 lawmakers have signed on as introducers.

The House version is set to be heard by the Human Services Committee at 8:30 a.m., Thursday. No hearing has been scheduled yet on the Senate side.

Senate Bill 2001 would allow adult residential care homes, with each allowed to have up to six clients, in agriculturally designated districts.

As Mizuno’s omnibus bill explains, there are 238,000 Hawaii residents over 60 now, representing 19 percent of the population. By 2030, that’s expected to grow to 27 percent — something the legislation refers to as a “silver tsunami.”

“The recession of 2007 removed the possibility of a comfortable retirement for many of the State’s elderly, and once seniors are no longer able to work or are employable, there is no safety net to keep retired Hawaii residents out of homelessness,” the bill’s introduction says.

“In the next 10 years, the ‘silver tsunami’ will substantially affect the entire State and the healthcare system. Because of the ‘silver tsunami,’ the legislature finds that essential policies must be enacted to best address the care and interest relating to Hawaii’s elderly and disabled.”