Category: Mike’s Column

In 2022, AB2119 became law. The “Medical Foster Home Program” allowed the Department of Social Services (DSS) to create a new licensed facility for veterans. In June 2026, DSS released a poorly worded provider information notice (PIN) that lacked vital information about how to become a licensee of a medical foster home for veterans (MFHV).

          Is this veteran’s housing and care worth pursuing? Absolutely not!

          The PIN states that DSS established the MFHV with “written directives” that will be used and enforced under Health and Safety Code 1568.22 to operate a care home for veterans. All MFHVs must comply with “the rules, regulations, and written directives adopted” by the department. The word adopted implies the Office of Administrative Law approved the written directives, and the Secretary of State approved the directives as state regulation, but neither has happened.

          The 173 pages of the undated written directives are “Version 1, Chapter 2.5.” The sections are 8110 – 81195.5. It appears the directives were completed on April 30, 2026. Two months later, these have been released.

          Unfortunately, H&S Code 1569.40 gave DSS permission to not seek full and legal adoption of “regulations,” and that is dangerous. DSS has no deadline to formerly adopt regulations. Version 1 is likely to evolve into Versions 2, 3, 4, etc. until DSS gets approval of a Title 22 chapter, 2.5.

          The H&S Codes addressing MFVH are 1568.21-1568.40 and are in the Community Care Facilities Act. These laws do not legally apply to RCFEs just ARFs. RCFEs are exempt from all laws not contained in the RCFE Act. But that leads to more confusion. An ARF and/or RCFE must surrender its licensure to become a veteran’s home. Perhaps it does not matter where the laws appear. If you have an ARF or RCFE license and want to seek a veteran’s care license, you must forfeit your current DSS-issued license. The confusion is clearly the fault of the state legislature. H&S Code 1568.23 does NOT allow any facility holding a DSS-issued license to be an MFHV.

          CFR section 17.73 of Title 38 states the “placement of veterans” is voluntary, and only the VA makes placement referrals to licensed facilities. The VA is also to conduct inspections “to ensure that the home continues to meet the requirements.”

          A big problem for prospective licensees is found in the directives’ Section 81101(c)(1): ‘“Capacity’ means the maximum number of persons authorized, not to exceed three veteran residents…,” but that reflects Title 38 of CFR Section 17.73(b)(iii): “There are not more than three residents receiving care (including veteran and non-veteran residents).” A MFHV cannot provide care for more than three people at any time. That means these private homes can never have more than three residents; a maximum capacity of three! An MFHV is “a private home in which a medical foster home caregiver (primary care person) provides care, lives in the home, with not more than three residents receiving care.” The limit to three residents includes both veterans and non-veterans.

          The VA will conduct a clinical evaluation to ensure that each placed veteran is “unable to live independently safely or needs a ‘nursing home level of care.’” A medical foster home caregiver must “provide a safe environment, room and board, supervision, and personal assistance, as appropriate for each veteran.”

          DSS will eventually have specific MFHV application forms, but those forms are not yet available.

          CFR section §17.74 of Title 38 has additional requirements: compliance with “state and local regulations” including “construction, maintenance, and sanitation regulations;” have safe and functioning systems for heating, hot and cold water, electricity, plumbing, sewage, cooking, laundry, artificial and natural light, and ventilation; meet the applicable provisions of the National Fire Protection Association (Life Safety Code); provide a “single occupancy” for each resident with a door that closes and latches; comply with specific safety sections of CFR §17.63 including comfortable dining and living room areas; provide food services meeting resident “preferences;” provide specific resident rights; plan and facilitate recreational and leisure activities; and although not currently required, but could be required, that a facility have an automatic sprinkler system.

          Who pays for the veterans’ care? It is NOT the VA nor the state. The resident or the resident’s representative must agree to the facility’s pricing and payment procedures. Thus, there is no incentive to get a license for only three persons with a private payment system.

          There are two pluses: the application fee is $88, and the application must be approved in 60 days or less. Right. Sixty days. There are several laws already mandating a 60-day turnaround of applications, but DSS has consistently failed to obey its law.

California’s “master plan” includes using facilities to house the homeless, place the formerly incarcerated (see new law), and empty mental institutions. The state needs facilities! So why is the Legislature unrelenting in its punishment of facility operators?

          Two new laws are days away that will give residents increased rights including extending rate increases from 60 days to 90. “Why?” is a legitimate question that went unanswered. An additional right for RCFE residents will be the cryptic and vague right “to request, refuse, or discontinue a service.”

          Will DSS explain what that means in timely, updated regulations? That is doubtful as the 2015 resident rights were just “cut and pasted” into Title 22 without the creation of policies and procedures to clarify many of the ambiguities found in those new rights. Government Code 11342.600 requires state agencies to create regulations to “make specific the law enforced or administered by it, or to govern its procedure.” The Office of Administrative Law classifies this type of statute as “susceptible to interpretation.”

          “To request, refuse, or discontinue a service” is certainly one of those laws that need to be made specific. That is not likely to occur given DSS’ history of failing to create clearly written and specific regulations.

          What consequences might facilities endure having to wait 90 days to increase fees? Remember, the state’s minimum wage increases to $16.50 per hour or even higher if a facility is located in a city or county with a much higher minimum wage. Forbes estimates the California cost of living for transportation will increase 14% and utilities will escalate as much as 41%.

          How long will California’s assisted living industry tolerate being pushed around by ignorant legislators before it pushes back? The state continues its unwise and foolish rescue of illegals (remember it wants to place illegals into facilities) and it spends billions on welfare, and soon transgender surgeries.

          However, the state’s attempt at leveraging welfare monies has been a fiscal disaster. The Department of Health Care Services (DHCS) has long mismanaged state and federal funds for its Assisted Living Waiver Program. Its failures include the inability to expand the program statewide, stalling its full implementation at 15 California counties and neglecting 43 others, then suspending the program in September because it ran out of money. This bungling of funds has left thousands of residents that need care on a waitlist until March or even later.

          Other states have mismanaged its funds, and their eligible residents are suing for benefits they know they are entitled to receive. Eligible California residents should also bring a suit against the state and seek an audit of how monies have been spent. Facilities should also bring suit against the state.

          California facilities receive as much as $7,717 per month. Then state nurses get $6.75 per 15 minutes for “rehabilitation services” with an additional $11.36 per 15 minutes for “transitional care coordination,” for an “augmented plan of care development.” These monies are being spent for services DHCS should already provide, but the ALWP monies are being spent on these ambiguous additional benefits.

          Well, California has lots of money, right? Why is this tolerated?

What would happen if the federal government started to regulate the fees and services in California’s assisted living industry? It’s possible as Congress is “studying” the industry, gathering information from three of the largest assisted living providers in the United States to “evaluate resident safety, facility staffing and pricing.” One senator wants to call out the industry’s “exorbitant costs and insidious hidden fees.” Another senator believes there have been “serious health and safety problems in assisted living communities that have not been addressed yet.”

          In response to these perceptions, Congress has created a website asking consumers to share their “bills and experiences” and to get public input into how and why the government should get involved. Will Congress study staffing challenges, rising operating costs, diminished reimbursements and recent assisted living bankruptcies, which hit a record high last year due to “cost inflation” or “reimbursements not in line with rising costs.”

          Through CalAIM, ALWP and similar programs, California has been pushing assisted living facilities to act more like skilled nursing facilities and admit low-income and Medi-Cal residents, aging prisoners, the homeless and persons with mental disabilities, but with higher operating expenses and greater compliance oversight, can the industry afford it?

          According to the 2020 Genworth Cost of Care Survey, the average cost of nursing home care was about $304 per day or well over $9,000 a month, but the average assisted living fee in California is $5,250 according to a recent Forbes study. If California and the U.S. continue to withhold adequate funding and reimbursement to nursing homes and then push assisted living facilities to accept nursing home-level residents, both ARF and RCFEs will be forced to admit post-surgical hip operations and abdominal surgeries. In addition, residents are likely to have various forms of cancers, traumatic brain injuries, strokes, wounds and AIDS.

The most recent statistics show a decline in California nursing homes from 1,230 in 2020 to 1,176 in 2023, attributed to overregulation, higher staffing requirements, and lower reimbursement rates. What about facility declines?

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California governor Gavin Newsom said, “This year California delivered on critical action to make people’s lives better, safer, healthier, and happier in putting people first, safeguarding freedoms, and creating economic opportunity.” Based upon the laws passed, the state has again taken aim at employers but not to create any “economic opportunity.”

          Let’s first clear the air about SB525, the healthcare worker minimum wage. It will NOT increase minimum wage to $25.00 hour for facility staff. The law is for nurse assistants, custodians, housekeepers, gift shop workers, kitchen staff, etc. who work in hospitals, nursing homes and similar medical settings. The raise was justified because of the “courage shown by workers during the pandemic.” Did the fast-food workers display similar courage meriting a $20.00 minimum wage hike starting April 1? Didn’t facility staff exhibit the same if not more courage?

          The state’s new $16.00 per hour minimum wage law will go into effect January 1, but some counties and cities have exceeded the state’s minimum hourly wage. The website to check on your city or county’s minimum wage is https://www.dir.ca.gov/dlse/minimum_wage.htm. Because fast food workers get $4.00 more per hour, it is likely caregivers will leave the assisted living industry to flip burgers rather than flip—turn—residents.

          Cannabis users will get “additional work protections” including the prevention of discrimination during the hiring process and there will be restrictions on terminating the cannabis user for off the job and away from the workplace use.

          More persons are now eligible for conservatorship because they are unable to provide for their personal safety, necessary medical care or have a “severe substance use disorder or serious mental health illness.” That’s in line with the state’s failed attempt to expand Medi-Cal services under the state’s CalAIM and Master Plan programs that force the mentally ill into mental health facilities then get discharged after “treatment” to adult and senior assisted living facilities. Each county, and thus taxpayer, will be on the financial hook for the treatment and care of such persons.

          On January 1, if a facility is located near a church or independent college, it may have to deal with a large number of homeless persons because the state approved the “Yes in God’s Backyard” legislation for use of church and college parking lots and other properties to house “low-income persons.” These sites can “bypass most local permitting and environmental review rules.” Coupled with this is the state’s expansion “of lifesaving treatment” allowing “more mobile pharmacies to be created in communities across the state” to dispense “treatment medications for opioid use disorder.”

A new law now voids noncompete clauses or agreements—both current and future—in employment contracts starting February 14.

          Paid “sick leave” will expand to five paid days per year (more in some cities and counties). The rational for the expansion: “Too many folks are still having to choose between skipping a day’s pay and taking care of themselves or their family members when they get sick,” said Governor Newsom.

          Another new law will expand the number of eligible days a person can have for experiencing a “reproductive loss.” AB352 will support non-Californians entering the state to access “reproductive rights” at taxpayer expense. Low-income Californians of all ages and regardless of immigration status will be able to access Medi-Cal starting in 2024. AB352 protects “all Californians’ and visitors’ electronic medical records related to abortion, gender-affirming care, pregnancy loss and other sensitive services.”

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