GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

H	1 

HOUSE BILL 451*

Short Title:  Hosp. Penalty Expanded/AB.	(Public)

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Sponsors: Representatives Linney; Capps, Clary, Cocklereece, Cummings, Davis, Lemmond, Pate, Reynolds, Sharpe, Sherrill, Snowden, Weatherly, and G. Wilson.

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Referred to:  Welfare Reform and Human Resources, if favorable, Judiciary I.

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March 9, 1995

A BILL TO BE ENTITLED
AN ACT TO EXPAND THE ADMINISTRATIVE PENALTY PROCESS TO HOSPITALS, HOME CARE AGENCIES, AND HOSPICES.
The General Assembly of North Carolina enacts:
Section 1.  Part A of Article 5 of Chapter 131E of the General Statutes is amended by adding the following new section to read:
"§ 131E-83. Penalties.
(a)	Violations classified.  The Department shall impose an administrative penalty in accordance with provisions of this Part on any facility's licensee which is found to be in violation of the requirements of this Article or applicable State and federal laws and regulations.  Citations issued for violations shall be classified according to the nature of the violation as follows:
(1)	'Type A Violation' means a violation by a facility's licensee of the regulations, standards, and requirements set forth in this Article, or applicable State or federal laws and regulations governing the licensure or certification of a facility which creates substantial risk that death or serious physical harm to a patient will occur or where such harm has occurred.  Type A Violations shall be abated or eliminated immediately.  The Department shall impose a civil penalty in an amount not less than two hundred fifty dollars  ($250.00) nor more than five thousand dollars ($5,000) for each Type A Violation.
(2)	'Type B Violation' means a violation by a facility's licensee of the regulations, standards, and requirements set forth in this Article, or applicable State or federal laws and regulations governing the licensure or certification of a facility which presents a direct relationship to the health, safety, or welfare of any patient, but which does not create substantial risk that death or serious physical harm will occur.  The Department may impose a civil penalty in an amount up to five hundred dollars ($500.00) for each Type B Violation.  A citation for a Type B Violation which relates to the physical plant, systems or equipment of the facility, and which causes no harm to a patient of the facility shall provide 10 days to correct the violation.  If such Type B Violation, which is not a repeat violation as specified in (b)(3) of this section, is corrected within the 10 days, no civil penalty shall be imposed.
(b)	Penalties for failure to correct violations within time specified.
(1)	Where a facility has failed to correct a Type A Violation, the Department shall assess the facility's licensee a civil penalty in the amount of up to five hundred dollars ($500.00) for each day that the deficiency continues.  The Department or its authorized representative shall conduct an on-site inspection of the facility to insure that the violation has been corrected.
(2)	Where a facility has failed to correct a Type B Violation within the time specified for correction by the Department, the Department shall assess the facility's licensee a civil penalty in the amount of up to two hundred dollars ($200.00) for each day that the deficiency continues beyond the date specified for correction without just reason for such failure.  The Department or its authorized representative shall conduct an on-site inspection of the facility to insure that the violation has been corrected.
(3)	The Department shall impose a civil penalty which is treble the amount assessed under subdivision (1) or (2) of subsection (a) of this section when a facility under the same management, ownership, or control:
a.	Has received a citation and paid a fine, or
b.	Has received a citation for which the Department, in its discretion, granted to it under subdivision (2) of subsection (a) of this section but did not impose a penalty,
	for violating the same specific provision of a statute or regulation for which it has received a citation during the previous 12 months or within the time period of the previous licensure inspection, whichever time period is longer.
(c)	Factors to be considered in determining amount of initial penalty.  In determining the amount of the initial penalty to be imposed under this section, the Department shall consider the following factors:
(1)	The gravity of the violation, including the probability that death or serious physical harm to a patient will result or has resulted; the severity of the actual or potential harm, and the extent to which the provisions of the applicable statutes or regulations were violated;
(2)	The reasonable diligence exercised by the licensee and efforts to correct violations;
(3)	The number and type of previous violations committed by the licensee;
(4)	The amount of assessment necessary to insure immediate and continued compliance; and
(5)	The number of patients put at risk by the violation.
(d)	The Department shall impose a civil penalty on any facility's licensee which refuses to allow an authorized representative of the Department to inspect the premises and records of the facility.
(e)	Any facility's licensee wishing to contest a penalty shall be entitled to an administrative hearing as provided in the Administrative Procedure Act, Chapter 150B of the General Statutes.  One issue at the administrative hearing shall be the reasonableness of the amount of any civil penalty assessed by the Department.  If a civil penalty is found to be unreasonable, the hearing officer may recommend that the penalty be modified accordingly.
(f)	The Secretary may being a civil action in the superior court of the county wherein the violation occurred to recover the amount of the administrative penalty whenever a facility:
(1)	Which has not requested an administrative hearing fails to pay the penalty within 60 days after being notified of the penalty; or
(2)	Which has requested an administrative hearing fails to pay the penalty within 60 days after the receipt of a written copy of the decision as provided in G.S. 150B-36.
(g)	The Penalty Review Committee established pursuant to G.S. 131D-34(h) shall review administrative penalties assessed pursuant to this section, provided, however, that the Penalty Review Committee shall not review penalty recommendations agreed to by the Department and the hospital for Type B Violations except those violations that have been previously cited against the hospital during the previous 12 months, or within the time period of the previous licensure inspection, whichever time period is longer."
Sec. 2.  Part C of Article 6 of Chapter 131E of the General Statutes is amended by adding the following new section to read:
"§ 131-143.  Penalties.
(a)	Violations classified.  The Department shall impose an administrative penalty in accordance with provisions of this Part on any Home Care Agency's licensee as defined in this Part which is found to be in violation of the requirements of Part C of Article 6 of Chapter 131E of the General Statutes or applicable State and federal laws and regulations.  Citations issued for violations shall be classified according to the nature of the violation as follows:
(1)	'Type A Violation' means a violation by an agency's licensee of the regulations, standards, and requirements set forth in Part C of Article 6 of Chapter 131E of the General Statutes, or applicable State or federal laws and regulations governing the licensure or certification of an agency which creates substantial risk that death or serious physical harm to a client will occur or where such harm has occurred.  Type A Violations shall be abated or eliminated immediately.  The Department shall impose a civil penalty in an amount not less than two hundred fifty dollars ($250.00) nor more than five thousand dollars ($5,000) for each Type A Violation.
(2)	'Type B Violation' means a violation by an agency's licensee of the regulations, standards, and requirements set forth in Part C of Article 6 of Chapter 131E of the General Statutes, or applicable State or federal laws and regulations, governing the licensure or certification of an agency which presents a direct relationship to the health, safety, or welfare of any client, but which does not create substantial risk that death or serious physical harm will occur.  The Department may impose a civil penalty in an amount up to five hundred dollars ($500.00) for each Type B Violation.  A citation for a Type B Violation which relates to the physical plant, systems, or equipment of the agency and which causes no harm to a client of the agency shall provide 10 days to correct the violation.  If such a Type B Violation, which is not a repeat violation as specified in (b)(3) of this section, is corrected within the 10 days, no civil penalty shall be imposed.
(b)	Penalties for failure to correct violations within time specified.
(1)	Where an agency has failed to correct a Type A Violation, the Department shall assess the agency's licensee a civil penalty in the amount of up to five hundred dollars ($500.00) for each day that the deficiency continues.  The Department or its authorized representative shall conduct an on-site inspection of the agency to insure that the violation has been corrected.
(2)	Where an agency has failed to correct a Type B Violation within the time specified for correction by the Department, the Department shall assess the agency a civil penalty in the amount of up to two hundred dollars ($200.00) for each day that the deficiency continues beyond the date specified for correction without just reason for such failure.  The Department or its authorized representative shall conduct an on-site inspection of the agency to insure that the violation has been corrected.
(3)	The Department shall impose a civil penalty which is treble the amount assessed under subdivision (1) or (2) of subsection (a) of this section when an agency under the same management, ownership, or control:
a.	Has received a citation and paid a fine, or
b.	Has received a citation for which the Department in its discretion granted to it under subdivision (2) of subsection (a) of this section but did not impose a penalty,
	for violating the same specific provision of a statute or regulation for which it has received a citation during the previous 12 months or within the time period of the previous licensure inspection, whichever time period is longer.
(c)	Factors to be considered in determining amount of initial penalty.  In determining the amount of the initial penalty to be imposed under this section, the Department shall consider the following factors:
(1)	The gravity of the violation, including the probability that death or serious physical harm to a client will result or has resulted; the severity of the actual or potential harm, and the extent to which the provisions of the applicable statutes or regulations were violated;
(2)	The reasonable diligence exercised by the licensee and efforts to correct violations;
(3)	The number and type of previous violations committed by the licensee;
(4)	The amount of assessment necessary to insure immediate and continued compliance; and
(5)	The number of clients put at risk by the violation.
(d)	The Department shall impose a civil penalty on any agency's licensee which refuses to allow an authorized representative of the Department to inspect the premises and records of the agency.
(e)	Any agency's licensee wishing to contest a penalty shall be entitled to an administrative hearing as provided in the Administrative Procedure Act, Chapter 150B of the General Statutes.  One issue at the administrative hearing shall be the reasonableness of the amount of any civil penalty assessed by the Department.  If a civil penalty is found to be unreasonable, the hearing officer may recommend that the penalty be modified accordingly.
(f)	The Secretary may bring a civil action in the superior court of the county wherein the violation occurred to recover the amount of the administrative penalty whenever an agency:
(1)	Which has not requested an administrative hearing fails to pay the penalty within 60 days after being notified of the penalty; or
(2)	Which has requested an administrative hearing fails to pay the penalty within 60 days after receipt of a written copy of the decision as provided in G.S. 150B-36.
(g)	The penalty review committee established pursuant to G.S. 131D-34(h) shall review administrative penalties assessed pursuant to this section, provided, however, that the Penalty Review Committee shall not review penalty recommendations agreed to by the Department and the Home Care Agency for Type B Violations except those violations that have been previously cited against the Home Care Agency during the previous 12 months, or within the time period of the previous licensure inspection, whichever time period is longer."
Sec. 3.  Article 10 of Chapter 131E of the General Statutes is amended by adding the following new section to read.
"§ 131E-208.  Penalties.  
(a)	Violations classified.  The Department shall impose an administrative penalty in accordance with provisions of this Part on any Hospice licensee which is found to be in violation of the requirements of Article 10 of Chapter 131E of the General Statutes or applicable State and federal laws and regulations.  Citations issued for violations shall be classified according to the nature of the violation as follows:
(1)	'Type A Violation' means a violation by a Hospice's licensee of the regulations, standards, and requirements set forth in Article 10 of Chapter 131E of the General Statutes or applicable State or federal laws and regulations governing the licensure or certification of a Hospice which creates substantial risk that death or serious physical harm to a client will occur or where such harm has occurred.  Type A Violations shall be abated or eliminated immediately.  The Department shall impose a civil penalty in an amount not less than two hundred fifty dollars ($250.00) nor more than five thousand dollars ($5,000) for each Type A Violation.
(2)	'Type B Violation' means a violation by a Hospice's licensee of the regulation, standards, and requirements set forth in Article 10 of Chapter 131E of the General Statutes or applicable State or federal laws and regulations, governing the licensure or certification of a Hospice which presents a direct relationship to the health, safety, or welfare of any client, but which does not create substantial risk that death or serious physical harm will occur.  The Department may impose a civil penalty in an amount up to five hundred dollars ($500.00) for each Type B Violation.  A citation for a Type B Violation which relates to the physical plant, systems, or equipment of the agency and which causes no harm to a Hospice client of the agency shall provide 10 days to correct the violation.  If such a Type B Violation, which is not a repeat violation as specified in (b)(3) of this section, is corrected within the 10 days, no civil penalty shall be imposed.
(b)	Penalties for failure to correct violations within time specified.
(1)	Where a Hospice has failed to correct a Type A Violation, the Department shall assess the Hospice's licensee a civil penalty in the amount of up to five hundred dollars ($500.00) for each day that the deficiency continues.  The Department or its authorized representative shall conduct an on-site inspection of the Hospice to insure that the violation has been corrected.
(2)	Where a Hospice has failed to correct a Type B Violation within the time specified for correction by the Department, the Department shall assess the agency's licensee a civil penalty in the amount of up to two hundred dollars ($200.00) for each day that the deficiency continues beyond the date specified for correction without just reason for such failure.  The Department of its authorized representative shall conduct an on-site inspection of the Hospice to insure that the violation has been corrected.
(3)	The Department shall impose a civil penalty which is treble the amount assessed under subdivision (1) or (2) of subsection (a) of this section when a Hospice under the same management, ownership, or control:
a.	Has received a citation and paid a fine, or
b.	Has received a citation for which the Department in its discretion granted to it under subdivision (2) of subsection (a) of this section but did not impose a penalty,
	for violating the same specific provision of a statute or regulation for which it has received a citation during the previous 12 months or within the time period of the previous licensure inspection, whichever time period is longer.
(c)	Factors to be considered in determining amount of initial penalty.  In determining the amount of the initial penalty to be imposed under this section, the Department shall consider the following factors:
(1)	The gravity of the violation, including the probability that death or serious physical harm to a client will result or has resulted; the severity of the actual or potential harm, and the extent to which the provisions of the applicable statutes or regulations were violated;
(2)	The reasonable diligence exercised by the licensee and efforts to correct violations;
(3)	The number and type of previous violations committed by the licensee;
(4)	The amount of assessment necessary to insure immediate and continued compliance; and
(5)	The number of clients put at risk by the violation.
(d)	The Department shall impose a civil penalty on any Hospice's licensee which refuses to allow an authorized representative of the Department to inspect the premises and records of the Hospice.
(e)	Any Hospice's licensee wishing to contest a penalty shall be entitled to an administrative hearing as provided in the Administrative Procedure Act, Chapter 150B of the General Statutes.  One issue at the administrative hearing shall be the reasonableness of the amount of any civil penalty assessed by the Department.  If a civil penalty is found to be unreasonable, the hearing officer may recommend that the penalty be modified accordingly.
(f)	The Secretary may bring a civil action in the superior court of the county wherein the violation occurred to recover the amount of the administrative penalty whenever a Hospice:
(1)	Which has not requested an administrative hearing fails to pay the penalty within 60 days after being notified of the penalty; or
(2)	Which has requested an administrative hearing fails to pay the penalty within 60 days after receipt of a written copy of the decision as provided in G.S. 150B-36.
(g)	The Penalty Review Committee established pursuant to G.S. 131D-34(h) shall review administrative penalties assessed pursuant to this section, provided, however, that the Penalty Review Committee shall not review penalty recommendations agreed to by the Department and the Hospice for Type B Violations except those violations that have been previously cited against the Hospice during the previous 12 months, or within the time period of the previous licensure inspection, whichever time period is longer."
Sec. 4.  This act becomes effective October 1, 1995, and applies to penalties for violations occurring on or after that date.