This article was first published in the Fall 2014 volume of the California Health Law News, a publication of the California Society for Healthcare Attorneys. It is reprinted here with permission.

INTRODUCTION

Regulations effective April 1, 2014, subject California hospitals to a significantly increased risk of being fined when state authorities find deficiencies in compliance with licensing requirements and other health care-related laws. This article describes and analyzes the new administrative penalty scheme.

BACKGROUND

Between October of 2007 and July of 2014, the California Department of Public Health (CDPH) issued 297 administrative penalties against California licensed hospitals, based on allegations that the hospitals "noncompliance with one or more requirements of licensure has caused, or is likely to cause, serious injury or death."¹ The penalties have ranged from $25,000 to $100,000, and total $13,885,000. CDPH's authority to issue these "immediate jeopardy" (IJ) penalties began on January 1, 2007, and initially were levied at $25,000 for each alleged IJ.² Over time, the maximum penalty amounts have increased. As of April l, 2014, the maximum penalty is $125,000 for a single immediate jeopardy; in addition penalties of up to $25,000 may now be assessed for each "non-IJ" licensing violation.

IJ penalties have become a significant part of CDPH's ongoing oversight of health care facilities. Typically, CDPH receives a self-report or complaint of an adverse event, which triggers an investigation that can take a single day or many months. At some point, usually weeks or months after the investigation has concluded, CDPH makes a determination that the deficiencies identified during the survey constitute an "IJ." The facility subsequently is issued a "statement of deficiencies," setting forth CD PH's rationale for determining that an IJ exists. The hospital then has 10 days to submit its plan of correction, which must detail the steps it has taken to address the cited deficiency but may not dispute whether an IJ actually exists. Eventually, often years later, the facility might receive a notice that an administrative penalty is being assessed, at which time the facility may appeal both the IJ finding and the penalty.

Not all deficiencies cited by CDPH are determined to be IJs, and not all IJs result in penalties. To date, CDPH has provided absolutely no guidance as to how it determines that an IJ has occurred, or which alleged immediate jeopardy deficiencies warrant administrative penalties, and there is no discernible pattern in its fining practices. For example, from FY 2007-08 to FY 2011-12, CDPH received 1,061 reports of the post-surgical retention of a foreign object.³ Of those incidents, only 57 resulted in an administrative penalty,⁴ and a review of those cases reveals that no uniform criteria were applied and no consistent decisions were made. To compound matters, CDPH's practice has been to inform a hospital that an Immediate Jeopardy finding will be issued months after conducting a survey, and to assess penalties years after the incident occurred. Thus, hospitals have languished in constant limbo, waiting to find out whether a penalty will be assessed for long past alleged deficiencies.

In theory, the recently promulgated regulations governing the assessment of IJ penalties should have provided much needed clarification to this situation. However, the regulations, which dramatically expand the circumstances in which a penalty may be issued and significantly increase the maximum penalties that may be assessed, are complex and confusing, and provide no additional transparency with regard to whether and when a fine will be imposed.

PROMULGATING REGULATIONS - A SEVEN-YEAR JOURNEY

The initial administrative penalty legislation enacted in 2006 instructed CDPH to promulgate regulations to govern penalty assessment, and listed eight specific criteria that should be included therein.⁵ However, CDPH was not actually required to promulgate any regulations before it began exercising its fining authority. Thus, the first 11 administrative penalties were publically announced on October 25, 2007, and CDPH has issued between four and 22 penalties every few months thereafter.⁶ In each instance, CDPH imposed the maximum penalty allowed, regardless of the nature and scope of any harm to the patient or any other factor. CDPH took the novel position that it was not permitted to impose a lesser penalty because there were no regulations that would permit nuanced assessments. This position is not supported by the plain language of the statute, which (1) authorized the issuance of fines "up to" the specified amounts, and (2) granted CDPH "discretion to consider all factors when determining the amount of an administrative penalty."⁷ Nevertheless, for the past seven years, CDPH consistently refused to assess any lesser amount.

In 2008, CDPH-sponsored Senate Bill 541 increased the maximum fines that CDPH could impose for deficiencies occurring after January 1, 2009, to $50,000 for the first IJ, $75,000 for the second, and $100,000 for the third or any subsequent violation. The impetus for the increased fines and the new "three-strikes" approach was CDPH's "belief" that the "existing penalty amount [was] too low."⁸ Notably, no regulations were promulgated by CDPH prior to the enactment of SB 541.

On March 5, 2014, CDPH announced⁹ the adoption of final regulations governing administrative penalties.¹⁰ As a result of promulgation of the regulations, the maximum penalties for immediate jeopardy violations occurring on or after April 1, 2014, have increased to $75,000, $100,000 and $125,000 for the first, second, and third IJ, respectively, and CDPH is authorized to begin issuing penalties of up to $25,000 for non-minor violations that do not rise to the level of an immediate jeopardy.¹¹ Alleged immediate jeopardies occurring prior to April 1, 2014, will still be fined under the prior, lower penalty amounts. However, because of CDPH's insistence on assessing the maximum penalty for pre-regulation deficiencies, it is very likely that penalties for those immediate jeopardies will be assessed at higher levels than if the regulations were applicable.

THE NEW CRITERIA ARE VAGUE, AMBIGUOUS, AND CONFUSING

Now that regulations are in effect, California hospitals might expect to have a clear roadmap of the circumstances under which they will be fined, and the amount of any such penalty. Unfortunately, that is not the case. Rather, the calculation of the amount to be assessed for an alleged "deficiency" requires a number of intricate steps, as follows:

1. Determine there is a "deficiency," that rises beyond a "non-minor" violation.

2. Calculate the "Initial Penalty," as follows:

a. Select one of six "Levels of Severity"

b. Select one of three "Scopes of Noncompliance"

c. Identify a percentage from the "Scope and Severity Matrix"

d. Identify the maximum statutory penalty amount, and

e. Multiply the values from c. and d.

3. Derive the "Base Penalty," which may be higher than the statutory maximum, by applying "adjustment factors" to the Initial Penalty. Those factors are:

a. The patient's physical and mental condition

b. Any actual financial harm to the patient

c. Factors beyond the hospital's control, and

d. Whether the violation was "willful."

4. Derive the "Final Penalty," by applying additional "adjustment factors" to the Base Penalty. Those factors are:

a. Whether there was an immediate correction,  and

b. The facility's history of compliance with related state and federal laws.

5. Assess the lesser of the Final Penalty or the statutory maximum.

As explained in detail below, each of these decision-points are vague, ambiguous, and open to interpretation and dispute. In response to concerns about the significant risk that the new regulatory scheme will be inconsistently applied, CDPH has stated that it "intends to implement a universal electronic penalty assessment tool that will be used by all District Offices and surveyor staff ... which will provide transparency and consistency throughout the state."¹² However, in all likelihood, there will be variations in the manner in which the analysis is conducted by different Licensing and Certification District Offices, which will lead to widely varying outcomes, in both the types of situations in which a fine is levied, and the amount of the fines that are imposed.

A. Step 1: Determining Whether the Alleged "Deficiency" Is Merely a "Minor Violation."

A "deficiency" is broadly defined as "a licensee's failure to comply with any law relating to the operation or maintenance of a hospital as a requirement of licensure," which requirements are set forth in the Health and Safety Code and California Code of Regulations (CCR), Title 22, Division 5.¹³ Historically, CDPH's allegations that a facility has not complied with a "requirement of licensure" have been tenuous. For example, 22 CCR §70263(c) requires that a pharmacy and therapeutics committee be established, that such committee "develop written policies and procedures for establishment of safe and effective systems for procurement, storage, distribution, dispensing and use of drugs and chemicals," and that such policies be implemented. Hospitals that have fully complied with this condition of licensure by both adopting and implementing appropriate policies have nevertheless been subject to administrative penalties based on a single medication error by a licensed physician or other health professional. In these situations, CDPH has changed the law to fit the facts; reclassifying a single error on the part of a licensed professional as "noncompliance" by a hospital with a "requirement of licensure." There is no indication in the new regulations that this practice of interpreting California licensing requirements as strict-liability medical-error provisions will change.

In theory, not all alleged deficiencies are subject to an administrative penalty; the Legislature explicitly excluded "minor violations" from the penalty scheme. The Legislature did not, however, define that term. In the regulations, a "minor violation" is defined as "any violation of law relating to the operation or maintenance of a hospital that the department determines has only a minimal relationship to the health or safety of hospital patients."¹⁴ Notably, this definition does not limit the scope of the laws that may be violated to those that are also "requirements of licensure," as do the" deficiency" and "immediate jeopardy definitions." The purpose of this broader scope is not clear.

In practice, the fact that administrative penalties are not authorized for "minor violations" does not actually limit CDPH's fining authority, as (1) the standard is based on what "the department determines" rather than any objective-person standard, and (2) the phrase "only a minimal relationship to the health or safety of hospital patients" is so vague and subject to narrow construction that CDPH will be able to assert that almost all alleged deficiencies rise beyond a "minor violation."

B. Step 2: Calculating the "Initial Penalty."

1. Identifying the Level of Severity.

Once a deficiency is alleged, and determined to be non-minor, the new criteria will be applied. The first factor is the "severity of the deficiency."¹⁵ There are six "Severity Levels," for non-minor violations, which are convoluted and confusing as drafted. In the table that follows, we provide a possible interpretation of each Level:

After defining each of the six Levels, the regulation explicitly states that the first two criteria required by the Legislature (the patient's physical and mental condition, and the probability and severity of the risk that the violation presents to the patient) "shall be considered" in determining the level of severity.^l6 Since both of those factors are actually included in each of the "Level" definitions, the purpose of the follow-up provision is not clear.

2. Determining the Scope of the Noncompliance.

The next factor is the "scope of the noncompliance." This factor purportedly measures "the scope to which the patients have been affected by, or the number of staff or locations involved in, the noncompliance."¹⁷ The three "scope" categories are:

• Isolated (one or a very limited number of patients affected/staff involved; situation occurred occasionally, or in a very limited number of locations)
• Pattern (more than a very limited number of patients affected/staff involved; situation occurred in several locations or repeatedly), and
• Widespread (situation was pervasive; represents a systemic failure that affected or could affect many/all of the hospital's patients).

It is not clear how these categories will be applied in typical "IJ'' circumstances. For example, if the alleged deficiency involves  a single patient, but the corrective action requires an entirely new procedure, CDPH could assert that an "isolated" event (it only happened once) was "widespread," because the procedure had not been implemented earlier, placing many patients at risk of an adverse outcome.

CDPH has stated that its final "Scope and Severity Matrix" is "modeled on the federal long-term care assessment matrix used by the Centers for Medicare and Medicaid Services," and that its intent" is to assess the scope level of a noncompliance in a manner that is consistent with the federal assessment process."¹⁸ Multiple commenters took issue with the application of a long-term care approach in an acute care setting stating, for example, that the underlying federal model "has proven hugely defective and ineffective in promoting quality and change."¹⁹

However, CDPH consistently asserted that the model was effective and would support consistency in assessing penalties.

3. Finding the Multiplier.

Once the Level of Severity and Scope of Noncompliance are identified, CDPH will consult its Scope and Severity Matrix to determine the multiplier for calculating the Initial Penalty. The Matrix is as follows:

4. Identifying the Maximum Penalty Amount.

As stated above, the amount of the maximum penalty depends on (1) whether the alleged deficiency is considered an immediate jeopardy and (2) if so, whether the hospital has been subject to immediate jeopardy fines in the prior three years. For non-IJs, the maximum penalty is $25,000. For IJs, the maximum penalty is $75,000 for a hospital's first immediate jeopardy, $100,000 for the second, and $125,000 for the third and any subsequent IJ. Thus, if a non-IJ violation is determined to be a Severity Level of 2 with an Isolated Scope, the Initial Penalty will be $5,000 ($25,000 x 20%). At the other end of the spectrum, if a "third" Immediate Jeopardy penalty is based on a determination that the violation caused the patient's death, the Initial Penalty will be $125,000 (100 percent of the maximum statutory amount), whether the scope is isolated, a pattern or widespread.

Although these regulations are new, CDPH has been issuing IJ penalties since October of 2007. CDPH intends to continue relying on the history of those penalties in determining whether or not an Immediate Jeopardy is a first, second, etc. penalty. Commenters to the proposed regulations asserted that this violates due process, because the prior penalties were not issued on the basis of these regulations. However, CDPH did not make any changes to the final regulations as a result of those comments.

In addition, if a facility has been issued IJ administrative penalties in the past, a newly issued penalty may be designated as a "first administrative penalty" if the date of any prior violation for which a penalty was issued is more than three years before the date of the violation under review, and if the hospital was in "substantial compliance" with both state licensing requirements and the Medicare Conditions of Participation during that three-year period.²⁰ For the purpose of the regulations, "substantial compliance" means that "any identified deficiencies pose no greater risk to patient health and safety than the potential for causing minimal harm."²¹ The regulations do not contain any guidance regarding how, by whom, or when, such "substantial compliance" determinations will be assessed.

C. Step 3: Calculating the Base Penalty

The Initial Penalty may be adjusted downward by as much as 5 percent or upward by as much as 21 percent, based on four specific factors: the patient's physical and mental condition post-incident; whether the patient suffered any financial harm; factors beyond the hospital's control (limited to circumstances that are caused by a disaster); and whether the alleged violation is determined to be "willful."

1. The Patient's Physical and Mental Condition

As noted above, the determination of the Level of Severity of an alleged deficiency includes (not once, but twice) "the patient's physical and mental condition," which is one of the eight assessment criteria required by the Legislature. That factor is to be considered yet a third time when adjusting the Initial Penalty. Specifically, for Severity Levels 3 and 5, both of which encompass patient harm, the Initial Penalty is to be adjusted upward by 10 percent if the harm resulted in "a physical or mental impairment that substantially limits one or more of the major life activities of a patient, or the loss of bodily function, if the impairment or loss lasts more than seven days or is still present at the time of discharge from the hospital, or the loss of a body part."²² If an impairment or loss of bodily function lasts more than three days (but, presumably, seven days or fewer), the Initial Penalty will be adjusted upward by 5 percent rather than 10 percent.²³

Although not clearly identified, this terminology mirrors the definition of a "Serious Disability" set forth in the statute governing self-reporting of adverse events.²⁴ Thus, in drawing these distinctions, CDPH appears to be attempting to assess a graduated penalty based on the severity of the harm that has occurred. The actual operation of this provision will be problematic, as it sets up this unworkable ladder:

• Level 3: actual harm that is not an immediate jeopardy (so, not serious injury or death).
• Level 3 plus: actual harm that is not an immediate jeopardy, but is a Serious Disability.
• Level 5: immediate jeopardy-serious injury.
• Level 5 plus: immediate jeopardy-serious injury that is also a Serious Disability.

With regard to Severity Level 3, it defies logic to assert that there will be actual patient harm that is not a "serious injury or death," and simultaneously is a Serious Disability due to a substantially limiting impairment or the loss of bodily function. Thus, if CDPH determines that the circumstances include the "Serious Disability" factors, it cannot logically assign a Severity Level 3 or 3-plus, it will have to assign Level 5. As to Severity Level 5, it is not clear how CDPH will draw the distinction between a serious injury and a Serious Disability Thus, in all likelihood, every time the "Serious Disability" circumstances exist, the alleged deficiency will be classified as a Level 5 plus.

2. Actual Financial Harm

Another criterion required by the Legislature is whether there was actual financial harm to any patient.²⁵ CDPH has included it as an adjustment factor, but has drastically restricted its impact on the overall calculation. Thus, if an alleged violation caused a patient "actual financial harm," which means "concrete financial loss for medical costs incurred by a patient, where the loss was not covered or reimbursed by health insurance,"²⁶ the Initial Penalty will be adjusted upward by one percent.²⁷

3. Factors Beyond the Hospital's Control

The Legislature also specifically directed CDPH to consider whether there were "factors beyond the facility's control that restrict the facility's ability to comply" with applicable licensing laws and regulations."²⁸ A fair reading of this provision would give hospitals some relief from the assessment of administrative penalties when the circumstances underlying the alleged deficiency were unforeseeable or could not be guarded against. For example, a hospital cannot "control" the activities of a licensed professional who deviates from the standard of care, notwithstanding the hospital's clear policies and procedures, and there is no licensing requirement that imposes such a strict liability standard. However, CDPH did not choose to recognize any of the many different circumstances that are truly uncontrollable.

Instead, CDPH limited the scope of this factor to disaster situations: for "factors beyond the hospital's control that restrict the hospital's ability to comply with licensure requirements, the initial penalty shall be adjusted downward by 5 percent, if the hospital developed and maintained disaster and emergency programs as required by state and federal law that were appropriately implemented during a disaster."²⁹ Thus, IF and ONLY IF: (1) a disaster occurs; (2) the hospital previously had developed and maintained legally-required disaster and emergency programs; (3) such programs were implemented during the disaster; and (4) despite all such efforts the disaster restricted the hospital's ability to comply with licensure requirements, THEN CDPH will decrease the amount of the Initial Penalty by 5 percent. It is inconceivable that CDPH would ever assess a penalty in such circumstances, and this provision has effectively diminished any impact of the Legislature's intent that hospitals not be fined for "factors beyond their control."

4. Willful Violations

The Legislature also included as a required factor "the demonstrated willfulness of the violation."³⁰ Again, the plain language of this provision calls for an interpretation that recognizes the complex nature of health care, and the human factors attendant to operation of a hospital. Again, however, CDPH has taken the more draconian approach, using this factor to turn the statute into a strict-liability, medical-error statute, rather than a balanced set of rules designed to protect patient safety.

Specifically, the regulations define "willfully" as "that the person doing an act or omitting to do an act intends the act or omission, and knows the relevant circumstances connected with the act or omission," and a "willful violation" as a situation in which the hospital, "through its employees or contractors, willfully commits an act or makes an omission with knowledge of the facts, which bring the act or omission within the deficiency that is the basis for the administrative penalty."³¹ In such circumstances, the Initial Penalty will be increased by 10 percent.  Unfortunately, these definitions are written so broadly that this adjustment factor can (and likely will) be applied against a hospital every time that a hospital employee or medical staff physician takes an action or refrains from acting and the result is an adverse outcome.

5. The Base Penalty

After each of the adjustment factors listed above is applied to an Initial Penalty, the resulting calculation is denominated the "Base Penalty." Depending on the starting point, if the Initial Penalty has been adjusted upwards, it is possible for the Base Penalty to be greater than 100 percent of the statutory maximum. For example, any time there is a patient death that is alleged to be the result of an IJ, the starting point will be 100 percent and any upward adjustment will result in a Base Penalty that is higher than the statutory maximum. The regulations explicitly permit such a circumstance, "so long as the final penalty does not exceed the statutory maximum."³²

D. Step 4: Calculating the Final Penalty

The Base Penalty for NON-Immediate Jeopardies may be adjusted downward by as much as 25 percent or upward by 5 percent, based on whether the violation was corrected immediately, as well as the hospital's history of compliance or non-compliance with state licensure requirements and federal Medicare Conditions of Participation in the prior three years. The Base Penalty for Immediate Jeopardies may be adjusted downward or upward by 5 percent based on the hospital's compliance history.

1. Immediate Correction

The Legislature's required criteria included the extent to which the facility detected the violation and took steps to immediately correct the violation and prevent the violation from recurring. The statute does not limit the application of this factor in any way, and it arguably should apply to all alleged deficiencies. However, CDPH has limited this factor to violations that "did not constitute immediate jeopardy or result in the death of the patient" (which is redundant, because a patient's death would be categorized as an immediate jeopardy). In such non-IJ circumstances, the Base Penalty may be adjusted downward by 20 percent if all of the following apply:

a. The hospital identified and corrected the noncompliance before it was identified by the department. Thus, the incident must be discovered by the hospital, rather than by a CDPH surveyor.

b. The hospital completed all corrective action to prevent recurrence within 10 calendar days of the date the noncompliance was identified, and detailed documentation of such actions. Note that the regulations do not set forth any guidance regarding when a noncompliance is "identified;" CDPH is likely to take the position that such identification is immediate once any adverse outcome is discovered, whether or not the facility is able to determine the exact cause of the outcome without first conducting an investigation.

c. The hospital met mandatory reporting requirements before the incident was identified by CDPH. Note that this provision does not address situations that do not trigger a reporting requirement.

d. "A penalty was not imposed for a repeat deficiency that received a penalty reduction under this article within the twelve-month period prior to the date of violation." This provision appears to indicate that any noncompliance that recurs within 12 months cannot receive the "non-IJ immediate correction" reduction, if such a reduction was applied to an initial administrative penalty. Given all of these requirements, the regulations have ensured that the Legislature's "immediate correction" factor is of little-to-no consequence.

2. History of Compliance with Related State and Federal Laws.

Yet another of the Legislature's enumerated criteria is "the facility's history of compliance with related state and federal statutes and regulations.''³³ The regulations state that such compliance history refers to a hospital's "record of compliance with licensure requirements under [HSC], and the regulations adopted thereunder, and with federal laws that set forth the conditions of participation for hospitals in the Medicare program, for a period of three years prior to the date the administrative penalty is issued."³⁴ For both IJ and non-IJ penalties, the base penalty will be adjusted downward by five percent if the hospital did not have any state or federal deficiencies rising to a Severity Level 3-6 in the prior three years, and will be adjusted upward by five percent if there were three or more repeat deficiencies at Severity Levels 2-6 in the prior three years. It is not clear if the reference to prior "deficiencies" in this provision goes only to deficiencies that have been assigned a severity level or if such levels will be assigned retroactively.

3. The Final Penalty

Once all of the adjustments are made to the Base Penalty, the Final Penalty will be the lesser of (1) the penalty with all adjustments or (2) the statutory maximum. Based on all of these factors, we have determined that the range of possible penalty assessments is between $4,513 and $125,000. In addition, if an administrative penalty would cause a financial hardship for a small and rural hospital, the hospital may request that the penalty be paid over an extended period of time, or that the penalty be reduced, or both.³⁵

APPEALING A PENALTY

The strict time deadline for appealing the assessment of an administrative penalty has not changed; a hospital that disputes a finding of a deficiency or the imposition of a penalty may request a hearing to challenge CDPH's decision.³⁶ All such appeals must be submitted within 10 working days of notification of the penalty.³⁷ Penalties that are appealed do not have to be paid until after the hearing process is complete, and only if CDPH prevails. We have handled and are handling many appeals of these penalties, and have been successful in getting them dismissed or significantly reduced.

CONCLUSION

According to the authorizing statutes' legislative history, the imposition of immediate jeopardy administrative penalties was intended to improve patient safety and health care quality for California residents, by enforcing California hospitals' compliance with licensing requirements.³⁸ However, there is absolutely no evidence that the penalties have had the desired effect, as errors still occur notwithstanding those hospitals' diligent efforts to avoid them. Indeed, the number of "Adverse Events" reported to CDPH actually has increased significantly over time. For example, there were 268 "surgical events" reported to CDPH in FY 2008-09, while that number was 340 in FY 20 11-12; overall, the total number of adverse events reported in those years were 1,423 and 1,558, respectively.³⁹ In short, there is no proof that this statutory scheme has reduced the number of errors in California hospitals during the past seven years.⁴⁰

We are unaware of any statistics regarding the number of immediate jeopardy deficiencies cited by CDPH in the last seven years. We do know, however, that some IJs have resulted in administrative penalties and others have not, and there has been no discernible distinction between the two. These new regulations in no way clarify the administrative penalty process: they provide no guidance as to what types of IJ and non-IJ deficiencies will trigger a penalty; they promulgate a complicated, subjective penalty calculation; and they create a whole new set of confusing issues. What is crystal clear, however, is that CDPH has no intention of letting up on its drive to raise money by penalizing hospitals under this regulatory scheme. The forecast for California hospitals is bleak, as the regulations are designed to result in the now increased maximum penalties for alleged IJs, and the likelihood of non-IJ penalties being assessed is also very high.

Now more than ever, California hospitals need knowledgeable and experienced counsel to determine whether to appeal and on what basis to challenge these administrative penalties. Whenever there is the possibility that an immediate jeopardy will be found by CDPH, during or after a survey, California hospitals need to act quickly to identify and preserve the facts of the case, record statements of witnesses, and complete a thorough root cause analysis. Then, months or years later, should fines be imposed, they will be well positioned to file an appeal.

ENDNOTES

1 All references to the number or amount of IJ penalties that CDPH has issued are derived from the press releases and 2567 forms published on the CDPH Web site at http://www.cdph.ca.gov/certlic/facilities/Pages/Counties.aspx.ca.gov/certlic/facilities/Pages/Counties.aspx.

2 Senate Bill 1312; California Health and Safety Code (HSC) § 1280.1. This legislation became effective the same year as California SB 130 I, which requires licensed health facilities to report to CDPH seven categories of "adverse events" including "surgical events," such as post-surgical retention of foreign objects, and "care management events," such as medication errors that result in death or serious disability. HSC § 1279.1. The fact that an "adverse event" is reported does not make it an immediate jeopardy, per se.

3 California Center for Health Care Quality and Licensing and Certification program Annual Fee Report for Fiscal Year 2013-2014.

4 See FN 1.

5 The factors that must be included in the regulations are:

1. The patient's physical and mental condition.
2. The probability and severity of the risk that the violation presents to the patient.
3. The actual financial harm to patients, if any.
4. The nature, scope, and severity of the violation.
5. The facility's history of compliance with related state and federal statutes and regulations.
6. Factors beyond the facility's control that restrict the facility's ability to comply with applicable licensing laws and regulations.
7. The demonstrated willfulness of the violation.
8. The extent to which the facility detected the violation and took steps to immediately correct the violation and prevent the violation from recurring HSC§ 1280.3(b).

6 See FN 1.

7 HSC § 1280.1(d) (emphasis added).

8 SB 541 Bill Analysis: Assembly Committee on Health, Hearing (Aug. 18, 2008).

9 See FN 1.

10 22 California Code of Regulations (CCR) §§ 70951, et seq., for General Acute Care Hospitals, and §§ 71701, et seq. for Acute Psychiatric Hospitals.

11 HSC § 1280.3(a).

12 Addendum II to Final Statement of Reasons Department Response to Comment 2-5 (October 15, 2013).

13 22 CCR § 70952(a)(2) (emphasis added).

14 22 CCR § 7095l(a)(l) (emphasis added).

15 22CCR§70954(b).

16 22 CCR § 70954(2).

17 Addendum ll to Final Statement of Reasons Department Commentary on Section 70954(c) (October 15, 2013).

18 Id.

19 Addendum IV to Final Statement of Reasons Comment 2.22 (October 15, 2013).

20 22 CCR § 70954(d).

21 22 CCR § 70952(a)(6).

22 22 CCR § 70955(a)(l)(A).

23 Id.

24 HSC § 1279.1.

25 HSC § 1280.3(b)(3).

26 22 CCR § 70952(a)(l).

27 22 CCR § 70955(a)(2).

28 HSC § 1280.3(b)(6).

29 22 CCR § 70955(a)(3).

30 HSC § 1280.3(b)(7).

31 22 CCR §§ 70952(7) and (8).

32 22 CCR § 70956.

33 HSC § 1280.3(b)(5).

34 22 CCR § 70957(a)(2).

35 22 CCR § 70960.

36 HSC § 1280.3(1).

37 Id.

38 See, e.g., SB 1312 Bill Analysis: Senate Third Reading, as amended Aug. 29,2006 (Assembly Floor, Aug. 29, 2006).

39 Center for Health Care Quality and Licensing and Certification program Annual Fee Report for Fiscal Year 2013-2014.

40 We predicted as much in our 2010 article in this publication: Holding the California Department of Public Health Accountable: Addressing Problems with Immediate Jeopardy Penalties, Mark. A. Kadzielski & Jee-Young Kim, California Health Law News, Vol. XX:Vlll, Issue 2, Summer 2010.