Governor Newsom signed into law new legislation that temporarily halts the issuance of new hospice licenses in California on and after January 1, 2022. New Section 1751.70 of the California Health and Safety Code imposes a moratorium on the California Department of Public Health (CDPH) issuing a new license to provide hospice services, unless CDPH makes a written finding that an applicant for a new license, or with a license application pending on January 1, 2022, has shown a demonstrable need for hospice services in the area where the applicant proposes to operate based on the concentration of all existing hospice services in that area.

The moratorium will end either 365 days from the date that the California State Auditor publishes a report on hospice licensure or when these provisions are repealed on January 1, 2027, whichever occurs first. The law has no effect on renewals of existing licenses.

It is not clear whether the law puts into jeopardy pending applications. It is likely that CDPH will interpret the law as permitting it to issue new licenses to applications pending on January 1, 2022 only if the pending applicant shows a demonstrable need for hospice services. Any other pending application likely will not be permitted to move forward. Applicants should assume that it will be very difficult to prove demonstrable need in most non-rural communities. To date, CDPH has not issued guidance on how it will determine a “demonstrable need” for hospice services in any given community. Given the risk of CDPH not processing a pending application after January 1, 2022, organizations with a pending application should follow up with CDPH and attempt to complete the application process prior to January 1, 2022.