Over the course of the last two decades, non-industrial businesses in California have faced increased scrutiny of their compliance with the complex rules related to their management of regulated wastes, such as hazardous waste, medical waste and confidential customer information. Perhaps most notably are the myriad of enforcement actions brought by various prosecutors against retailers. To date, penalties paid to the state by non-industrial waste generators are estimated upwards of a half billion dollars.
While retail enforcement had constituted a significant part of the effort, we have seen a recent shift in the attention of these prosecutors towards the health care sector. In September 2023, prosecutors announced a $49 million settlement with one health care provider resolving allegations of unlawfully disposing of hazardous waste, medical waste and protected health information statewide.
This health care pivot is not surprising. The federal government estimated Californians’ personal health care spending in 2020 totaled $405 billion. A wide variety of regulated waste is generated in the health care sector, which can be handled by a significant number of staff with a wide range of responsibilities given the nature of health care operations. Complex, and often confusing, requirements govern the management of hazardous waste, medical waste and confidential patient information. In many cases, the laws governing waste classifications overlap, if not outright inconsistent, creating a regulatory puzzle that poses a significant compliance challenge for providers. Adding to this complexity, California law contains additional, often significantly more stringent requirements than federal law (which serves to regulate many other states), requiring nationwide providers to create a California-specific compliance programs.
Many businesses have a waste compliance program in place and are lulled into a false sense of security by a lack of enforcement. For instance, this can arise from regular “CUPA” inspections conducted by local environmental regulators in California. Such inspections, however, typically involve only a limited review of a facility’s waste compliance program. On the other hand, prosecutors often focus on the bottom line by conducting solid waste dumpster audits—also known as “dives”—with findings often truly surprising the facility, which otherwise viewed itself in complete compliance, and leading to the initiation of an in‑depth prosecutorial investigation with significant penalties potentially on the line.
To minimize the risk that your organization ends up on the receiving end of a multi-million dollar penalty demand from California prosecutors over allegations of improper waste management, health care providers should take steps now to ensure their organization has implemented a robust waste compliance program. To that end, in our experience, successful waste compliance programs rely on a multi-layered approach, including:
- Conducting training regularly, including clear and easily digestible instructions, guiding front-line employees on the proper waste management requirements;
- Preparing clear and concise policies and procedures for waste management;
- Assisting employees by promptly responding to inevitable questions that arise regarding waste handling;
- Designating leaders responsible for waste management programs; and
- Instituting a robust audit program with required follow-up to ensure corrective action is implemented to address audit findings.
Taking steps now to enhance a health care provider’s waste compliance program will serve to minimize the risk that an investigation be initiated, and if one is nonetheless opened, may provide a route for quickly ending the investigation with the payment of minimal penalties.