BILL NUMBER: AB 927 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member McCarty
(Coauthor: Assembly Member Rodriguez)
FEBRUARY 26, 2015
An act to amend Sections 1265, 1265.3, 1267.5, and 1422.5 of the
Health and Safety Code, relating to health facilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 927, as introduced, McCarty. Health facilities: nursing homes.
Existing law provides for the licensure and regulation of health
facilities, as defined. A violation of those provisions is a crime.
Existing law requires any person or government entity desiring a
license for a health facility, approval for a special service, or
approval to manage a health facility currently licensed as a general
acute care hospital, acute psychiatric hospital, skilled nursing
facility, intermediate care facility, or special hospital, that has
not filed an application for a license to operate that facility, to
file with the department a verified application containing specific
information.
This bill would require the denial of an application under those
provisions if the applicant fails to provide the requisite
information or provide it in the form requested.
Existing law requires each applicant for a license to operate a
skilled nursing facility or intermediate care facility to make
certain disclosures regarding corporate governance and ownership to
the State Department of Public Health. Existing law prohibits certain
persons, as defined, from governing or owning a beneficial interest
of 5% or more of a skilled nursing facility or intermediate care
facility, as specified, without approval of the department.
This bill would expand those disclosure requirements and the
provisions that prohibit certain persons from governing or owning a
beneficial interest in a skilled nursing facility or intermediate
care facility, as specified. The bill would establish provisions for
the denial of an application under circumstances in which a person
named in an application has governed or owned a facility that has
violated the law during a certain timeframe, as specified.
Existing law requires the department to implement a consumer
information service system regarding long-term care facilities.
This bill would revise the information the system is required to
contain and would require it to be available on the Internet by March
1, 2016.
Because this bill would require additional disclosures, of which a
failure to disclose or a false disclosure would be a crime, the bill
would impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known as the Nursing Home Ownership
Disclosure Act of 2015.
SEC. 2. Section 1265 of the Health and Safety Code is amended to
read:
1265. (a) Any person, political subdivision
of the state, or governmental agency desiring a license for a health
facility, approval for a special service under this chapter, or
approval to manage a health facility currently licensed as a health
facility, as defined in subdivision (a), (b), (c), (d), or (f) of
Section 1250, that has not filed an application for a license to
operate that facility shall file with the department a verified
application on forms prescribed and furnished by the department,
containing all of the following:
(a)
(1) The name of the applicant and, if an individual,
whether the applicant has attained the age of 18 years.
(b)
(2) The type of facility or health facility.
(c)
(3) The location thereof.
(d)
(4) The name of the person in charge thereof.
(e)
(5) Evidence satisfactory to the department that the
applicant is of reputable and responsible character. If the applicant
is a firm, association, organization, partnership, business trust,
corporation, or company, like evidence shall be submitted as to the
members or shareholders thereof, and the person in charge of the
health facility for which application for license is made. If the
applicant is a political subdivision of the state or other
governmental agency, like evidence shall be submitted as to the
person in charge of the health facility for which application for
license is made.
(f)
(6) Evidence satisfactory to the department of the
ability of the applicant to comply with this chapter and of rules and
regulations promulgated under this chapter by the department.
(g)
(7) Evidence satisfactory to the department that the
applicant to operate a skilled nursing facility or intermediate care
facility possesses financial resources sufficient to operate the
facility for a period of at least 45 days. A management company shall
not be required to submit this information.
(h)
(8) Each applicant for a license to operate a skilled
nursing facility or intermediate care facility shall disclose to the
department evidence of the right to possession of the facility at the
time the application will be granted, which may be satisfied by the
submission of a copy of applicable portions of a lease agreement or
deed of trust. The names and addresses of any persons or
organizations listed as owner of record in the real estate, including
the buildings and the grounds appurtenant to the buildings, shall be
disclosed to the department.
(i)
(9) Any other information as may be required by the
department for the proper administration and enforcement of this
chapter.
(j)
(10) Upon submission of an application to the
department by an intermediate care facility/developmentally disabled
habilitative or an intermediate care facility/developmentally
disabled-nursing, the application shall include a statement of need
signed by the chairperson of the area board pursuant to Chapter 4
(commencing with Section 4570) of Division 4.5 of the Welfare and
Institutions Code. In the event the area board has not provided the
statement of need within 30 days of receipt of the request from the
applicant, the department may process the application for license
without the statement.
(k)
(b) The information required pursuant to this section,
other than individuals' social security numbers, shall be made
available to the public upon request, and shall be included in the
department's public file regarding the facility.
(l)
(c) With respect to a facility licensed as a health
facility, as defined in subdivision (a), (b), (c), (d), or
(f) of Section 1250, for purposes of this section, "manage" means to
assume operational control of the facility.
(d) Failure of an applicant to cooperate with the licensing agency
in the completion of an application pursuant to this section shall
result in the denial of the application. "Failure of an applicant to
cooperate" means that the information required pursuant to this
chapter and by regulations of the department has not been provided,
or has not been provided in the form requested by the licensing
agency, or both.
SEC. 3. Section 1265.3 of the Health and Safety Code is amended to
read:
1265.3. (a) For any individual or entity that seeks approval to
operate or manage a health facility licensed pursuant to subdivision
(a), (b), (c), (d), or (f) of Section 1250 and is subject
to Section 1265, the department shall consider the following:
(1) To determine whether the applicant is of reputable and
responsible character, the department shall consider any available
information that the applicant has demonstrated a pattern and
practice of violations of state or federal laws and regulations. The
department shall give particular consideration to those violations
that affect the applicant's ability to deliver safe patient or
resident care.
(2) To determine whether the applicant has the ability to comply
with this chapter and the rules and regulations adopted under this
chapter, the department shall consider evidence that shall include
all of the following:
(A) If any, prior history of operating in this state any other
facility licensed pursuant to Section 1250, and the applicant's
history of substantial compliance with the requirements imposed under
that license, applicable federal laws and regulations, and
requirements governing the operators of those facilities.
(B) If any, prior history of operating in any other state any
facility authorized to receive Medicare Program reimbursement or
Medicaid Program reimbursement, and the applicant's history of
substantial compliance with that state's requirements, and applicable
federal laws, regulations, and requirements.
(C) If any, prior history of providing health services as a
licensed health professional or an individual or entity contracting
with a health care service plan or insurer, and the applicant's
history of substantial compliance with state requirements, and
applicable federal law, regulations, and requirements.
(b) The department may also require the entity described in
subdivision (a) to furnish other information or documents for the
proper administration and enforcement of the licensing laws.
SEC. 4. Section 1267.5 of the Health and Safety Code is amended to
read:
1267.5. (a) (1) Each applicant for a license to operate a skilled
nursing facility or intermediate care facility shall disclose to the
state department the name and business address of each general
partner if the applicant is a partnership, or each director and
officer if the applicant is a corporation, and each person having a
beneficial ownership interest of 5 percent or more in the applicant
corporation or partnership.
(2) If any person described in paragraph (1) has served or
currently serves as an administrator, general partner, trustee or
trust applicant, sole proprietor of any applicant or licensee who is
a sole proprietorship, executor, or corporate officer or director of,
or has held a direct or indirect beneficial ownership
interest of 5 percent or more in, any other skilled nursing facility
or intermediate care facility or in this
state or any other state, in any community care facility
licensed pursuant to Chapter 3 (commencing with Section 1500)
of this division , or in any
residential care facility for the elderly licensed pursuant to
Chapter 3.2 (commencing with Section 1569), the applicant shall
disclose the relationship to the state department, including the
name and current or last address of the health facility or
, community care facility , or residential
care facility for the elderly, and the date the relationship
commenced and, if applicable, the date it was terminated.
(3) (A) If the facility is operated by, or proposed to be operated
in whole or part under, a management contract, the names and
addresses of any person or organization, or both, having an ownership
or control interest of 5 percent or more in the management company
shall be disclosed to the state department. This provision shall not
apply if the management company has submitted an application for
licensure with the state department and has complied with paragraph
(1).
(B) If the management company is a subsidiary of one or more other
organizations, the information shall include the names and addresses
of the parent organizations of the management company and the names
and addresses of any officer or director of the parent organizations.
The failure to comply with this subparagraph may result in action to
revoke or deny a license. However, once the information that is
required under this subparagraph is provided, the action to revoke
the license shall terminate.
(C) If the management company or parent organizations of the
management company manage or previously managed any other skilled
nursing facility or intermediate care facility in this state or any
other state, any community care facility licensed pursuant to Chapter
3 (commencing with Section 1500), or any residential care facility
for the elderly licensed pursuant to Chapter 3.2 (commencing with
Section 1569), the applicant shall disclose the name and current or
last address of the health facility, community care facility, or
residential care facility for the elderly, and the date the
management commenced and, if applicable, the date it was terminated.
(4) (A) If the applicant or licensee is a
subsidiary of one or more other organizations, the information shall
include the names and addresses of the parent organizations of the
subsidiary and the names and addresses of any officer or director of
the parent organizations.
(B) If the parent organizations of the subsidiary or applicant own
or manage, or previously owned or managed, any other skilled nursing
facility or intermediate care facility in this state or any other
state, any community care facility licensed pursuant to Chapter 3
(commencing with Section 1500), or any residential care facility for
the elderly licensed pursuant to Chapter 3.2 (commencing with Section
1569), the applicant shall disclose the relationship to the state
department, including the name and current or last address of the
health facility, community care facility, or residential care
facility for the elderly, and the date the relationship commenced
and, if applicable, the date it was terminated.
(5) The applicant shall disclose the history of compliance and any
history of noncompliance with any applicable state or federal law or
regulation for each facility described in paragraph (2),
subparagraph (C) of paragraph (3), and subparagraph (B) of paragraph
(4) during the period in which any of the following apply:
(A) Any person described in paragraph (1) had a relationship to
the facility.
(B) Any management company described in paragraph (3) managed the
facility.
(C) Any parent organizations described in paragraph (4) had a
relationship to the facility.
(5)
(6) The information required by this subdivision shall
be provided to the state department upon initial application for
licensure, and any change in the information shall be provided to the
state department within 30 calendar days of that change.
(6)
(7) Except as provided in subparagraph (B) of paragraph
(3), the failure to comply with this section may result in action to
revoke or deny a license.
(7)
(8) The information required by this section shall be
made available to the public upon request, shall be included in the
public file of the facility, and by July 1, 2002, shall be included
in the department's automated certification licensing administration
information management system.
(b) (1) On and after January 1, 1990, no
person may acquire a direct or indirect beneficial
interest of 5 percent or more in any corporation or
, partnership , or limited liability
company licensed to operate a skilled nursing facility or
intermediate care facility, or in any parent
organizations of a corporation, partnership, or limited liability
company licensed to operate a skilled nursing facility or
intermediate care facility, in any management company under
contract with a licensee of a skilled nursing facility or
intermediate care facility, or in any parent organizations of a
management company under contract with a licensee of a skilled
nursing facility or intermediate care facility, nor may any
person become an officer or director of, or general partner in, a
corporation, partnership, limited liability company, or
management company of this type without the prior written approval of
the state department. Each application for departmental approval
pursuant to this subdivision shall include the information specified
in subdivision (a) as regards the person for whom the application is
made.
The
(2) The state department shall
approve or disapprove the application within 30 days after receipt
thereof, unless the state department, with just cause, extends the
application review period beyond 30 days.
(c) The state department may deny approval of a license
application or of an application for approval under subdivision (b)
if a person named in the application, as required by this section,
was an officer, director, general partner, or owner of a 5-percent or
greater beneficial interest in a licensee of, or in a management
company under contract with a licensee of, a skilled nursing
facility, intermediate care facility, community care facility, or
residential care facility for the elderly at a time when one or more
violations of law were committed therein that resulted in suspension
or revocation of its license, or at a time when a court-ordered
receiver was appointed pursuant to Section 1327, or at a time when a
final Medi-Cal decertification action was taken under federal law.
However, the prior suspension, revocation, or court-ordered
receivership of a license shall not be grounds for denial of the
application if the applicant shows to the satisfaction of the state
department (1) that the person in question took every reasonably
available action to prevent the violation or violations that resulted
in the disciplinary action and (2) that he or she took every
reasonably available action to correct the violation or violations
once he or she knew, or with the exercise of reasonable diligence
should have known of, the violation or violations.
(c) The state department shall deny approval of a license
application or of an application for approval under subdivision (b)
if a person named in the application, as required by this section,
was an officer, director, general partner, or owner of a 5-percent or
greater direct or indirect beneficial interest in a licensee or in
any parent organizations of a licensee of, or in a management company
under contract with a licensee of, a skilled nursing facility,
intermediate care facility, community care facility, or residential
care facility for the elderly at a time during the seven-year period
prior to the application in which that facility committed one or more
violations of law or regulatory requirements that resulted in any of
the following:
(1) Immediate jeopardy to the health, safety, or welfare of one or
more residents.
(2) Suspension or revocation of a facility's license.
(3) Termination of a facility's Medicare or Medi-Cal
certification.
(4) Appointment of a court-ordered receiver pursuant to Section
1327.
(d) The state department may deny approval of a license
application or of an application for approval under subdivision (b)
if a person named in the application, as required by this section,
was an officer, director, general partner, or owner of a 5-percent or
greater beneficial interest in a licensee or in any parent
organizations of a licensee of, or in a management company under
contract with a licensee of, a skilled nursing facility, intermediate
care facility, community care facility, or residential care facility
for the elderly at a time during the seven-year period prior to the
application in which any of the following occurred:
(1) The department revoked, suspended, or denied a nursing home
administrator's license held or sought by the person.
(2) The State Department of Social Services revoked, suspended, or
denied a residential care facility for the elderly administrator's
certificate held or sought by the person pursuant to Chapter 3.2
(commencing with Section 1569).
(3) The person prevented or attempted to impede the work of any
authorized representative of the department.
(4) The person failed to demonstrate competence in operating a
facility.
(5) The person failed to report abuse of residents in accordance
with any state or federal requirement.
(6) The facility committed one or more violations of law or
regulatory requirements that resulted in any of the following:
(A) A settlement agreement to resolve proceedings to suspend,
deny, or revoke the license of a facility or to terminate a facility'
s Medicare or Medi-Cal certification.
(B) Appointment of a temporary manager pursuant to Section 1325.5.
(C) One or more class "A" or class "AA" citations pursuant to
Section 1424 or 1424.5.
(D) A court order or judgment granting damages or any form of
equitable relief, including an injunction, resulting from an action
filed by the Attorney General.
(d)
(e) No application shall be denied pursuant to this
section until the state department first (1) provides the applicant
with notice in writing of grounds for the proposed denial of
application, and (2) affords the applicant an opportunity to submit
additional documentary evidence in opposition to the proposed denial.
(e)
(f) Nothing in this section shall cause any individual
to be personally liable for any civil penalty assessed pursuant to
Chapter 2.4 (commencing with Section 1417) or create any new criminal
or civil liability contrary to general laws limiting that liability.
(f)
(g) This section shall not apply to a bank, trust
company, financial institution, title insurer, controlled escrow
company, or underwritten title company to which a license is issued
in a fiduciary capacity.
(g) As used in this section, "person" has the same meaning as
specified in Section 19.
(h) This section shall not apply to the directors of a nonprofit
corporation exempt from taxation under Section 23701d of the Revenue
and Taxation Code that operates a skilled nursing facility or
intermediate care facility in conjunction with a licensed residential
facility, where the directors serve without financial compensation
and are not compensated by the nonprofit corporation in any other
capacity.
(i) For purposes of this section:
(1) "Beneficial interest" means the interest held by any person,
including a private equity firm and real estate investment trust,
that acquires an interest in any entity, including, but not limited
to, any firm, association, organization, partnership, business trust,
investment trust, corporation, or limited liability corporation,
that is licensed to operate a facility, as defined in subdivision (c)
or (d) of Section 1250, by assuming that entity's debt.
(2) "Indirect beneficial interest" means the internet held by any
person, including a private equity firm and real estate investment
trust, that provides capital or assets to a facility, as defined in
subdivision (c) or (d) of Section 1250, in exchange for a share of 5
percent or more of the facility's gross income or profits.
(3) "Management company" means any company or entity that has
assumed operational or managerial control over the facility or who
directly or indirectly conducts the day-to-day operations of the
facility either under contract or through some other arrangement.
(4) "Person" has the same meaning as specified in Section 19.
SEC. 5. Section 1422.5 of the Health and Safety Code is amended to
read:
1422.5. (a) The department shall develop and establish a
statewide consumer information service system to provide
updated current and accurate
information to the general public and consumers regarding long-term
care facilities in their communities. The consumer information
service system shall include, but need not be limited to, all of the
following elements:
(1) An on-line inquiry system accessible through a statewide
toll-free telephone number and the Internet.
(1) An online information system available on the Internet through
an accessible Internet Web site. The Internet Web site created
pursuant to this paragraph shall be operational and made available to
the public by March 1, 2016, and shall include the information
elements specified in paragraph (2).
(2) Long-term health care facility profiles, with data on services
provided, a history of all deficiencies, citations
and , and complaints for the last
two three full survey cycles, and
current ownership information. The profile for each facility
shall include, but not be limited to, all of the following:
(A) The name, address, and telephone number of the facility.
(B) The number of units or beds in the facility.
(C) Whether the facility accepts Medicare or Medi-Cal patients.
(D) Whether the facility has a special care unit or program for
people with Alzheimer's disease and other dementias, and whether the
facility participates in the voluntary disclosure program for special
care units.
(E) Whether the facility is a for-profit or not-for-profit
provider.
(3) Information regarding substantiated complaints shall include
the action taken and the date of action.
(4) Information regarding the state citations assessed shall
include the status of the state citation, including the facility's
plan or correction, and information as to whether an appeal has been
filed.
(5) Any appeal resolution pertaining to a citation or complaint
shall be updated on the file in a timely manner.
(b) Where feasible, the department shall interface the consumer
information service system with its Automated Certification and
Licensure Information Management System.
(c) It is the intent of the Legislature that the department, in
developing and establishing the system pursuant to subdivision (a),
maximize the use of available federal funds.
(d) (1) Notwithstanding the consumer information service system
established pursuant to subdivision (a), by January 1, 2002, the
state department shall develop a method whereby information is
provided to the public and consumers on long-term health care
facilities. The information provided shall include, but not be
limited to, all of the following elements:
(A) Substantiated complaints, including the action taken and the
date of the action.
(B) State citations assessed, including the status of any citation
and whether an appeal has been filed.
(C) State actions, including license suspensions, revocations, and
receiverships.
(D) Federal enforcement sanctions imposed, including any denial of
payment, temporary management, termination, or civil money penalty
of five hundred dollars ($500) or more.
(E) Any information or data beneficial to the public and
consumers.
(2) This subdivision shall become inoperative on July 1, 2003.
(B) The name of the current administrator, director of nursing,
and medical director.
(C) Current and accurate ownership information pursuant to
Sections 1265, 1267.5, 1599.64, and 1599.645, including, but not
limited to, all of the following:
(i) Whether the facility is a for-profit or not-for-profit
provider.
(ii) The name, address, and telephone number of the licensee.
(iii) The name and contact information of a single entity that is
responsible for all aspects of patient care and the operation of the
facility.
(iv) Whether the facility is part of a multifacility organization
and, if so, the name, address, and telephone number of the
organization and, if applicable, of any parent organizations.
(v) Whether the facility is operated by a management company and,
if so, the name, address, and telephone number of the management
company and, if applicable, of any parent organizations of the
management company.
(vi) The names and addresses of each person who is an officer or
director of the licensee, parent organizations, and management
company, if applicable.
(vii) The names and addresses of any person or organization, or
both, having an ownership or control interest of 5 percent or more in
the licensee, parent organizations, and management company, if
applicable.
(viii) The names and
addresses of all long-term health care facilities owned, leased,
managed, or operated by any person, corporation, management company,
parent organization, or other entity described in clauses (ii) to
(vii), inclusive.
(ix) The names and addresses of the property owners.
(D) The number of licensed beds in the facility.
(E) Whether the facility accepts Medicare or Medi-Cal patients.
(F) Whether the facility has filed a notice of intent to withdraw
from the Medi-Cal program, and the date that the notice of intent to
withdraw was filed with the department.
(G) Whether the facility has a special care unit or program for
people with Alzheimer's disease and other dementias, and whether the
facility participates in the voluntary disclosure program for special
care units.
(H) Information regarding all complaints, along with any outcome,
including, but not limited to, the date of the complaint, the nature
of the complaint, the date the complaint was investigated, the action
taken, and the date of the action taken.
(I) Information describing all state and federal deficiencies
issued to the facility, including, but not limited to, the date of
the deficiency, the nature of the deficiency, the scope and severity
of the deficiency, and a statement that the facility's plan of
correction is available upon request through the department's
district offices.
(J) Information describing all state citations assessed,
including, but not limited to, the date of the citation, the nature
of the citation, the class of the citation, the amount of the penalty
assessed, and the status of the citation.
(K) Updated information, on a regular and timely basis, regarding
any appeal resolution pertaining to a citation or complaint.
(L) Information describing state enforcement actions imposed,
including, but not limited to, license suspensions, revocations, and
the appointment of temporary managers and receiverships.
(M) Information describing federal enforcement sanctions imposed,
including, but not limited to, any denial of payment, temporary
management, termination, or any civil monetary penalty imposed.
(N) Information on compliance with staffing ratio requirements.
(O) Any information or data the department deems beneficial to the
public and consumers.
(b) It is the intent of the Legislature that the department, in
developing and establishing the system pursuant to subdivision (a),
maximize the use of available federal funds.
(e)
(c) In implementing this section, the department shall
ensure the confidentiality of personal and identifying information of
residents and employees and shall not disclose this information
through the consumer information service system developed pursuant to
this section.
(d) The department shall make current written copies of the
long-term health care facility profiles available to the public
through its district offices.
SEC. 6. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.