Bill Text: CA SB650 | 2021-2022 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Skilled nursing facilities.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2021-10-04 - Chaptered by Secretary of State. Chapter 493, Statutes of 2021. [SB650 Detail]

Download: California-2021-SB650-Amended.html

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Amended  IN  Assembly  July 01, 2021

Amended  IN  Senate  May 25, 2021

Amended  IN  Senate  April 28, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill

No. 650

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Introduced by Senator Stern

February 19, 2021

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An act to add Section 128734.1 to the Health and Safety Code, relating to skilled nursing facilities.

LEGISLATIVE COUNSEL'S DIGEST

SB 650, as amended, Stern. Skilled nursing facilities.

Existing law requires an organization that operates, conducts, owns, or maintains a health facility, and the officers thereof, to make and file with the Office of Statewide Health Planning and Development specified reports relating to the facility’s finances, including, among other things, a balance sheet detailing the assets, liabilities, and net worth of the health facility at the end of its fiscal year.

This bill would would, except as specified, require an organization that operates, conducts, owns, manages, or maintains a skilled nursing facility or facilities to prepare and file with the office an annual consolidated financial report that includes data from all operating entities, license holders, licenseholders, and related parties in which the organization has an ownership or control interest of 5% or more and that provides any service, facility, or supply to the skilled nursing facility. The bill would also require those organizations to submit copies of specified contractual agreements and leases, except when the contractual agreement is subject to the attorney-client privilege or another recognized privilege. The bill would require the office to develop policies and procedures to outline the format of information to be submitted, determine if the annual consolidated financial report is complete, and post those reports and related documents, other than the copies of contractual agreements and leases, documents to its internet website. The bill would make these provisions operative on January 1, 2023.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 128734.1 is added to the Health and Safety Code, to read:

128734.1.

 (a) (1) An organization that operates, conducts, owns, manages, or maintains a skilled nursing facility or facilities licensed pursuant to subdivision (c) of Section 1250 shall prepare and file with the office, at the times as the office shall require, an annual consolidated financial report. The financial report shall include data from all operating entities, license holders, licenseholders, and related parties in which the organization has an ownership or control interest of 5 percent or more and that provides any service, facility, or supply to the skilled nursing facility.

(2) The annual consolidated financial report required to be prepared pursuant to paragraph (1) shall be reviewed audited by a certified public accountant in accordance with generally accepted accounting principles and with the Financial Accounting Standards Board’s financial reporting requirements, with financial statements prepared using the accrual basis, and shall, in addition to the requirements set forth in Section 128735, include, but not be limited to, the following statements:

(A) A balance sheet detailing the assets, liabilities, and net worth of the skilled nursing facility at the end of its fiscal year.

(B) A statement of income, expenses, and operating surplus or deficit for the annual fiscal period, and a statement of ancillary utilization and patient census.

(C) A statement detailing patient revenue by payer, including, but not limited to, Medicare, Medi-Cal, and other payers, and revenue center.

(D) A statement of cashflows, including, but not limited to, ongoing and new capital expenditures and depreciation.

(E) A statement reporting the information required in subparagraphs (A), (B), (C), and (D) for each separately licensed skilled nursing facility operated, conducted, or maintained by the reporting organization.

(3) The annual consolidated financial report required by paragraph (1) shall include a detailed document outlining a visual representation of the organization’s structure that includes both of the following:

(A) All related parties in which the organization has an ownership or control interest of 5 percent or more and that provides any service, facility, or supply to the skilled nursing facility.

(B) Unrelated parties that provide services, facilities, or supplies to the skilled nursing facility or facilities that are operated, conducted, owned, managed, or maintained by the organization, including, but not limited to, management companies and property companies, and that are paid more than two hundred thousand dollars ($200,000) by the skilled nursing facility.

(b)An organization that operates, conducts, owns, manages, or maintains a skilled nursing facility or facilities licensed pursuant to subdivision (c) of Section 1250 shall submit copies of all contractual agreements and leases with any organization for which a skilled nursing facility is required to include data in its financial report pursuant to paragraph (1) of subdivision (a) and any provider of goods and services that is paid more than two hundred thousand dollars ($200,000) by the skilled nursing facility, except for contractual agreements that are subject to the attorney-client privilege or another recognized privilege. Notwithstanding subdivisions (c) and (d), the contractual agreements and leases submitted pursuant to this subdivision shall not be made public.

(c)

(b) The office shall post reports and related documents submitted pursuant to this section to its internet website.

(d)

(c) Any report, document, statement, writing or any other type of record received, owned, used, or retained by the office in connection with this section is a public record within the meaning of subdivision (d) (e) of Section 6252 of the Government Code and is subject to disclosure pursuant to the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code).

(e)

(d) The office shall develop policies and procedures to outline the format of information to be submitted pursuant to this section. The office shall determine if the annual consolidated financial report is complete, but shall not be required to determine its accuracy.

(f)

(e) For the purposes of this section, “related party” has the same meaning as in Section 128734, and may include, but is not limited to, home offices; management organizations; owners of real estate; entities that provide staffing, therapy, pharmaceutical, marketing, administrative management, consulting, and insurance services; providers of supplies and equipment; financial advisors and consultants; banking and financial entities; any and all parent companies, holding companies, and sister organizations; and any entity in which an immediate family member of an owner of those organizations has an ownership interest of 5 percent or more. “Immediate family member” includes spouse, natural parent, child, sibling, adopted child, adoptive parent, stepparent, stepchild, stepsister, stepbrother, father-in-law, mother-in-law, sister-in-law, brother-in-law, son-in-law, daughter-in-law, grandparent, and grandchild.

(f) This section shall not apply to a facility operated by a health care district organized and governed pursuant to the Local Healthcare District Law (Division 23 (commencing with Section 32000)).

(g) This section shall become operative on January 1, 2023.