Skilled nursing facilities: unpaid penalties: related parties.

The Long-Term Care, Health, Safety, and Security Act of 1973 generally requires the State Department of Public Health to license and regulate long-term health care facilities and to establish an inspection and reporting system to ensure that long-term health care facilities are in compliance with state statutes and regulations. The term "long-term health care facility" includes, among other types of facilities, a skilled nursing facility. Existing law relating to health facility data reporting requires an organization that operates, conducts, owns, or maintains a licensed skilled nursing facility to file with the Office of Statewide Health Planning and Development information as to whether the licensee, or a general partner, director, or officer of the licensee, has an ownership or control interest of 5% or more in a related party that provides any service to the skilled nursing facility. Existing law defines "related party" for those purposes as an organization related to the licensee provider or that is under common ownership or control, as defined in a specified federal regulation. This bill would, beginning January 1, 2023, expressly authorize the department, if a licensee provider fails to pay specified penalties in full when all appeals have been exhausted and the department's position has been upheld, to give written notice to the licensee provider and related parties in which the licensee provider has an ownership or control interest of 5% or more that the department may take appropriate legal action to recover the unpaid penalty amount from the licensee provider's financial interest in the related party. The bill would also require the department, if it determines after 2 notifications that the related parties are not financially viable or recovery is unlikely, to document that determination, as specified. This bill also would require the department to give written notice to related parties when a citation has been issued against a facility licensee, and to advise the related parties of the potential action if the violation is not remedied and penalties are assessed. Existing law specifies procedures for the appointment of a temporary manager to manage a long-term health care facility when certain circumstances exist. Existing law authorizes the department to use funds from the Health Facilities Citation Penalties Account to operate the facility after all other facility revenues are exhausted. This bill would state that funds from that account that are used for the purposes of the facility's management constitute a debt due to the state that may be collected pursuant to appropriate legal action taken by the department to collect the debt from the licensee, including from the licensee's financial interest in a related party. The bill would require the department, beginning January 1, 2023, to give written notice to related parties that it may take action to collect the licensee's debt, as specified. The bill would also require the department, if it determines after 2 notifications that the related parties are not financially viable or recovery is unlikely, to document that determination, as specified. Existing law requires the State Department of Health Care Services to impose a uniform quality assurance fee on each skilled nursing facility, with certain exceptions, in accordance with a prescribed formula. Under existing law, if a skilled nursing facility fails to pay all or part of the quality assurance fee within a specified time period, among other requirements, the unpaid amount constitutes a debt to the state that may be collected pursuant to specified provisions. This bill would also authorize the department to take appropriate legal action to recover the unpaid quality assurance fee amount, including any interest and penalties owed, from the licensee's financial interest in the related party and would require the department to give written notice to the licensee and related parties before the department takes such action.