Protecting California’s Nursing Home Residents through Transparency
SACRAMENTO – At the end of life, some of our most vulnerable members of society live in skilled nursing facilities (SNFs), and more than 9,000 of those residents lost their lives due to COVID-19 in California since March 2020. The large number of nursing home deaths have led a number of state lawmakers to focus on the conditions inside nursing homes, including reviewing the cost of letting unwieldy corporate profiteering go unexamined and unchecked.
SB 650, The Corporate Transparency in Elder Care Act of 2021, by Senator Henry Stern (D-Los Angeles), cleared both houses of the Legislature today with bipartisan support. The bill requires skilled nursing facilities to provide consolidated financial reports and documentation of the corporate structure to the public and the Office of Statewide Health Planning and Development.
“Many large, for-profit SNF chains use complex ownership structures to increase their profitability by making it appear they can’t do anything to control their costs, when in reality they’re keeping the money all in the dark recesses of the corporate family,” said Stern. “This shines the bright light of day on this practice by requiring nursing home chains to place consolidated financial reports on each individual facility’s website.”
Reports have found the nursing home industry uses various entities to support their overall business activities. This may have the effect of shielding funds so they cannot be fully considered by the state when it sets rates and reimbursements for care. As a result, rates paid by the state – the taxpayers – may be overpaying the nursing homes for the cost of care. Worse still, the individual facilities within the corporate enterprise would have less money available to hire qualified staff and pay them appropriately, have the appropriate supplies on hand, and provide residents with the quality of care they deserve.
“At its core, this urgent need for transparency is a quality of care issue,” continued Stern. “Research out of UCSF has shown SNFs with registered nurse staffing levels under the recommended minimum standard were twice as likely to have COVID-19 resident infections. The information required this bill will allow both consumers and the state to determine whether large corporate entities owning and operating nursing homes are using all available money for patient care or whether they’re diverting the money to related entities and vastly overpaying for the services they are receiving.”
SB 650 is part of a broader package of measures, deemed the PROTECT Plan, designed to better regulate the nursing home industry. The plan, supported by the California Advocates for Nursing Home Reform, SEIU California, AARP California, Disability Rights California, the Consumer Attorneys of California, the Geriatric Circle, California Association of Long Term Care Medicine and many others, prioritizes responsible ownership, treatment, equity, & corporate transparency.
Governor Newsom has until October 10th to sign, veto, or allow SB 650 and other PROTECT Plan bills to become law without his signature.
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