One Step Closer to Protecting California’s Most Vulnerable

Stern’s SB 650, The Corporate Transparency in Elder Care Act of 2021, Clears Senate Health Committee

April 27, 2021

SACRAMENTO – At the end of life, some of our most vulnerable members of society live in skilled nursing facilities (SNFs), more than 9,000 of whom lost their lives due to COVID-19 in California over the last year.  The large number of nursing home deaths have led a number of state lawmakers to focus on the conditions inside nursing homes, including focusing on 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 the Senate Health Committee on an 8-2 vote.  The bill requires skilled nursing facilities and other “related parties” or management entities with control over patient care to provide consolidated financial reports 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 seem like they can’t do anything to control their costs, while in reality they’re keeping the money all in 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 utilizes 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.  This would mean rates paid by the state – the taxpayers – would be overpaying the nursing homes for the cost of care. Worse still, the individual facilities within that corporate enterprise would have less money for actual operations, less staff, lower wages, limited supplies, and more.

“At its core, this urgent need for transparency is an issue of quality care,” 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 by my bill will allow both consumers and the state to assess whether large corporate entities owning and operating nursing homes are using all available money for patient care, rather than diverting revenues into related entities – or 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.

SB 650 will be heard in the Senate Appropriations Committee in May.