Stern Bills Signed by Governor Bring Justice to the Care Economy

October 5, 2021

SACRAMENTO – The most vulnerable part of anyone’s life is often the beginning and the end. At the end of life, some of our most vulnerable members of society live in skilled nursing facilities (SNFs).  At the beginning, low income moms and babies need more healthcare coverage.  Yesterday, Governor Newsom signed two bills authored and co-authored by Senator Henry Stern (D-Los Angeles).   Stern’s legislation mirrors life, with bills on more just beginnings and ends of life for the most vulnerable.

SB 650, The Corporate Transparency in Elder Care Act of 2021, by Senator Henry Stern (D-Los Angeles), was signed yesterday by California Governor Gavin Newsom.  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.  Yesterday, Newsom also signed SB 65, the California Momnibus Act, authored by Senator Nancy Skinner (D-Berkeley) and co-authored by Stern.

Nursing home reform SB 650 will prevent corporate profiteering on the backs of MediCal recipients and low paid caregivers, while the Momnibus Act SB 65 extends maternal health protections to low income moms and babies. 

Speaking with Governor Newsom in the signing ceremony yesterday, Senator Stern said, “The question is, at the beginning and end of life,  where is California going to be with people it represents in those moments?  So when a mom carrying a baby to term has that baby born, and then at the end of their life is getting ready to pass through, what’s it like for that mom in that home on Medi-Cal?  What’s it like to help your parent that you cared for so long with Alzheimers or Parkinsons and they don’t want to be in an institutional setting and you want to bring them home and how do you do that?

Stern continued, “Governor Newsom is creating the mechanics to make that happen with the signatures of these bills and this whole plan today and that shows huge moral leadership on his part.  In signing SB 650 corporate transparency, we’re talking here in California and in Congress about how much do we actually want to invest in the care economy?  Governor Newsom has set the bar awfully high and is pushing the whole nation to say  that the care economy is the economy.  That is our ultimate test.  But if we’re going to invest billions, we need to make sure that those dollars get to where they need to get and that’s to the caregivers delivering care and the people receiving it.  And so hopefully with SB 650 we start to move the for-profit to get every dollar we can for Medi-Cal right to the frontlines where they belong. “

More than 9,000 nursing home residents have lost their lives due to COVID-19 in California since March of 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.

“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 disclosure required by 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. Yesterday, the Governor signed two other measures from the plan, AB 323 (Kalra) and AB 1042 (Jones-Sawyer). The PROTECT 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.

The financial information required by SB 650 will be required beginning in the fiscal year ending December 31, 2023. SB 65 will take effect January 1, 2022.