Freestanding skilled nursing facilities.

Existing law requires the State Department of Public Health to license, inspect, and regulate skilled nursing facilities, as defined, and prohibits a person, firm, partnership, association, corporation, or political subdivision of the state, or other governmental agency within the state from operating, establishing, managing, conducting, or maintaining a skilled nursing facility in this state, without first obtaining a license from the department. Existing law prohibits a person from acquiring a beneficial interest of 5% or more in any corporation or partnership licensed to operate a skilled nursing facility, or in any management company under contract with a licensee of a skilled nursing facility, or from becoming an officer or director of, or general partner in, a corporation, partnership, or management company without the prior written approval of the department. Existing law requires a licensee for a skilled nursing facility to provide written notice of a proposed change in licensee or management company to all residents of the facility and their representatives at least 90 days prior to a finalization of the sale, transfer of operation, or other change or transfer of ownership interests, except as specified. Existing law requires an applicant for a skilled nursing facility or intermediate care facility to submit certain information to the department, such as the name and address of a parent organization if the applicant is a subsidiary of another organization, and report any changes to that information within 30 days. Existing law imposes criminal penalties on a person who violates the licensing and regulatory requirements imposed on skilled nursing facilities. This bill would prohibit a person or an applicant for licensure from acquiring, operating, establishing, managing, conducting, or maintaining a freestanding skilled nursing facility without first obtaining a license from the department for that purpose. The bill would also apply the licensure requirement to a change of ownership or a change in management of such a facility. The bill would specify the requirements to apply for a license, after July 1, 2023, including evidence that the applicant is reputable and responsible to assume the license or management and evidence of specified financial capacity, and, if the applicant is part of a chain, providing a diagram indicating the relationship between the applicant and the persons or entities, as defined, that are part of the chain. The bill would require an applicant for a skilled nursing facility or intermediate care facility to report any changes in information in an application 30 days prior to that change, except as specified. The bill would make all applications prepared in relation to these provisions public records, except as specified under any applicable federal or state privacy laws. The bill would authorize or require the department to deny an application for licensure, or to revoke a license, under certain circumstances. By expanding the duties on licensees, this bill would expand an existing crime, thereby imposing a state-mandated local program. The bill would authorize the department to take specified actions, including imposing civil penalties, if an applicant acquires, operates, establishes, manages, conducts, or maintains a skilled nursing facility before the department acts on its application or following the denial of its application, or if the person does not first apply to the department for a license. The bill would specify that its provisions do not preclude the department from taking additional state or federal enforcement actions, as specified, including misdemeanor penalties for willful or repeated violations. The bill would require the department to ensure a facility's operation is transitioned to a qualified operator, following the denial of an application. The bill would authorize the department, subsequent to licensure, to assess a civil penalty of $10,000 for a material violation of these provisions. The bill would specify that its provisions do not apply to a skilled nursing facility operated as a distinct part of an acute care hospital or to a receiver or temporary manager appointed in accordance with other laws. The bill would require the department to convene a stakeholder group on or before April 1, 2023, to determine the feasibility of establishing a new methodology to calculate application fees. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.