Skilled nursing facilities: direct care spending requirement.

Existing law provides for the licensure and regulation of health facilities, including skilled nursing facilities, by the State Department of Public Health. A violation of those provisions is a crime. Existing law requires health facilities to submit specified financial reports to the Department of Health Care Access and Information. Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. This bill would require, no later than July 1, 2023, the establishment of a direct patient-related services spending, reporting, and rebate requirement for skilled nursing facilities, with exceptions. Under the direct patient-related services spending requirement, the bill would require that a minimum of 85% of a facility's total non-Medicare health revenues from all payer sources in each fiscal year be expended on residents' direct patient-related services, as defined. The bill would require a facility to report total revenues collected from all revenue sources, along with the portion of revenues that are expended on all direct patient-related services and nondirect patient-related services, to the State Department of Health Care Services by June 30 of each calendar year, with certification signed by a duly authorized official, as specified. The bill would require the State Department of Health Care Services to conduct an audit of the financial information reported by the facilities, to ensure its accuracy and to identify and recover any payments that exceed the allowed limit, as specified. The bill would require the department to conduct the audit every 3 years, at the same time as the facility's Medi-Cal audit. If a skilled nursing facility fails to comply with the direct patient-related services spending requirement, the bill would require the facility to issue a pro rata dividend or credit to the state and to all individuals and entities making non-Medicare payments to the facility for resident services, as specified. The bill would require the State Department of Health Care Services to ensure that those payments are made and to impose sanctions, as specified. The bill would also authorize the department to withhold certain payments from a skilled nursing facility licensee for failure to fully disclose information, as specified. Because a violation of these requirements would be a crime, the bill would impose a state-mandated local program. 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.