Governor puts Care First; Demands Transparency on Nursing Home Spending

October 4, 2021
Posted in Press

Contact: Mike Roth, 916-813-1554
Maria Elena Jauregui, Spanish-language, 818-355-5291

PROTECT Plan Aims to Fix Broken Nursing Home Industry

DATA SHOWS NEED FOR TRANSPARENCY FOR NURSING HOME DOLLARS WITH SB 650

Sacramento, CA – The Service Employees International Union (SEIU) California released the following statement upon Governor Newsom signing SB 650 (Stern) into law. SB 650 requires nursing homes to file annual consolidated financial statements, giving the State and the public more information on nursing homes, many of which are privately owned by large for-profit chains that utilize increasingly elaborate corporate structures to hide their finances and shield themselves from oversight.

“The COVID-19 pandemic highlighted what SEIU members already knew: the nursing home industry hasn’t been putting care first,” said April Verrett, President of SEIU Local 2015 and Executive Board Member of SEIU California. “SB 650 shines a light on how nursing home owners hide behind financial and legal corporate shell games to enrich themselves, while their facilities are understaffed, lack supplies, and pay poverty wages—all at the expense of taxpayers, the elderly and people with disabilities. 

“SEIU members stood with the California Advocates for Nursing Home Reform and AARP to ensure California regulators and consumer advocates are able to follow the money to transform our state’s nursing homes from profit centers to care centers. We applaud the Governor for standing with nursing home workers and signing this critical legislation into law.” 

SB 650 is the cornerstone of the PROTECT Plan, a package of legislation designed to fix California’s ailing nursing home industry. The package includes the following bills that Governor Newsom signed into law today:

SB 650 (Stern): Corporate Transparency in Elder Care Act of 2021
Californians are paying more for nursing home care, for fewer residents, than ever before and we are not getting our money’s worth. Despite spending nearly six billion dollars a year, complaints against facilities are at record highs and the care provided is often abysmal Nursing homes are using complex ownership structures to siphon unprecedented amounts of money to “related parties,” allowing corporate home offices to hide their profits and support facilities’ claims for yet more public money. SB 650 requires nursing homes to file annual consolidated financial statements, giving the State and the public more transparency for nursing home payments. The bill also requires nursing home management and property companies to submit certified financial reports. The public has the right to know how much of its money is supporting nursing home residents versus how much is being spent on the lifestyles of billionaire nursing homes owners.

AB 323 (Kalra): Nursing Home Citations
By many measures, nursing home care in California has never been worse. Complaints filed against nursing homes in California are at record levels. Chronic understaffing, inappropriate discharges, overdrugging, and poor infection control practices stubbornly persist and contributed to the unfathomable disaster that played out in nursing homes in 2020. AB 323 will enhance the state nursing home enforcement system by providing a long-overdue inflationary boost to nursing home citation penalties. The bill also updates the criteria for AA citations (those that cause the death of a resident) from the old “direct proximate cause of death’ standard to the more clear “substantial factor” standard. Nursing homes should receive an AA citation when their misconduct is a substantial factor in a resident’s death. AB 323 will help improve nursing home compliance with the regulatory standards of care but more critically, improve resident safety and well-being.

AB 849 (Reyes): Nursing Home Resident Rights
Since 1982, California nursing home residents have had a “private right of action” (the ability to sue) for violations of their rights. Last year, the state Supreme Court ruled that nursing homes that violate the rights of residents may only be held liable for $500 maximum, regardless of how many rights a facility violates and how egregious those violations are. Nursing homes now routinely infringe multiple rights of residents and simply send the victims $500 checks as a license to violate. Poor care is officially profitable. AB 849 will restore facility liability to up to $500 per violation, so that offending facilities have to answer for every breach of resident rights it commits.

AB 1042 (Jones-Sawyer): Joint Liability
AB 1042 closes loopholes in accountability for the owners of skilled nursing facilities. The current law is used by SNF investors as a barrier to achieving high standards and quality care. This bill opposes that trend by establishing shared standards and liability for entities that have shared ownership or control. Related parties will be notified of Class A, AA, and B citations, and will be held liable for unpaid monetary penalties on those citations. Additionally, related parties will be held accountable for unpaid Quality Assurance Fees (QAFs), as well as any penalties and interest on unpaid QAFs.

The PROTECT Plan legislative package also includes the following bills waiting for Governor Newsom’s signature:

AB 279 (Muratsuchi): Prohibiting Resident Eviction During the Pandemic
Many residents of California skilled nursing facilities (“SNFs”) and Intermediate Care Facilities (“ICFs”) face a terrible prospect in the ongoing COVID pandemic: involuntary transfer to new facilities, sight unseen, far from their families and support networks. AB 279 would prohibit the owner of an ICF or SNF from ceasing to deliver or making significant changes to residential care services, or from transferring a resident to another facility, during any declared state of emergency relating to the coronavirus disease 2019 (COVID-19), except if the owner files for bankruptcy. The bill’s protections would expire one year after the cessation of states of emergency, to permit residents and their families to assess new facilities if their current homes are going to close.

AB 749 (Nazarian): Certification of Nursing Home Medical Directors
25% of California’s COVID deaths have occurred in nursing homes. Many of these deaths could have been prevented with modest training for medical directors. Medical directors are physicians who lead the clinical care and help set the facility culture in nursing homes. Some facilities have medical directors who lack the qualifications for the job. This bill will require nursing home medical directors to be certified by the American Board of Post-Acute and Long-Term Care Medicine. Certification should improve the performance of nursing home medical directors, which will improve the care for all residents.

“When I learned about the legislation our Union was championing, I decided to research it on my own,” said Margaret Caldwell, a CNA in Eureka. “I was surprised to learn that the self-dealing and the lack of transparency I had witnessed was not peculiar to our corporate owners, but is rampant throughout the industry. Instead of investing in resident care and creating well-compensated jobs in our communities, these companies are using America’s elderly and disabled as cash cows. Staff become disillusioned and leave. So I spoke out at lobby visits and hearings to fight for these bills. You can read my piece that was published in the Times-Standard here. Together, we will continue to work as a united force to improve skilled nursing facilities for residents and employees.”

“These bills are an important first step to getting the money where it’s supposed to be: on safe staffing, good jobs, and safe patient care,” said Jesus Figueroa, a CNA in the Sacramento Area. “In my facility, we often have only two CNAs on the floor for as many as 52 patients. How can two people feed 52 elderly patients—not to mention shower, clothe, walk with, assist with toileting, answer call lights, assist with emergencies, and more. It’s impossible. We’re supposed to have two or three times that many CNAs on the floor. And clearly the owners have the money.”

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