On July 21, 2023, the Department of Health Care Access and Information of the California Health and Human Services Agency released a Notice of Proposed Rulemaking (the “Proposed Rule”) with regulations that would implement new financial and ownership transparency requirements for skilled nursing facilities (“SNFs”) in California.

Senate Bill 650, which was signed into law in October 2021 and codified at Section 128734.1 of the California Health and Safety Code, requires organizations that operate, conduct, own, manage, or maintain a SNF to file annual consolidated financial reports with the Department, effective for fiscal years ending on or after December 31, 2023. Under the statute, an organization’s report must include data from all operating entities, license holders, and related parties in which the organization has an ownership or control interest of 5 percent or more and that provide any service, facility, or supply to the SNF.

The Proposed Rule implements Senate Bill 650 and outlines specific requirements for the submission of the annual consolidated financial report, including that it be reviewed by a certified public accountant and include various financial statements, balance sheets, and statements of patient census and patient revenue by payer. The organization also must submit to the Department a visual representation of the organization’s structure that includes all (i) related parties in which the organization has an ownership or control interest of 5 percent or more and that provide any service, facility, or supply to the SNF and (ii) unrelated parties that provide services, facilities, or supplies to the SNF or other facilities that are operated or owned by the organization, and that are paid more than $200,000.

Each report will be due to the Department within four months after the SNF’s fiscal year end and must be accompanied by a certification signed by a duly authorized official of the SNF. If a SNF fails to file a required report, it will be liable for a civil penalty of $100 for each day after the due date, with a maximum annual civil penalty of $36,500.

The Department is accepting comments on the Proposed Rule until September 5, 2023. The Proposed Rule would be effective for fiscal years ending on or after December 31, 2023.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Paul Mourning Paul Mourning

Paul Mourning is a partner in the New York office of Crowell & Moring. Paul has a multidimensional practice focused on health care and nonprofit organizations, particularly relating to corporate, regulatory, and transactional matters. Clients include acute care, residential long-term care, home care…

Paul Mourning is a partner in the New York office of Crowell & Moring. Paul has a multidimensional practice focused on health care and nonprofit organizations, particularly relating to corporate, regulatory, and transactional matters. Clients include acute care, residential long-term care, home care, and hospice providers, as well as managed care and other health insurance organizations. Paul has served as National Legal Counsel to The Salvation Army for many years. He advises a variety of tax-exempt clients in a number of service areas, including religious organizations, foundations, educational institutions, museums, social service agencies, and trade associations.

Photo of Deirdre Long Absolonne Deirdre Long Absolonne

Nonprofit organizations and brand owners trust Deirdre Long Absolonne as outside general counsel dedicated to advancing their mission while mitigating risk. Deirdre drafts and negotiates key contracts and advises on corporate governance, intellectual property, compliance, policy, and other matters, teaming with clients and

Nonprofit organizations and brand owners trust Deirdre Long Absolonne as outside general counsel dedicated to advancing their mission while mitigating risk. Deirdre drafts and negotiates key contracts and advises on corporate governance, intellectual property, compliance, policy, and other matters, teaming with clients and colleagues to provide holistic support.

Deirdre represents charitable, religious, and social service organizations; foundations; health care and educational institutions; and other tax-exempt entities. She has significant experience in intellectual property matters, including trademark registrations, copyright issues, trademark licensing, and the enforcement of trademark rights, particularly enforcement challenges and licensing opportunities that arise from famous marks. Her experience includes trademark matters for clients across industries, including financial services, medical devices, consumer products, fashion, and technology. She also counsels clients with respect to technology-related issues and transactions.

Deirdre is a member of the New York City Bar Association Nonprofit Organizations Committee and served on Crowell’s Diversity Council from 2019 – 2023.

Photo of Alice Hall-Partyka Alice Hall-Partyka

Alice Hall-Partyka is a counsel at Crowell & Moring’s Los Angeles office, where she is a member of the firm’s Health Care Group. She counsels payers, providers, and technology companies on a broad range of health care regulatory, corporate, and policy matters. Alice

Alice Hall-Partyka is a counsel at Crowell & Moring’s Los Angeles office, where she is a member of the firm’s Health Care Group. She counsels payers, providers, and technology companies on a broad range of health care regulatory, corporate, and policy matters. Alice uses her industry experience to help clients identify practical solutions and navigate complex regulatory frameworks.

Alice advises health care companies that are adapting to evolving laws and regulations, developing new products or services, or seeking to improve their regulatory compliance. She also strategizes with and represents clients that are responding to governmental inquiries and investigations. Alice’s areas of focus include Medicaid and Medicare program requirements, mental health parity, health reform, state regulation of payers and providers, digital health and innovative technologies, and health care fraud and abuse.

Photo of Stephanie Marcantonio Stephanie Marcantonio

Stephanie Marcantonio is a Corporate partner in Crowell & Moring’s New York office, and serves as a member of the firm’s Health Care Group Steering Committee.

Stephanie regularly advises public and private companies, including tax-exempt entities, religious organizations and foundations, on a wide…

Stephanie Marcantonio is a Corporate partner in Crowell & Moring’s New York office, and serves as a member of the firm’s Health Care Group Steering Committee.

Stephanie regularly advises public and private companies, including tax-exempt entities, religious organizations and foundations, on a wide array of corporate transactional and governance matters. Her practice includes structuring and negotiating acquisitions, divestitures, and joint ventures. She also represents lenders and borrowers in health care financings, and has acted as regulatory counsel to lenders such as Credit Suisse, Deutsche Bank, J.P. Morgan, and Morgan Stanley in connection with numerous nine- and 10-figure financings of nursing facilities, assisted-living facilities, and other health care providers, and the related securitizations.