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Hearing, Rallies Today on Bill to Reform CA Nursing Homes

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Tuesday, July 13, 2021   

SACRAMENTO, Calif. -- As the legislative session in Sacramento comes to a close, lawmakers will consider a bill to require nursing homes to better account for the billions of taxpayer dollars they take in each year.

The State Assembly Committee on Health will hear Senate Bill 650, to require nursing homes to provide detailed financial reports that include transactions with any vendors in which they own more than a 5% interest.

Sen. Henry Stern, D-Los Angeles, sponsored the bill.

"Unless we actually know the nature of these related-party transactions, there's an ability to erect a very insidious shell game," Stern asserted. "Moving money around, and not knowing where it is; that we could be seeing billions of dollars in waste and abuse."

Opponents of the bill said it puts too big a regulatory burden on an industry that's reeling from COVID-19. Rallies in support of the bill, and the care economy in general, take place today in Los Angeles and Oakland.

Blanca Castro, senior manager of advocacy for AARP California, said COVID exposed longstanding problems with short staffing. She noted state data showed more than 110,000 nursing home residents and staff had become infected as of May.

"The time is now to hold to nursing home operators accountable," Castro argued. "Over 9,000 lives were lost; that includes residents and staff."

Arnulfo De La Cruz, executive vice president of Service Employees International Union Local 2015, which represents nursing home staff, said some nursing-home corporations use what he called "accounting tricks" with affiliated companies to extract profits from rent, supplies and more.

"Shining a light on the lack of transparency by some of California's largest nursing-home employers is a fundamental step towards our vision for a long term care system that puts care first, not profit," De La Cruz emphasized.

Tony Chicotel, staff attorney for the nonprofit California Advocates for Nursing Home Reform, said the concerns predate the pandemic.

"Nursing homes know their costs. They know their profits, and the state simply doesn't," Chicotel contended. "This lack of transparency results in the state getting ripped off, paying for the private jets and vacation homes of nursing-home owners, instead of the staff and resources critical for resident well-being."

A recent state auditor's report found from 2006 to 2015, three of the state's biggest nursing-home corporations grew substantially, and their related-party transactions soared, even as deficiencies that caused serious harm or death to residents increased by 35%.

Disclosure: AARP California contributes to our fund for reporting on Health Issues, and Senior Issues. If you would like to help support news in the public interest, click here.


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