SENIOR ASSEMBLY FEDERAL PROPOSAL NO. 2
INTRODUCED BY SENIOR ASSEMBLY MEMBER WEINTRAUB
LEGISLATIVE COUNSEL'S DIGEST
AFP 2: NURSING HOMES: DISCLOSURE OF OWNERSHIP INFORMATION.
UNDER EXISTING LAW, LONG-TERM HEALTH CARE FACILITIES, INCLUDING SKILLED NURSING FACILITIES, ARE INSPECTED AND REGULATED BY THE STATE DEPARTMENT OF PUBLIC HEATH. EXISTING LAW REQUIRES THE DEPARTMENT TO IMPLEMENT A CONSUMER INFORMATION SERVICE SYSTEM TO PROVIDE SPECIFIED INFORMATION REGARDING THOSE FACILITIES.
THIS MEASURE WOULD MEMORIALIZE THE LEGISLATURE AND THE
GOVERNOR TO ENACT LEGISLATION THAT WOULD ADDRESS VARIOUS CONCERNS RELATING TO THE OPERATION OF NURSING HOMES, INCLUDING TAKING ACTION TO REQUIRE LARGE PRIVATE
INVESTMENT GROUPS THAT OWN MORE THAN 5 NURSING HOMES
TO DISCLOSE SPECIFIED INFORMATION RELATING TO OPERATIONAL OWNERSHIP.
VOTE: MAJORITY.
AFP 2: RELATING TO NURSING HOMES
WHEREAS, ON SUNDAY, SEPTEMBER 23, 2007, THE NEW YORK TIMES PUBLISHED A FEATURE ARTICLE BY STAFF WRITER CHARLES DUHIGG ENTITLED: “AT MANY HOMES, MORE PROFIT AND LESS NURSING”; AND
WHEREAS, FOR THE ARTICLE, THE NEW YORK TIMES ANALYZED TRENDS AT NURSING HOMES PURCHASED BY PRIVATE INVESTMENT GROUPS BY EXAMINING DATA AVAILABLE FROM THE CENTERS FOR MEDICARE AND MEDICAID SERVICES, A DIVISION OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES; AND
WHEREAS, THE NEW YORK TIMES’ EXAMINED MORE THAN 1,200 NURSING HOMES PURCHASED BY LARGE PRIVATE INVESTMENT GROUPS SINCE 2000 AND MORE THAN 1,400 OTHER HOMES, AND COMPARED INVESTOR-OWNED HOMES AGAINST NATIONAL AVERAGES IN MULTIPLE CATEGORIES, INCLUDING COMPLAINTS RECEIVED BY REGULATORS, HEALTH AND SAFETY VIOLATIONS CITED BY REGULATORS, FINES LEVIED BY STATE AND FEDERAL AUTHORITIES, THE PERFORMANCE OF HOMES AS REPORTED IN A NATIONAL DATABASE KNOWN AS THE MINIMUM DATA SET REPOSITORY, AND THE PERFORMANCE OF HOMES AS REPORTED IN THE ONLINE SURVEY, CERTIFICATION, AND REPORTING DATABASE; AND
WHEREAS, AFTER THE PRIVATE INVESTMENT GROUPS ACQUIRED NURSING HOMES, THEY OFTEN REDUCED COSTS, INCREASED PROFITS, AND QUICKLY RESOLD FACILITIES FOR SIGNIFICANT GAINS; BUT BY REGULATORY BENCHMARKS, RESIDENTS AT THESE FACILITIES ARE WORSE OFF, ON AVERAGE, THAN THEY WERE UNDER PREVIOUS OWNERS, ACCORDING TO DATA COLLECTED BY GOVERNMENT AGENCIES FROM 2000 TO 2006, INCLUSIVE; AND
WHEREAS, THE NEW YORK TIMES ANALYSIS SHOWS THAT MANAGERS AT MANY NURSING HOMES ACQUIRED BY LARGE PRIVATE INVESTORS HAVE CUT EXPENSES AND STAFF, SOMETIMES BELOW LEGAL REQUIREMENTS; AND
WHEREAS, REGULATORS SAY THAT AT FACILITIES OWNED BY
PRIVATE INVESTMENT FIRMS, RESIDENTS HAVE SUFFERED, AND, ON AVERAGE, HAVE FAIRED
MORE POORLY THAN OCCUPANTS AT OTHER HOMES WITH COMMON PROBLEMS LIKE DEPRESSION,
LOSS OF MOBILITY, AND LOSS OF ABILITY TO DRESS AND BATHE
THEMSELVES, ACCORDING TO DATA COLLECTED BY THE CENTERS FOR MEDICARE AND MEDICAID
SERVICES; AND
WHEREAS, THE TYPICAL NURSING HOME ACQUIRED BY A PRIVATE INVESTMENT GROUP BEFORE 2006 SCORED WORSE THAN NATIONAL RATES IN 12 OF THE 14 INDICATORS THAT REGULATORS USED TO TRACK AILMENTS OF LONG-TERM RESIDENTS, INCLUDING BEDSORES AND EASILY PREVENTABLE INFECTIONS, AS WELL AS THE NEED TO BE RESTRAINED. BEFORE THEY WERE ACQUIRED BY PRIVATE INVESTMENT GROUPS, MANY OF THOSE NURSING HOMES SCORED AT OR ABOVE NATIONAL AVERAGES IN SIMILAR MEASUREMENTS; AND
WHEREAS, IN THE PAST, RESIDENTS’ FAMILIES OFTEN RESPONDED TO SUCH DECLINES IN CARE BY SUING, AND REGULATORS LEVIED HEAVY FINES AGAINST NURSING HOME CHAINS WHERE UNDERSTAFFING LED TO LAPSES IN CARE. PRIVATE INVESTMENT GROUPS HAVE NOW MADE IT VERY DIFFICULT FOR PLAINTIFFS TO SUCCEED IN COURT AND FOR REGULATORS TO LEVY CHAINWIDE FINES BY CREATING COMPLEX CORPORATE STRUCTURES THAT OBSCURE WHO CONTROLS THEIR NURSING HOMES; AND
WHEREAS, IN RECENT YEARS, LARGE PRIVATE INVESTMENT GROUPS HAVE AGREED TO BUY SIX OF THE NATION’S 10 LARGEST NURSING HOME CHAINS, CONTAINING OVER 141,000 BEDS, OR 9 PERCENT OF THE NATION’S TOTAL, AND PRIVATE INVESTMENT GROUPS OWN AT LEAST ANOTHER 60,000 BEDS AT SMALLER CHAINS AND ARE EXPECTED TO ACQUIRE MANY MORE NURSING HOMES AS FIRMS COME UNDER SHAREHOLDER PRESSURE TO SELL; NOW, THEREFORE, BE IT
RESOLVED, BY THE SENIOR ASSEMBLY AND THE SENIOR SENATE, JOINTLY, THAT THE SENIOR LEGISLATURE OF THE STATE OF CALIFORNIA AT ITS 2008 REGULAR SESSION, A MAJORITY OF THE MEMBERS VOTING THEREFOR, HEREBY PROPOSES THAT THE FEDERAL GOVERNMENT ADOPT APPROPRIATE LEGISLATION AND THAT THE CENTERS FOR MEDICARE AND MEDICAID SERVICES ADOPT IMPLEMENTING POLICIES AND TAKE IMMEDIATE ACTION TO REQUIRE LARGE PRIVATE INVESTMENT GROUPS THAT OWN MORE THAN FIVE NURSING HOMES TO DISCLOSE AT THE TIME OF PURCHASE THEIR TOTAL OPERATIONAL OWNERSHIP; AND BE IT FURTHER
RESOLVED, THAT THERE BE A SINGLE IDENTIFIABLE LICENSABLE ENTITY THAT HAS TOTAL RESPONSIBILITY AND ACCOUNTABILITY FOR ALL ASPECTS OF A NURSING HOME’S OPERATION, INCLUDING PATIENT CARE AND FACILITIES; AND BE IT FURTHER
RESOLVED, THAT THE SENIOR LEGISLATURE OF THE STATE OF CALIFORNIA RESPECTFULLY MEMORIALIZES THE CONGRESS AND THE PRESIDENT TO ENACT APPROPRIATE LEGISLATION THAT WOULD ADDRESS THE CONCERNS SET FORTH IN THIS MEASURE; AND BE IT FURTHER
RESOLVED, THAT A COPY OF THIS MEASURE BE TRANSMITTED TO THE PRESIDENT AND VICE PRESIDENT, THE SPEAKER OF THE HOUSE OF REPRESENTATIVES, THE CHAIRPERSONS OF THE HOUSE AND SENATE COMMITTEES ON AGING, AND TO EACH SENATOR AND REPRESENTATIVE FROM CALIFORNIA IN THE CONGRESS OF THE UNITED STATES.
RN 08 22037
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