Friday Feb 03, 2023

Bill Text – AB-2079 Skilled nursing facilities: direct care spending requirement. – California Legislative Information

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1272.5.

 (a) No later than July 1, 2023, a direct care spending, reporting, and rebate requirement shall be established pursuant to this section for skilled nursing facilities that are certified under the federal Centers for Medicare and Medicaid Services (CMS).

(1) A skilled nursing facility shall report total revenues collected from each and all revenue sources, along with the portion of revenues that are expended on all direct care and nondirect care, to the Department of Health Care Access and Information, consistent with the reporting described in Section 128735, by June 30 of each calendar year. Consistent with the reports and requirements described in subdivisions (a) to (e), inclusive, of Section 128735 and in Section 128740, all information
submitted pursuant to this section shall be accompanied by a report certification signed by a duly authorized official of the skilled nursing facility or of the skilled nursing facility’s home office that certifies that, to the best of the official’s knowledge and information, each statement and amount in the accompanying report is believed to be true and correct.

(2) The direct care spending requirement shall require a minimum of 85 percent of a facility’s total health and nonhealth revenues from each and all payer sources in each fiscal year to be expended on the direct care of residents.

(b) (1) “Direct care” shall include all of the following:

(A) Staffing services, including wages and benefits for nursing managers, nursing staff, and other personnel, who may include registered nurses,
licensed practical nurses, certified nurse aides, noncertified or resident care aides, directors of nurses, in-house clerical staff regularly interacting with residents and caregivers, receptionists, evaluation nurses, minimum data set coordinators, and medical directors.

(B) Ancillary services, including, but not limited to, therapy services, supplies, pharmacy services, consultants, and laboratory services.

(C) Support services, including plant operations and maintenance, laundry and linen, dietary and food services, social services, services by a social service worker, services by a behavioral health consultant, and in-service education.

(2) Any administrative costs and profits paid to contractors or related party entities for staffing services, ancillary services, or support services shall be excluded from the
definition of direct care.

(3) For purposes of calculating purchased and contracted services, the total number used shall be discounted at 85 percent of the contracted or purchased amount.

(c) (1) “Nondirect care” shall include all of the following:

(A) All administrative costs, including management and executive wages and benefits, all costs to management companies, administrative service companies, home office expenses for parent companies and holding companies, legal expenses, trade association fees and dues, insurance costs, licensing fees, and quality assurance fees. All administrative costs and profits paid to contractors or related party entities for staffing services, ancillary services, support services, or other services are considered nondirect care.

(B) Capital costs, including depreciation, leases and rentals, interest rates, property taxes, corporate taxes, and property insurance.

(C) Other expenses, including other interest rates and provision for bad debts.

(D) Profits, including net income and any profits paid to related parties on leases and property, and any profits paid to management companies.

(2) Exceptions to nondirect care may be approved by the State Public Health Officer for special high-cost equipment or improvements of the physical plant that directly benefit residents, such as establishing single rooms and private bathrooms.

(d) (1) The State Department of Health Care Services shall conduct an
audit, as described in Section 14170 of the Welfare and Institutions Code, of the financial information reported by skilled nursing …….

Source: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220AB2079

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