Bill Mandating Financial Reporting for California SNFs Heads to Governor

A bill that would require skilled nursing operators in California to report their finances to the state and the public is headed to to the governor.

Senate Bill 650, also known as the Corporate Transparency in Elder Care Act of 2021, cleared both bodies of the state’s legislature after it passed in the Senate on Sept. 9.

Organizations that operate, conduct own, manage, or maintain a SNF will be required to prepare and file an annual consolidated financial report with the Office of Statewide Health Planning and Development “that includes data from all operating entities, licenseholders, and related parties in which the organization has an ownership or control interest of 5% or more and that provides any service, facility, or supply to the skilled nursing facility,” according to the bill.

The report, among other things, would include a balance sheet detailing the assets and liabilities, as well as the net worth of the facility at the end of its fiscal year, the bill states.

The governor has until Oct. 10 to sign the bill, veto it or allow SB 650 become law without his signature. Democratic Senator Henry Stern of Los Angeles introduced the measure back in February.

“Many large, for-profit SNF chains use complex ownership structures to increase their profitability by making it appear they can’t do anything to control their costs, when in reality they’re keeping the money all in the dark recesses of the corporate family,” Stern said in a statement. “This shines the bright light of day on this practice by requiring nursing home chains to place consolidated financial reports on each individual facility’s website.”

“At its core, this urgent need for transparency is a quality of care issue,” Stern added.

The bill is one in a series of measures, referred to as the PROTECT Plan, aimed at better regulating the nursing home industry, according to the press release.

The California Advocates for Nursing Home Reform, SEIU California, AARP California, Disability Rights California, the Consumer Attorneys of California, the Geriatric Circle, California Association of Long Term Care Medicine, and others, support SB 650.