Today's Law As Amended


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SB-707 Continuing care contracts.(2021-2022)



As Amends the Law Today


SECTION 1.

 Section 1778 of the Health and Safety Code is amended to read:

1778.
 (a)  There is hereby created in the State Treasury a fund which shall be known as the Continuing Care Provider Fee  CCRC Oversight  Fund. The fund shall consist of fees received by the department pursuant to this chapter. Notwithstanding Section 13340 of the Government Code, the Continuing Care Provider Fee  CCRC Oversight  Fund is hereby continuously appropriated to the department, without regard to fiscal years.
(b)  Use of the funds appropriated pursuant to this section shall include funding of the following:
(1)  Program personnel salary costs, including, but not limited to, the following:
(1)  (A)  Program personnel salary costs, to include but not be limited to:   A  Continuing Care Contracts Program Manager at a level consistent with other management classifications that direct a regulatory program with statewide impact requiring  impact. The position shall require  skills and knowledge at the highest level with responsibility for work of the most critical or sensitive nature as it relates to the department’s mission, including protecting vulnerable elderly persons, supervising technical staff with oversight of highly complex operations operations,  and responsibility for policy and program evaluation and recommendations; full-time legal counsel with a working knowledge of all laws relating to the regulation of continuing care retirement communities and residential care facilities for the elderly; financial analyst with working knowledge of generally accepted accounting principles and auditing standards; and other appropriate analytical and technical support positions.  recommendations. 
(B) A full-time legal counsel with a working knowledge of all laws relating to the regulation of continuing care retirement communities and residential care facilities for the elderly.
(C) A financial analyst with working knowledge of generally accepted accounting principles and auditing standards.
(D) Other appropriate analytical and technical support positions.
(2)  Contracts with technically qualified persons, to include  including,  but not be  limited to to,  financial, actuarial, and marketing consultants, as necessary to provide advice regarding the feasibility or viability of continuing care retirement communities and providers.
(3)  Other program costs or costs directly supporting program staff.
(4)  The department shall use no more than 5 percent of the fees collected pursuant to this section for overhead costs, including facilities operation, operation  and indirect department and division costs.
(c)   As needed, the department shall adjust the calculations for the application fees under Section 1779.2 and annual fees under Section 1791 to ensure that the balance in the CCRC Oversight Fund is adequate to fund the reasonable regulatory costs of the program, as specified in subdivision (b).  If the balance in the Continuing Care Provider Fee Fund is projected to exceed five hundred thousand dollars ($500,000) for the next budget year, the  CCRC Oversight Fund exceeds an amount adequate to fund the reasonable regulatory costs of the program, as specified in subdivision (b), the  department shall adjust the calculations for the application fees under Section 1779.2 and annual fees under Section 1791 to reduce the amounts collected. A link to the approved budget for the Continuing Care Contracts Section shall be posted on the department’s internet website. 
(d)  The intent of the Legislature is to empower the program administrator with the ability and authorization to obtain necessary resources or staffing to carry out the program objectives.

SEC. 2.

 Section 1793.13 of the Health and Safety Code is amended to read:

1793.13.
 (a) The department may require a provider to submit a financial plan, if either plan and quarterly financial reports, if any  of the following applies: apply: 
(1) A provider fails to file a complete annual report as required by Section 1790.
(2) The department has reason to believe that the provider is insolvent, is in imminent danger of becoming insolvent, is in a financially unsound or unsafe condition, or that its condition is such that it may otherwise be unable to fully perform its obligations pursuant to continuing care contracts.
(3) Both of the following occur and continue for at least 30 days:
(A) The provider fails to maintain the minimum reserve required pursuant to Section 1792.
(B) (i) For a provider with mortgage financing from a third-party lender or public bond issue, the coverage ratio of the provider’s debt service, as described in Section 1792.3, is less than 1:1 and the provider has less than 90 days’ cash on hand in the reserve account calculated and described in Section 1792.4.
(ii) For a provider without mortgage financing from a third-party lender or public bond issue, the provider has less than 90 days’ cash on hand in the reserve account calculated and described in Section 1792.4.
(b) (1)  A provider shall submit its financial plan to the department within 60 days following the date of the department’s request. The financial plan shall explain how and when the provider will rectify remedy  the problems and deficiencies identified by the department.
(2) A provider shall submit quarterly updates to the financial plan to the department. Quarterly reports shall explain the provider’s progress toward remedying the problems and deficiencies identified by the department.
(c)   The department shall approve or disapprove the plan within 30 days of its receipt.
(d)   If the plan is approved, the provider shall immediately implement the plan. plan and distribute a copy of the plan to the facility’s resident council. All quarterly reports required by this section shall also be distributed to the facility’s resident council immediately following submission to the department. 
(e)   If the plan is disapproved, or if it is determined that the plan is not being fully implemented, the department may consult with its financial consultants to develop a corrective action plan at the provider’s expense, or require the provider to obtain new or additional management capability approved by the department to solve its difficulties. A reasonable period, as determined by the department, shall be allowed for the reorganized management to develop a plan which, that,  subject to the approval of the department, will reasonably assure ensure  that the provider will meet its responsibilities under the law. A corrective action plan or a plan for reorganization shall be shared with the facility’s resident council within a reasonable period of time. 
(f) The provider shall share its approved financial plan and its most recent quarterly report with a prospective or incoming resident if that person will become a resident before the remediation of the problems and deficiencies identified by the department.
(g) If the provider fails to correct deficiencies by the expiration of the financial plan, the department may take further actions consistent with Section 1793.50.