After the Pandemic Hit Nursing Homes Hard, California Lawmakers Push to Tighten Licensing Rules

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Source: Kaiser Health News, by Samantha Young

When Johanna Trenerry found a nursing home for her husband after his stroke, she expected his stay would be temporary.

He never came home.

Arthur Trenerry died at Windsor Redding Care Center in Northern California in October 2020. The 82-year-old great-grandfather is among more than 9,900 California nursing home residents who have died of covid-19.

The nursing home where Trenerry died is licensed by the state, but not under its current owner, Shlomo Rechnitz. The state denied Rechnitz a license, citing at least one death and multiple cases of “serious harm” at other nursing homes he owns or operates. To get around that, Rechnitz formed a business partnership with one of the home’s former owners, who continues to hold the facility’s license.

Some California lawmakers want to put an end to those types of business arrangements and ban people or entities from buying or operating nursing homes unless they have a license — which is the situation in most states. They’re also proposing an overhaul of the licensing process to reject applicants with poor performance and those without adequate experience or financial resources.

The ambitious effort, which the industry considers an overreach, could make California’s oversight the gold standard and a model for other states trying to improve nursing home care. Nationwide, more than 152,000 residents of nursing homes have died of covid during the pandemic, according to federal data.

“The public health emergency that we’ve experienced could be something that becomes a catalyst for making real change,” said Dr. Debra Saliba, a UCLA professor of medicine who served on a National Academies of Sciences, Engineering, and Medicine committee that released a comprehensive report on nursing homes in April. “One of the things that we have right now is the determination, the resources to make things happen.”

In his State of the Union address in March, President Joe Biden said the quality of care had declined in nursing homes taken over by investors — and vowed to set higher federal standards. In anticipation of the speech, the White House released a proposal calling on Congress to boost funding for nursing home inspections and to give federal regulators the authority to deny Medicare funds to underperforming facilities. The administration also directed the Centers for Medicare & Medicaid Services to propose minimum staffing standards within a year.

States are also taking steps to improve quality. New Jersey, for example, this year adopted a law that toughens penalties for health violations and requires nursing homes to disclose financial records.

In California, lawmakers are considering several proposals, including the changes to nursing home licensing rules.

Companies and individuals can buy or run nursing homes in California before they get a license, a process that even an industry lobbyist described at a legislative hearing this year as “backward” and unique to the state.

“In California, nursing home owners and operators can operate without a license even after they’ve been denied a license,” said state Assembly member Al Muratsuchi (D-Torrance), author of AB 1502. “Many of these owners and operators have, unfortunately, an extensive history of neglect and abuse.”

Muratsuchi’s bill would require an owner or company to apply for a license 120 days before buying or operating a nursing home and include financial records that contain the names of all owners and investors. The state would reject applicants who fail to meet standards for character, performance in other homes, and the financial ability to run the home. Homes operating without a license would lose Medicaid funding and couldn’t admit new residents.

The powerful California Association of Health Facilities, which represents more than 800 nursing homes, has blocked previous licensing legislation and has set its sights on Muratsuchi’s bill. The group is led by Craig Cornett, a veteran of the state Capitol who has worked for four Assembly speakers and two Senate leaders.

The organization has made just over $2 million in political contributions and spent $5.9 million lobbying lawmakers from Jan. 1, 2011, through March 31, 2022, according to records filed with the California secretary of state’s office.

The bill fails to consider the state’s “complex regulatory environments” and would create “extensive” disclosure requirements on ownership applications that “in many cases would fill an entire room with boxes and boxes of paper,” Jennifer Snyder, a lobbyist for the association, told lawmakers in January.

The measure would “eliminate the ability for most current owners in California to actually apply or even apply for a change of ownership,” she added.

But this year, the industry faces an altered political landscape.

Covid has pushed lawmakers to act — and Muratsuchi has gained a valuable co-sponsor for his bill, Democratic state Assembly member Jim Wood, head of the Assembly Health Committee. Wood has condemned nursing homes for not doing enough during the pandemic and has directed state regulators to conduct stricter oversight.

Muratsuchi’s measure has cleared the state Assembly and awaits a hearing in the Senate.

Investigations by news organizations CalMatters and LAist last year found that at least two California nursing home operators without licenses were running dozens of facilities even though officials at the state Department of Public Health had declared them unfit to do so.

The homes remain open, in large part because finding another nursing home for residents is incredibly difficult.

In July 2016, state regulators denied a license to Rechnitz — who had purchased the Windsor Redding Care Center, where Arthur Trenerry died — citing 265 health and safety code violations at his other facilities in the previous three years. Nevertheless, Rechnitz continues to operate the home in partnership with a former owner, Lee Samson, who is listed as a license holder in state records.

Mark Johnson, a lawyer who represents Rechnitz and his company, Brius Healthcare, said that Windsor Redding Care Center’s “license is in good standing” and that Rechnitz is managing the facility under an agreement “that is customary in the skilled nursing facility industry.” Rechnitz has filed a new and updated license application with the state, Johnson said.

Johanna Trenerry said she had no idea Rechnitz had been denied a license. Had she known, she said, she would never have placed her husband of 60 years at Windsor Redding.

Even before her husband caught covid, Trenerry and her children were trying to transfer him to another home because he seemed overly medicated, could no longer hold up his head, and fell numerous times trying to get out of bed, she said. Once, she recalled, the nursing home brought out the wrong person when the family visited.

They kept him “so drugged up,” said Nancy Hearden, one of the Trenerrys’ eight children. “And I think it was just because it was easier for them. He wasn’t getting to go to his rehab. I felt, ‘We’ve got to get him out of this place.’”

Then he got covid.

Sixty of the 84 residents at the facility came down with the disease in September 2020 — and at least two dozen of them died. According to a lawsuit filed by family members of 15 residents who died, including the Trenerrys, employees of the home were forced to work despite having covid symptoms. The lawsuit refers to state citations that found the home didn’t supply enough personal protective equipment to staffers, didn’t test staff, and placed covid patients and untested patients in the same rooms with residents who weren’t infected.

Johnson denied the allegations.

IRS Health Care Tax Tips

The IRS offers the following tips on Forms 1040, 1040A, and 1040EZ that relate to the health care law:

  • Form 8965, Health Coverage Exemptions: Complete this form to claim a coverage exemption or report a Marketplace-granted coverage exemption. Use the worksheet in the Form 8965 Instructions if you need to calculate the shared responsibility payment.
  • Form 8962, Premium Tax Credit: Complete this form to claim this credit on your tax return and reconcile advance payments of the premium tax credit.
  • Form 1095, Health Care information Forms: If you enrolled in coverage through the Health Insurance Marketplace, you should get Form 1095-A, Health Insurance Marketplace Statement, which will help complete Form 8962. Wait to file until you get this form. Your health coverage provider or your employer may give you a Form 1095-B, Health Coverage, or Form 1095-C, Employer-Provided Health Insurance Offer and Coverage. You do not have to wait to get these forms before your file your tax return.
  • Form 1040:
  1. Line 46: Enter advance payments of the premium tax credit that must be repaid.
  2. Line 61: Report health coverage or enter individual shared responsibility payment.
  3. Line 69: Report net premium tax credit if the allowed premium tax credit is more than advance credit payments paid on your behalf.
  • Form 1040-A
  1. Line 29: Enter advance payments of the premium tax credit that must be repaid.
  2. Line 38: Report health coverage or enter individual shared responsibility payment.
  3. Line 45: Report net premium tax credit if the allowed premium tax credit is more than advance credit payments paid on your behalf.
  • Form 1040-EZ
  1. Line 11: Report health coverage or enter individual shared responsibility payment.
  2. Form 1040EZ cannot be used to report advance payments or to claim the premium tax credit.

For more information about the Affordable Care Act and filing your 2015 income tax return visit IRS.gov/aca. VisitIRS.gov for more information on this topic if you file Form 1040-NR or 1040-NR-EZ.

Major Health Insurance Changes for the New Year

Covered CA 2016 ChangesCovered California is reminding consumers and small businesses about important changes in 2016. Starting January 1, Covered California increased access to plans and providers and offered more health plans, and increased the number of benefits that are not subject to a deductible. Here is a run-down of the changes:

Most California Consumers Get New Forms for the 2015 Tax Year
This year, consumers who are insured through their employer or a government program, like Medi-Cal, will get Form 1095-B or Form 1095-C. The forms show who maintained minimum essential coverage and is not liable for the tax penalty. Consumers under Covered California will continue to get a Form 1095-A. For more information, visithttps://www.irs.gov/Affordable-Care-Act/Questions-and-Answers-about-Health-Care-Information-Forms-for-Individuals.

The Penalty for Not Buying Affordable Insurance Is Going Up — A Lot
The IRS penalty applies to people who go without insurance when they can afford to buy it. It will increase for 2016 to at least $695 per adult and $347.50 per child under 18 or 2.5% of household income, whichever is greater. A recent study by the Henry J. Kaiser Family Foundation estimates that the average household penalty in 2016 will be $969, which is a 47% increase from 2015. For more information, visit www.taxpayeradvocate.irs.gov/estimator/isrp.

New Requirements and New Options for Many of California’s Small Businesses
Employers with more than 50 full-time-equivalent (FTE) employees must offer health insurance to employees or pay a penalty. Through 2015, this requirement applied only to businesses with more than 100 employees. Any of these employers with an employee who does not take their offer of coverage will have to pay a penalty if the employee goes on to get financial assistance to purchase coverage through Covered California. For more information, visit https://www.irs.gov/Affordable-Care-Act/Employers/ACA-Information-Center-for-Applicable-Large-Employers-ALEs.

Covered California for Small Business will expand beyond the ceiling of 50 employees to serve companies employing 100 or fewer FTE employees. For more information, visit www.CoveredCA.com/ForSmallBusiness.

Major Improvements in Choice, Access and Benefits
Covered California used its power as an active purchaser to hold down rate changes for a second year. Before the Affordable Care Act, consumers regularly experienced double-digit premium increases. For 2016, Covered California negotiated a weighted average change of 4%, which is lower than last year’s change of 4.2%. In addition, nearly 90% of Covered California enrollees get some financial assistance to help pay premiums. On average, those subsidies resulted in more than $5,200 for each household in 2014.

Benefit Changes for the 2016 coverage year:

  • The majority of Bronze plan consumers now get three office visits a year to a primary care provider or specialist with no deductible. Other needed services, such as lab tests and rehabilitation, will not be subject to a deductible.
  • Covered California’s Silver plan will combine copay and coinsurance into a single product. Every doctor visit, lab test, and prescription will not be subject to a deductible in this single product. Consumers with chronic conditions will be protected by a cap on specialty drugs. The vast majority of consumers will see their specialty drugs capped at $250 per month, per prescription. Plus, because of Covered California’s standard benefit design, the caps must be offered by every health insurance plan in the individual market and by all plans offered by the exchange. For more information, visit http://news.CoveredCA.com/2015/05/covered-california-board-protects.html.
  • Adult dental coverage is now offered as an add-on.
  • 6% of Covered California consumers will be able to choose from at least three health insurance companies thanks to the addition of two new health insurance companies — UnitedHealthcare Benefits Plan of California and Oscar Health Plan of California as well as the expansion of Blue Shield of California and Health Net.
  • More than 90% of hospitals (general acute centers as designated by the California Office of Statewide Health Planning and Development) in California will be available through at least one health insurance company, and 74% will be available through three or more companies.

 Medi-Cal Coverage for Undocumented Children

  • Medi-Cal will be expanded to all children regardless of their immigration status. The new law goes into effect in May 2016.

Health Care Improvements for All Californians
Starting July 1, health plans must publish and maintain printed and online provider directories. Health plans must maintain accurate provider directories, including routine updates. For more information, visithttp://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160SB137.

A new state law will require health plans and insurers to implement formula-tier requirements and cost-sharing caps similar to products offered through Covered California. Assembly Bill 339 requires plans and insurers to have formularies that do not discourage the enrollment of people with certain health conditions. It also sets requirements regarding access to in-network retail pharmacies, standardized formularies, and coverage for certain single-tablet HIV and AIDS treatments. For more information, visithttp://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB339.

IRS to propose rules clarifying ACA penalties

Proposed Internal Revenue Service rules set to be published in the Federal Register will exempt from Affordable Care Act tax penalties people in state programs for the medically needy, Medicaid pilot programs and two military health programs. Enrollees in these programs may erroneously believe that the programs provide enough benefits to comply with the ACA’s individual insurance mandate. The proposed rules will also emphasize that penalties are computed for the taxpayer, not for each person in the family. BenefitsPro.com (1/23)

The Costs of Remaining Uninsured: Navigating the Affordable Care Act

NavigatingSome consumers will pay the penalty instead of buying insurance through the exchange. But they should consider the long-term financial benefits of having health insurance, according a blog entry by Consumer Advocate Eleanor Blayney, CFP.

Facing the choice to get insurance or pay a penalty, they may resort to simple math and conclude that $95 is a lot more affordable than the $3,000 or $4,000 for the lowest level of insurance coverage available on the state exchanges. However, Blayney advises Americans to consider several factors before deciding to pay the federal penalty and forego health insurance:

• You Risk penalties for having no insurance: In 2014, uninsured Americans will have to get health insurance or pay a penalty of $95 per adult and $47.50 per child or 1% of family income, whichever is greater. In 2015, the penalty rises to $325 per adult (half as much for each child) or 2% of income, whichever is greater. The penalties rise even further in 2016 and beyond.

 You risk huge medical costs due to an accident: Being young and healthy does not vaccinate you from the kind of risk that can leave you and your family destitute.

You May have limited access to quality medical care when you do need it:  Some providers may simply decline you as a patient when they find out that you are uninsured.

• You will be more likely to neglect the routine, preventative procedures: If you are unwilling to pay for insurance, you’ll probably skip the high cost of an annual check-up or routine procedures. It will cost more for the uninsured to get health care coverage under the Affordable Care Act.

IRS issues final ACA rules for individual coverage, penalties

Individuals who do not have health insurance will be subject to an annual penalty of $95 or 1% of income next year, depending on which is greater, rising to $695 or 2.5% by 2016, under final Internal Revenue Service rules. Employees who get health insurance coverage through a union or temporary staffing agency will not be penalized, tax lawyers said. Early retirees, former employees and dependents who are eligible for but decline to purchase coverage through a former employer may be eligible for tax credits if they buy a plan through a public marketplace. Reuters (8/27) , Business Insurance (tiered subscription model) (8/27) , Kaiser Health News/Capsules blog (8/27)

Wellness experts say incentives are big part of company plans

Industry experts said companies have quickly caught on to the benefits of using employee incentives and penalties to drive wellness program participation. Aon Hewitt medical director Dr. Michael Cryer said he never expected the percentage of companies linking biometric outcomes to incentives would increase from 4% to 25% in one year. Tom Billet of Towers Watson said companies also are using financial incentives to get more people engaged in wellness programs. Reuters (10/10)

Last Updated 05/25/2022

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