The Department of Health Care Access and Information (HCAI) recently published a proposed regulatory text to implement California Senate Bill 650 (SB 650). SB 650 was approved in 2021 to increase financial and operational transparency for skilled nursing facilities (SNFs).
The proposed rule requires an organization that operates, conducts, owns, manages, or maintains an SNF to prepare and file an annual consolidated financial report to the Department. A certified public accountant is required to review or audit the report, which begins with the fiscal year ending December 31, 2023.
Under the statute, the organization’s annual consolidated financial report must include the individual financial information from all operating entities, license holders, and related parties in which the organization has an ownership or control interest of 5% or more and that provide any services, facilities, or supplies to the SNF.
The annual consolidated financial report must include a:
- Balance sheet
- Statement of changes in equity
- Statement of income, expense, and operating surplus or deficit
- Statement of cash flows
- Combined financial statement that includes all entities in the consolidated financial report
- Statement of patient census by payer
- Statement of patient revenue by payer and by routine and ancillary revenue center
The organization also must submit to the Department a visual representation of the organization’s structure that includes all:
- Related parties in which the organization has an ownership or control interest of 5% or more and that provide any services, facilities, or supplies to the SNF
- Unrelated parties that provide services, facilities, or supplies to the SNF or other facilities that the organization operates, conducts, owns, manages, or maintains and that are paid more than $200,000
The reporting is due within four months after the SNF’s fiscal year-end.
We encourage all our clients to become familiar with the requirements. To ensure compliance with the regulations, we encourage you to contact your Aldrich Advisor.
The text of the bill can be found here.
