14126.029. (Added by Stats. 2021, Ch. 143, Sec. 384.)

(a) For purposes of this section, the following definitions apply:

(1) “Long-term health care facility” means a skilled nursing facility or nursing facility as those terms are defined in paragraph (1) of subdivision (c) and subdivision (k) of Section 1250 of the Health and Safety Code, respectively.

(2) “Timely” means within three calendar days of a long-term health care facility being served a hearing decision.

(b) A long-term health care facility shall timely comply with a hearing decision, as issued by the department’s Office of Administrative Hearings and Appeals pursuant to Section 1396r(e)(3) of Title 42 of the United States Code and Section 1599.1 of the Health and Safety Code, that finds that the long-term health care facility improperly transferred, discharged, or refused to readmit a resident.

(c) (1) Notwithstanding any other law, and in addition to any other remedial action available to the department, if a long-term health care facility fails to timely comply with a hearing decision issued by the department’s Office of Administrative Hearings and Appeals, the department may assess penalties pursuant to this subdivision.

(2) Commencing on the fourth calendar day after the date of service of the hearing decision, the department may assess a penalty of seven hundred fifty dollars ($750) for each calendar day the facility fails to comply with the hearing decision.

(3) For each individual hearing decision, the department shall not assess aggregate penalties that exceed seventy-five thousand dollars ($75,000).

(d) To demonstrate compliance with a hearing decision, a long-term health care facility shall file a certification of compliance with the department within three calendar days of the date the hearing decision is served on that facility, in a form and manner as established by the department. The certification shall specify the date of service of the hearing decision and the date on which the resident was readmitted or the facility otherwise complied with the hearing decision. The department shall make a certificate of compliance available on its internet website.

(f) (1) Notwithstanding any other law, the amount of the assessed penalties, as calculated pursuant to subdivision (c), for a long-term health care facility may be deducted by the department from any Medi-Cal payments to that facility until the penalties are paid in full. If the department deducts the penalties from the Medi-Cal payments to the facility, the department shall provide prior written notice to the facility, and, in taking into account the financial condition of the facility, may apply that deduction over a period of time.

(2) Notwithstanding any other law, if there is a merger, acquisition, or change of ownership involving a long-term health care facility that has outstanding penalties pursuant to this section, the successor long-term health care facility shall be responsible for paying to the department the full amount of outstanding penalties attributable to the facility for which it was assessed, upon the effective date of that transaction.

(g) The department may waive all or a portion of the penalties assessed under this section if a facility petitions for a waiver and the department determines, in its sole discretion, that the petitioning facility meets both of the following:

(1) The facility complied with the hearing decision or otherwise demonstrated to the department’s satisfaction that sufficient corrective action has been taken to remediate the underlying improper conduct.

(2) The facility demonstrated to the department’s satisfaction that imposing the full amount of penalties under this section has a high likelihood of creating an undue financial hardship for that facility or creates a significant difficulty in providing services to Medi-Cal beneficiaries.

(h) Any penalties collected by the department pursuant to this section shall be deposited into the General Fund, and, upon appropriation by the Legislature, shall be used to improve quality of long-term care services under the Medi-Cal program, and to fund the department’s administrative costs associated with the hearings conducted pursuant to Section 1396r(e)(3) of Title 42 of the United States Code and Section 1599.1 of the Health and Safety Code for purposes of implementing this section.

(i) Any penalty the department assesses on a long-term health care facility pursuant to this section is appealable only to the superior court of the county where the facility is located.

(j) Any penalty issued pursuant to this section shall not prohibit any state or federal enforcement action, including, but not limited to, an enforcement action by the State Department of Public Health, for a violation of improper transfer or discharge or failure to readmit requirements.

(k) Notwithstanding the rulemaking provisions of Chapter 3.5 (commencing Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of information notices, provider bulletins, or other similar instructions, without taking any further regulatory action.

(l) The department shall seek any federal approvals it deems necessary to implement this section. This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is not jeopardized.

(m) In the event that the long-term health care facility seeks judicial review of the hearing decision and the hearing decision is reversed through such review, the department, after being provided a copy of the final judicial order by the facility, shall refund to the facility any penalties paid by the facility associated with the reversed hearing decision.

(n) (1) A hearing decision for a hearing described in subdivision (b) shall be made by a hearing officer trained to consider and apply the procedural and substantive requirements of all applicable federal and state laws and regulations governing the transfer and discharge process.

(2) A hearing described in subdivision (b) shall afford the resident and facility due process, including, but not limited to, allowing the direct and cross-examination of witnesses under oath, allowing the presentation of documents as exhibits, and making a recording of all sessions of the proceedings of sufficient quality to allow for the preparation of a written transcript.