New Monetary Penalties for Some Skilled Nursing Transfers, Discharges, and Readmissions

Hanson Bridgett LLP

Hanson Bridgett LLP

Key Points

  • Governor Newsom signed into law Assembly Bill (AB) 133, which creates a $750 per day civil money penalty for skilled nursing facilities (SNF) that do not comply with a transfer, discharge, or readmission hearing decision within three calendar days.
  • AB 133 also requires an SNF to submit a certification of compliance to the Department of Health Care Services (DHCS), attesting it has complied with the hearing officer's order.
  • The transfer, discharge, or readmission hearing must afford due process to the participants and be conducted by a trained hearing officer.

On July 27, 2021, Governor Newsom signed into law AB 133, which, in part, grants DHCS the authority to assess a $750 per day civil money penalty on any SNF that fails to comply with a hearing decision issued by DHCS's Office of Administrative Hearings and Appeals. That office conducts transfer, discharge, and readmission hearings. Unless an SNF complies with a hearing decision within three days from service of that decision on the facility, DHCS may assess a $750 per day penalty until compliance is achieved. In order to prove compliance with the hearing decision, an SNF will be required to submit a certification of compliance to DHCS. DHCS is required to create a format for this certification. The total penalty accrued may not exceed $75,000.

In addition to implementing a new monetary penalty and certification of the compliance process, AB 133 also provides for a waiver process under certain circumstances and mandates requirements for the DHCS hearing itself. The hearing requirements include mandating that the hearing decision be rendered by a trained hearing officer and that the hearing provide the participants with due process. Specifically, participants must at least be given the right to conduct direct and cross-examination of witnesses under oath, present documentary evidence, and receive a recording of the proceeding that is sufficient to prepare a written transcript.

These new requirements are immediately effective. While hearings on transfer, discharge, and readmission already have costs, these new requirements add an extra layer of difficulty for SNFs facing difficult resident situations. The added potential penalties make it even more important for facilities to understand and comply with the intricate documentary requirements of transfer, discharge, and readmission. Taking early steps to create solid evidence in support of your facility's actions will be more critical than ever.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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