AB 1502 Update

Adverse Changes Made By the Senate

According to CANHR, California’s Senate made several changes to AB 1502, rendering it ineffective in its original intent. The most pressing concerns include the following amendments by the Senate:

Reduced Standards for Suitability

The Senate parsed down the language in the bill that would have set high standards for nursing home operator suitability. For example, the bill’s original text asked for operators to have the abilities, education, and character to run a facility and comply with federal and state laws.

The amendments only require operators to meet vague responsibility and reputable standards while operating in the interim before receiving a license.

Reduced Enforcement Measures

CANHR’s veto letter states that Senate amendments to AB 1502 replace effective enforcement measures with meaningless consequences for non-compliance violations. The bill’s current form includes a $2,000 Class B penalty, the lowest penalty category in California.

Nursing home operators earn millions of dollars yearly from state-sponsored healthcare programs, making the $2,000 fine an inconsequential punishment for violating the law.

Limited Vetting Process

The Senate’s changes limit the vetting procedure for nursing homes, inviting wealthy nursing home corporations to manipulate the system in their favor. For example, the bill only requires the CDPH to vet applicants for approval.

CANHR believes that many nursing home operators will use shell companies to apply, meaning that owners and operators won’t be vetted based on their qualifications. Rather, they can gain approval with a shell company that doesn’t have a negative history and exploits the loophole created by these amendments.