Nursing Homes In Dire Need of Regulation After Thousands Die From COVID-19, State Lawmakers Say

With more than 9,000 nursing home residents in California dead from COVID-19, lawmakers at a hearing Tuesday demanded dramatic changes to the state’s nursing home licensing program, citing recent investigations by LAist and CalMatters.

The hearing was called by Assembly Health Committee chair Jim Wood after the legislature’s 2021 session, to gather testimony ahead of a bill proposed for next year. The law would reform the licensing process by banning new operators from using a previous owner’s license during the application period. Staffing shortages at nursing homes, the state’s limited capacity for enforcement, and the rise of private equity investing in skilled nursing facilities all drew scrutiny during the hearing, which lasted over three hours.

"Why are we still here?" asked Assembly Health Chair Jim Wood (D-Santa Rosa). "It’s not just COVID. These are longstanding issues."

Wood was one of several people at the hearing to hone in on the California Department of Public Health’s licensing loophole. Recent investigations by LAist and CalMatters found that even if owners had long records of poor care, they were still able to continue running facilities without licenses.

He said he was frustrated that it took a pandemic and news reports to draw attention to this issue. "We have to wait for news articles, we have to wait for people to die,” Wood said.

Solorzano was photographed in 2018 with Gov. Gavin Newsom, whose campaign ReNew supported with $20,000.

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Screenshot from ReNew's Instagram account

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How It Works Now

In California, a nursing home operator can take over a facility first, and then apply for a license through the California Department of Public Health. State health officials say that during this process, a valid license does exist — that of the previous owner. Patient advocates call this practice "squatting." Under this system, even an operator who has been denied a license to operate a facility can continue to run it, while they appeal that decision. The application and appeal process can drag on for years.

LAist found that CDPH denied ReNew Health’s owner Crystal Solorzano applications to run nine facilities in April 2020. The agency cited a track record of substandard care and even concerns about Solorzano’s character. Yet, despite the denial, Solorzano’s businesses continued running its facilities for more than a year.

Tony Chicotel, attorney with the California Advocates for Nursing Home Reform, testified that the loophole is “straight bananas.” He said that those buildings have more deficiencies, and are home to more low-income patients and nursing home residents of color.

“It invites suffering and death,” Chicotel said. “Facilities run by squatters are among the worst nursing homes in the state.” In addition to the more than 9,000 COVID-19 deaths at skilled nursing facilities, tens of thousands of residents were also infected with the disease.

Several people who gave testimony on Tuesday spoke in favor of AB 1502, the bill introduced by Assemblymember Al Muratsuchi (D-Torrance) to reform the licensing process. The bill will be considered next year.

"When does ‘temporary’ stop becoming ‘temporary,’ in terms of allowing someone whose application was denied to be able to operate the facility?” Muratsuchi said. He pointed to a CalMatters investigation into the years-long saga of nursing home magnate Shlomo Rechnitz and a group of facilities he has applied to take over.

Muratsuchi also read from a story by LAist reporters, detailing an allegedly fraudulent transcript submitted by ReNew Health owner Crystal Solorzano to CDPH.

The transcript indicates that Solorzano graduated with honors from Touro’s School of Health Services. However, Touro College does not have a “School of Health Services.”

The institution instead has a School of Health Sciences. “It is a distinction with a difference and makes the transcript itself appear invalid on its face,” according to Elisheva Schlam, a spokesperson for Touro. Schlam said Solorzano did not attend the school.

Application Denied

CDPH cited the transcript in denying Solorzano’s requests to take over nine nursing homes in 2020, saying it raised concerns about Solorzano’s character. The state agency also detailed a lengthy record of substandard care in her nursing homes, including 128 federal regulatory violations. At nursing homes connected to ReNew Health and Solorzano, government inspectors have documented "deficient practices [that] resulted in a widespread outbreak of COVID-19" and the “physical, verbal and sexual abuse” of residents.

Hyde Park Health Care Center in South Los Angeles was one of 26 nursing homes in California connected to ReNew by LAist.

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Chava Sanchez

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LAist

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Muratsuchi called Solorzano a “repeat bad actor” at the hearing.

His bill also garnered support from State Auditor Elaine M. Howle. She testified that it addressed concerns she raised in a 2018 audit, which found that CDPH’s change of ownership decisions "appear inconsistent" because the process is poorly defined.

Acting deputy director Cassie Dunham of the California Department of Public Health responded to criticism with technical information about the department’s responsibilities. Dunham testified that current regulations around nursing home licensing "may be lacking and may be not preventing certain situations from occurring."

Craig Cornett, president of the California Association of Healthcare Facilities, which represents nursing home owners, called for a more “timely, efficient” process for licensing and ownership changes. He showed a slide detailing the dozens of steps nursing home owners must take to gain and retain licenses and certification. Cornett said he was opposed to Muratsuchi’s bill, calling it an “overarching and punitive approach to the process”.

In response to a question from Muratsuchi, Cornett also stated he was not familiar with Solorzano’s allegedly fraudulent transcript.

AB 1520 is meant to complement bills that passed before the 2021 session ended in September. Among them was SB 650, which will require greater financial transparency from a nursing home industry that has adopted increasingly complex corporate structures in recent years.