A recent CalMatters investigation spotlighted an opaque licensing process for California’s nursing homes, plagued by indecision, delays and misleading information. For instance, the investigation found that the California Department of Public Health has allowed the state’s largest nursing home owner, Shlomo Rechnitz, to operate facilities for years through a web of companies while license applications for his facilities languish in “pending” status.
That story “blew the lid off of my thinking,” said Assemblymember Jim Wood, a Santa Rosa Democrat who chairs the Assembly Health Committee — and helps decide which health legislation in that house will live or die. “I didn’t realize to the extent that it was happening.”
Nonetheless, his committee declined to hear the bill, which would forbid the use of management agreements to “circumvent state licensure requirements” and would require owners and operators to get approval from CDPH before acquiring, operating or managing a nursing home. Instead, the committee turned Muratsuchi’s proposal into a two-year bill that won’t be heard before next January.
Advocates had expected the bill to face opposition from the nursing home industry, which has deep ties to influential players at the Capitol. The CEO of the nursing home industry group, Craig Cornett, was a top aide to two former state Senate leaders and four former Assembly speakers before joining the California Association of Health Facilities in 2017. He’s known for having masterful knowledge of the state government bureaucracy and is included on a list of the most influential people around the Capitol.
Cornett’s industry group employs a lobbying firm that counts Assembly Speaker Anthony Rendon’s cousin, Edward Rendon, as one of its lobbyists. Edward Rendon is also a partner at a consulting firm called Spiker Rendon that was paid $45,000 last year by Cornett's organization, according to its lobbying reports.
The California Association of Health Facilities has donated more than $1.6 million to California campaigns in the past decade, according to filings with the California secretary of state.
And Rockport Healthcare Services, the administrative services company for many nursing homes, employs the lobbying firm of Jason Kinney, whose French Laundry birthday bash last November was attended by Gov. Gavin Newsom.
The Newsom administration also hasn’t taken a position on the bill, although that is not unusual at this stage.
Wood insists that delaying Muratsuchi’s bill will not lead to its death, saying he is deeply committed to solving the state’s nursing home licensing problems “once and for all.”
Dr. Mark Ghaly, secretary of California Health and Human Services Agency, which oversees CDPH, declined to answer questions for this story or for CalMatters’ investigation into the department’s licensing practices. Newsom also declined to be interviewed for either story.
However, the governor recently agreed to donate $10,000 to charity after an investigation by LAist showed that he had received a political contribution in that amount from ReNew Health Consulting Services, which is affiliated with a troubled nursing home chain. LAist, affiliated with KPCC in Los Angeles, and CalMatters are part of a collaboration of California’s nonprofit newsrooms to investigate the state’s supervision of nursing homes.
Wood’s communications director, Cathy Mudge, told CalMatters this week that the Newsom administration had not pressured his committee to stall the bill.
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