(a) If a facility is certified to participate in the federal Medicare program as a skilled nursing facility under Title XVIII of the Social Security Act, in the medicaid program as a nursing facility under Title XIX of the Social Security Act, or in both and any of the following occurs, the state department may rescind its regular license to operate and issue a provisional license under Section 1437:

(1) The facility’s provider agreement is terminated, by the federal government or the department.

(2) A temporary manager is appointed, under federal law, to operate it.

(3) Payment becomes due on a federal civil money penalty of seven thousand dollars ($7,000) per day, or greater, imposed on it.

(4) A federal civil monetary penalty of any amount is imposed and has continued for a period of 30 days or more.

(5) A federal civil monetary penalty of any amount is imposed and has accrued in an amount equal to, or greater than, thirty-five thousand dollars ($35,000).

(b) The state department may not take action pursuant to subdivision (a) until a final administrative decision is issued if the facility has requested a hearing pursuant to federal law, until a facility has waived its right to a hearing under federal law, or until the time for requesting a hearing under federal law has expired and a hearing request was not received by federal authorities.

(c) If a receiver or temporary manager is appointed to operate a skilled nursing facility or an intermediate care facility, specified in paragraphs (1) and (2) of subdivision (a) of Section 1418, pursuant to state law, or as otherwise specified in regulations adopted by the department, the state department may rescind its regular license to operate and issue a provisional license under this section.

(d) (1) A provisional license issued pursuant to this section shall terminate six months from the date of issuance unless extended by the department.

(2) At least 30 days prior to the termination of a provisional license, the department shall give the facility a full and complete inspection. Beginning January 1, 2023, the department shall provide written notice to related parties described in subdivision (a) of Section 1424.3, of the outcome of the inspection and the possible outcomes set forth in this paragraph. If, at the time of the inspection, it is determined that the facility meets all applicable requirements for licensure, a regular license shall be restored. If, at the time of the inspection, it is determined that the facility does not meet the requirements for licensure, but the facility has made substantial progress towards meeting the requirements, as determined by the department, the provisional license shall be renewed for six months. If, at the time of the first inspection, the department determines that there has not been substantial progress towards meeting the requirements for licensure, or, if at any subsequent inspection the department determines that there has not been substantial progress towards meeting requirements identified at the most recent previous inspection, a regular license shall not be issued.

(e) The facility may request a hearing in writing within 10 days of the receipt of notice from the department denying a regular license under this section. The provisional license shall remain in effect during the pendency of the hearing. The hearing shall be held in accordance with Section 100171. The hearing officer shall uphold the denial of a regular license if the department proves, by a preponderance of the evidence, that the licensee did not meet the requirements for licensure.

(Amended by Stats. 2021, Ch. 475, Sec. 4. (AB 1042) Effective January 1, 2022.)