Brius Healthcare gets most citations for serious deficiencies, but it's the state that gets the blame in auditor's report

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California's oversight agencies have not met their responsibilities when it comes to ensuring quality care at the state's nursing homes, even as the three main providers there have grown into money-making machines, according to a new report by the state auditor.

The report, ordered by the state Legislature, focused on quality of care, financial practices and statewide oversight. In California, the departments of Public Health and Health Care Services, and the Office of Statewide Health Planning and Development all have a role in  ensuring that nursing facilities meet quality of care standards.

Auditor Elaine Howle found that between 2006 and 2015, the number of assessed penalties decreased by more than one-third, even while the number of recorded deficiencies increased by nearly one-third.

She criticized the agencies for their lack of communication, overlapping processes that create inefficiencies and unclear standards.

"Public Health's licensing decisions appear inconsistent because of its poorly defined review processes and failure to document adequately its rationale for approving or denying license applications," her report states.

Howle also reviewed the business practices of Brius, Plum and Longwood, the three largest private operators in California. Brius in particular has been criticized for payments to related parties — including roughly $5 million in pass-throughs in 2016 when it claimed a shortfall of the same amount due to staffing.

The auditor's report said the three major providers' income grew from less than $10 million in 2006 to between $35 million and $54 million by 2015, and she noted that they earned additional money by obtaining goods or services from other businesses that they or their family members owned or controlled.

But Howle confirmed that such transactions are “common in the industry and legally allowable.” In most instances, she said, the companies properly disclosed the related-party transactions.

The report also attempted to measure the state's ability to enforce quality care. Of the three providers, Brius had the most serious deficiencies, with more than twice the average rate of all facilities, according to the North Coast Journal.

State Assemblyman Jim Wood was one of the lawmakers who called for the audit. He called its findings a “bitter pill.”

"This extremely thorough audit of the industry and the agencies that oversee it shows that so much more needs to be done,” Wood said in press release. “The watchdogs of this industry — our state agencies — need to work better together to reduce duplication of effort and that especially DPH needs to up their game when it comes to improving licensing review, increasing inspections and issuing citations in a much more timely manner to protect the residents and give families confidence that their family members are well taken care of.”

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