On June 24, 2025, California Attorney General Rob Bonta announced a lawsuit against a San Diego-based operator of skilled nursing facilities (SNFs). The lawsuit pertains to 19 SNFs operated by the provider in California and alleges violations of the state’s Unfair Competition Law. Specifically, the operator is accused of failing to meet statutory minimum staffing levels and failing to adequately protect residents in its care, resulting in delayed care and critical oversights that caused severe harm to residents.
The lawsuit further states that, while receiving substantial payments from Medi-Cal, the operator engaged in repeated violations of California laws and regulations governing minimum staffing requirements for SNFs.
An investigation by the California Department of Justice (DOJ)’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA) found that the operator engaged in a pattern of unlawful conduct that contributed to resident harm, preventable neglect, abuse, and injuries. From 2020 through 2024, the facilities were reportedly staffed below California’s minimum requirements in over 14,126 instances.
According to the DMFEA, this level of understaffing exposed residents to preventable harm, including fractured bones that went days without assessment or treatment, residents with head trauma leaving facilities without staff awareness, unwitnessed falls, pressure injuries so severe that in one case a resident’s hip bone was visible, delayed responses to medical emergencies, and residents being left in soiled diapers for extended periods due to a lack of available staff.
The investigation also found that the operator diverted more than $31 million in “profit” or “management fees” instead of using those funds to meet required staffing levels. The DOJ alleges that these actions violated California’s Unfair Competition Law.
The state is seeking civil monetary penalties, injunctive relief to prevent future violations, appointment of a receiver or compliance monitor, and recovery of litigation costs. Under the Unfair Competition Law, defendants may be liable for civil penalties of up to $2,500 per violation. Penalties may be doubled for each violation involving a senior citizen or disabled individual.
Compliance Perspective
Issue
Facilities must ensure that an adequate number of staff with the appropriate competencies and skill sets are available to meet the needs of residents, as identified through comprehensive assessments and individualized care plans. Staffing levels must be evaluated and adjusted for each shift—day, evening, and night—and should reflect changes in the facility’s resident population. In addition, facilities must develop and maintain plans to support recruitment and retention of direct care staff. Quality of care is a core requirement for all services provided to residents. Care must align with professional standards, person-centered care plans, and resident preferences. Staff must also protect residents’ rights, including freedom from abuse, neglect, and exploitation. Failure to meet these standards may result in findings of substandard care and lead to regulatory citations, civil penalties, and other enforcement actions.
Discussion Points
- Review and update staffing-related policies and procedures to ensure they support safe, high-quality care and align with regulatory requirements. Confirm that the Facility Assessment, as required by F838, accurately reflects current resident needs and guides appropriate staffing decisions for each shift.
- Provide initial and ongoing training to all nursing and direct care staff on their responsibilities for delivering care that meets professional standards and protects resident rights. Ensure that staff demonstrate competency in essential care tasks and have access to current policies and procedures.
- Conduct regular audits to confirm that staffing levels are adequate and that staff are following facility policies and providing appropriate care. Include verification that the Facility Assessment is current and that staffing plans are implemented effectively. Use QAPI processes to monitor care outcomes and identify areas for improvement.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*