Attorney General Bonta Conditionally Approves Proposed Transaction to Ensure Continued Access to Senior Care Services in Fresno County

OAKLAND -California Attorney General Rob Bonta today announced conditionally approving the sale and transfer of ownership, control, and governance of Bethel Lutheran Home, Inc. (Bethel), a California nonprofit religious corporation, to for-profit Bayshire Central Valley LLC, a California limited liability company that is doing business as Jericho Care Group, and its newly formed affiliates (Jericho). Bethel has been serving seniors since 1928 and operates a single campus in Fresno County that includes 59 skilled nursing beds, 33 assisted living suites, and 36 independent living cottages. The conditional approval ensures the continued operation of essential senior care services and uninterrupted access for residents. Under California law, any transaction involving the sale, or transfer of control and governance of a nonprofit health facility, must secure the advance approval of the Attorney General's Office.

"Today's conditional approval helps ensure that a change in ownership does not disrupt care for residents at Bethel Lutheran Home, which has been part of the Fresno County community for nearly 100 years," said Attorney General Bonta. "The safeguards outlined in our conditional approval letter will keep services in place, maintain oversight, and protect staffing and finances. We will monitor compliance and enforce the requirements as necessary."

Jericho operates a range of skilled nursing facilities, residential care facilities for the elderly, assisted living facilities, and senior retirement communities in Fresno and surrounding communities. The terms of the proposed transaction were set forth in the written notice to the Attorney General.

After conducting a review of the proposed transaction, Attorney General Bonta consented to the sale subject to numerous conditions, including:

• Establishing independent state oversight through a Monitor appointed within 90 days of closing, with monitoring authority lasting 10 years.
• Mandating ongoing reporting obligations for 7-10 years, including quarterly and annual compliance reports to both the Monitor and the Attorney General covering staffing, licensing, quality metrics, and regulatory actions.
• Requiring the continued operation of the skilled nursing facility, assisted living/residential care facility, and independent living community for at least 7 years after closing, with maintained licensure, services, and levels of care.
• Mandating compliance for 7 years with all applicable state and federal staffing ratios, and training and competency requirements.
• Requiring for 7 years approval by the Attorney General of any material modifications or rescissions, and requiring 60 days' notice of any subsequent sale, transfer, or change in ownership.
• Imposing financial safeguards for 10 years, including limits on debt or restructuring that could impair operations, an independent fair market rent determination, and caps on rent increases (generally no more than 3% annually for 10 years).
• Requiring for 7 years the preservation of resident protections, including honoring existing residency agreements, prohibiting discrimination, and maintaining resident and staffing advisory structures (including a Community Advisory Board and a Quality Committee established within 30 days of closing).
• Requiring for 10 years continued Medi-Cal and Medicare participation, including preserving significant access to skilled nursing beds for Medi-Cal beneficiaries.

The California Department of Justice's Healthcare Rights and Access Section (HRA) works proactively to increase and protect the affordability, accessibility, and quality of healthcare in California. HRA's attorneys monitor and contribute to various areas of the Attorney General's healthcare work, including nonprofit health care transactions; consumer rights; anticompetitive consolidation and conduct in the healthcare market; anticompetitive drug pricing; privacy issues; civil rights, such as reproductive rights and LGBTQ healthcare-related rights; and public health work on tobacco, e-cigarettes, and other products.