(a) The department may require a provider to submit a financial plan and periodic financial reports if any of the following apply: (1) A provider fails to submit to the department an audited annual report as required by Section 1790. (2) The department has reason to believe that the provider is insolvent, is in imminent danger of becoming insolvent, is in a financially unsound or unsafe condition, or that its condition is such that it may otherwise be unable to fully perform its obligations pursuant to continuing care contracts. (3) The department receives notice from a provider within two weeks after the end of a calendar month in which the circumstances described in subparagraph (A) and one of the circumstances described in subparagraph (B) occurred and were continuing at the end of that month. The provider shall notify the department within the specified timeframe above if it meets the circumstances outlined in this paragraph. (A) Overall average occupancy of all facility levels of care is below 80 percent at a facility. For purposes of this subparagraph, âall facility levels of careâ includes, if applicable, independent living, assisted living, and skilled nursing. Overall average occupancy shall be calculated as the average for all units over the preceding two months, excluding units that were not on the market or already reserved. Overall average occupancy shall not apply to newly opened continuing care retirement communities for a period of 12 months from the date of opening. A provider shall not keep a unit off the market to avoid repaying all or a portion of the entrance fee of a repayable contract. (B) (i) The provider fails to maintain the minimum reserve required pursuant to Section 1792.3. (ii) The provider fails to meet one or more of its debt covenants from a third-party lender, a bond issue, or a third-party lender and a bond issue. (iii) The provider has a net operating loss for a period of three consecutive months. (b) (1) A provider shall submit its financial plan to the department within 60 days following the date of the departmentâs request. The financial plan shall explain how and when the provider will remedy the problems and deficiencies identified by the department. If the provider determines that the plan contains trade secret information protected under the Uniform Trade Secrets Act (Title 5 (commencing with Section 3426) of Part 1 of Division 4 of the Civil Code), the provider shall submit at the same time a separate version of the plan with the trade secret information redacted. The provider shall identify to the department the portions of the plan that it asserts are trade secrets. (2) If a financial plan and periodic financial reports are required by the department, a provider shall submit periodic reports to the department. Periodic reports shall explain the providerâs progress toward remedying the problems and deficiencies identified by the department. The department may require reporting at intervals that the department deems necessary. (c) The department shall approve or disapprove the plan and redacted form of the plan within 30 calendar days of its receipt. If the plan is approved and the redacted form of the plan is not, the provider will be given an opportunity to resubmit the redacted form of the plan for the departmentâs approval. (d) If the plan is approved, the provider shall immediately implement the plan. Within 10 calendar days of approval, the provider shall distribute a copy of the plan or the approved redacted form of the plan to the facilityâs resident council or association. If the plan is approved and the redacted form of the plan is not, the provider shall distribute a copy of the redacted form of the plan to the facilityâs resident council or association within 10 calendar days of approval. All periodic reports required by this section shall also be distributed to the facilityâs resident council or association within 10 calendar days of submission to the dep
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