(a)  The receiver shall be appointed for an initial period of not more than six months. The initial six-month period may be extended for additional periods not exceeding six months, as determined by the court pursuant to this section. At the end of four months, the receiver shall report to the court on its assessment of the probability that the long-term health care facility will meet state standards for operation by the end of the initial six-month period and will continue to maintain compliance with those standards after termination of the receiver’s management. If it appears that the facility cannot be brought into compliance with state standards within the initial six-month period, the court shall take appropriate action as follows:

(1)  Extend the receiver’s management for an additional six months if there is a substantial likelihood that the facility will meet state standards within that period and will maintain compliance with the standards after termination of the receiver’s management. The receiver shall report to the court in writing upon the facility’s progress at the end of six weeks of any extension ordered pursuant to this paragraph.

(2)  Order the director to revoke or temporarily suspend, or both, the license pursuant to Section 1296 and extend the receiver’s management for the period necessary to transfer patients in accordance with the transfer plan, but for not more than six months from the date of initial appointment of a receiver, or 14 days, whichever is greater. An extension of an additional six months may be granted if deemed necessary by the court.

(b)  If it appears at the end of six weeks of an extension ordered pursuant to paragraph (1) of subdivision (a) that the facility cannot be brought into compliance with state standards for operation or that it will not maintain compliance with those standards after the receiver’s management is terminated, the court shall take appropriate action as specified in paragraph (2) of subdivision (a).

(c)  In evaluating the probability that a long-term health care facility will maintain compliance with state standards of operation after the termination of receiver management ordered by the court, the court shall consider at least the following factors:

(1)  The duration, frequency, and severity of past violations in the facility.

(2)  History of compliance in other long-term health care facilities operated by the proposed licensee.

(3)  Efforts by the licensee to prevent and correct past violations.

(4)  The financial ability of the licensee to operate in compliance with state standards.

(5)  The recommendations and reports of the receiver.

(d)  Management of a long-term health care facility operated by a receiver pursuant to this article shall not be returned to the licensee, to any person related to the licensee, or to any person who served as a member of the facility’s staff or who was employed by the licensee prior to the appointment of the receiver unless both of the following conditions are met:

(1)  The department believes that it would be in the best interests of the residents of the facility, requests that the court return the operation of the facility to the former licensee, and provides clear and convincing evidence to the court that it is in the best interests of the facility’s residents to take that action.

(2)  The court finds that the licensee has fully cooperated with the department in the appointment and ongoing activities of a receiver appointed pursuant to this section, and, if applicable, any temporary manager appointed pursuant to Section 1325.5.

(e)  The owner of the facility may at any time sell, lease, or close the facility, subject to the following provisions:

(1)  If the owner closes the facility, or the sale or lease results in the closure of the facility, the court shall determine if a transfer plan is necessary. If the court so determines, the court shall adopt and implement a transfer plan of not more than 30 days.

(2)  If the licensee proposes to sell or lease the facility and the facility will continue to operate as a long-term health care facility, the court and the state department shall reevaluate any proposed transfer plan. If the court and the state department determine that the sale or lease of the facility will result in compliance with licensing standards, the transfer plan and the receivership shall, subject to those conditions that the court may impose and enforce, be terminated upon the effective date of the sale or lease.

(Amended by Stats. 2001, Ch. 685, Sec. 8. Effective January 1, 2002.)