From: Mark A. Johnson [mailto:mjohnson@HEALTH-LAW,COM] Sent: Friday, March 13, 2015 12:50 PM. To: Wilkening, MichaeK@CHHS Ce: U, Tze Ming (CDPH-EXEC-OLS); Mark Reagan Subject: Brius, LLC Mr. Wilkening, I wanted to follow up on our meeting on February 26", as we are still “in the dark” as to CDPH’s motivations, and update you on a development related to one of the issues we discussed. As you may recall, CDPH denied the change of ownership (“CHOW”) application for a facility called Riverside Point in Chico, California. During our meeting, we raised this case fo you as an example of the lack of transparency with CDPH and actions being evidence of some ulterior motivation ‘The CHOW denial was September 16th. A timely appeal was filed on October 3rd. As we did not hear anything in nearly ‘two months, we reached out to Teresa Gutierrez at CDPH to determine the status of the appeal on November 24th, On December 2nd, we received a phone call from Ms. Gutierrez informing us that the matter was referred to Scott Vivona and “in-house legal”, though the individual was not specified. We emailed Mr. Vivona. Mr. Vivona replied on December 2nd informing us that “Someone from our Office of Legal Services will be contacting shortly.” The next communication ‘was the Accusation filed on February 2nd. We immediately filed a notice of defense and are awaiting a hearing on the matter. (Although we have reiterated our desire to resolve the matter short of hearing.) In late January, the District Administrator for CDPH for Chico came to Riverside Point and asked the administrator to sign a prepared statement on CDPH letterhead stating that Rockport Healthcare Services was operating the facility. 1 immediately reached out to Ming ‘Tze regarding this strange and unprecedented demand. On February 2nd, [ exchanged emails with Ming Tze, counsel for CDPH, in response to questions about Riverside Point and what agreements were in place. I forwarded him a copy of the application and the interim management agreement that was submitted with the application. [also sent him a copy of the agreement between the prospective licensee and Rockport Healthcare Services. (See attached email.) It is my understanding that he provided this information to Scott Vivona and his team. CDPH did not reach out to me since that February 2nd email to discuss the matter or ask any questions. Prior to our meeting with you, Jean lacino sent a letter to the licensee of Riverside Point stating that they would need to find a new operator because the CHOW was denied. She was well aware of the pending appeal. She made no attempt to contact the prospective licensee or me to discuss the matter. On or about February 13th, CDPH representatives (Scott Vivona, Ming Tze, Jean lacino, and Belinda Whitsett) had a call with Laurie Schrumpf (counsel for the licensee, Riverside Point). During that call, the CDPH representatives initially claimed to not have a copy of the interim ‘management agreement in place at the facility, thought it was submitted with the CHOW. In addition, CDPH representatives acknowledged that a valid and timely appeal had been filed by the prospective licensee. We then this issue briefly during our meeting with you. (On March 4th, CDPH representatives (Scott Vivona, Ming Tze and Ley Arquisola) had a conference call with the licensee's representative. During this call, CDPH stated that the licensee should find a new operator for the facility as the prospective licensee’s application had been denied. The justification for this demand by the CDPH is an Alll Facilities Letter issued on March 4th, that was clearly developed to target Mr. Rechnitz and his organizations. (A copy attached.) CDPH stated that “they needed to find an operator that had no connection whatsoever to Mr. Rechnitz.” CDPH also stated that “they had not heard from” the prospective licensee about the matter. This is not accurate and further demonstrates the inappropriate behavior by the CDPH representatives. Not surprisingly, the licensee’s counsel immediately reached out to us to discuss the matter. 1| apologize for the length of this email, but this story is indicative of the lack of communication, transpareney and misrepresentations that we have been dealing with for months. ‘These communications would appear to indicate that the appeal of the CHOW denial will not receive a fair hearing and has already been decided. Once again, Mr. Rechnitz’s organization is receiving disparate treatment for an unexplained reason. In addition, in the Accusation, CDPH stated its basis for the licensure denial at Riverside Point. Based on our review of the accurate statistics (as opposed to the ‘erroneous statistics on the CDPH website), we believe that the statistics demonstrate why Mr. Rechntiz’s organization should be licensed at Riverside Point, Our analysis demonstrates that his facilities are above the California averages in ‘most categories, Please let me know when we can follow up on our meeting as well as this issue. Recall that we are trying to determine the basis for the clear targeting that has been going on over the past several months. We are also seeking to ensure that Brius and its related organizations are treated fairly and in the same manner as other operators. ‘Thank you for your time and attention, Mark Mark A. Johnson Hooper, Lundy & Bookman, P.C. 101 W. 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