BILL NUMBER: SB 346 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 23, 2015
AMENDED IN SENATE APRIL 9, 2015
INTRODUCED BY Senator Wieckowski
FEBRUARY 24, 2015
An act to amend Sections 127280 and 129050 of, to add and
repeal Section 127361 of, and Section
129050 of, to amend, repeal, and add Section 127280 of, to add
Chapter 2.6 (commencing with Section 127470) to Part 2 of Division
107 of, and to add and repeal Section 127361 of, the
Health and Safety Code, relating to health facilities.
LEGISLATIVE COUNSEL'S DIGEST
SB 346, as amended, Wieckowski. Health facilities: community
benefits.
Existing law makes certain findings and declarations regarding the
social obligation of private nonprofit hospitals to provide
community benefits in the public interest, and requires these
hospitals, among other responsibilities, to adopt and update a
community benefits plan for providing community benefits either
alone, in conjunction with other health care providers, or through
other organizational arrangements. Existing law requires each private
nonprofit hospital, as defined, to complete a community needs
assessment, as defined, and to thereafter update the community needs
assessment at least once every 3 years. Existing law also requires
the hospital to file a report on its community benefits plan and the
activities undertaken to address community needs with the Office of
Statewide Health Planning and Development. Existing law requires the
statewide office to make the plans available to the public. Existing
law requires that each hospital include in its community benefits
plan measurable objectives and specific benefits.
This bill would declare the necessity of establishing uniform
standards for reporting the amount of charity care and community
benefits a facility provides to ensure that private nonprofit
hospitals and nonprofit multispecialty clinics actually meet the
social obligations for which they receive favorable tax treatment,
among other findings and declarations.
This bill would require a private nonprofit hospital and nonprofit
multispecialty clinic, as defined, to provide community benefits to
the public by allocating a specified percentage of the economic value
of community benefits to charity health care, as defined, and
community building activities, as specified. The bill would, by
January 1, 2018, require a private nonprofit hospital or nonprofit
multispecialty clinic to develop, in collaboration with the community
benefits planning committee, as established, a community health
needs assessment that evaluates the health needs and resources of the
community. The bill would also require these entities, prior to
completing the needs assessment, to develop a community benefits
statement and a description of the process for approval of the
community benefits plan by the hospital's or clinic's governing
board, as specified. The bill would authorize the hospital or clinic
to create a community benefits advisory committee for the purpose of
soliciting community input. This bill would require the hospital or
clinic to make available to the public a copy of the assessment, file
the assessment with the Office of Statewide Health Planning and
Development, and update the assessment at least every 3 years.
This bill would also require a private nonprofit hospital and
nonprofit multispecialty clinic, by April 1, 2018, to develop a
community benefits plan that includes a summary of the needs
assessment and a statement of the community health care needs that
will be addressed by the plan, and list the services, as provided,
that the hospital or clinic intends to provide in the following year
to address community health needs identified in the community health
needs assessments. The bill would require the hospital or clinic to
make its community health needs assessment and community benefits
plan or community health plan available to the public on its Internet
Web site and would require that a copy of the assessment and plan be
given free of charge to any person upon request.
This bill would require a private nonprofit hospital or nonprofit
multispecialty clinic, after April 1, 2018, every 2 years
to annually submit a community benefits plan to
the Office of Statewide Health Planning and Development, as
specified, and would allow a hospital or clinic under the common
control of a single corporation or other entity to file a
consolidated plan, as provided. The bill would require that the
governing board of each hospital or clinic adopt the community
benefits plan and make it available to the public, as specified.
This bill would make the existing law described above inoperative,
and would make the new provisions described above operative, upon
the certification by the Director of Statewide Health Planning and
Development of the adoption of regulations that prescribe a
standardized format for community benefits plans, as provided. This
bill would subsequently repeal the existing law described above.
This The bill would require the office
to develop and adopt those regulations,
regulations by January 1, 2017, to provide technical assistance
to help private nonprofit hospitals and nonprofit multispecialty
clinics exempt from licensure comply with the community benefits
provisions, to make public each community health needs assessment and
community benefits plan and any comments received regarding those
assessments and plans, to maintain a public calendar of community
benefit plan adoption meetings, and to calculate and make public the
total value of community benefits provided by hospitals, as
specified. This bill would authorize the Office of Statewide Health
Planning and Development to assess a civil penalty, as provided,
against any hospital or clinic that fails to comply with these
provisions. This bill would make conforming changes.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 127280 of the Health and Safety Code is amended
to read:
127280. (a) Every health facility licensed pursuant to Chapter 2
(commencing with Section 1250) of Division 2, except a health
facility owned and operated by the state, shall each year be charged
a fee established by the office consistent with the requirements of
this section.
(b) Commencing in calendar year 2004, every freestanding
ambulatory surgery clinic, as defined in Section 128700, shall each
year be charged a fee established by the office consistent with the
requirements of this section.
(c) The fee structure shall be established each year by the office
to produce revenues equal to the appropriation made in the annual
Budget Act or another statute to pay for the functions required to be
performed by the office pursuant to this chapter, Chapter
2.6 (commencing with Section 127470), Article 2
(commencing with Section 127340) of Chapter 2, or Chapter 1
(commencing with Section 128675) of Part 5, and to pay for any other
health-related programs administered by the office. The fee shall be
due on July 1 and delinquent on July 31 of each year.
(d) The fee for a health facility that is not a hospital, as
defined in subdivision (c) of Section 128700, shall be not more than
0.035 percent of the gross operating cost of the facility for the
provision of health care services for its last fiscal year that ended
on or before June 30 of the preceding calendar year.
(e) The fee for a hospital, as defined in subdivision (c) of
Section 128700, shall be not more than 0.035 percent of the gross
operating cost of the facility for the provision of health care
services for its last fiscal year that ended on or before June 30 of
the preceding calendar year.
(f) The fee for a freestanding ambulatory surgery clinic shall be
established at an amount equal to the number of ambulatory surgery
data records submitted to the office pursuant to Section 128737 for
encounters in the preceding calendar year multiplied by not more than
fifty cents ($0.50).
(g) There is hereby established the California Health Data and
Planning Fund within the office for the purpose of receiving and
expending fee revenues collected pursuant to this chapter.
(h) Any amounts raised by the collection of the special fees
provided for by subdivisions (d), (e), and (f) that are not required
to meet appropriations in the Budget Act for the current fiscal year
shall remain in the California Health Data and Planning Fund and
shall be available to the office in succeeding years when
appropriated by the Legislature in the annual Budget Act or another
statute, for expenditure under the provisions of this chapter,
Chapter 2.6 (commencing with Section 127470),
Article 2 (commencing with Section 127430) of Chapter 2, and
Chapter 1 (commencing with Section 128675) of Part 5, or for any
other health-related programs administered by the office, and shall
reduce the amount of the special fees that the office is authorized
to establish and charge.
(i) (1) No health facility liable for the payment of fees required
by this section shall be issued a license or have an existing
license renewed unless the fees are paid. A new, previously
unlicensed, health facility shall be charged a pro rata fee to be
established by the office during the first year of operation.
(2) The license of any health facility, against which the fees
required by this section are charged, shall be revoked, after notice
and hearing, if it is determined by the office that the fees required
were not paid within the time prescribed by subdivision (c).
(j) This section is inoperative as of the date of the written
certification required by paragraph (1) of subdivision (a) of Section
127487, and is repealed on January 1 of the year after the year in
which it becomes inoperative.
SEC. 2. Section 127280 is added to the
Health and Safety Code , to read:
127280. (a) Every health facility licensed pursuant to Chapter 2
(commencing with Section 1250) of Division 2, except a health
facility owned and operated by the state, shall each year be charged
a fee established by the office consistent with the requirements of
this section.
(b) Commencing in calendar year 2004, every freestanding
ambulatory surgery clinic, as defined in Section 128700, shall each
year be charged a fee established by the office consistent with the
requirements of this section.
(c) The fee structure shall be established each year by the office
to produce revenues equal to the appropriation made in the annual
Budget Act or another statute to pay for the functions required to be
performed by the office pursuant to this chapter, Chapter 2.6
(commencing with Section 127470), or Chapter 1 (commencing with
Section 128675) of Part 5, and to pay for any other health-related
programs administered by the office. The fee shall be due on July 1
and delinquent on July 31 of each year.
(d) The fee for a health facility that is not a hospital, as
defined in subdivision (c) of Section 128700, shall be not more than
0.035 percent of the gross operating cost of the facility for the
provision of health care services for its last fiscal year that ended
on or before June 30 of the preceding calendar year.
(e) The fee for a hospital, as defined in subdivision (c) of
Section 128700, shall be not more than 0.035 percent of the gross
operating cost of the facility for the provision of health care
services for its last fiscal year that ended on or before June 30 of
the preceding calendar year.
(f) The fee for a freestanding ambulatory surgery clinic shall be
established at an amount equal to the number of ambulatory surgery
data records submitted to the office pursuant to Section 128737 for
encounters in the preceding calendar year multiplied by not more than
fifty cents ($0.50).
(g) There is hereby established the California Health Data and
Planning Fund within the office for the purpose of receiving and
expending fee revenues collected pursuant to this chapter.
(h) Any amounts raised by the collection of the special fees
provided for by subdivisions (d), (e), and (f) that are not required
to meet appropriations in the Budget Act for the current fiscal year
shall remain in the California Health Data and Planning Fund and
shall be available to the office in succeeding years when
appropriated by the Legislature in the annual Budget Act or another
statute, for expenditure under the provisions of this chapter,
Chapter 2.6 (commencing with Section 127470), and Chapter 1
(commencing with Section 128675) of Part 5, or for any other
health-related programs administered by the office, and shall reduce
the amount of the special fees that the office is authorized to
establish and charge.
(i) (1) No health facility liable for the payment of fees required
by this section shall be issued a license or have an existing
license renewed unless the fees are paid. A new, previously
unlicensed, health facility shall be charged a pro rata fee to be
established by the office during the first year of operation.
(2) The license of any health facility, against which the fees
required by this section are charged, shall be revoked, after notice
and hearing, if it is determined by the office that the fees required
were not paid within the time prescribed by subdivision (c).
(j) This section shall be operative on the date of the written
certification required by subdivision (a) of Section 127487.
SEC. 2. SEC. 3. Section 127361 is
added to the Health and Safety Code, immediately following Section
127360, to read:
127361. This article is inoperative as of the date of the written
certification required by paragraph (1) of subdivision (a) of
Section 127487, and is repealed on January 1 of the year after the
year in which it becomes inoperative.
SEC. 3. SEC. 4. Chapter 2.6
(commencing with Section 127470) is added to Part 2 of Division 107
of the Health and Safety Code, to read:
CHAPTER 2.6. COMMUNITY BENEFITS
Article 1. Hospital Community Benefits
127470. (a) The Legislature finds and declares the following:
(1) Access to health care services is of vital concern to the
people of California.
(2) Health care providers play an important role in providing
essential health care services in the communities they serve.
(3) Notwithstanding public and private efforts to increase access
to health care, the people of California continue to have significant
unmet health needs. Studies indicate that as many as 6.9 million
Californians are uninsured during a year.
(4) The state has a substantial interest in ensuring that the
unmet health needs of its residents are addressed. Health care
providers can help address these needs by providing charity care and
community benefits to the uninsured and underinsured members of their
communities.
(5) Hospitals have different roles in the community depending on
their mission, governance, tax status, and articles of incorporation.
Private hospitals that are investor owned and have for-profit tax
status pay property taxes, corporate income taxes, and other taxes,
such as unemployment insurance, on a different basis than nonprofit,
district, or public hospitals. Nonprofit health facilities, including
hospitals and multispecialty clinics, as described in subdivision
(l) of Section 1206, receive favorable tax treatment by the
government and, in exchange, assume a social obligation to provide
charity care and other community benefits in the public interest.
(b) It is the intent of the Legislature in enacting this chapter
to provide uniform standards for reporting the amount of charity care
and community benefits provided to ensure that private nonprofit
hospitals and multispecialty clinics operated by nonprofit
corporations, as described in subdivision (l) of Section 1206,
actually meet the social obligations for which they receive favorable
tax treatment.
127472. The following definitions apply for the purposes of this
chapter:
(a) "Community" means the service area or patient population for
which a private nonprofit hospital or nonprofit multispecialty clinic
provides health care services. A private nonprofit hospital or
nonprofit multispecialty clinic shall create a health equity
assessment based on the key factors relating to health and mental
health disparities and inequities described in paragraph (2) of
subdivision (d) of Section 131019.5, and may not define its
service area to exclude vulnerable populations, including, but not
limited to, medically underserved, low-income, or minority
populations who are part of its patient populations, live in
geographic areas in which its patient populations reside, otherwise
should be included based on the method the hospital facility uses to
define its community, or populations described in subdivision (l).
(b) (1) "Community benefits" means the unreimbursed goods,
services, activities, programs, and other resources provided by a
private nonprofit hospital or nonprofit multispecialty clinic that
addresses community-identified health needs and concerns,
and health disparities related to its healthy equity assessment,
particularly for people who are uninsured, underserved, or
members of a vulnerable population. Community benefits include, but
are not limited to, charity care, shortfalls in
all of the following:
(A) Charity care.
(B) Shortfalls in Medi-Cal,
California Children's Services Program, or county indigent programs
at cost up to 125 percent of the Medicare rate for the health care
services or items provided on an inpatient basis, an outpatient
basis, or through other nonprofit or public outpatient clinics,
hospitals, or health care organizations, the
organizations.
(C) The cost of community
building activities, the activities for
vulnerable populations.
(D) The cost of community health
improvement services and community benefit operations, the
operations.
(E) The cost of school health
centers, as defined in Section 124174, the
124174.
(F) The cost of health
professions education and training provided without charge to
community members or participants, amounts
participants.
(G) Amounts given, with no
expectation of reimbursement or repayment, to employees from, or
working among, a vulnerable population , for the
purpose of satisfying or paying off, in full or in part,
preemployment student educational loan obligations,
subsidized obligations.
(H) Subsidized health services
for vulnerable populations, research, and contributions to
community groups, vaccination programs and services for low-income
families, chronic populations.
(I) Vaccination programs.
(J) Chronic illness prevention
programs and services, home-based services
for vulnerable populations.
(K) Home-based health care
programs for low-income families, or community-based
vulnerable populations.
(L) Community-based mental health
and outreach, the key factors described in paragraph (2) of
subdivision (d) of Section 131019.5, and assessment
programs for vulnerable populations.
(M) Outreach and assessment
programs for low-income families. For purposes of this
subdivision, "low-income families" means families or individuals with
income less than or equal to 350 percent of the federal poverty
level. vulnerable populations.
(2) For purposes of this subdivision, "community building
activities" means the cost of various kinds of community building
activities, including physical improvements and housing, economic
development, community support, environmental improvements, community
health improvement advocacy, coalition building, workforce
development, the key factors described in paragraph (2) of
subdivision (d) of Section 131019.5, and leadership
development and training for community members.
(3) (A) For purposes of this subdivision, "charity care" means the
unreimbursed cost to a private nonprofit hospital or nonprofit
multispecialty clinic of providing services to the uninsured or
underinsured, as well as providing health care services or items on
an inpatient or outpatient basis to a financially qualified patient,
as defined in Section 127400, with no expectation of payment.
(B) Charity care does not include any of the following:
(i) Uncollected fees or accounts written off as bad debt.
(ii) Care provided to patients for which a public program or
public or private grant funds pay for any of the charges for the
care.
(iii) Contractual adjustments in the provision of health care
services below the amount identified as gross charges or
"chargemaster" rates by the health care provider.
(iv) Any amount over 125 percent of the Medicare rate for the
health care services or items provided on an inpatient or outpatient
basis.
(v) Any amount over 125 percent of the Medicare rate for
providing, funding, or otherwise financially supporting health care
services or items with no expectation of payment provided to
financially qualified patients through other nonprofit or public
outpatient clinics, hospitals, or health care organizations.
(vi) The cost to a nonprofit hospital of paying a tax or other
governmental assessment.
(4) "Community benefits" does not include any of the following:
(A) The unreimbursed cost of providing services to those enrolled
in Medicare or county indigent programs or any
goods, services, activities, programs, or other resources program or
activity for which there is direct offsetting revenue.
(B) Uncollected fees or accounts written off as bad debt.
(C) Contractual adjustments in the provision of health care
services below the amount identified as gross charges or
"chargemaster" rates by the health care provider.
(D) Any amount over 125 percent of the Medicare rate for the
health care services or items provided on an inpatient or outpatient
basis.
(E) Any amount over 125 percent of the Medicare rate for
providing, funding, or otherwise financially supporting health care
services or items with no expectation of payment provided to
financially qualified patients through other nonprofit or public
outpatient clinics, hospitals, or health care organizations.
(c) (1) "Community benefits planning committee" means a committee,
designated by a private nonprofit hospital or nonprofit
multispecialty clinic, that oversees the community needs assessment
and the development of the community benefits plan implementation
strategy to meet the community health needs identified through the
community health needs assessment.
(2) The community benefits planning committee shall be composed of
the following:
(A) One of the following:
(i) The governing board of the hospital organization that operates
the hospital facility or a committee or other party authorized by
that governing body to the extent that the committee or other party
is permitted under state law to act on behalf of the governing body.
(ii) If the hospital facility has its own governing body and is
recognized as an entity under state law but is a disregarded entity
for federal tax purposes, the governing body of that hospital
facility or other committee or party authorized by that governing
body to the extent that the committee or other party is permitted
under state law to act on behalf of the governing body.
(B) At least one individual from the local, tribal, or regional
governmental public health department, or an equivalent department or
agency, with knowledge, information, or expertise relevant to the
health needs of that community.
(C) At least one individual from an underserved and vulnerable
population.
(d) "Discounted care" means the cost for medical care provided
consistent with Article 1 (commencing with Section 127400) of Chapter
2.5.
(e)
( d) (1) "Direct offsetting revenue" means
revenue from goods, services, activities, programs, or other
resources that offsets the total community benefit expense of the
goods, services, activities, programs, or other resources.
(2) "Direct offsetting revenue" includes revenue generated by the
goods, services, activities, programs, or other resources, including,
but not limited to, payment or reimbursement for services provided
to program patients as well as restricted grants or contributions
that the private nonprofit hospital or nonprofit multispecialty
clinic uses to provide a community benefit, such as a restricted
grant to provide financial assistance or fund research.
(3) "Direct offsetting revenue" does not include unrestricted
grants or contributions that the private nonprofit hospital or
nonprofit multispecialty clinic uses to provide a community benefit,
nor payments for Medi-Cal, the California Children's Services
Program, or county indigent programs.
(f)
( e) "Nonprofit multispecialty clinic" means
a clinic as described in subdivision (l) of Section 1206.
(g)
( f) "Office" means the Office of Statewide
Health Planning and Development.
(h)
( g) "Private nonprofit hospital" means a
private nonprofit acute care hospital operated or controlled by a
nonprofit corporation, as defined in Section 5046 of the Corporations
Code, that has been determined to be exempt from taxation under the
Internal Revenue Code. For purposes of this chapter, "private
nonprofit hospital" does not include any of the following:
(1) A district hospital organized and governed pursuant to the
Local Health Care District Law (Division 23 (commencing with Section
32000)) or a nonprofit corporation that is affiliated with the health
care district hospital owner by means of the district's status as
the nonprofit corporation's sole corporate member pursuant to
subparagraph (B) of paragraph (1) of subdivision (h) of Section
14169.31 of the Welfare and Institutions Code.
(2) A rural general acute care hospital, as defined in subdivision
(a) of Section 1250.
(3) A children's hospital, as defined in Section 10727 of the
Welfare and Institutions Code.
(4) A multispecialty clinic operated by a for-profit hospital,
regardless of its net revenue.
(i)
( h) "Underserved population" or "vulnerable
population" means any of the following:
(1) A population that is exposed to medical or financial risk by
virtue of being uninsured, underinsured, or eligible for Medi-Cal or
a county indigent program.
(A) "Uninsured" means a self-pay patient as defined in Section
127400.
(B) "Underinsured" means a patient with high medical costs, as
defined in Section 127400.
(2) A population, including, but not limited to, the following:
(A) A vulnerable community, as defined by Section 131019.5.
(B) Individuals with low educational attainment as measured by the
percentage of the population over 25 years of age with less than a
high school diploma.
(C) Individuals who suffer from linguistic isolation as measured
by the percentage of households in which no one who is 14 years of
age or older speaks English with greater than elementary proficiency.
(2) Individuals below 400 percent of the federal poverty level,
unless the hospital serves a county in which the county has adopted
an ordinance to provide financial assistance for health care to
individuals with incomes above 400 percent of the federal poverty
level, in which case the income threshold for the vulnerable
population shall be the income threshold adopted by the county.
(3) Individuals with limited English proficiency.
(3)
( 4) A population that meets the definition
of disadvantaged community pursuant to Section 39711.
(4) Other populations that are specifically identified in the
community health needs assessment required pursuant to Section
127475.
127472.5. The provisions of this chapter, except for Section
127487, are operative on the date of the written certification
required by paragraph (1) of subdivision (a) of Section 127487.
Article 2. Community Benefits Statement, Community Health
Needs Assessment, and Community Benefits Plan
127473. Private nonprofit hospitals and nonprofit multispecialty
clinics shall provide community benefits to the community as follows:
(a) A minimum of 90 percent of the total economic value of
community benefits shall be allocated to community benefits that
improve community health for underserved and vulnerable populations
or that address a specific need identified in the community health
needs assessment required pursuant to Section 127475. For purposes of
this paragraph, community benefits that improve community health for
underserved and vulnerable populations may include activities,
including health professions education and training, that are not
provided exclusively to underserved and vulnerable populations, if
the activity will improve community health for underserved and
vulnerable populations.
(b) A minimum of 25 percent of the total economic value of
community benefits shall be allocated to community building
activities geographically located within underserved and vulnerable
populations.
(c) To meet the requirements of subdivisions (a) and (b),
community benefits shall be allocated for projects that
simultaneously meet both criteria.
127474. Prior to completing the community health needs assessment
pursuant to Section 127475, a private nonprofit hospital or a
nonprofit multispecialty clinic shall develop, in collaboration with
the community benefits planning committee, all of the following:
(a) A community benefits statement that describes the hospital's
or clinic's commitment to developing, adopting, and implementing a
community benefits program. The hospital's or clinic's governing
board shall document that it has reviewed the hospital's or clinic's
organizational mission statement and considered amendments to it that
would better align that organizational mission statement with the
community benefits statement.
(b) A description of the process for approval of the community
benefits plan by the hospital's or clinic's governing board,
including a declaration that the board and administrators of the
hospital or clinic shall be responsible for oversight and
implementation of the community benefits plan. The board may
establish a community benefits implementation committee that shall
include members of the board, senior administrators, and community
stakeholders.
127475. (a) By January 1, 2018, a private nonprofit hospital or
nonprofit multispecialty clinic shall develop, in collaboration with
the community benefits planning committee, a community health needs
assessment that evaluates the health needs and resources of the
community it serves.
(b) In conducting its community health needs assessment, a private
nonprofit hospital or nonprofit multispecialty clinic shall solicit
comments from and meet with local government officials, including
representatives of local public health departments. A private
nonprofit hospital or nonprofit multispecialty clinic shall also
solicit comments from and meet with representatives of vulnerable
populations, including diverse racial, ethnic, cultural, and LGBTQQ
communities, women's health advocates, mental health advocates,
health and mental health providers, community-based organizations and
advocates, academic institutions, local public health
departments, local government entities, low-income and
vulnerable consumers, health care providers, registered nurses,
community groups representing, among others, patients, labor,
seniors, and consumers, and other health-related organizations.
Particular attention shall be given to persons who are themselves
underserved and who work with
underserved and vulnerable populations. Particular attention shall
also be given to identifying local needs to address racial and ethnic
disparities in health outcomes. A private nonprofit hospital or
nonprofit multispecialty clinic may create a community benefits
advisory committee for the purpose of soliciting community input.
(c) In preparing its community health needs assessment, a private
nonprofit hospital or nonprofit multispecialty clinic shall use
available public health data. data, including
any health equity assessment conducted by the Office of Health
Equity pursuant to Section 131019.5. A private nonprofit
hospital or nonprofit multispecialty clinic may collaborate with
other facilities and health care institutions in conducting community
health needs assessments and may make use of existing studies in
completing their own needs assessments.
(d) Not later than 30 days prior to completing a community health
needs assessment, a private nonprofit hospital or nonprofit
multispecialty clinic shall make available to the public a copy of
the assessment for review and comment.
(e) A community health needs assessment shall be filed with the
office. A private nonprofit hospital or a nonprofit multispecialty
clinic shall update its community needs assessment at least every
three years.
127476. (a) By April 1, 2018, a private nonprofit hospital or
nonprofit multispecialty clinic shall develop, in collaboration with
the community, a community benefits plan designed to achieve all of
the following outcomes:
(1) Access to health care for members of underserved and
vulnerable populations.
(2) Addressing of the essential health care needs of the
community, with particular attention to the needs of members of
underserved and vulnerable populations.
(3) Creation of measurable improvements in the health of the
community, with particular attention to the needs of members of
underserved and vulnerable populations.
(b) In developing a community benefits plan, a private nonprofit
hospital or nonprofit multispecialty clinic shall solicit comments
from and meet with local government officials, including
representatives of local public health departments. A private
nonprofit hospital or nonprofit multispecialty clinic shall also
solicit comments from and meet with health care providers, community
groups representing, among others, patients, labor, seniors, and
consumers, and other health-related organizations. Particular
attention shall be given to persons who are themselves underserved,
who work with underserved and vulnerable populations or with
populations at risk for racial and ethnic disparities in health
outcomes.
(c) A community benefits plan shall include, at a minimum, all of
the following:
(1) A summary of the needs assessment and a statement of the
community health care needs that will be addressed by the plan.
(2) A list of the services the private nonprofit hospital or
nonprofit multispecialty clinic intends to provide in the following
year to address community health needs identified in the community
health needs assessments. The list of services shall be categorized
under the following:
(A) Charity care, as defined in subdivision (b) of Section 127472.
(B) Other community benefits, including community health
improvement services and community benefit operations, health
professions education, subsidized health services, research, and
contributions to community groups.
(C) Community building activities targeting underserved and
vulnerable populations.
(3) A description of the target community or communities that the
plan is intended to benefit.
(4) An estimate of the economic value of the community benefits at
cost that the private nonprofit hospital or nonprofit multispecialty
clinic intends to provide.
(5) A summary of the process used to elicit community
participation in the community health needs assessment and community
benefits plan design, and a description of the process for ongoing
participation of community members in plan implementation and
oversight, and a description of how the assessment and plan respond
to the comments received by the private nonprofit hospital or
nonprofit multispecialty clinic from the community.
(6) A list of individuals, organizations, and government officials
consulted during the development of the plan.
(7) A description of the intended impact on health outcomes
attributable to the plan, including short- and long-term measurable
goals and objectives.
(8) Mechanisms to evaluate the plan's effectiveness.
(9) The name and title of the individual responsible for
implementing the plan.
(10) The names of individuals on the private nonprofit hospital's
or nonprofit multispecialty clinic's governing board.
(11) If applicable, a report on the community benefits efforts of
the preceding year, including the amounts and types of community
benefits provided, in a manner to be prescribed by the office; a
statement of the plan's impact on health outcomes, including a
description of the private nonprofit hospital's or nonprofit
multispecialty clinic's progress toward meeting its short- and
long-term goals and objectives; and an evaluation of the plan's
effectiveness.
(d) A private nonprofit hospital or nonprofit multispecialty
clinic may also report on bad debts and Medicare shortfalls.
Reporting bad debts and Medicare shortfalls shall not be reported as
community benefits and shall be calculated based on hospital costs,
not charges.
(e) The governing board of a private nonprofit hospital or
nonprofit multispecialty clinic shall adopt the community benefits
plan at a meeting that is open to the public. No later than 30 days
prior to the plan's adoption by the governing board of the private
nonprofit hospital or nonprofit multispecialty clinic, a private
nonprofit hospital or nonprofit multispecialty clinic shall
make do both of the following:
( 1) Make available to
the public and to the office, in a printed copy and on its Internet
Web site, both of the following: a draft of
its community benefits plan, and notice of the date, time,
and location of the meeting at which the community benefits plan is
to be voted on for adoption by the governing board of the private
nonprofit hospital or nonprofit multispecialty clinic.
(1) A draft of its community benefits plan.
(2) Notice of the date, time, and location of the meeting at which
the community benefits plan is to be voted on for adoption by the
governing board of the private nonprofit hospital or nonprofit
multispecialty clinic.
(2) Provide for a process by which the individuals and groups
listed in subdivision (b) may provide written comment on the draft
community benefits plan.
(f) After April 1, 2018, a private nonprofit hospital or nonprofit
multispecialty clinic shall, every two years,
shall annually submit a community benefits plan that
conforms with this chapter and subdivisions (b) to (e), inclusive, to
the office, no later than 120 days after the end of the hospital's
or clinic's fiscal year.
(g) A person or entity may file comments on a private nonprofit
hospital's or nonprofit multispecialty clinic's community benefits
plan with the office.
(h) A private nonprofit hospital or nonprofit multispecialty
clinic, under the common control of a single corporation or another
entity, may file a consolidated plan if the distinct needs of
the communities served by each hospital in the consolidated plan are
identified, and if the plan addresses services in all of the
categories listed in paragraph (2) of subdivision (c) to be provided
by each hospital or clinic under common control of the corporation or
entity.
127477. A private nonprofit hospital or a nonprofit
multispecialty clinic that reports community benefits to the
community shall report on those community benefits in a consistent
and comparable manner to all other private nonprofit hospitals and
nonprofit multispecialty clinics.
127478. A private nonprofit hospital or a nonprofit
multispecialty clinic shall make its community health needs
assessment and community benefits plan available to the public on its
Internet Web site. A copy of the assessment and plan shall be given
free of charge to any person upon request.
Article 3. Duties of the Office of Statewide Health Planning
and Development
127487. (a) (1) The By January 1, 2017,
the office shall develop and adopt regulations to prescribe a
standardized format for community benefits plans pursuant to this
chapter. Immediately following the adoption of those regulations, the
director of the office shall certify the adoption of the regulations
in writing, post the written certification to the office's Internet
Web site and deliver it to the Secretary of State, the Secretary of
the Senate, the Chief Clerk of the Assembly, and the Legislative
Counsel.
(2) The office shall develop a standardized methodology for
estimating the economic value of community benefits based on the cost
to a private nonprofit hospital or a nonprofit multispecialty
clinic. In no case shall the economic value of community benefits
exceed the actual cost to a private nonprofit hospital or a nonprofit
multispecialty clinic, nor more than 125 percent of the Medicare
rate for the health care services or items provided on an inpatient
basis, an outpatient basis, or through other nonprofit or public
outpatient clinics, hospitals, or health care organizations.
(3) In developing standards of reporting on community benefits,
the office shall, to the maximum extent possible, conform to Internal
Revenue Service reporting standards for those data elements reported
to the Internal Revenue Service, but shall also include those data
elements required under this chapter or other state law, including
charity care, as defined in Section 127400.
(4) A private nonprofit hospital or nonprofit multispecialty
clinic shall annually file with the office its IRS Form 990, or its
successor form, and the office shall post the form on its Internet
Web site.
(b) The office shall provide technical assistance to help private
nonprofit hospitals and nonprofit multispecialty clinics comply with
this chapter.
(c) The office shall make public a community health needs
assessment and community benefits plan and any comments received
regarding those assessments and plans. The office shall make these
documents available on its Internet Web site.
(d) The office shall maintain a public calendar of community
benefit adoption meetings held by the governing board of each private
nonprofit hospital or nonprofit multispecialty clinic. Notice that
includes the Office of Statewide Health Planning and Development
(OSHPD) facility number, name, parent company, date, time, and
location of each meeting shall be posted no later than 14 days prior
to the meeting date.
(e) For every year that a community benefits plan is submitted
pursuant to subdivision (f) of Section 127476, the office shall
calculate and make public the total value of community benefits
provided by each private nonprofit hospital and nonprofit
multispecialty clinic that reports pursuant to this chapter.
127488. The office may assess a civil penalty against a private
nonprofit hospital or nonprofit multispecialty clinic that fails to
comply with this article in the same manner as specified in Section
128770.
127489. This chapter chapter, except for
Section 127487, shall be operative on the date of the written
certification required by subdivision (a) of Section 127487.
SEC. 4. SEC. 5. Section 129050 of
the Health and Safety Code is amended to read:
129050. A loan shall be eligible for insurance under this chapter
if all of the following conditions are met:
(a) The loan shall be secured by a first mortgage, first deed of
trust, or other first priority lien on a fee interest of the borrower
or by a leasehold interest of the borrower having a term of at least
20 years, including options to renew for that duration, longer than
the term of the insured loan. The security for the loan shall be
subject only to those conditions, covenants and restrictions,
easements, taxes, and assessments of record approved by the office,
and other liens securing debt insured under this chapter. The office
may require additional agreements in security of the loan.
(b) The borrower obtains an American Land Title Association title
insurance policy with the office designated as beneficiary, with
liability equal to the amount of the loan insured under this chapter,
and with additional endorsements that the office may reasonably
require.
(c) The proceeds of the loan shall be used exclusively for the
construction, improvement, or expansion of the health facility, as
approved by the office under Section 129020. However, loans insured
pursuant to this chapter may include loans to refinance another prior
loan, whether or not state insured and without regard to the date of
the prior loan, if the office determines that the amount refinanced
does not exceed 90 percent of the original total construction costs
and is otherwise eligible for insurance under this chapter. The
office may not insure a loan for a health facility that the office
determines is not needed pursuant to subdivision (k).
(d) The loan shall have a maturity date not exceeding 30 years
from the date of the beginning of amortization of the loan, except as
authorized by subdivision (e), or 75 percent of the office's
estimate of the economic life of the health facility, whichever is
the lesser.
(e) The loan shall contain complete amortization provisions
requiring periodic payments by the borrower not in excess of its
reasonable ability to pay as determined by the office. The office
shall permit a reasonable period of time during which the first
payment to amortization may be waived on agreement by the lender and
borrower. The office may, however, waive the amortization
requirements of this subdivision and of subdivision (g) of this
section when a term loan would be in the borrower's best interest.
(f) The loan shall bear interest on the amount of the principal
obligation outstanding at any time at a rate, as negotiated by the
borrower and lender, as the office finds necessary to meet the loan
money market. As used in this chapter, "interest" does not include
premium charges for insurance and service charges if any. Where a
loan is evidenced by a bond issue of a political subdivision, the
interest thereon may be at any rate the bonds may legally bear.
(g) The loan shall provide for the application of the borrower's
periodic payments to amortization of the principal of the loan.
(h) The loan shall contain those terms and provisions with respect
to insurance, repairs, alterations, payment of taxes and
assessments, foreclosure proceedings, anticipation of maturity,
additional and secondary liens, and other matters the office may in
its discretion prescribe.
(i) The loan shall have a principal obligation not in excess of an
amount equal to 90 percent of the total construction cost.
(j) The borrower shall offer reasonable assurance that the
services of the health facility will be made available to all persons
residing or employed in the area served by the facility.
(k) The office has determined that the facility is needed by the
community to provide the specified services. In making this
determination, the office shall do all of the following:
(1) Require the applicant to describe the community needs the
facility will meet and provide data and information to substantiate
the stated needs.
(2) Require the applicant, if appropriate, to demonstrate
participation in the community needs assessment required by Section
127476.
(3) Survey appropriate local officials and organizations to
measure perceived needs and verify the applicant's needs assessment.
(4) Use any additional available data relating to existing
facilities in the community and their capacity.
(5) Contact other state and federal departments that provide
funding for the programs proposed by the applicant to obtain those
departments' perspectives regarding the need for the facility.
Additionally, the office shall evaluate the potential effect of
proposed health care reimbursement changes on the facility's
financial feasibility.
(6) Consider the facility's consistency with the Cal-Mortgage
State Plan.
( l ) In the case of acquisitions, a project loan shall
be guaranteed only for transactions not in excess of the fair market
value of the acquisition.
Fair market value shall be determined, for purposes of this
subdivision, pursuant to the following procedure, that shall be
utilized during the office's review of a loan guarantee application:
(1) Completion of a property appraisal by an appraisal firm
qualified to make appraisals, as determined by the office, before
closing a loan on the project.
(2) Evaluation of the appraisal in conjunction with the book value
of the acquisition by the office. When acquisitions involve
additional construction, the office shall evaluate the proposed
construction to determine that the costs are reasonable for the type
of construction proposed. In those cases where this procedure reveals
that the cost of acquisition exceeds the current value of a
facility, including improvements, then the acquisition cost shall be
deemed in excess of fair market value.
(m) Notwithstanding subdivision (i), any loan in the amount of ten
million dollars ($10,000,000) or less may be insured up to 95
percent of the total construction cost.
In determining financial feasibility of projects of counties
pursuant to this section, the office shall take into consideration
any assistance for the project to be provided under Section 14085.5
of the Welfare and Institutions Code or from other sources. It is the
intent of the Legislature that the office endeavor to assist
counties in whatever ways are possible to arrange loans that will
meet the requirements for insurance prescribed by this section.
(n) The project's level of financial risk meets the criteria in
Section 129051.