Bill Text

PDF |Add To My Favorites | print page

AB-1046 Hospitals: community benefits.(2015-2016)

SHARE THIS:share this bill in Facebookshare this bill in Twitter
AB1046:v98#DOCUMENT

Amended  IN  Assembly  April 07, 2015

CALIFORNIA LEGISLATURE— 2015–2016 REGULAR SESSION

Assembly Bill
No. 1046


Introduced by Assembly Member Dababneh

February 26, 2015


An act to amend Sections 127340, 127345, 127350, and 127355 and 127360 of, and to add Section 127365 to, to repeal Section 127355 of, and to repeal and add Section 127350 of, the Health and Safety Code, relating to hospitals.


LEGISLATIVE COUNSEL'S DIGEST


AB 1046, as amended, Dababneh. Hospitals: community benefits.
Existing law requires certain private not-for-profit acute hospitals to, every 3 years, complete a community needs assessment, as defined, and to annually adopt and update a community benefits plan, as defined. Existing law exempts certain hospitals from these provisions, including small and rural hospitals. Existing law requires a hospital to file a report on its community benefits plan and the activities undertaken to address community needs with the Statewide Office of Health Planning and Development. Existing law requires the office to make those reports available to the public.
This bill would revise and recast these provisions to, among other things, make changes to specify the elements that are required to be included in a community benefits plan health needs assessment (CHNA) report, which would replace the community benefits plan, and delete the exemption from these requirements for small and rural hospitals. The bill would instead require a hospital to adopt a community benefits plan the CHNA report every 3 years, and to submit an update of the activities conducted under the plan report to the office annually. The bill would require the office to post on its Internet Web site the updates to community benefits plans received by the office from each hospital. The bill would require a hospital to make updates to its community benefits plan available to the public, upon request, at no charge. CHNA report to be widely available to the public, as prescribed.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 127340 of the Health and Safety Code is amended to read:

127340.
 The Legislature finds and declares all of the following:
(a) Private not-for-profit hospitals meet certain health needs of their communities through the provision of essential health care and other services. Public recognition of their unique status has led to favorable tax treatment by the government. In exchange, nonprofit hospitals assume a social obligation, inherent in their missions, to provide community benefits in the public interest.

(b)Hospitals and the environment in which they operate have undergone dramatic changes. The pace of change will accelerate in response to health care reform. In light of this, significant public benefit would be derived if private not-for-profit hospitals reviewed and reaffirmed periodically their commitment to assist in meeting their communities’ health needs by identifying and documenting benefits provided to the communities which they serve.

(c)California’s private not-for-profit hospitals provide a wide range of benefits to their communities in addition to those reflected in the financial data reported to the state.

These benefits include, but are not limited to, all of the following:

(1)Community health services that may include community health education, community-based clinical services, health care support services, and social or environmental services.

(2)Health professions education.

(3)Subsidized health services, including, but not limited to, emergency and trauma, neonatal intensive care, burn and special care units, women and children’s services, renal services, hospice, home care, adult day care, behavioral health care services, and palliative care.

(4)Research in clinical care, community health, and general studies, including health care delivery.

(5)Financial and in-kind contributions, including grants or other funds to not-for-profit health care organizations improving community health needs.

(6)Administrative and operational costs associated with conducting community health needs assessments and implementing and evaluating community benefits plans.

(d)Direct provision of health goods and services or partnerships to enhance the provision of health goods and services, as well as preventive programs, should be emphasized by hospitals in the development of community benefits plans.

(b) California’s private not-for-profit hospitals provide a wide range of benefits to their communities, in addition to those reflected in the financial data reported to the state in the form of community benefits. These contributions seek to achieve a community benefit objective, including improving access to health services, enhancing public health, advancing increased general knowledge, and relief of a government burden to improve health. This includes, but is not limited to, programs or activities that meet the following requirements:
(1) Are available broadly to the public and serve low-income consumers.
(2) Reduce geographic, financial, or cultural barriers to accessing health services, which, if they ceased, would result in access problems, including, but not limited to, longer wait times or increased travel distances.
(3) Address federal, state, or local public health priorities, such as eliminating disparities in access to health care services or disparities in health status among different populations.
(4) Leverage or enhance public health department activities, such as childhood immunization efforts.
(5) Strengthen community health resilience by improving the ability of a community to withstand and recover from public health emergencies.
(6) Otherwise would become the responsibility of the government or another tax-exempt organization.
(7) Advance increased general knowledge through education or research that benefits the public.

SEC. 2.

 Section 127345 of the Health and Safety Code is amended to read:

127345.
 As used in this article, the following terms have the following meanings:

(a)“Community benefits plan” means a written document that shall include, but shall not be limited to, a description of the activities that the hospital has undertaken in order to address identified community health needs within its mission and financial capacity, and the process by which the hospital developed the plan in consultation with the community.

(b)“Community” means the service areas or patient populations for which the hospital provides health care services.

(c)Solely for the planning and reporting purposes of this article, “community benefit” means a hospital’s activities that are intended to address community health needs and priorities primarily through disease prevention and improvement of health status, including, but not limited to, any of the following:

(1)Health care services, rendered to vulnerable populations, including, but not limited to, charity care and the unreimbursed cost of providing services to the uninsured, underinsured, and those eligible for Medi-Cal, Medicare, county indigent programs, or other means-tested government programs.

(2)The unreimbursed cost of services included in subdivision (d) of Section 127340.

(3)Financial or in-kind support of public health programs.

(4)Donation of funds, property, or other resources that contribute to community health improvement.

(5)Health care cost containment.

(6)Enhancement of access to health care or related services that contribute to community health improvement.

(7)Services offered without regard to financial return because they meet a community health need in the service area of the hospital, and other services including health promotion, health education, research, prevention, and social services.

(8)Food, shelter, clothing, education, transportation, and other goods or services that help community health improvement.

(a) “Authorized body of a hospital facility” means either of the following:
(1) The governing body, including the board of directors, board of trustees, or equivalent controlling body, of the hospital organization that operates the hospital facility, or a committee of, or other party authorized by, that governing body, to the extent that committee or other party is permitted under state law to act on behalf of the governing body.
(2) The governing body of an entity that is regarded or treated as a partnership for federal tax purposes that operates the hospital facility or a committee of, or other party authorized by, that governing body, to the extent that committee or other party is permitted under state law to act on behalf of the governing body.
(b) “Cash and in-kind contribution” means contributions made by the organization to health care organizations and other community groups for one or more of the community benefit activities.
(c) “Charity care” means free or discounted health services provided to persons who meet the organization’s criteria for financial assistance and are unable to pay for all or a portion of the services. Charity care shall be recorded at cost. Charity care does not include bad debt or uncollectible charges that the organization recorded as revenue but wrote off due to a patient’s failure to pay.
(d) “Community benefits” includes, but is not limited to, any of the following:
(1) The unpaid cost of charity care and other financial assistance.
(2) The unpaid cost of government-sponsored health care programs, including, but not limited to all of the following:
(A) Medicare.
(B) Medicaid, including the Medi-Cal program.
(C) State Children’s Insurance Program.
(D) State or local medically indigent programs.
(E) Other means-tested government programs.
(3) The cost of community benefit programs and activities, including, but not limited to, the following:
(A) Community health improvement services.
(B) Health professions education.
(C) Subsidized health services.
(D) Research.
(E) Cash and in-kind contributions.
(F) Community building activities.
(G) Community benefit operations.
(e) “Community benefit operations” means activities associated with conducting community health needs assessments, community benefit program administration, and the organization’s activities associated with fundraising or grant-writing for community benefit programs. Activities or programs cannot be reported if they are provided primarily for marketing purposes or if they are more beneficial to the organization than to the community.
(f) “Community building activities” includes, but is not limited to, all of the following:
(1) Physical improvements and housing, which may include the provision or rehabilitation of housing for vulnerable populations.
(2) Economic development, which may include assisting small business development in neighborhoods with vulnerable populations and creating new employment opportunities in areas with high rates of joblessness.
(3) Community support, which may include child care and mentoring programs for vulnerable populations or neighborhoods, neighborhood support groups, violence prevention programs, and disaster readiness and public health emergency activities.
(4) Environmental improvements, which may include activities to address environmental hazards that affect community health, such as alleviation of water or air pollution, safe removal or treatment of garbage or other waste products, and other activities to protect the community from environmental hazards.
(5) Leadership development and training for community members, which may include training in conflict resolution, civic, cultural, or language skills, and medical interpreter skills for community residents.
(6) Coalition building, which may include participation in community coalitions and other collaborative efforts with the community to address health and safety issues.
(7) Community health improvement advocacy, which may include efforts to support policies and programs to safeguard or improve public health, access to health care services, housing, the environment, and transportation.
(8) Workforce development, which may include recruitment of physicians and other health professionals to medical shortage areas or other areas designated as underserved, and collaboration with educational institutions to train and recruit health professionals needed in the community.
(9) Other community building activities that protect or improve the community’s health or safety that are not described in the categories listed in paragraphs (1) to (8), inclusive.
(g) “Community health improvement services” means activities or programs, subsidized by the hospital, that are carried out or supported for the express purpose of improving community health.

(d)

(h) “Community health needs assessment” means the process by which the hospital identifies, identifies unmet community health needs for its primary service area, as determined by the hospital, unmet community health needs hospital.

(e)

(i) “Community health needs” means those requisites for improvement or maintenance of health status in the community.
(j) “Community health needs assessment report” means the written report adopted for the hospital facility by an authorized body of the hospital facility.
(k) “Health professions education” means educational programs that result in a degree, certificate, or training necessary to be licensed to practice as a health professional, as required by state law, or continuing education necessary to retain state license or certification by a board in the individual’s health profession specialty.

(f)

(l) (1) “Hospital” means a private not-for-profit acute hospital licensed under subdivision (a), (b), or (f) of Section 1250 and is owned by a corporation that has been determined to be exempt from taxation under the United States Internal Revenue Code. “Hospital”
(2) “Hospital” does not include a hospital that is dedicated to serving children and that does not receive direct payment for services to any patient.

(g)“Mission statement” means a hospital’s primary objectives for operation as adopted by its governing body.

(m) “Implementation Strategy” means the written document prepared for annual submission to the Office of Statewide Health Planning and Development that describes the hospital facility’s strategy to meet the community health needs identified through the hospital facility’s community health needs assessment.
(n) “Other means-tested government programs” means government-sponsored health programs where eligibility for benefits or coverage is determined by income or assets, including, but not limited to, the State Children’s Health Insurance Program (SCHIP) and the California Children’s Services (CCS) Program.
(o) “Research” may include, but is not limited to, clinical research, community health research, and generalizable studies on health care delivery.
(p) “Subsidized health services” means clinical services provided despite a financial loss to the organization.

(h)

(q) “Vulnerable populations” population means any a population that is exposed to medical or financial risk by virtue of being uninsured, underinsured, or eligible for Medi-Cal, Medicare, county indigent programs, or other means-tested programs.

SEC. 3.Section 127350 of the Health and Safety Code is amended to read:
127350.

Each hospital shall do all of the following:

(a)Every three years, complete, either alone, in conjunction with other health care providers, or through other organizational arrangements, a community health needs assessment evaluating the health needs of the community serviced by the hospital, that includes, but is not limited to, a process for consulting with community groups and local government officials in the identification and prioritization of community health needs that the hospital can address directly, in collaboration with others, or through other organizational arrangement.

(b)Following completion of the community health needs assessment every three years, adopt a community benefits plan for providing community benefits either alone, in conjunction with other health care providers, or through other organizational arrangements.

(c)Annually submit an update of the activities conducted pursuant to the community benefits plan, including, but not limited to, the activities that the hospital has undertaken in order to address community health needs within its mission and financial capacity, to the Office of Statewide Health Planning and Development. The hospital shall, to the extent practicable, assign and report the economic value of community benefits provided in furtherance of its plan. Each hospital shall file a copy of the update with the office not later than 150 days after the hospital’s fiscal year ends.

(d)The updates filed by the hospitals with the office shall be made available to the public by the office, and, upon request, by the hospital, at no charge. Hospitals under the common control of a single corporation or another entity may file a consolidated update of its community benefits plan.

SEC. 4.Section 127355 of the Health and Safety Code is amended to read:
127355.

The hospital shall include all of the following elements in its community benefits plan:

(a)Mechanisms to evaluate the plan’s effectiveness including, but not limited to, a method for soliciting the views of the community served by the hospital and identification of community groups and local government officials consulted during the development of the plan.

(b)Measurable objectives to be achieved within specified timeframes.

(c)Community benefits categorized into the following framework:

(1)Charity care at cost.

(2)Unreimbursed cost of Medi-Cal, Medicare, county indigent programs, or other means-tested government programs.

(3)Community health improvement services.

(4)Health research, health professions education, and training programs.

(5)Subsidized health services, cash, and in-kind contributions and other benefits.

(6)Nonquantifiable benefits.

SEC. 3.

 Section 127350 of the Health and Safety Code is repealed.
127350.

Each hospital shall do all of the following:

(a) By July 1, 1995, reaffirm its mission statement that requires its policies integrate and reflect the public interest in meeting its responsibilities as a not-for-profit organization.

(b) By January 1, 1996, complete, either alone, in conjunction with other health care providers, or through other organizational arrangements, a community needs assessment evaluating the health needs of the community serviced by the hospital, that includes, but is not limited to, a process for consulting with community groups and local government officials in the identification and prioritization of community needs that the hospital can address directly, in collaboration with others, or through other organizational arrangement. The community needs assessment shall be updated at least once every three years.

(c) By April 1, 1996, and annually thereafter 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.

(d) Annually submit its community benefits plan, including, but not limited to, the activities that the hospital has undertaken in order to address community needs within its mission and financial capacity to the Office of Statewide Health Planning and Development. The hospital shall, to the extent practicable, assign and report the economic value of community benefits provided in furtherance of its plan. Effective with hospital fiscal years, beginning on or after January 1, 1996, each hospital shall file a copy of the plan with the office not later than 150 days after the hospital’s fiscal year ends. The reports filed by the hospitals shall be made available to the public by the office. Hospitals under the common control of a single corporation or another entity may file a consolidated report.

SEC. 4.

 Section 127350 is added to the Health and Safety Code, to read:

127350.
 (a) Each hospital shall assess the health needs of its community.
(b) Each hospital shall conduct a community health needs assessment (CHNA) every three years, as described in this subdivision.
(1) A hospital facility shall complete all of the following steps:
(A) Define the community it serves.
(B) Assess the health needs of that community.
(C) In assessing the health needs of the community, solicit and take into account input received from persons who represent the broad interests of that community, including those with special knowledge of or expertise in public health.
(D) Document the CHNA in a written report that is adopted for the hospital facility by an authorized body of the hospital facility.
(E) Make the CHNA report widely available to the public.
(2) A hospital facility shall be considered to have conducted a CHNA on the date it has completed all of the steps described in this subdivision.
(3) In defining the community it serves for purposes of this subdivision, a hospital facility may take into account all relevant facts and circumstances, including the geographic area served by the hospital facility, target population served, and principal functions. A hospital facility may not define its community to exclude medically underserved, low-income, or minority populations who live in the geographic areas from which the hospital facility draws its patients, unless those populations are not part of the hospital facility’s target patient population or affected by its principal functions, or otherwise should be included based on the method the hospital facility uses to define its community. A hospital facility shall take into account all patients, without regard to whether or how much they or their insurers pay for the care provided, or whether they are eligible for assistance under the hospital facility’s charity care, discount, or other financial assistance policies.
(4) A hospital facility shall identify significant health needs of the community, prioritize those health needs, and identify resources potentially available to address those health needs, such as organizations, facilities, and programs in the community, including those of the hospital facility. A hospital facility may determine whether a health need is significant based on all of the facts and circumstances present in the community it serves. In addition, a hospital facility may use any criteria to prioritize the significant health needs it identifies, including, but not limited to, the burden, scope, severity, or urgency of the health need; the estimated feasibility and effectiveness of possible interventions; the health disparities associated with the need; or the importance the community places on addressing the need.
(5) A hospital facility shall solicit and take into account input received from all of the following sources in identifying and prioritizing significant health needs and in identifying resources potentially available to address those health needs:
(A) At least one state, local, tribal, or regional governmental public health department or equivalent department or agency, or a State Office of Rural Health described in Section 338J of the Public Health Service Act (42 U.S.C. Sec. 254r), with knowledge, information, or expertise relevant to the health needs of that community.
(B) Members of medically underserved, low-income, and minority populations in the community served by the hospital facility, or individuals or organizations serving or representing the interests of those populations. For purposes of this paragraph, medically underserved populations include populations experiencing health disparities or at risk of not receiving adequate medical care, as a result of being uninsured or underinsured or due to geographic, language, financial, or other barriers.
(C) Written comments received on the hospital facility’s most recently conducted CHNA and most recently adopted implementation strategy.
(6) A hospital facility may solicit and take into account input received from a broad range of persons located in or serving its community, including, but not limited to, health care consumers and consumer advocates, nonprofit and community-based organizations, academic experts, local government officials, local school districts, health care providers and community health centers, health insurance and managed care organizations, private businesses, and labor and workforce representatives.
(7) The CHNA report adopted pursuant to subdivision (c) shall include all of the following:
(A) A definition of the community served by the hospital facility and a description of how the community was determined.
(B) A description of the process and methods used to conduct the CHNA, that describes the data and other information used in the assessment, as well as the methods of collecting and analyzing this data and information, and identifies any parties with whom the hospital facility collaborated, or with whom it contracted for assistance, in conducting the CHNA.
(C) A description of how the hospital facility solicited and took into account input received from persons who represent the broad interests of the community it serves. This requirement shall be fulfilled if the report summarizes, in general terms, any input provided by persons who represent the broad interests of the community it serves and how and over what time period that input was provided; provides the names of any organizations providing input and summarizes the nature and extent of the organization’s input; and describes the medically underserved, low-income, or minority populations being represented by organizations or individuals that provided input. A CHNA report does not need to name or otherwise identify specific individual providing input. In the event a hospital facility solicits, but cannot obtain, input from a source described in this section, the CHNA report shall describe the hospital facility’s efforts to solicit input from that source.
(D) A prioritized description of the significant health needs of the community identified through the CHNA, along with a description of the process and criteria used in identifying certain health needs as significant and prioritizing those significant health needs.
(E) A description of the resources potentially available to address the significant health needs identified through the CHNA.
(F) An evaluation of the impact of any actions that were taken since the hospital facility finished conducting its immediately preceding CHNA, to address the significant health needs identified in the hospital facility’s prior CHNA.
(8) While a hospital facility may conduct its CHNA in collaboration with other organizations and facilities, including, but not limited to, related and unrelated hospital organizations and facilities, for-profit and government hospitals, governmental departments, and nonprofit organizations, every hospital facility shall document the information described in this paragraph in a separate CHNA report unless it adopts a joint CHNA report as described in subdivision (b). If a hospital facility is collaborating with other facilities and organizations in conducting its CHNA, or if another organization has conducted a CHNA for all or part of the hospital facility’s community, portions of the hospital facility’s CHNA report may be substantively identical to portions of a CHNA report of a collaborating hospital facility or other organization conducting a CHNA, if appropriate under the facts and circumstances.
(c) An authorized body of the hospital facility shall adopt the implementation strategy to meet the community health needs identified through the CHNA.
(d) A hospital facility that collaborates with other hospital facilities or other organizations in conducting its CHNA shall satisfy this section if an authorized body of the hospital facility adopts for the hospital facility a joint CHNA report produced for the hospital facility and one or more of the collaborating facilities and organizations, provided that the following conditions are met:
(1) The joint CHNA report meets the requirements of this section.
(2) The joint CHNA report is clearly identified as applying to the hospital facility.
(3) All of the collaborating hospital facilities and organizations included in the joint CHNA report define their community to be the same.
(e) A hospital facility’s CHNA report is made widely available to the public only if the hospital facility does both of the following:
(1) Makes the current and prior CHNA reports widely available on an Internet Web site.
(2) Makes a paper copy of the current and prior CHNA report available for public inspection upon request and without charge.
(f) (1) A hospital’s implementation strategy shall do either of the following:
(A) Describe how the hospital facility plans to address the health need by describing the actions the hospital facility intends to take to address the health need and the anticipated impact of these actions; identifying the resources the hospital facility plans to commit to address the health need, reported in the categories outlined in subdivision (d) of Section 127345; and describing planned collaboration between the hospital facility and other facilities or organizations in addressing the health need.
(B) Identify the health need as one the hospital facility does not intend to address, and explain why the hospital facility does not intend to address the health need. In explaining why it does not intend to address a significant health need, a brief explanation of the hospital facility’s reason for not addressing the health need is sufficient.
(2) A hospital facility may develop an implementation strategy in collaboration with other hospital facilities or other organizations, including, but not limited to, related and unrelated hospital organizations and facilities, for-profit and government hospitals, governmental entities, and nonprofit organizations. Unless otherwise authorized by law, a hospital facility that collaborates with other facilities or organizations in developing its implementation strategy shall still document its implementation strategy in a separate written plan that is tailored to the particular hospital facility, taking into account its specific resources.
(3) An authorized body of the hospital facility shall adopt the implementation strategy on or before the 15th day of the fifth month after the end of the taxable year in which the hospital facility completes the final step for the CHNA.
(4) A hospital facility shall annually submit an update on activities related to the implementation strategy to the office, not later than 150 days after the hospital’s fiscal year ends. Hospitals under the common control of a single corporation or another entity may file a consolidated report.

SEC. 5.

 Section 127355 of the Health and Safety Code is repealed.
127355.

The hospital shall include all of the following elements in its community benefits plan:

(a) Mechanisms to evaluate the plan’s effectiveness including, but not limited to, a method for soliciting the views of the community served by the hospital and identification of community groups and local government officials consulted during the development of the plan.

(b) Measurable objectives to be achieved within specified timeframes.

(c) Community benefits categorized into the following framework:

(1) Medical care services.

(2) Other benefits for vulnerable populations.

(3) Other benefits for the broader community.

(4) Health research, education, and training programs.

(5) Nonquantifiable benefits.

SEC. 6.

 Section 127360 of the Health and Safety Code is amended to read:
127360.

Nothing in this article shall be construed to authorize or require specific formats for hospital needs assessments, community benefit plans, or reports until recommendations pursuant to former Section 127365, as added by Chapter 1023 of the Statutes of 1996, are considered and enacted by the Legislature.

Nothing in this article shall

127360.
 This article shall not be used to justify the tax-exempt status of a hospital under state law. Nothing in this article shall This article shall not preclude the office from requiring hospitals to directly report their charity activities.

SEC. 5.SEC. 7.

 Section 127365 is added to the Health and Safety Code, to read:

127365.
 The Office of Statewide Health Planning and Development shall do all of the following:
(a) Post on its Internet Web site the community benefits plans and implementation strategy updates that are submitted to the office pursuant to subdivision (b) or (c) (f) of Section 127350 within 120 days of receipt of those plans or updates.
(b) Identify on its Internet Web site any hospital that did not file an update of its community benefits plan implementation strategy on a timely basis.