1190.
(a) For purposes of this division, the following definitions shall apply:(1) “Academic medical center” means either of the following:
(A) A health system that is operating with a medical school that is fully accredited by the Liaison Committee on Medical Education as of June 9, 2017, and that is either of the following:
(i) A public university system, as defined in subdivision (f) of Section 99250 of the Education Code.
(ii) Governed by a four-year university accredited by the Western Association of State and Colleges Senior College and University Commission.
(B) A comprehensive cancer center and hospital that is so designated by the National Cancer Institute and that is located in the City of Duarte.
(2) “Acquisition” means the direct or indirect purchase in any manner, including, but not limited to, lease, transfer, exchange, option, receipt of a conveyance, creation of a joint venture, or any other manner of purchase, by a health care system, private equity group, or hedge fund of a material amount of the assets or operations, as used in Sections 5914 and 5920 of the Corporations Code, of a health care facility or provider. A transfer includes, but is not limited to, any arrangement, written or oral, that alters voting control of, responsibility for, or control of the governing body of the health care facility or provider.
(3) “Change of control” means an arrangement in which a health care system establishes a change in governance or sharing of control over health care services provided by that health care facility or provider, or in which a health care system otherwise acquires direct or indirect control over the operations of a health care facility or provider in whole or in substantial part, as consistent with subdivision (a) of Section 5914 of, and subdivision (a) of Section 5920 of the Corporations Code. For purposes of this division, an “arrangement” shall include any agreement, association, partnership, joint venture, or other arrangement that results in a change of governance or control. A change of control does not exist where a health care system only extends an offer of employment to, or hires, a provider.
(4) “Board” means the Health Policy Advisory Board established pursuant to Section 1190.05.
(5) “Clinical integration” means a showing by the health care system, private equity group, or hedge fund making a change of control with or acquiring the health care facility that there will likely be a reduction in costs to the benefit of consumer care and outcomes or an increase in the quality of care as a result of the acquisition or change of control. An increase or improvement in quality of care shall include a showing of a reduction in morbidity or mortality, better population health care management, improvement in nationally recognized quality measures, including, but not limited to, measures used or endorsed by the National Committee for Quality Assurance, the National Quality Forum, the Physician Consortium for Performance Improvement, the Agency for Healthcare Research and Quality, others recognized or used by the federal Centers for Medicare and Medicaid Services, or any other commonly accepted metric or standard for improving consumer health and patient outcomes.
(6) “Health care facility” means a facility, nonprofit or for-profit corporation, institution, clinic, place, or building where health-related physician, surgery, or laboratory services are provided, including, but not limited to, a hospital, clinic, ambulatory surgery center, treatment center, or laboratory or physician office located outside of a hospital.
(7) “Health care system” means an entity or system of entities that includes or owns three or more hospitals within the state of which at least one is a general acute care hospital, as defined in subdivision (a) of Section 1250.
(8) “Hedge fund” means a pool of funds by investors, including a pool of funds managed or controlled by private limited partnerships, if those investors or the management of that pool or private limited partnership employ investment strategies of any kind to earn a return on that pool of funds.
(9) “Hospital” means a general acute care hospital, acute psychiatric hospital, or special hospital, as those terms are defined in subdivision (a), (b), or (f) of Section 1250, respectively.
(10) “Nonphysician Provider” means an individual or group of individuals that are licensed as defined under Division 2 (commencing with Section 500) of the Business and Professions Code that does not provide health-related physician, surgery, or laboratory services to consumers.
(11) “Private equity group” means an investor or group of investors who engages in the raising or returning of capital and who invests, develops, or disposes of specified assets.
(12) “Provider” means an individual or group of individuals that provides health-related physician, surgery, or laboratory services to consumers.
(13) “Rural area” means a medical service study area with a population density of fewer than 250 persons per square mile and no population center in excess of 50,000 within the area, as determined by the Office of Statewide Health Planning and Development.
(14) “Underserved population” means a population with an income threshold below 138 percent of the United States Department of Health and Human Services federal poverty guidelines, a population served by the Medi-Cal program, an uninsured population, a rural area, or a combination thereof.
(b) These definitions shall not apply to acquisitions or changes of control entered into prior to January 1, 2021, including subsequent renewals, as long as those acquisitions or changes of control do not involve a material change in the corporate relationship between a health care system and a health care facility or provider, or a material change in the corporate relationship between the private equity group or hedge fund and a health care facility or provider, on or after January 1, 2021.