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:

(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.

(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) (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.

(e) “Nonprofit multispecialty clinic” means a clinic as described in subdivision (l) of Section 1206.

(f) “Office” means the Office of Statewide Health Planning and Development.

(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.

(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.

(4) A population that meets the definition of disadvantaged community pursuant to Section 39711.

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.

(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.

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.