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AB-204 Hospitals: community benefits plan reporting.(2019-2020)

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Date Published: 06/28/2019 09:00 PM
AB204:v97#DOCUMENT

Amended  IN  Senate  June 28, 2019
Amended  IN  Assembly  May 16, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 204


Introduced by Assembly Member Wood

January 14, 2019


An act to amend Sections 127345, 127350, and 127360 of, and to add Section 127346 to, the Health and Safety Code, relating to hospitals.


LEGISLATIVE COUNSEL'S DIGEST


AB 204, as amended, Wood. Hospitals: community benefits plan reporting.
Existing law requires private not-for-profit hospitals to, among other things, adopt and update a community benefits plan, as defined, for providing community benefits either alone, in conjunction with other health care providers, or through other organizational arrangements. Existing law requires these hospitals to annually submit their community benefits plans to the Office of Statewide Health Planning and Development and, to the extent practicable, assign and report the economic value of community benefits provided. Existing law defines specified terms for purposes of these provisions and makes certain findings and declarations regarding the social obligation of private not-for-profit hospitals to provide community benefits in the public interest.
This bill would require the Office of Statewide Health Planning and Development, no later than July 1, 2020, to develop regulations to standardize the calculation of the economic value of community benefits and community benefit plan reporting, as specified. The bill would require the office, upon implementation of the regulations, Development to annually prepare a report on community benefits, as specified, and post the report and the community benefit plans submitted by the hospitals on its internet website. The bill would authorize the office to impose fines not to exceed $5,000 on hospitals that fail to adopt, update, or submit community benefit plans. The bill would authorize the office to grant an extension under these provisions, as specified.
The bill would require hospitals to assign and report the economic value of community benefits upon implementation of the regulations described above, benefits, and include a description of how needs identified in the assessment are being addressed. The bill would expand the provision that authorizes hospitals to file a consolidated community benefits report, as specified, and would require each hospital’s community benefit report to contain an explanation of the methodology used to determine their costs. The bill would also require each hospital to annually post its community benefits plan on its internet website.
The bill would revise the definition of community benefits to exclude activities or programs that are provided primarily for marketing purposes or are more beneficial to the organization than to the community. The bill would also revise the definition of hospital to include small and rural hospitals that are part of a hospital system, and to exclude certain health care district hospitals and nonprofit corporations affiliated with a health care district hospital, as specified. The bill would also make clarifying changes to existing law.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 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) “Charity care” means free health services provided without expectation of payment 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 reported at cost, as reported to the Office of Statewide Health Planning and Development. Charity care does not include bad debt defined as uncollectible charges that the organization recorded as revenue but wrote off due to a patient’s failure to pay.

(a)

(b) “Community benefits plan” means the written document prepared for annual submission to the Office of Statewide Health Planning and Development 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 needs within its mission and financial capacity, and the process by which the hospital developed the plan in consultation with the community.

(b)

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

(c)

(d) (1) Solely for the planning and reporting purposes of this article, “community benefit” means a hospital’s activities that are intended to address community needs and priorities primarily through disease prevention and improvement of health status, including, but not limited to, any of the following:
(A) 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, California Children’s Services Program, or county indigent programs.
(B) The unreimbursed cost of services included in subdivision (d) of Section 127340.
(C) Financial or in-kind support of public health programs.
(D) Donation of funds, property, or other resources that contribute to a community priority.
(E) Health care cost containment.
(F) Enhancement of access to health care or related services that contribute to a healthier community.
(G) Services offered without regard to financial return because they meet a community need in the service area of the hospital, and other services including health promotion, health education, prevention, and social services.
(H) Food, shelter, clothing, education, transportation, and other goods or services that help maintain a person’s health.
(2) “Community benefit” does not mean activities or programs that are provided primarily for marketing purposes or are more beneficial to the organization than to the community.

(d)

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

(e)

(f) “Community needs” means those requisites for improvement or maintenance of health status in the community.

(f)

(g) “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” does not mean any of the following:
(1) Hospitals that are dedicated to serving children and that do not receive direct payment for services to any patient.
(2) Small and rural hospitals as defined in Section 124840, unless the hospital is part of a hospital system.
(3) 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.

(g)

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

(h)

(i) “Vulnerable populations” means any population that is exposed to medical or financial risk by virtue of being uninsured, underinsured, or eligible for Medi-Cal, Medicare, California Children’s Services Program, or county indigent programs.

SEC. 2.

 Section 127346 is added to the Health and Safety Code, to read:
127346.

(a)The Office of Statewide Health Planning and Development shall, no later than July 1, 2020, develop regulations to standardize both of the following:

(1)Calculation of the economic value of community benefits.

(2)Community benefit plan reporting.

(b)The office shall, as part of the regulations described in paragraph (1) of subdivision (a), require that the value of charity care be calculated using a percentage of Medicare allowable rates as determined by the office.

(c)The office

127346.
 (a) The Office of Statewide Health Planning and Development may impose a fine not to exceed five thousand dollars ($5,000) on hospitals for failure to adopt, update, or submit community benefit plans consistent with Section 127350.

(d)

(b) The office may grant a hospital an automatic 60-day extension for submitting annual community benefit plans.

(e)Upon implementation of the regulations described in subdivision (a), the

(c) The office shall annually prepare, and post on its internet website, a report that includes all of the following:
(1) The amount each hospital spent on community benefits.
(2) The amount of community benefit spending attributable to charity care, the unpaid cost of government-sponsored health care programs, and community benefit programs and activities.
(3) A list of all hospitals that failed to report community benefits spending.

(f)

(d) The office shall make all community benefit plans submitted by hospitals pursuant to Section 127350 available to the public on its internet website.

SEC. 3.

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

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) (1) 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, upon implementation of the regulations described in Section 127346, shall assign and report the economic value of community benefits provided in furtherance of its plan, and include a description of how needs identified in the assessment are being addressed and which needs are not being addressed, and why. 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.
(2) Hospitals under the common control of a single corporation or another entity may file a consolidated report if the report includes each hospital’s community benefit financial data and describes the benefits provided to the communities in the hospitals’ geographic area. Hospitals on a consolidated license may file a consolidated community benefit plan report if they serve the same geographic area.
(3) Each hospital’s community benefit report shall contain an explanation of the methodology used to determine the hospital’s costs, written in plain English.
(e) Annually post its community benefits plan on its internet website.

SEC. 4.

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

127360.
 Nothing in this article shall be used to justify the tax-exempt status of a hospital under state law. Nothing in this article shall preclude the office from requiring hospitals to directly report their charity activities.