Bill Text

Bill Information


Bill PDF |Add To My Favorites | print page

AB-666 Health systems: community benefits plans.(2023-2024)

SHARE THIS: share this bill in Facebook share this bill in Twitter
Date Published: 04/06/2023 09:00 PM
AB666:v97#DOCUMENT

Amended  IN  Assembly  April 06, 2023
Amended  IN  Assembly  March 23, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 666

Introduced by Assembly Member Arambula

February 13, 2023

An act to amend Sections 127345, 127346, 127350, 127355 of, to repeal and add Section 127340 of, and to add Section 127356 to, the Health and Safety Code, relating to health care.


LEGISLATIVE COUNSEL'S DIGEST


AB 666, as amended, Arambula. Health systems: community benefits plans.
Existing law establishes the Department of Health Care Access and Information to oversee various aspects of the health care market, including oversight of hospital facilities and community benefits plans. Existing law requires a private, not-for-profit hospital to adopt and update a community benefits plan that describes the activities the hospital has undertaken to address identified community needs within its mission and financial capacity, including health care services rendered to vulnerable populations. Existing law defines the term “community” as the service areas or patient populations for which the hospital provides health care services, defines “vulnerable populations” for these purposes to include a 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, and defines “community benefit” to mean the hospital’s activities that are intended to address community needs, such as support to local health departments, among other things. Existing law requires a hospital to conduct a community needs assessment to evaluate the health needs of the community and to update that assessment at least once every 3 years. Existing law requires a hospital to annually submit a community benefits plan to the department not later than 150 days after the hospital’s fiscal year ends. Existing law authorizes the department to impose a fine not to exceed $5,000 against a hospital that fails to adopt, update, or submit a community benefits plan, and requires the department to annually report on its internet website the amount of community benefit spending and list those that failed to report community benefit spending, among other things.
This bill would require the department to define the term “community” by regulation within certain parameters, would redefine the term “community benefit” to mean services rendered to those eligible for, but not enrolled in the above-described programs, the unreimbursed costs as reported in specified tax filings, and the support to local health departments as documented by those local health departments, among other things, and would redefine the term “vulnerable populations” to include those eligible for, but not enrolled in the above-described programs, those below median income experiencing economic disparities, and certain socially disadvantaged groups, such as those who are incarcerated. The bill would require that a community needs assessment include the needs of the vulnerable populations and include a description of which vulnerable populations are low or moderate income, coordination with a local health department, and require that it be updated at least once every 2 years. The bill would require that a community benefits plan demonstrate alignment with the State Health Improvement Plan and the Community Health Improvement Plan, include the proportion and amount of community benefit spending on vulnerable populations, and include measurable objectives that outline equity benchmarks. The bill would additionally require a hospital to annually submit a copy of a specified Internal Revenue Service form to the department. The bill would increase the maximum fine for failure to adopt, update, or submit, a community benefits plan to $25,000 and would authorize the department to impose a maximum fine of $50,000 for a hospital’s failure to demonstrate implementation of a community benefits plan. The bill would require the department to include in its annual report the amount of community benefits spending attributable to public health needs and a list of hospitals that fail to comply with specified requirements.
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 repealed.

SEC. 2.

 Section 127340 is added to the Health and Safety Code, to read:

127340.
 The Legislature finds and declares both of the following:
(a) Private not-for-profit hospitals may meet certain needs of their communities through the provision of community benefits. Public recognition of their status has led to favorable tax treatment by the government as nonprofit corporations. In exchange for this favorable tax treatment, nonprofit hospitals assume a social obligation to provide community benefits in the public interest.
(b) Hospitals and the environment in which they operate have undergone dramatic changes since the enactment of the Affordable Care Act, changes in federal law regarding community benefit reporting by nonprofit hospitals, and changes in numerous state laws. The pace of change continues to accelerate in response to health care coverage expansion and reform. It is the intent of the Legislature to align this article regarding community benefit with other state and federal law, to create a public regulatory process for further clarifying definitions and reporting requirements, and to make other changes.

SEC. 3.

 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 Department of Health Care Access and Information. no more than 100 percent of Medicare, consistent with the methodology in Section 127405. 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 hospital shall not attempt to collect debt in violation of the Hospital Fair Pricing Act pursuant to Article 1 (commencing with Section 127400) of Chapter 2.5.
(b) “Community benefits plan” means the written document prepared for annual submission to the Department of Health Care Access and Information 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, consistent with this article, and the process by which the hospital developed the plan in consultation with the community, local public health departments, and other stakeholders.
(c) “Community” shall be defined by the Department of Health Care Access and Information through regulation. “Community” shall include medically underserved areas and health profession shortage areas in the region. “Community” shall also include the service areas or patient populations for which the hospital provides health care services.
(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, but not enrolled in, Medi-Cal, Medicare, California Children’s Services Program, or county indigent programs.
(B) The unreimbursed cost of services reported on its Internal Revenue Service Form 990, Schedule H.
(C) Financial or in-kind support of public health programs, as documented by the public health department receiving the support.
(D) Donation of funds, property, or other resources that contribute to a community priority, as determined in consultation with the affected community, stakeholders, and the local public department.
(E) Health profession education and workforce training. care cost containment.
(F) Enhancement of access to health care or related services that contribute to a healthier community.
(G) Services offered and donation of funds, property, or other resources without financial return because they meet a community need as defined in consultation with the affected community, stakeholders, and the local public health departments, and other services including health promotion, health education, prevention, public health, and social services.
(H) Food, shelter, clothing, education, transportation, and other goods or services that help maintain a person’s health.
(I) Health profession education and workforce training.
(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.
(3) “Community benefit” does not include any tax, fee, quality assurance fee, or payment related to the quality assurance fee to the California Hospital Medical Center Foundation. of the following:
(A) Consistent with federal law and rules, Medicare shortfalls.
(B) Medi-Cal shortfalls that are greater than the federal upper payment limit or 100 percent of what the hospital would reasonably expect Medicare to pay for the same service.
(C) Any tax, fee, quality assurance fee, or payment related to the quality assurance fee to the California Health Foundation and Trust.
(e) “Community needs assessment” means the process by which the hospital identifies unmet community needs for the community. community in conjunction with stakeholders in the community.
(f) “Community needs” means those requisites for improvement or maintenance of health status in the community.
(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.
(h) “Mission statement” means a hospital’s primary objectives for operation as adopted by its governing body.
(i) “Vulnerable populations” means any population that is exposed to medical or financial risk by virtue of being uninsured, underinsured, or eligible for, but not enrolled in, Medi-Cal, Medicare, California Children’s Services Program, or county indigent programs. “Vulnerable populations” also includes both of the following:
(1) Racial and ethnic groups experiencing disparately poor health outcomes, including Black/African American, American Indian, Alaska Native, Asian Indian, Cambodian, Chinese, Filipino, Hmong, Japanese, Korean, Laotian, Vietnamese, Native Hawaiian, Guamanian or Chamorro, Samoan, or other nonwhite racial groups, as well as individuals of Hispanic/Latino origin, including Mexicans, Mexican Americans, Chicanos, Salvadorans, Guatemalans, Cubans, and Puerto Ricans.
(2) Socially disadvantaged groups, including all of the following:
(A) The unhoused.
(B) Communities with inadequate access to clean air and safe drinking water, as defined by an environmental California Healthy Places Index score of 50 percent or lower.
(C) People with disabilities.
(D) People identifying as lesbian, gay, bisexual, transgender, or queer.
(E) Individuals with limited English proficiency.
(F) People below median income experiencing economic disparities, such as poverty, unemployment, or underemployment.
(G) People who are incarcerated or formerly incarcerated.
(H) Immigrants or refugees.
(I) At-risk youth.

SEC. 4.

 Section 127346 of the Health and Safety Code is amended to read:

127346.
 (a) The Department of Health Care Access and Information may impose a fine not to exceed twenty-five thousand dollars ($25,000) on hospitals for failure to adopt, update, or submit community benefits plans consistent with the requirements set forth in this article and a fine not to exceed fifty thousand dollars ($50,000) for failure to demonstrate implementation of the community benefits plan.
(b) The department may grant a hospital an automatic 60-day extension for submitting annual community benefit plans.
(c) The department 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) The amount of community benefit spending attributable to public health needs, consistent with this article.
(4) A list of all hospitals that failed to comply with the requirements of this article.
(5) A list of hospitals complying with each of the requirements of the Hospital Fair Pricing Act pursuant to Article 1 (commencing with Section 127400) of Chapter 2.5.
(d) The department shall make all community benefit plans submitted by hospitals pursuant to Section 127350 available to the public on its internet website.

SEC. 5.

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

127350.
 Each hospital shall do all of the following:
(a) Annually 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) (1) 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.
(2) The community needs assessment shall document the needs of vulnerable populations as defined in this article. The community needs assessment shall include a description of which vulnerable populations are low or moderate income and what proportion of those populations are low or moderate income.
(3) The community needs assessment shall include coordination with the local public health department.
(4) The community needs assessment shall be updated at least once every two years.
(c) Annually 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. The community benefits plan shall demonstrate alignment with the State Health Improvement Plan and the Community Health Improvement Plan for the respective local health jurisdictions.
(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 identified by the community needs assessment within its mission and financial capacity to the Department of Health Care Access and Information. The hospital shall report how its community benefits were valued, consistent with this article, and include a description of how needs identified in the assessment are being addressed and which needs are not being addressed, and why. The report shall also include the proportion and amount of community benefit spending on vulnerable populations. Each hospital shall also report why, as well as how, the community benefits plan activities address priorities in the State Health Improvement Plan. The community benefits plan shall be consistent with this article. Annually, each hospital shall file a copy of the plan with the department 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, as defined by the Department of Health Care Access and Information. 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 language.
(e) Annually submit a copy of its completed Internal Revenue Service Form 990, Schedule H, to the Department of Health Care Access and Information.

(e)

(f) Annually post its community benefits plan on its internet website.

SEC. 6.

 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, including measurable objectives that outline equity benchmarks and efforts to promote equity and reduce disparities.
(c)  Community benefits reported by categories consistent with those reported on its Internal Revenue Service Form 990, Schedule H.

SEC. 7.

 Section 127356 is added to the Health and Safety Code, to read:

127356.
 (a) No later than July 1, 2025, the Department of Health Care Access and Information shall adopt emergency regulations to implement the revisions to this article. These emergency regulations may remain in effect until January 1, 2030, at which time permanent regulations shall be adopted.
(b) The regulations shall include, but are not limited to, the following:
(1) The definition of “community,” including “affected community.”
(2) Any further definition of “community benefits.”
(3) The definition of “stakeholder,” which shall include interested parties as defined by the Department of Health Care Access and Information.
(4) Reporting requirements that shall be consistent with this article and shall, to the extent feasible, be consistent with the reporting requirements of the Internal Revenue Service Form 990, Schedule H.
(5) Any other provisions of this article the Department of Health Care Access and Information deems necessary.