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AB-1204 Hospital equity reporting.(2021-2022)



Current Version: 04/15/21 - Amended Assembly Compare Versions information image


AB1204:v97#DOCUMENT

Amended  IN  Assembly  April 15, 2021
Amended  IN  Assembly  April 05, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1204


Introduced by Assembly Member Wicks
(Coauthor: Assembly Member Aguiar-Curry)

February 19, 2021


An act to amend Section 127345 of, and to add Article 3 (commencing with Section 127370) to Chapter 2 of Part 2 of Division 107 of, the Health and Safety Code, relating to hospitals.


LEGISLATIVE COUNSEL'S DIGEST


AB 1204, as amended, Wicks. Hospital equity reporting.
Existing law establishes the Office of Statewide Health Planning and Development (OSHPD) to oversee various aspects of the health care market, including oversight of hospital facilities and community benefit 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 “vulnerable populations” for these purposes to mean 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. Existing law requires a hospital to annually submit its community benefits plan to OSHPD not later than 150 days after the hospital’s fiscal year ends.
This bill would add racial and ethnic groups experiencing disparate health outcomes and socially disadvantaged groups to the definition of “vulnerable populations” for community benefits reporting purposes.
This bill would require a hospital or medical group to prepare and annually submit an equity report to OSHPD not later than 150 days after its fiscal year ends. The bill would require an equity report to include, among other things, analyses of access to care and employment disparities and plans for addressing those disparities. The bill would authorize OSHPD to impose a fine not to exceed $5,000 per day against a hospital or medical group that fails to adopt, update, or submit an equity report, and would require OSHPD to list those that failed to submit an equity report on its internet website.
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.
(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.
(c) “Community” means 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 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.
(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.
(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 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 disparate 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.

SEC. 2.

 Article 3 (commencing with Section 127370) is added to Chapter 2 of Part 2 of Division 107 of the Health and Safety Code, to read:
Article  3. The Medical Equity Disclosure Act

127370.
 The Legislature finds and declares all of the following:
(a) The COVID-19 health emergency has thrown into sharp relief longstanding health inequities along racial, ethnic, and socioeconomic lines. Black, Hispanic, and Indigenous people have been disproportionately affected during the pandemic; for example, the age-adjusted mortality rate among Black people with COVID-19 is more than three times as high as that of Whites.
(b) Disparities in access to care and quality of care contribute to racial health disparities. The disparate impact of the pandemic has highlighted the tiered nature of the current health care system, a structure that significantly impacts the quality of care patients receive along racial, ethnic, and socioeconomic lines.
(c) Reporting on the racially disproportionate impact of COVID-19 has called attention to the need for further data on racial and ethnic disparities in health care.
(d) Data currently reported by California hospitals that could be used to analyze access to and quality of care by age, sex, race, ethnicity, language, disability status, sexual orientation, gender identity, and socioeconomic status is not available to consumers or the general public. Meanwhile, there is little transparency into potential disparities in access to care and quality of care for medical groups.
(e) Although nonprofit hospitals are currently required to develop and report on their community benefits plans to provide services to vulnerable populations in their service areas, the law should be updated to ensure that the needs of vulnerable populations, including racial and ethnic groups experiencing disparate health outcomes and socially disadvantaged groups, are specifically considered and addressed.
(f) All California health systems and large physician providers, whether operated as nonprofit or for-profit, and by a county, the University of California, or other governmental entity, should systematically collect and publish racial and ethnic data for a range of standard access, quality, and outcome measures, as well as their processes to overcome biases in the provision of and access to health care services.
(g) The Agency for Healthcare Research and Quality (AHRQ) Quality Indicators (QIs) are standardized, evidence-based measures of health care access and quality that are readily used with hospital inpatient administrative data for all payor categories to measure and track clinical performance and outcomes. The four areas for which AHRQ has developed indicators focus on adult prevention, pediatric prevention, inpatient quality, and patient safety. The state has used these indicators in the past to explore racial and ethnic disparities at an aggregate level.
(h) The National Committee for Quality Assurance (NCQA) Healthcare Effectiveness Data and Information Set (HEDIS) is a widely used set of performance measures in the managed care industry across all payor categories. HEDIS incorporated physician-level measures in 2006. HEDIS measures of physician quality examine effectiveness of care, access to care, and service use, and can be used to assess access and quality at the individual, practice, or medical group level for both adult and pediatric populations.
(i) The dearth of racially and ethnically disaggregated data reflecting the health of communities of color underlies the challenges of a fully informed public health response, and is a matter of statewide concern. It will benefit the state’s public health response for hospitals, health systems, and medical groups to share information with the state, consumers, and the public using the standardized AHRQ QIs and NCQA HEDIS measures, as it will facilitate input by affected communities into addressing longstanding racial, ethnic, and socioeconomic health disparities, and thereby contribute to well-informed health policy.
(j) In addition, health systems and large medical groups must examine and address the ways in which they contribute to racial health inequities beyond health care provision in their own workforces. This is especially true given 45 percent of the direct care workforce comprises is composed of Black and Indigenous women and women of color. It is the policy of the State of California to promote an equitable and inclusive health care workforce. It will serve this policy for health systems and medical groups to disclose data on employment and pay disparities, and to develop and share publicly their plans for addressing those employment disparities.
(k) Facilitating the public sharing of data on health care disparities will assist the state and civil rights advocates in enforcing existing civil rights laws, including Section 11135 of the Government Code, the Unruh Civil Rights Act (Section 51 of the Civil Code), Title VI of the Civil Rights Act of 1964 (Public Law 88-352), and Section 1557 of the Patient Protection and Affordable Care Act (Public Law 111-148).

127371.
 As used in this article:
(a) “Equity report” means a written document prepared for annual submission to the Office of Statewide Health Planning and Development pursuant to this article.
(b) “Hospital” means an acute hospital licensed pursuant to subdivision (a), (b), or (f) of Section 1250.
(c) “Hospital system” means an entity or system of entities that includes or owns two 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.
(d) “Integrated system” means an entity or system of entities that includes one or more hospitals and is related to one or more hospitals, health plans, or physician groups through parent-subsidiary relationships, contractual relationships, or common boards and shared senior management.
(e) “Medical group” means medical offices with more than 300 physicians, professional medical corporations with more than 300 physicians, medical partnerships with more than 300 physicians, and medical foundations with more than 300 physicians.
(f) “Patient population” means all of the people served by a provider.
(g) “Provider” means a hospital or medical group.
(h) “Vulnerable populations” includes both of the following:
(1) Racial and ethnic groups experiencing disparate 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.

127372.
 (a) A provider shall prepare an annual equity report. The equity report shall include an analysis of health status and access to care disparities for patients on the basis of age, sex, race, ethnicity, language, disability status, sexual orientation, gender identity, and payor, an analysis of employment disparities for the provider’s employees on the basis of race, ethnicity, and gender, and plans for addressing those health care and employment disparities.
(b) (1) The annual equity report submitted by a hospital shall report on the Agency for Healthcare Research and Quality’s Quality Indicators, including measures of access, quality, and outcomes by age, sex, race, ethnicity, language, disability status, sexual orientation, gender identity, and payor for the hospital’s patient populations. The equity report shall also include a plan to address any disparity identified in the data, with measurable objectives and specific timeframes.
(2) A hospital system with more than one hospital shall present the information in the equity report disaggregated at the individual hospital level and aggregated across all hospitals in the system.
(c) (1) The annual equity report submitted by a medical group shall report on the National Committee for Quality Assurance’s Healthcare Effectiveness Data and Information Set and Major Physician Measure Set, including measures of access, quality, and outcomes by age, sex, race, ethnicity, language, disability status, sexual orientation, gender identity, and payor for the medical group’s patient populations. The equity report shall also include a plan to address any disparity identified in the data, with measurable objectives and specific timeframes.
(2) A medical group with more than one location where patients are seen shall present the information disaggregated at the county level and aggregated across all locations where patients are seen. If a medical group has locations in the County of Los Angeles, the medical group shall further disaggregate information at the Service Planning Area level, as established by the County of Los Angeles.
(3) A medical group composed primarily of emergency physicians shall not be required to prepare or submit an annual equity report for patients treated in the emergency department of a general acute care hospital that are required to be covered by a hospital’s equity report, if the emergency physician provided services only in the emergency department.
(d) The equity report for a provider subject to Section 12999 of the Government Code shall include both of the following:
(1) A copy of the most recent pay data report prepared pursuant to Section 12999 of the Government Code.
(2) A plan to improve equity and diversity of staff and management, taking into account the data from the report prepared pursuant to Section 12999 of the Government Code.

127373.
 (a) A provider shall do all of the following with respect to an equity report prepared pursuant to Section 127372:
(1) Include in the equity report an explanation of the methodology used, written in plain English.
(2) Annually submit the equity report to the Office of Statewide Health Planning and Development. A provider shall file a copy of the report and its underlying data with the office not later than 150 days after the provider’s fiscal year ends.
(3) Annually post the equity report on the provider’s internet website. The report shall be available via a link that includes the words “Equity Report” or a substantially similar term, which shall be visible on the main page of the provider’s internet website as loaded by a standard internet browser in an easily readable font size without having to scroll down.
(b) A provider under the common control of a single corporation or another entity may file a consolidated equity report if the report includes each provider’s equity data.
(c) Providers that are part of an integrated system may prepare and submit a single joint equity report if the report separately addresses each provider’s equity analysis.

127374.
 (a) The Office of Statewide Health Planning and Development may impose a fine not to exceed five thousand dollars ($5,000) per day against a provider that fails to adopt, update, or submit an equity report consistent with this article and any implementing regulations adopted by the office.
(b) The office may grant a provider an automatic 60-day extension to submit an equity report.
(c) The office shall annually prepare, and post on its internet website, a report that includes a list of all providers that failed to submit equity reports.
(d) The office shall make all equity reports submitted pursuant to this article available to the public on its internet website.
(e) Data and information made public by the office shall be disclosed in a manner that protects the personal information of patients pursuant to state and federal privacy laws, including the Confidentiality of Medical Information Act (Part 2.6 (commencing with Section 56) of Division 1 of the Civil Code) and the federal Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191).

127375.
 The Office of Statewide Health Planning and Development shall adopt any rules, regulations, or informal guidance necessary to further the objectives of this article.

SEC. 3.

 The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.