BILL NUMBER: SB 346 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Wieckowski
FEBRUARY 24, 2015
An act to amend Sections 127280 and 129050 of, to add Chapter 2.6
(commencing with Section 127470) to, and to repeal Article 2
(commencing with Section 127340) of Chapter 2 of, Part 2 of Division
107 of, the Health and Safety Code, relating to health facilities.
LEGISLATIVE COUNSEL'S DIGEST
SB 346, as introduced, Wieckowski. Health facilities: community
benefits.
Existing law makes certain findings and declarations regarding the
social obligation of private nonprofit hospitals to provide
community benefits in the public interest, and requires these
hospitals, among other responsibilities, to 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. Existing law requires each private
nonprofit hospital, as defined, to complete a community needs
assessment, as defined, and to thereafter update the community needs
assessment at least once every 3 years. Existing law also requires
the hospital to file a report on its community benefits plan and the
activities undertaken to address community needs with the Office of
Statewide Health Planning and Development. Existing law requires the
statewide office to make the plans available to the public. Existing
law requires that each hospital include in its community benefits
plan measurable objectives and specific benefits.
This bill would declare the necessity of establishing uniform
standards for reporting the amount of charity care and community
benefits a facility provides to ensure that private nonprofit
hospitals and nonprofit multispecialty clinics actually meet the
social obligations for which they receive favorable tax treatment,
among other findings and declarations.
This bill would require a private nonprofit hospital and nonprofit
multispecialty clinic, as defined, to provide community benefits to
the public by allocating available community benefit moneys to
charity health care, as defined, and community building activities,
as specified. The bill would, by January 1, 2018, require a private
nonprofit hospital or nonprofit multispecialty clinic to develop, in
collaboration with the community benefits planning committee, as
established, a community health needs assessment that evaluates the
health needs and resources of the community. The bill would also
require these entities, prior to completing the needs assessment, to
develop a community benefits statement and a description of the
process for approval of the community benefits plan by the hospital's
or clinic's governing board, as specified. The bill would authorize
the hospital or clinic to create a community benefits advisory
committee for the purpose of soliciting community input. This bill
would require the hospital or clinic to make available to the public
a copy of the assessment, file the assessment with the Office of
Statewide Health Planning and Development, and update the assessment
at least every 3 years.
This bill would also require a private nonprofit hospital and
nonprofit multispecialty clinic, by April 1, 2018, to develop a
community benefits plan that includes a summary of the needs
assessment and a statement of the community health care needs that
will be addressed by the plan, and list the services, as provided,
that the hospital or clinic intends to provide in the following year
to address community health needs identified in the community health
needs assessments. The bill would require the hospital or clinic to
make its community health needs assessment and community benefits
plan or community health plan available to the public on its Internet
Web site and would require that a copy of the assessment and plan be
given free of charge to any person upon request.
This bill would require a private nonprofit hospital or nonprofit
multispecialty clinic, after April 1, 2018, every 2 years to submit a
community benefits plan to the Office of Statewide Health Planning
and Development, as specified, and would allow a hospital or clinic
under the common control of a single corporation or other entity to
file a consolidated plan, as provided. The bill would require that
the governing board of each hospital or clinic adopt the community
benefits plan and make it available to the public, as specified.
This bill would require the Office of Statewide Health Planning
and Development to develop and adopt regulations to prescribe a
standardized format for community benefits plans, as provided, to
provide technical assistance to help private nonprofit hospitals and
nonprofit multispecialty clinics exempt from licensure comply with
the community benefits provisions, to make public each community
health needs assessment and community benefits plan and any comments
received regarding those assessments and plans, to maintain a public
calendar of community benefit plan adoption meetings, and to
calculate and make public the total value of community benefits
provided by hospitals, as specified. This bill would authorize the
Office of Statewide Health Planning and Development to assess a civil
penalty, as provided, against any hospital or clinic that fails to
comply with these provisions. This bill would make conforming
changes.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 127280 of the Health and Safety Code is amended
to read:
127280. (a) Every health facility licensed pursuant to Chapter 2
(commencing with Section 1250) of Division 2, except a health
facility owned and operated by the state, shall each year be charged
a fee established by the office consistent with the requirements of
this section.
(b) Commencing in calendar year 2004, every freestanding
ambulatory surgery clinic clinic, as
defined in Section 128700, shall each year be charged a fee
established by the office consistent with the requirements of this
section.
(c) The fee structure shall be established each year by the office
to produce revenues equal to the appropriation made in the annual
Budget Act or another statute to pay for the functions required to be
performed by the office pursuant to this chapter, Article 2
Chapter 2.6 (commencing with Section
127340) of Chapter 2, 127470), or Chapter 1
(commencing with Section 128675) of Part 5, and to pay for any other
health-related programs administered by the office. The fee shall be
due on July 1 and delinquent on July 31 of each year.
(d) The fee for a health facility that is not a hospital, as
defined in subdivision (c) of Section 128700, shall be not more than
0.035 percent of the gross operating cost of the facility for the
provision of health care services for its last fiscal year that ended
on or before June 30 of the preceding calendar year.
(e) The fee for a hospital, as defined in subdivision (c) of
Section 128700, shall be not more than 0.035 percent of the gross
operating cost of the facility for the provision of health care
services for its last fiscal year that ended on or before June 30 of
the preceding calendar year.
(f) (1) The fee for a
freestanding ambulatory surgery clinic shall be established at an
amount equal to the number of ambulatory surgery data records
submitted to the office pursuant to Section 128737 for encounters in
the preceding calendar year multiplied by not more than fifty cents
($0.50).
(2) (A) For the calendar year 2004 only, a freestanding ambulatory
surgery clinic shall estimate the number of records it will file
pursuant to Section 128737 for the calendar year 2004 and shall
report that number to the office by March 12, 2004. The estimate
shall be as accurate as possible. The fee in the calendar year 2004
shall be established initially at an amount equal to the estimated
number of records reported multiplied by fifty cents ($0.50) and
shall be due on July 1 and delinquent on July 31, 2004.
(B) The office shall compare the actual number of records filed by
each freestanding clinic for the calendar year 2004 pursuant to
Section 128737 with the estimated number of records reported pursuant
to subparagraph (A). If the actual number reported is less than the
estimated number reported, the office shall reduce the fee of the
clinic for calendar year 2005 by the amount of the difference
multiplied by fifty cents ($0.50). If the actual number reported
exceeds the estimated number reported, the office shall increase the
fee of the clinic for calendar year 2005 by the amount of the
difference multiplied by fifty cents ($0.50) unless the actual number
reported is greater than 120 percent of the estimated number
reported, in which case the office shall increase the fee of the
clinic for calendar year 2005 by the amount of the difference, up to
and including 120 percent of the estimated number, multiplied by
fifty cents ($0.50), and by the amount of the difference in excess of
120 percent of the estimated number multiplied by one dollar ($1).
(g) There is hereby established the California Health Data and
Planning Fund within the office for the purpose of receiving and
expending fee revenues collected pursuant to this chapter.
(h) Any amounts raised by the collection of the special fees
provided for by subdivisions (d), (e), and (f) that are not required
to meet appropriations in the Budget Act for the current fiscal year
shall remain in the California Health Data and Planning Fund and
shall be available to the office in succeeding years when
appropriated by the Legislature in the annual Budget Act or another
statute, for expenditure under the provisions of this chapter,
Article 2 Chapter 2.6 (commencing with
Section 127340) of Chapter 2, 127470),
and Chapter 1 (commencing with Section 128675) of Part 5, or for any
other health-related programs administered by the office, and shall
reduce the amount of the special fees that the office is authorized
to establish and charge.
(i) (1) No health facility liable for the payment of fees required
by this section shall be issued a license or have an existing
license renewed unless the fees are paid. A new, previously
unlicensed, health facility shall be charged a pro rata fee to be
established by the office during the first year of operation.
(2) The license of any health facility, against which the fees
required by this section are charged, shall be revoked, after notice
and hearing, if it is determined by the office that the fees required
were not paid within the time prescribed by subdivision (c).
(j) This section shall become operative on January 1, 2002.
SEC. 2. Article 2 (commencing with Section 127340) of Chapter 2 of
Part 2 of Division 107 of the Health and Safety Code is repealed.
SEC. 3. Chapter 2.6 (commencing with Section 127470) is added to
Part 2 of Division 107 of the Health and Safety Code, to read:
CHAPTER 2.6. COMMUNITY BENEFITS
Article 1. Hospital Community Benefits
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 may not define its service area to
exclude 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,
particularly for people who are uninsured, underserved, or members of
a vulnerable population. Community benefits include, but are not
limited to, charity care, the cost of community building activities,
the cost of community health improvement services and community
benefit operations, the cost of school health centers, as defined in
Section 124174, the cost of health professions education and training
provided without charge to community members or participants,
subsidized health services for vulnerable populations, research, and
contributions to community groups, vaccination programs and services
for low-income families, chronic illness prevention programs and
services, home-based health care programs for low-income families, or
community-based mental health and outreach and assessment programs
for low-income families. For purposes of this subparagraph,
"low-income families" means families or individuals with income less
than or equal to 350 percent of the federal poverty level.
(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, 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 mean the unreimbursed cost of
providing services to those enrolled in Medi-Cal, Medicare,
California Children's Services Program, or county indigent programs
or any goods, services, activities, programs, or other resources
program or activity for which there is direct offsetting revenue.
(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) "Discounted care" means the cost for medical care provided
consistent with Article 1 (commencing with Section 127400) of Chapter
2.5.
(e) (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.
(f) "Nonprofit multispecialty clinic" means a clinic as described
in subdivision (l) of Section 1206.
(g) "Office" means the Office of Statewide Health Planning and
Development.
(h) "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.
(i) "Underserved and 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.
(2) A population, including, but not limited to, the following:
(A) Individuals with low educational attainment as measured by the
percentage of the population over 25 years of age with less than a
high school diploma.
(B) Individuals who suffer from linguistic isolation as measured
by the percentage of households in which no one who is 14 years of
age or older speaks English with greater than elementary proficiency.
(3) A population that meets the definition of disadvantaged
community pursuant to Section 39711.
(4) Other populations that are specifically identified in the
community health needs assessment required pursuant to Section
127475.
Article 2. Community Benefits Statement, Community Health
Needs Assessment, and Community Benefits Plan
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 available community benefit
moneys 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 available community benefit
moneys shall be allocated to community building activities
geographically located within underserved and vulnerable populations.
(c) To meet the requirements of subdivisions (a) and (b), moneys
shall be used 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 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. 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
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, Medicare shortfalls, Medi-Cal
shortfalls, and shortfalls from any other public program. Reporting
bad debts, Medicare shortfalls, Medi-Cal shortfalls, and other
shortfalls from any other public program 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
available to the public and to the office, in a printed copy and on
its Internet Web site, both of the following:
(1) A draft of its community benefits plan.
(2) 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, 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 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.
Article 3. Duties of the Office of Statewide Health Planning
and Development
127487. (a) (1) The office shall develop and adopt regulations to
prescribe a standardized format for community benefits plans
pursuant to this chapter.
(2) The office shall develop a standardized methodology for
estimating the economic value of community benefits.
(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.
SEC. 4. Section 129050 of the Health and Safety Code is amended to
read:
129050. A loan shall be eligible for insurance under this chapter
if all of the following conditions are met:
(a) The loan shall be secured by a first mortgage, first deed of
trust, or other first priority lien on a fee interest of the borrower
or by a leasehold interest of the borrower having a term of at least
20 years, including options to renew for that duration, longer than
the term of the insured loan. The security for the loan shall be
subject only to those conditions, covenants and restrictions,
easements, taxes, and assessments of record approved by the office,
and other liens securing debt insured under this chapter. The office
may require additional agreements in security of the loan.
(b) The borrower obtains an American Land Title Association title
insurance policy with the office designated as beneficiary, with
liability equal to the amount of the loan insured under this chapter,
and with additional endorsements that the office may reasonably
require.
(c) The proceeds of the loan shall be used exclusively for the
construction, improvement, or expansion of the health facility, as
approved by the office under Section 129020. However, loans insured
pursuant to this chapter may include loans to refinance another prior
loan, whether or not state insured and without regard to the date of
the prior loan, if the office determines that the amount refinanced
does not exceed 90 percent of the original total construction costs
and is otherwise eligible for insurance under this chapter. The
office may not insure a loan for a health facility that the office
determines is not needed pursuant to subdivision (k).
(d) The loan shall have a maturity date not exceeding 30 years
from the date of the beginning of amortization of the loan, except as
authorized by subdivision (e), or 75 percent of the office's
estimate of the economic life of the health facility, whichever is
the lesser.
(e) The loan shall contain complete amortization provisions
requiring periodic payments by the borrower not in excess of its
reasonable ability to pay as determined by the office. The office
shall permit a reasonable period of time during which the first
payment to amortization may be waived on agreement by the lender and
borrower. The office may, however, waive the amortization
requirements of this subdivision and of subdivision (g) of this
section when a term loan would be in the borrower's best interest.
(f) The loan shall bear interest on the amount of the principal
obligation outstanding at any time at a rate, as negotiated by the
borrower and lender, as the office finds necessary to meet the loan
money market. As used in this chapter, "interest" does not include
premium charges for insurance and service charges if any. Where a
loan is evidenced by a bond issue of a political subdivision, the
interest thereon may be at any rate the bonds may legally bear.
(g) The loan shall provide for the application of the borrower's
periodic payments to amortization of the principal of the loan.
(h) The loan shall contain those terms and provisions with respect
to insurance, repairs, alterations, payment of taxes and
assessments, foreclosure proceedings, anticipation of maturity,
additional and secondary liens, and other matters the office may in
its discretion prescribe.
(i) The loan shall have a principal obligation not in excess of an
amount equal to 90 percent of the total construction cost.
(j) The borrower shall offer reasonable assurance that the
services of the health facility will be made available to all persons
residing or employed in the area served by the facility.
(k) The office has determined that the facility is needed by the
community to provide the specified services. In making this
determination, the office shall do all of the following:
(1) Require the applicant to describe the community needs the
facility will meet and provide data and information to substantiate
the stated needs.
(2) Require the applicant, if appropriate, to demonstrate
participation in the community needs assessment required by Section
127350. 127476.
(3) Survey appropriate local officials and organizations to
measure perceived needs and verify the applicant's needs assessment.
(4) Use any additional available data relating to existing
facilities in the community and their capacity.
(5) Contact other state and federal departments that provide
funding for the programs proposed by the applicant to obtain those
departments' perspectives regarding the need for the facility.
Additionally, the office shall evaluate the potential effect of
proposed health care reimbursement changes on the facility's
financial feasibility.
(6) Consider the facility's consistency with the Cal-Mortgage
state plan.
( l ) In the case of acquisitions, a project loan shall
be guaranteed only for transactions not in excess of the fair market
value of the acquisition.
Fair market value shall be determined, for purposes of this
subdivision, pursuant to the following procedure, that shall be
utilized during the office's review of a loan guarantee application:
(1) Completion of a property appraisal by an appraisal firm
qualified to make appraisals, as determined by the office, before
closing a loan on the project.
(2) Evaluation of the appraisal in conjunction with the book value
of the acquisition by the office. When acquisitions involve
additional construction, the office shall evaluate the proposed
construction to determine that the costs are reasonable for the type
of construction proposed. In those cases where this procedure reveals
that the cost of acquisition exceeds the current value of a
facility, including improvements, then the acquisition cost shall be
deemed in excess of fair market value.
(m) Notwithstanding subdivision (i), any loan in the amount of ten
million dollars ($10,000,000) or less may be insured up to 95
percent of the total construction cost.
In determining financial feasibility of projects of counties
pursuant to this section, the office shall take into consideration
any assistance for the project to be provided under Section 14085.5
of the Welfare and Institutions Code or from other sources. It is the
intent of the Legislature that the office endeavor to assist
counties in whatever ways are possible to arrange loans that will
meet the requirements for insurance prescribed by this section.
(n) The project's level of financial risk meets the criteria in
Section 129051.