BILL NUMBER: AB 1046 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 7, 2015
INTRODUCED BY Assembly Member Dababneh
FEBRUARY 26, 2015
An act to amend Sections 127340, 127345, 127350, and
127355 and 127360 of, and to
add Section 127365 to, to repeal Section 127355 of, and to
repeal and add Section 127350 of, the Health and Safety Code,
relating to hospitals.
LEGISLATIVE COUNSEL'S DIGEST
AB 1046, as amended, Dababneh. Hospitals: community benefits.
Existing law requires certain private not-for-profit acute
hospitals to, every 3 years, complete a community needs assessment,
as defined, and to annually adopt and update a community benefits
plan, as defined. Existing law exempts certain hospitals from these
provisions, including small and rural hospitals. Existing law
requires a hospital to file a report on its community benefits plan
and the activities undertaken to address community needs with the
Statewide Office of Health Planning and Development. Existing law
requires the office to make those reports available to the public.
This bill would revise and recast these provisions to, among other
things, make changes to specify the
elements that are required to be included in a community
benefits plan health needs assessment (CHNA) report,
which would replace the community benefits plan, and delete the
exemption from these requirements for small and rural hospitals. The
bill would instead require a hospital to adopt a community
benefits plan the CHNA report every 3 years, and
to submit an update of the activities conducted under the
plan report to the office annually. The bill
would require the office to post on its Internet Web site
the updates to community benefits plans received by the office from
each hospital. The bill would require a hospital to make updates to
its community benefits plan available to the public, upon request, at
no charge. CHNA report to be widely available to the
public, as prescribed.
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 127340 of the Health and Safety Code is amended
to read:
127340. The Legislature finds and declares all of the following:
(a) Private not-for-profit hospitals meet certain health needs of
their communities through the provision of essential health care and
other services. Public recognition of their unique status has led to
favorable tax treatment by the government. In exchange, nonprofit
hospitals assume a social obligation , inherent in their
missions, to provide community benefits in the public interest.
(b) Hospitals and the environment in which they operate have
undergone dramatic changes. The pace of change will accelerate in
response to health care reform. In light of this, significant public
benefit would be derived if private not-for-profit hospitals reviewed
and reaffirmed periodically their commitment to assist in meeting
their communities' health needs by identifying and documenting
benefits provided to the communities which they serve.
(c) California's private not-for-profit hospitals provide a wide
range of benefits to their communities in addition to those reflected
in the financial data reported to the state.
These benefits include, but are not limited to, all of the
following:
(1) Community health services that may include community health
education, community-based clinical services, health care support
services, and social or environmental services.
(2) Health professions education.
(3) Subsidized health services, including, but not limited to,
emergency and trauma, neonatal intensive care, burn and special care
units, women and children's services, renal services, hospice, home
care, adult day care, behavioral health care services, and palliative
care.
(4) Research in clinical care, community health, and general
studies, including health care delivery.
(5) Financial and in-kind contributions, including grants or other
funds to not-for-profit health care organizations improving
community health needs.
(6) Administrative and operational costs associated with
conducting community health needs assessments and implementing and
evaluating community benefits plans.
(d) Direct provision of health goods and services or partnerships
to enhance the provision of health goods and services, as well as
preventive programs, should be emphasized by hospitals in the
development of community benefits plans.
(b) California's private not-for-profit hospitals provide a wide
range of benefits to their communities, in addition to those
reflected in the financial data reported to the state in the form of
community benefits. These contributions seek to achieve a community
benefit objective, including improving access to health services,
enhancing public health, advancing increased general knowledge, and
relief of a government burden to improve health. This includes, but
is not limited to, programs or activities that meet the following
requirements:
(1) Are available broadly to the public and serve low-income
consumers.
(2) Reduce geographic, financial, or cultural barriers to
accessing health services, which, if they ceased, would result in
access problems, including, but not limited to, longer wait times or
increased travel distances.
(3) Address federal, state, or local public health priorities,
such as eliminating disparities in access to health care services or
disparities in health status among different populations.
(4) Leverage or enhance public health department activities, such
as childhood immunization efforts.
(5) Strengthen community health resilience by improving the
ability of a community to withstand and recover from public health
emergencies.
(6) Otherwise would become the responsibility of the government or
another tax-exempt organization.
(7) Advance increased general knowledge through education or
research that benefits the public.
SEC. 2. 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) "Community benefits plan" means a written document 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 health needs within its mission and financial capacity, and
the process by which the hospital developed the plan in consultation
with the community.
(b) "Community" means the service areas or patient populations for
which the hospital provides health care services.
(c) Solely for the planning and reporting purposes of this
article, "community benefit" means a hospital's activities that are
intended to address community health needs and priorities primarily
through disease prevention and improvement of health status,
including, but not limited to, any of the following:
(1) 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, county indigent programs, or other
means-tested government programs.
(2) The unreimbursed cost of services included in subdivision (d)
of Section 127340.
(3) Financial or in-kind support of public health programs.
(4) Donation of funds, property, or other resources that
contribute to community health improvement.
(5) Health care cost containment.
(6) Enhancement of access to health care or related services that
contribute to community health improvement.
(7) Services offered without regard to financial return because
they meet a community health need in the service area of the
hospital, and other services including health promotion, health
education, research, prevention, and social services.
(8) Food, shelter, clothing, education, transportation, and other
goods or services that help community health improvement.
(a) "Authorized body of a hospital facility" means either of the
following:
(1) The governing body, including the board of directors, board of
trustees, or equivalent controlling body, of the hospital
organization that operates the hospital facility, or a committee of,
or other party authorized by, that governing body, to the extent that
committee or other party is permitted under state law to act on
behalf of the governing body.
(2) The governing body of an entity that is regarded or treated as
a partnership for federal tax purposes that operates the hospital
facility or a committee of, or other party authorized by, that
governing body, to the extent that committee or other party is
permitted under state law to act on behalf of the governing body.
(b) "Cash and in-kind contribution" means contributions made by
the organization to health care organizations and other community
groups for one or more of the community benefit activities.
(c) "Charity care" means free or discounted health services
provided 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 recorded at cost. Charity care
does not include bad debt or uncollectible charges that the
organization recorded as revenue but wrote off due to a patient's
failure to pay.
(d) "Community benefits" includes, but is not limited to, any of
the following:
(1) The unpaid cost of charity care and other financial
assistance.
(2) The unpaid cost of government-sponsored health care programs,
including, but not limited to all of the following:
(A) Medicare.
(B) Medicaid, including the Medi-Cal program.
(C) State Children's Insurance Program.
(D) State or local medically indigent programs.
(E) Other means-tested government programs.
(3) The cost of community benefit programs and activities,
including, but not limited to, the following:
(A) Community health improvement services.
(B) Health professions education.
(C) Subsidized health services.
(D) Research.
(E) Cash and in-kind contributions.
(F) Community building activities.
(G) Community benefit operations.
(e) "Community benefit operations" means activities associated
with conducting community health needs assessments, community benefit
program administration, and the organization's activities associated
with fundraising or grant-writing for community benefit programs.
Activities or programs cannot be reported if they are provided
primarily for marketing purposes or if they are more beneficial to
the organization than to the community.
(f) "Community building activities" includes, but is not limited
to, all of the following:
(1) Physical improvements and housing, which may include the
provision or rehabilitation of housing for vulnerable populations.
(2) Economic development, which may include assisting small
business development in neighborhoods with vulnerable populations and
creating new employment opportunities in areas with high rates of
joblessness.
(3) Community support, which may include child care and mentoring
programs for vulnerable populations or neighborhoods, neighborhood
support groups, violence prevention programs, and disaster readiness
and public health emergency activities.
(4) Environmental improvements, which may include activities to
address environmental hazards that affect community health, such as
alleviation of water or air pollution, safe removal or treatment of
garbage or other waste products, and other activities to protect the
community from environmental hazards.
(5) Leadership development and training for community members,
which may include training in conflict resolution, civic, cultural,
or language skills, and medical interpreter skills for community
residents.
(6) Coalition building, which may include participation in
community coalitions and other collaborative efforts with the
community to address health and safety issues.
(7) Community health improvement advocacy, which may include
efforts to support policies and programs to safeguard or improve
public health, access to health care services, housing, the
environment, and transportation.
(8) Workforce development, which may include recruitment of
physicians and other health professionals to medical shortage areas
or other areas designated as underserved, and collaboration with
educational institutions to train and recruit health professionals
needed in the community.
(9) Other community building activities that protect or improve
the community's health or safety that are not described in the
categories listed in paragraphs (1) to (8), inclusive.
(g) "Community health improvement services" means activities or
programs, subsidized by the hospital, that are carried out or
supported for the express purpose of improving community health.
(d)
(h) "Community health needs assessment" means the
process by which the hospital identifies,
identifies unmet community health needs for its primary service
area , as determined by the hospital, unmet
community health needs hospital .
(e)
(i) "Community health needs" means those requisites for
improvement or maintenance of health status in the community.
(j) "Community health needs assessment report" means the written
report adopted for the hospital facility by an authorized body of the
hospital facility.
(k) "Health professions education" means educational programs that
result in a degree, certificate, or training necessary to be
licensed to practice as a health professional, as required by state
law, or continuing education necessary to retain state license or
certification by a board in the individual's health profession
specialty.
(f)
( l ) (1)
"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"
(2) "Hospital" does not include a
hospital that is dedicated to serving children and that does not
receive direct payment for services to any patient.
(g) "Mission statement" means a hospital's primary objectives for
operation as adopted by its governing body.
(m) "Implementation Strategy" means the written document prepared
for annual submission to the Office of Statewide Health Planning and
Development that describes the hospital facility's strategy to meet
the community health needs identified through the hospital facility's
community health needs assessment.
(n) "Other means-tested government programs" means
government-sponsored health programs where eligibility for benefits
or coverage is determined by income or assets, including, but not
limited to, the State Children's Health Insurance Program (SCHIP) and
the California Children's Services (CCS) Program.
(o) "Research" may include, but is not limited to, clinical
research, community health research, and generalizable studies on
health care delivery.
(p) "Subsidized health services" means clinical services provided
despite a financial loss to the organization.
(h)
(q) "Vulnerable populations"
population " means any a
population that is exposed to medical or financial risk by
virtue of being uninsured, underinsured, or eligible for Medi-Cal,
Medicare, county indigent programs, or other means-tested programs.
SEC. 3. Section 127350 of the Health and Safety
Code is amended to read:
127350. Each hospital shall do all of the following:
(a) Every three years, complete, either alone, in conjunction with
other health care providers, or through other organizational
arrangements, a community health 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 health needs that the hospital can
address directly, in collaboration with others, or through other
organizational arrangement.
(b) Following completion of the community health needs assessment
every three years, adopt a community benefits plan for providing
community benefits either alone, in conjunction with other health
care providers, or through other organizational arrangements.
(c) Annually submit an update of the activities conducted pursuant
to the community benefits plan, including, but not limited to, the
activities that the hospital has undertaken in order to address
community health needs within its mission and financial capacity, to
the Office of Statewide Health Planning and Development. The hospital
shall, to the extent practicable, assign and report the economic
value of community benefits provided in furtherance of its plan. Each
hospital shall file a copy of the update with the office not later
than 150 days after the hospital's fiscal year ends.
(d) The updates filed by the hospitals with the office shall be
made available to the public by the office, and, upon request, by the
hospital, at no charge. Hospitals under the common control of a
single corporation or another entity may file a consolidated update
of its community benefits plan.
SEC. 4. 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.
(c) Community benefits categorized into the following framework:
(1) Charity care at cost.
(2) Unreimbursed cost of Medi-Cal, Medicare, county indigent
programs, or other means-tested government programs.
(3) Community health improvement services.
(4) Health research, health professions education, and training
programs.
(5) Subsidized health services, cash, and in-kind contributions
and other benefits.
(6) Nonquantifiable benefits.
SEC. 3. Section 127350 of the Health
and Safety Code is repealed.
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) 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, to the extent practicable, assign and report the
economic value of community benefits provided in furtherance of its
plan. 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. The reports filed by the hospitals shall be made available to
the public by the office. Hospitals under the common control of a
single corporation or another entity may file a consolidated report.
SEC. 4. Section 127350 is added to the
Health and Safety Code , to read:
127350. (a) Each hospital shall assess the health needs of its
community.
(b) Each hospital shall conduct a community health needs
assessment (CHNA) every three years, as described in this
subdivision.
(1) A hospital facility shall complete all of the following steps:
(A) Define the community it serves.
(B) Assess the health needs of that community.
(C) In assessing the health needs of the community, solicit and
take into account input received from persons who represent the broad
interests of that community, including those with special knowledge
of or expertise in public health.
(D) Document the CHNA in a written report that is adopted for the
hospital facility by an authorized body of the hospital facility.
(E) Make the CHNA report widely available to the public.
(2) A hospital facility shall be considered to have conducted a
CHNA on the date it has completed all of the steps described in this
subdivision.
(3) In defining the community it serves for purposes of this
subdivision, a hospital facility may take into account all relevant
facts and circumstances, including the geographic area served by the
hospital facility, target population served, and principal functions.
A hospital facility may not define its community to exclude
medically underserved, low-income, or minority populations who live
in the geographic areas from which the hospital facility draws its
patients, unless those populations are not part of the hospital
facility's target patient population or affected by its principal
functions, or otherwise should be included based on the method the
hospital facility uses to define its community. A hospital facility
shall take into account all patients, without regard to whether or
how much they or their insurers pay for the care provided, or whether
they are eligible for assistance under the hospital facility's
charity care, discount, or other financial assistance policies.
(4) A hospital facility shall identify significant health needs of
the community, prioritize those health needs, and identify resources
potentially available to address those health needs, such as
organizations, facilities, and programs in the community, including
those of the hospital facility. A hospital facility may determine
whether a health need is significant based on all of the facts and
circumstances present in the community it serves. In addition, a
hospital facility may use any criteria to prioritize the significant
health needs it identifies, including, but not limited to, the
burden, scope, severity, or urgency of the health need; the estimated
feasibility and effectiveness of possible interventions; the health
disparities associated with the need; or the importance the community
places on addressing the need.
(5) A hospital facility shall solicit and take into account input
received from all of the following sources in identifying and
prioritizing significant health needs and in identifying resources
potentially available to address those health needs:
(A) At least one state, local, tribal, or regional governmental
public health department or equivalent department or agency, or a
State Office of Rural Health described in Section 338J of the Public
Health Service Act (42 U.S.C. Sec. 254r), with knowledge,
information, or expertise relevant to the health needs of that
community.
(B) Members of medically underserved, low-income, and minority
populations in the community served by the hospital facility, or
individuals or organizations serving or representing the interests of
those populations. For purposes of this paragraph, medically
underserved populations include populations experiencing health
disparities or at risk of not receiving adequate medical care, as a
result of being uninsured or underinsured or due to geographic,
language, financial, or other barriers.
(C) Written comments received on the hospital facility's most
recently conducted CHNA and most recently adopted implementation
strategy.
(6) A hospital facility may solicit and take into account input
received from a broad range of persons located in or serving its
community, including, but not limited to, health care consumers and
consumer advocates, nonprofit and community-based organizations,
academic experts, local government officials, local school districts,
health care providers and community health centers, health insurance
and managed care organizations, private businesses, and labor and
workforce representatives.
(7) The CHNA report adopted pursuant to subdivision (c) shall
include all of the following:
(A) A definition of the community served by the hospital facility
and a description of how the community was determined.
(B) A description of the process and methods used to conduct the
CHNA, that describes the data and other information used in the
assessment, as well as the methods of collecting and analyzing this
data and information, and identifies any parties with whom the
hospital facility collaborated, or with whom it contracted for
assistance, in conducting the CHNA.
(C) A description of how the hospital facility solicited and took
into account input received from persons who represent the broad
interests of the
community it serves. This requirement shall be fulfilled if the
report summarizes, in general terms, any input provided by persons
who represent the broad interests of the community it serves and how
and over what time period that input was provided; provides the names
of any organizations providing input and summarizes the nature and
extent of the organization's input; and describes the medically
underserved, low-income, or minority populations being represented by
organizations or individuals that provided input. A CHNA report does
not need to name or otherwise identify specific individual providing
input. In the event a hospital facility solicits, but cannot obtain,
input from a source described in this section, the CHNA report shall
describe the hospital facility's efforts to solicit input from that
source.
(D) A prioritized description of the significant health needs of
the community identified through the CHNA, along with a description
of the process and criteria used in identifying certain health needs
as significant and prioritizing those significant health needs.
(E) A description of the resources potentially available to
address the significant health needs identified through the CHNA.
(F) An evaluation of the impact of any actions that were taken
since the hospital facility finished conducting its immediately
preceding CHNA, to address the significant health needs identified in
the hospital facility's prior CHNA.
(8) While a hospital facility may conduct its CHNA in
collaboration with other organizations and facilities, including, but
not limited to, related and unrelated hospital organizations and
facilities, for-profit and government hospitals, governmental
departments, and nonprofit organizations, every hospital facility
shall document the information described in this paragraph in a
separate CHNA report unless it adopts a joint CHNA report as
described in subdivision (b). If a hospital facility is collaborating
with other facilities and organizations in conducting its CHNA, or
if another organization has conducted a CHNA for all or part of the
hospital facility's community, portions of the hospital facility's
CHNA report may be substantively identical to portions of a CHNA
report of a collaborating hospital facility or other organization
conducting a CHNA, if appropriate under the facts and circumstances.
(c) An authorized body of the hospital facility shall adopt the
implementation strategy to meet the community health needs identified
through the CHNA.
(d) A hospital facility that collaborates with other hospital
facilities or other organizations in conducting its CHNA shall
satisfy this section if an authorized body of the hospital facility
adopts for the hospital facility a joint CHNA report produced for the
hospital facility and one or more of the collaborating facilities
and organizations, provided that the following conditions are met:
(1) The joint CHNA report meets the requirements of this section.
(2) The joint CHNA report is clearly identified as applying to the
hospital facility.
(3) All of the collaborating hospital facilities and organizations
included in the joint CHNA report define their community to be the
same.
(e) A hospital facility's CHNA report is made widely available to
the public only if the hospital facility does both of the following:
(1) Makes the current and prior CHNA reports widely available on
an Internet Web site.
(2) Makes a paper copy of the current and prior CHNA report
available for public inspection upon request and without charge.
(f) (1) A hospital's implementation strategy shall do either of
the following:
(A) Describe how the hospital facility plans to address the health
need by describing the actions the hospital facility intends to take
to address the health need and the anticipated impact of these
actions; identifying the resources the hospital facility plans to
commit to address the health need, reported in the categories
outlined in subdivision (d) of Section 127345; and describing planned
collaboration between the hospital facility and other facilities or
organizations in addressing the health need.
(B) Identify the health need as one the hospital facility does not
intend to address, and explain why the hospital facility does not
intend to address the health need. In explaining why it does not
intend to address a significant health need, a brief explanation of
the hospital facility's reason for not addressing the health need is
sufficient.
(2) A hospital facility may develop an implementation strategy in
collaboration with other hospital facilities or other organizations,
including, but not limited to, related and unrelated hospital
organizations and facilities, for-profit and government hospitals,
governmental entities, and nonprofit organizations. Unless otherwise
authorized by law, a hospital facility that collaborates with other
facilities or organizations in developing its implementation strategy
shall still document its implementation strategy in a separate
written plan that is tailored to the particular hospital facility,
taking into account its specific resources.
(3) An authorized body of the hospital facility shall adopt the
implementation strategy on or before the 15th day of the fifth month
after the end of the taxable year in which the hospital facility
completes the final step for the CHNA.
(4) A hospital facility shall annually submit an update on
activities related to the implementation strategy to the office, not
later than 150 days after the hospital's fiscal year ends. Hospitals
under the common control of a single corporation or another entity
may file a consolidated report.
SEC. 5. Section 127355 of the Health
and Safety Code is repealed.
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.
(c) Community benefits categorized into the following framework:
(1) Medical care services.
(2) Other benefits for vulnerable populations.
(3) Other benefits for the broader community.
(4) Health research, education, and training programs.
(5) Nonquantifiable benefits.
SEC. 6. Section 127360 of the Health
and Safety Code is amended to read:
127360. Nothing in this article shall be construed to authorize
or require specific formats for hospital needs assessments, community
benefit plans, or reports until recommendations pursuant to former
Section 127365, as added by Chapter 1023 of the Statutes of 1996, are
considered and enacted by the Legislature.
Nothing in this article shall
127360. This article shall not be used to
justify the tax-exempt status of a hospital under state law.
Nothing in this article shall This article shall not
preclude the office from requiring hospitals to directly report
their charity activities.
SEC. 5. SEC. 7. Section 127365 is
added to the Health and Safety Code, to read:
127365. The Office of Statewide Health Planning and Development
shall do all of the following:
(a) Post on its Internet Web site the community benefits
plans and implementation strategy updates that
are submitted to the office pursuant to subdivision (b) or
(c) (f) of Section 127350 within 120 days of
receipt of those plans or updates.
(b) Identify on its Internet Web site any hospital that did not
file an update of its community benefits plan
implementation strategy on a timely basis.