Senate BillNo. 346


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:

P3    1

SECTION 1.  

Section 127280 of the Health and Safety Code
2 is amended to read:

3

127280.  

(a) Every health facility licensed pursuant to Chapter
42 (commencing with Section 1250) of Division 2, except a health
5facility owned and operated by the state, shall each year be charged
6a fee established by the office consistent with the requirements of
7this section.

8(b) Commencing in calendar year 2004, every freestanding
9ambulatory surgerybegin delete clinicend deletebegin insert clinic,end insert as defined in Section 128700,
10shall each year be charged a fee established by the office consistent
11with the requirements of this section.

12(c) The fee structure shall be established each year by the office
13to produce revenues equal to the appropriation made in the annual
14Budget Act or another statute to pay for the functions required to
15be performed by the office pursuant to this chapter,begin delete Article 2end delete
16begin insert Chapter 2.6end insert (commencing with Sectionbegin delete 127340) of Chapter 2,end delete
17begin insert 127470),end insert or Chapter 1 (commencing with Section 128675) of Part
185, and to pay for any other health-related programs administered
19by the office. The fee shall be due on July 1 and delinquent on
20July 31 of each year.

P4    1(d) The fee for a health facility that is not a hospital, as defined
2in subdivision (c) of Section 128700, shall be not more than 0.035
3percent of the gross operating cost of the facility for the provision
4of health care services for its last fiscal year that ended on or before
5June 30 of the preceding calendar year.

6(e) The fee for a hospital, as defined in subdivision (c) of Section
7128700, shall be not more than 0.035 percent of the gross operating
8cost of the facility for the provision of health care services for its
9last fiscal year that ended on or before June 30 of the preceding
10calendar year.

11(f) begin delete(1)end deletebegin deleteend deleteThe fee for a freestanding ambulatory surgery clinic
12shall be established at an amount equal to the number of
13ambulatory surgery data records submitted to the office pursuant
14to Section 128737 for encounters in the preceding calendar year
15multiplied by not more than fifty cents ($0.50).

begin delete

16(2) (A) For the calendar year 2004 only, a freestanding
17ambulatory surgery clinic shall estimate the number of records it
18will file pursuant to Section 128737 for the calendar year 2004
19and shall report that number to the office by March 12, 2004. The
20estimate shall be as accurate as possible. The fee in the calendar
21year 2004 shall be established initially at an amount equal to the
22estimated number of records reported multiplied by fifty cents
23 ($0.50) and shall be due on July 1 and delinquent on July 31, 2004.

24(B) The office shall compare the actual number of records filed
25by each freestanding clinic for the calendar year 2004 pursuant to
26Section 128737 with the estimated number of records reported
27pursuant to subparagraph (A). If the actual number reported is less
28than the estimated number reported, the office shall reduce the fee
29of the clinic for calendar year 2005 by the amount of the difference
30multiplied by fifty cents ($0.50). If the actual number reported
31exceeds the estimated number reported, the office shall increase
32the fee of the clinic for calendar year 2005 by the amount of the
33difference multiplied by fifty cents ($0.50) unless the actual number
34reported is greater than 120 percent of the estimated number
35reported, in which case the office shall increase the fee of the clinic
36for calendar year 2005 by the amount of the difference, up to and
37including 120 percent of the estimated number, multiplied by fifty
38cents ($0.50), and by the amount of the difference in excess of 120
39percent of the estimated number multiplied by one dollar ($1).

end delete

P5    1(g) There is hereby established the California Health Data and
2Planning Fund within the office for the purpose of receiving and
3expending fee revenues collected pursuant to this chapter.

4(h) Any amounts raised by the collection of the special fees
5provided for by subdivisions (d), (e), and (f) that are not required
6to meet appropriations in the Budget Act for the current fiscal year
7shall remain in the California Health Data and Planning Fund and
8shall be available to the office in succeeding years when
9appropriated by the Legislature in the annual Budget Act or another
10statute, for expenditure under the provisions of this chapter,begin delete Article
112end delete
begin insert Chapter 2.6end insert (commencing with Sectionbegin delete 127340) of Chapter 2,end delete
12begin insert 127470),end insert and Chapter 1 (commencing with Section 128675) of
13Part 5, or for any other health-related programs administered by
14the office, and shall reduce the amount of the special fees that the
15office is authorized to establish and charge.

16(i) (1) No health facility liable for the payment of fees required
17by this section shall be issued a license or have an existing license
18renewed unless the fees are paid. A new, previously unlicensed,
19health facility shall be charged a pro rata fee to be established by
20the office during the first year of operation.

21(2) The license of any health facility, against which the fees
22required by this section are charged, shall be revoked, after notice
23and hearing, if it is determined by the office that the fees required
24were not paid within the time prescribed by subdivision (c).

begin delete

25(j) This section shall become operative on January 1, 2002.

end delete
26

SEC. 2.  

Article 2 (commencing with Section 127340) of
27Chapter 2 of Part 2 of Division 107 of the Health and Safety Code
28 is repealed.

29

SEC. 3.  

Chapter 2.6 (commencing with Section 127470) is
30added to Part 2 of Division 107 of the Health and Safety Code, to
31read:

32 

33Chapter  2.6. Community Benefits
34

34 

35Article 1.  Hospital Community Benefits
36

 

37

127470.  

(a) The Legislature finds and declares the following:

38(1) Access to health care services is of vital concern to the
39people of California.

P6    1(2) Health care providers play an important role in providing
2essential health care services in the communities they serve.

3(3) Notwithstanding public and private efforts to increase access
4to health care, the people of California continue to have significant
5unmet health needs. Studies indicate that as many as 6.9 million
6Californians are uninsured during a year.

7(4) The state has a substantial interest in ensuring that the unmet
8health needs of its residents are addressed. Health care providers
9can help address these needs by providing charity care and
10community benefits to the uninsured and underinsured members
11of their communities.

12(5) Hospitals have different roles in the community depending
13on their mission, governance, tax status, and articles of
14incorporation. Private hospitals that are investor owned and have
15for-profit tax status pay property taxes, corporate income taxes,
16and other taxes, such as unemployment insurance, on a different
17basis than nonprofit, district, or public hospitals. Nonprofit health
18facilities, including hospitals and multispecialty clinics, as
19described in subdivision (l) of Section 1206, receive favorable tax
20treatment by the government and, in exchange, assume a social
21obligation to provide charity care and other community benefits
22in the public interest.

23(b) It is the intent of the Legislature in enacting this chapter to
24provide uniform standards for reporting the amount of charity care
25and community benefits provided to ensure that private nonprofit
26hospitals and multispecialty clinics operated by nonprofit
27corporations, as described in subdivision (l) of Section 1206,
28actually meet the social obligations for which they receive
29favorable tax treatment.

30

127472.  

The following definitions apply for the purposes of
31this chapter:

32(a) “Community” means the service area or patient population
33for which a private nonprofit hospital or nonprofit multispecialty
34clinic provides health care services. A private nonprofit hospital
35or nonprofit multispecialty clinic may not define its service area
36to exclude medically underserved, low-income, or minority
37populations who are part of its patient populations, live in
38geographic areas in which its patient populations reside, otherwise
39should be included based on the method the hospital facility uses
P7    1to define its community, or populations described in subdivision
2(l).

3(b) (1) “Community benefits” means the unreimbursed goods,
4services, activities, programs, and other resources provided by a
5private nonprofit hospital or nonprofit multispecialty clinic that
6addresses community-identified health needs and concerns,
7particularly for people who are uninsured, underserved, or members
8of a vulnerable population. Community benefits include, but are
9not limited to, charity care, the cost of community building
10activities, the cost of community health improvement services and
11community benefit operations, the cost of school health centers,
12as defined in Section 124174, the cost of health professions
13education and training provided without charge to community
14members or participants, subsidized health services for vulnerable
15populations, research, and contributions to community groups,
16vaccination programs and services for low-income families, chronic
17illness prevention programs and services, home-based health care
18programs for low-income families, or community-based mental
19health and outreach and assessment programs for low-income
20families. For purposes of this subparagraph, “low-income families”
21means families or individuals with income less than or equal to
22350 percent of the federal poverty level.

23(2) For purposes of this subdivision, “community building
24activities” means the cost of various kinds of community building
25activities, including physical improvements and housing, economic
26development, community support, environmental improvements,
27community health improvement advocacy, coalition building,
28workforce development, and leadership development and training
29for community members.

30(3) (A) For purposes of this subdivision, “charity care” means
31the unreimbursed cost to a private nonprofit hospital or nonprofit
32multispecialty clinic of providing services to the uninsured or
33underinsured, as well as providing health care services or items
34on an inpatient or outpatient basis to a financially qualified patient,
35as defined in Section 127400, with no expectation of payment.

36(B) Charity care does not include any of the following:

37(i) Uncollected fees or accounts written off as bad debt.

38(ii) Care provided to patients for which a public program or
39public or private grant funds pay for any of the charges for the
40care.

P8    1(iii) Contractual adjustments in the provision of health care
2services below the amount identified as gross charges or
3“chargemaster” rates by the health care provider.

4(iv) Any amount over 125 percent of the Medicare rate for the
5health care services or items provided on an inpatient or outpatient
6basis.

7(v) Any amount over 125 percent of the Medicare rate for
8providing, funding, or otherwise financially supporting health care
9services or items with no expectation of payment provided to
10financially qualified patients through other nonprofit or public
11outpatient clinics, hospitals, or health care organizations.

12(vi) The cost to a nonprofit hospital of paying a tax or other
13governmental assessment.

14(4) “Community benefits” does not mean the unreimbursed cost
15of providing services to those enrolled in Medi-Cal, Medicare,
16California Children’s Services Program, or county indigent
17programs or any goods, services, activities, programs, or other
18resources program or activity for which there is direct offsetting
19revenue.

20(c) (1) “Community benefits planning committee” means a
21committee, designated by a private nonprofit hospital or nonprofit
22multispecialty clinic, that oversees the community needs
23assessment and the development of the community benefits plan
24implementation strategy to meet the community health needs
25identified through the community health needs assessment.

26(2) The community benefits planning committee shall be
27composed of the following:

28(A) One of the following:

29(i) The governing board of the hospital organization that operates
30the hospital facility or a committee or other party authorized by
31that governing body to the extent that the committee or other party
32is permitted under state law to act on behalf of the governing body.

33(ii) If the hospital facility has its own governing body and is
34recognized as an entity under state law but is a disregarded entity
35for federal tax purposes, the governing body of that hospital facility
36or other committee or party authorized by that governing body to
37the extent that the committee or other party is permitted under state
38law to act on behalf of the governing body.

39(B) At least one individual from the local, tribal, or regional
40governmental public health department, or an equivalent
P9    1department or agency, with knowledge, information, or expertise
2relevant to the health needs of that community.

3(C) At least one individual from an underserved and vulnerable
4population.

5(d) “Discounted care” means the cost for medical care provided
6consistent with Article 1 (commencing with Section 127400) of
7Chapter 2.5.

8(e) (1) “Direct offsetting revenue” means revenue from goods,
9services, activities, programs, or other resources that offsets the
10total community benefit expense of the goods, services, activities,
11programs, or other resources.

12(2) “Direct offsetting revenue” includes revenue generated by
13the goods, services, activities, programs, or other resources,
14including, but not limited to, payment or reimbursement for
15services provided to program patients as well as restricted grants
16or contributions that the private nonprofit hospital or nonprofit
17multispecialty clinic uses to provide a community benefit, such as
18a restricted grant to provide financial assistance or fund research.

19(3) “Direct offsetting revenue” does not include unrestricted
20grants or contributions that the private nonprofit hospital or
21 nonprofit multispecialty clinic uses to provide a community benefit.

22(f) “Nonprofit multispecialty clinic” means a clinic as described
23in subdivision (l) of Section 1206.

24(g) “Office” means the Office of Statewide Health Planning and
25Development.

26(h) “Private nonprofit hospital” means a private nonprofit acute
27care hospital operated or controlled by a nonprofit corporation, as
28defined in Section 5046 of the Corporations Code, that has been
29determined to be exempt from taxation under the Internal Revenue
30Code. For purposes of this chapter, “private nonprofit hospital”
31does not include any of the following:

32(1) A district hospital organized and governed pursuant to the
33Local Health Care District Law (Division 23 (commencing with
34Section 32000)) or a nonprofit corporation that is affiliated with
35the health care district hospital owner by means of the district’s
36status as the nonprofit corporation’s sole corporate member
37pursuant to subparagraph (B) of paragraph (1) of subdivision (h)
38of Section 14169.31 of the Welfare and Institutions Code.

39(2) A rural general acute care hospital, as defined in subdivision
40(a) of Section 1250.

P10   1(3) A children’s hospital, as defined in Section 10727 of the
2Welfare and Institutions Code.

3(4) A multispecialty clinic operated by a for-profit hospital,
4regardless of its net revenue.

5(i) “Underserved and vulnerable population” means any of the
6following:

7(1) A population that is exposed to medical or financial risk by
8virtue of being uninsured, underinsured, or eligible for Medi-Cal
9or a county indigent program.

10(A) “Uninsured” means a self-pay patient as defined in Section
11127400.

12(B) “Underinsured” means a patient with high medical costs,
13as defined in Section 127400.

14(2) A population, including, but not limited to, the following:

15(A) Individuals with low educational attainment as measured
16by the percentage of the population over 25 years of age with less
17than a high school diploma.

18(B) Individuals who suffer from linguistic isolation as measured
19by the percentage of households in which no one who is 14 years
20of age or older speaks English with greater than elementary
21 proficiency.

22(3) A population that meets the definition of disadvantaged
23community pursuant to Section 39711.

24(4) Other populations that are specifically identified in the
25community health needs assessment required pursuant to Section
26127475.

27 

28Article 2.  Community Benefits Statement, Community Health
29Needs Assessment, and Community Benefits Plan
30

 

31

127473.  

Private nonprofit hospitals and nonprofit multispecialty
32clinics shall provide community benefits to the community as
33follows:

34(a) A minimum of 90 percent of the available community benefit
35moneys shall be allocated to community benefits that improve
36community health for underserved and vulnerable populations or
37that address a specific need identified in the community health
38needs assessment required pursuant to Section 127475. For
39purposes of this paragraph, community benefits that improve
40community health for underserved and vulnerable populations may
P11   1include activities, including health professions education and
2training, that are not provided exclusively to underserved and
3vulnerable populations, if the activity will improve community
4health for underserved and vulnerable populations.

5(b) A minimum of 25 percent of the available community benefit
6moneys shall be allocated to community building activities
7geographically located within underserved and vulnerable
8populations.

9(c) To meet the requirements of subdivisions (a) and (b), moneys
10shall be used for projects that simultaneously meet both criteria.

11

127474.  

Prior to completing the community health needs
12assessment pursuant to Section 127475, a private nonprofit hospital
13or a nonprofit multispecialty clinic shall develop, in collaboration
14with the community benefits planning committee, all of the
15following:

16(a) A community benefits statement that describes the hospital’s
17or clinic’s commitment to developing, adopting, and implementing
18a community benefits program. The hospital’s or clinic’s governing
19board shall document that it has reviewed the hospital’s or clinic’s
20organizational mission statement and considered amendments to
21it that would better align that organizational mission statement
22with the community benefits statement.

23(b) A description of the process for approval of the community
24benefits plan by the hospital’s or clinic’s governing board,
25including a declaration that the board and administrators of the
26hospital or clinic shall be responsible for oversight and
27implementation of the community benefits plan. The board may
28establish a community benefits implementation committee that
29shall include members of the board, senior administrators, and
30community stakeholders.

31

127475.  

(a) By January 1, 2018, a private nonprofit hospital
32or nonprofit multispecialty clinic shall develop, in collaboration
33with the community benefits planning committee, a community
34health needs assessment that evaluates the health needs and
35resources of the community it serves.

36(b) In conducting its community health needs assessment, a
37private nonprofit hospital or nonprofit multispecialty clinic shall
38solicit comments from and meet with local government officials,
39including representatives of local public health departments. A
40private nonprofit hospital or nonprofit multispecialty clinic shall
P12   1also solicit comments from and meet with health care providers,
2registered nurses, community groups representing, among others,
3patients, labor, seniors, and consumers, and other health-related
4organizations. Particular attention shall be given to persons who
5are themselves underserved and who work with underserved and
6vulnerable populations. Particular attention shall also be given to
7identifying local needs to address racial and ethnic disparities in
8health outcomes. A private nonprofit hospital or nonprofit
9multispecialty clinic may create a community benefits advisory
10committee for the purpose of soliciting community input.

11(c) In preparing its community health needs assessment, a private
12nonprofit hospital or nonprofit multispecialty clinic shall use
13available public health data. A private nonprofit hospital or
14nonprofit multispecialty clinic may collaborate with other facilities
15and health care institutions in conducting community health needs
16assessments and may make use of existing studies in completing
17their own needs assessments.

18(d) Not later than 30 days prior to completing a community
19health needs assessment, a private nonprofit hospital or nonprofit
20multispecialty clinic shall make available to the public a copy of
21the assessment for review and comment.

22(e) A community health needs assessment shall be filed with
23the office. A private nonprofit hospital or a nonprofit multispecialty
24clinic shall update its community needs assessment at least every
25three years.

26

127476.  

(a) By April 1, 2018, a private nonprofit hospital or
27nonprofit multispecialty clinic shall develop, in collaboration with
28the community, a community benefits plan designed to achieve
29all of the following outcomes:

30(1) Access to health care for members of underserved and
31vulnerable populations.

32(2) Addressing of the essential health care needs of the
33community, with particular attention to the needs of members of
34underserved and vulnerable populations.

35(3) Creation of measurable improvements in the health of the
36community, with particular attention to the needs of members of
37underserved and vulnerable populations.

38(b) In developing a community benefits plan, a private nonprofit
39hospital or nonprofit multispecialty clinic shall solicit comments
40from and meet with local government officials, including
P13   1representatives of local public health departments. A private
2nonprofit hospital or nonprofit multispecialty clinic shall also
3solicit comments from and meet with health care providers,
4community groups representing, among others, patients, labor,
5seniors, and consumers, and other health-related organizations.
6Particular attention shall be given to persons who are themselves
7underserved, who work with underserved and vulnerable
8populations or with populations at risk for racial and ethnic
9disparities in health outcomes.

10(c) A community benefits plan shall include, at a minimum, all
11of the following:

12(1) A summary of the needs assessment and a statement of the
13community health care needs that will be addressed by the plan.

14(2) A list of the services the private nonprofit hospital or
15nonprofit multispecialty clinic intends to provide in the following
16year to address community health needs identified in the
17community health needs assessments. The list of services shall be
18categorized under the following:

19(A) Charity care, as defined in subdivision (b) of Section
20127472.

21(B) Other community benefits, including community health
22improvement services and community benefit operations, health
23professions education, subsidized health services, research, and
24contributions to community groups.

25(C) Community building activities targeting underserved and
26vulnerable populations.

27(3) A description of the target community or communities that
28the plan is intended to benefit.

29(4) An estimate of the economic value of the community benefits
30that the private nonprofit hospital or nonprofit multispecialty clinic
31intends to provide.

32(5) A summary of the process used to elicit community
33participation in the community health needs assessment and
34community benefits plan design, and a description of the process
35for ongoing participation of community members in plan
36implementation and oversight, and a description of how the
37assessment and plan respond to the comments received by the
38private nonprofit hospital or nonprofit multispecialty clinic from
39the community.

P14   1(6) A list of individuals, organizations, and government officials
2 consulted during the development of the plan.

3(7) A description of the intended impact on health outcomes
4attributable to the plan, including short- and long-term measurable
5goals and objectives.

6(8) Mechanisms to evaluate the plan’s effectiveness.

7(9) The name and title of the individual responsible for
8implementing the plan.

9(10) The names of individuals on the private nonprofit hospital’s
10or nonprofit multispecialty clinic’s governing board.

11(11) If applicable, a report on the community benefits efforts
12of the preceding year, including the amounts and types of
13community benefits provided, in a manner to be prescribed by the
14office; a statement of the plan’s impact on health outcomes,
15 including a description of the private nonprofit hospital’s or
16nonprofit multispecialty clinic’s progress toward meeting its short-
17and long-term goals and objectives; and an evaluation of the plan’s
18effectiveness.

19(d) A private nonprofit hospital or nonprofit multispecialty clinic
20may also report on bad debts, Medicare shortfalls, Medi-Cal
21shortfalls, and shortfalls from any other public program. Reporting
22bad debts, Medicare shortfalls, Medi-Cal shortfalls, and other
23shortfalls from any other public program shall not be reported as
24community benefits and shall be calculated based on hospital costs,
25not charges.

26(e) The governing board of a private nonprofit hospital or
27nonprofit multispecialty clinic shall adopt the community benefits
28plan at a meeting that is open to the public. No later than 30 days
29prior to the plan’s adoption by the governing board of the private
30nonprofit hospital or nonprofit multispecialty clinic, a private
31nonprofit hospital or nonprofit multispecialty clinic shall make
32available to the public and to the office, in a printed copy and on
33its Internet Web site, both of the following:

34(1) A draft of its community benefits plan.

35(2) Notice of the date, time, and location of the meeting at which
36the community benefits plan is to be voted on for adoption by the
37governing board of the private nonprofit hospital or nonprofit
38multispecialty clinic.

39(f) After April 1, 2018, a private nonprofit hospital or nonprofit
40multispecialty clinic shall, every two years, submit a community
P15   1benefits plan that conforms with this chapter and subdivisions (b)
2to (e), inclusive, to the office, no later than 120 days after the end
3of the hospital’s or clinic’s fiscal year.

4(g) A person or entity may file comments on a private nonprofit
5hospital’s or nonprofit multispecialty clinic’s community benefits
6plan with the office.

7(h) A private nonprofit hospital or nonprofit multispecialty
8clinic, under the common control of a single corporation or another
9entity, may file a consolidated plan if the plan addresses services
10in all of the categories listed in paragraph (2) of subdivision (c) to
11be provided by each hospital or clinic under common control of
12the corporation or entity.

13

127477.  

A private nonprofit hospital or a nonprofit
14multispecialty clinic that reports community benefits to the
15community shall report on those community benefits in a consistent
16and comparable manner to all other private nonprofit hospitals and
17nonprofit multispecialty clinics.

18

127478.  

A private nonprofit hospital or a nonprofit
19multispecialty clinic shall make its community health needs
20assessment and community benefits plan available to the public
21on its Internet Web site. A copy of the assessment and plan shall
22be given free of charge to any person upon request.

23 

24Article 3.  Duties of the Office of Statewide Health Planning
25and Development
26

 

27

127487.  

(a) (1) The office shall develop and adopt regulations
28to prescribe a standardized format for community benefits plans
29pursuant to this chapter.

30(2) The office shall develop a standardized methodology for
31estimating the economic value of community benefits.

32(3) In developing standards of reporting on community benefits,
33the office shall, to the maximum extent possible, conform to
34Internal Revenue Service reporting standards for those data
35elements reported to the Internal Revenue Service, but shall also
36include those data elements required under this chapter or other
37state law, including charity care, as defined in Section 127400.

38(4) A private nonprofit hospital or nonprofit multispecialty clinic
39shall annually file with the office its IRS Form 990, or its successor
40form, and the office shall post the form on its Internet Web site.

P16   1(b) The office shall provide technical assistance to help private
2nonprofit hospitals and nonprofit multispecialty clinics comply
3with this chapter.

4(c) The office shall make public a community health needs
5assessment and community benefits plan and any comments
6received regarding those assessments and plans. The office shall
7make these documents available on its Internet Web site.

8(d) The office shall maintain a public calendar of community
9benefit adoption meetings held by the governing board of each
10private nonprofit hospital or nonprofit multispecialty clinic. Notice
11that includes the Office of Statewide Health Planning and
12Development (OSHPD) facility number, name, parent company,
13date, time, and location of each meeting shall be posted no later
14than 14 days prior to the meeting date.

15(e) For every year that a community benefits plan is submitted
16pursuant to subdivision (f) of Section 127476, the office shall
17calculate and make public the total value of community benefits
18provided by each private nonprofit hospital and nonprofit
19multispecialty clinic that reports pursuant to this chapter.

20

127488.  

The office may assess a civil penalty against a private
21nonprofit hospital or nonprofit multispecialty clinic that fails to
22comply with this article in the same manner as specified in Section
23128770.

24

SEC. 4.  

Section 129050 of the Health and Safety Code is
25amended to read:

26

129050.  

A loan shall be eligible for insurance under this chapter
27if all of the following conditions are met:

28(a) The loan shall be secured by a first mortgage, first deed of
29trust, or other first priority lien on a fee interest of the borrower
30or by a leasehold interest of the borrower having a term of at least
3120 years, including options to renew for that duration, longer than
32the term of the insured loan. The security for the loan shall be
33subject only to those conditions, covenants and restrictions,
34easements, taxes, and assessments of record approved by the office,
35and other liens securing debt insured under this chapter. The office
36may require additional agreements in security of the loan.

37(b) The borrower obtains an American Land Title Association
38title insurance policy with the office designated as beneficiary,
39with liability equal to the amount of the loan insured under this
P17   1chapter, and with additional endorsements that the office may
2reasonably require.

3(c) The proceeds of the loan shall be used exclusively for the
4construction, improvement, or expansion of the health facility, as
5approved by the office under Section 129020. However, loans
6insured pursuant to this chapter may include loans to refinance
7another prior loan, whether or not state insured and without regard
8to the date of the prior loan, if the office determines that the amount
9refinanced does not exceed 90 percent of the original total
10construction costs and is otherwise eligible for insurance under
11this chapter. The office may not insure a loan for a health facility
12that the office determines is not needed pursuant to subdivision
13(k).

14(d) The loan shall have a maturity date not exceeding 30 years
15from the date of the beginning of amortization of the loan, except
16as authorized by subdivision (e), or 75 percent of the office’s
17estimate of the economic life of the health facility, whichever is
18the lesser.

19(e) The loan shall contain complete amortization provisions
20requiring periodic payments by the borrower not in excess of its
21reasonable ability to pay as determined by the office. The office
22shall permit a reasonable period of time during which the first
23payment to amortization may be waived on agreement by the lender
24and borrower. The office may, however, waive the amortization
25requirements of this subdivision and of subdivision (g) of this
26section when a term loan would be in the borrower’s best interest.

27(f) The loan shall bear interest on the amount of the principal
28obligation outstanding at any time at a rate, as negotiated by the
29borrower and lender, as the office finds necessary to meet the loan
30money market. As used in this chapter, “interest” does not include
31premium charges for insurance and service charges if any. Where
32a loan is evidenced by a bond issue of a political subdivision, the
33interest thereon may be at any rate the bonds may legally bear.

34(g) The loan shall provide for the application of the borrower’s
35periodic payments to amortization of the principal of the loan.

36(h) The loan shall contain those terms and provisions with
37respect to insurance, repairs, alterations, payment of taxes and
38assessments, foreclosure proceedings, anticipation of maturity,
39additional and secondary liens, and other matters the office may
40in its discretion prescribe.

P18   1(i) The loan shall have a principal obligation not in excess of
2an amount equal to 90 percent of the total construction cost.

3(j) The borrower shall offer reasonable assurance that the
4services of the health facility will be made available to all persons
5residing or employed in the area served by the facility.

6(k) The office has determined that the facility is needed by the
7community to provide the specified services. In making this
8determination, the office shall do all of the following:

9(1) Require the applicant to describe the community needs the
10facility will meet and provide data and information to substantiate
11the stated needs.

12(2) Require the applicant, if appropriate, to demonstrate
13participation in the community needs assessment required by
14Sectionbegin delete 127350.end deletebegin insert 127476.end insert

15(3) Survey appropriate local officials and organizations to
16measure perceived needs and verify the applicant’s needs
17assessment.

18(4) Use any additional available data relating to existing facilities
19in the community and their capacity.

20(5) Contact other state and federal departments that provide
21funding for the programs proposed by the applicant to obtain those
22departments’ perspectives regarding the need for the facility.
23Additionally, the office shall evaluate the potential effect of
24proposed health care reimbursement changes on the facility’s
25financial feasibility.

26(6) Consider the facility’s consistency with the Cal-Mortgage
27state plan.

28(l) In the case of acquisitions, a project loan shall be guaranteed
29only for transactions not in excess of the fair market value of the
30acquisition.

31Fair market value shall be determined, for purposes of this
32subdivision, pursuant to the following procedure, that shall be
33utilized during the office’s review of a loan guarantee application:

34(1) Completion of a property appraisal by an appraisal firm
35qualified to make appraisals, as determined by the office, before
36closing a loan on the project.

37(2) Evaluation of the appraisal in conjunction with the book
38value of the acquisition by the office. When acquisitions involve
39additional construction, the office shall evaluate the proposed
40construction to determine that the costs are reasonable for the type
P19   1of construction proposed. In those cases where this procedure
2reveals that the cost of acquisition exceeds the current value of a
3facility, including improvements, then the acquisition cost shall
4be deemed in excess of fair market value.

5(m) Notwithstanding subdivision (i), any loan in the amount of
6ten million dollars ($10,000,000) or less may be insured up to 95
7percent of the total construction cost.

8In determining financial feasibility of projects of counties
9pursuant to this section, the office shall take into consideration
10any assistance for the project to be provided under Section 14085.5
11of the Welfare and Institutions Code or from other sources. It is
12the intent of the Legislature that the office endeavor to assist
13counties in whatever ways are possible to arrange loans that will
14meet the requirements for insurance prescribed by this section.

15(n) The project’s level of financial risk meets the criteria in
16 Section 129051.



O

    99