BILL NUMBER: AB 2741 AMENDED BILL TEXT AMENDED IN SENATE JULY 2, 2008 AMENDED IN ASSEMBLY MAY 23, 2008 AMENDED IN ASSEMBLY APRIL 3, 2008 INTRODUCED BY Assembly Member Torrico FEBRUARY 22, 2008 An act to amend Section 1265.3 of the Health and Safety Code, relating to health facilities. LEGISLATIVE COUNSEL'S DIGEST AB 2741, as amended, Torrico. Hospitals: management requirements. Existing law provides for the licensure and regulation of health facilities by the State Department of Public Health. A violation of these provisions is a crime. Existing law requires that, with respect to any individual or entity that seeks approval to operate or manage a health facility, as defined, the department shall consider specific evidence in making determinations regarding character and ability to comply with applicable licensing and regulatory provisions and to consider specified factors with respect to the applicant's character, including the financial capacity to provide care in accordance with existing state and federal requirements, and the ability to comply with statutory provisions relating to regulation of the facility. This bill would provide that if the transaction by which the applicant has
not metacquired, or plans to acquire, ownership or control of the health facility is not subject to certain statutory requirements regulating the sale, transfer, lease, exchange, option, conveyance, or otherwise disposal of the assets, or control thereof, of a nonprofit corporation that operates or controls a facility that provides health care, the department shall obtain a health impact analysis of the transaction in order to determine whether the transaction may create a significant effect on the availability or accessibility of health care services to the affected community and whether the transaction is in the public interest, as specified . The bill would allow the department to contract with an expert or consultant to review the proposed transaction and would entitle the department to reimbursement for reasonable and necessary costs of this review from the applicant. The bill would require the department to consult with the Attorney General regarding the provisions of the bill. By increasing the scope of the definition of a crime, this bill would result in a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1265.3 of the Health and Safety Code is amended to read: 1265.3. (a) For any individual or entity that seeks approval to operate or manage a health facility licensed pursuant to subdivision (a), (b), or (f) of Section 1250 and is subject to Section 1265, the department shall consider the following: (1) To determine whether the applicant is of reputable and responsible character, the department shall consider any available information that the applicant has demonstrated a pattern and practice of violations of state or federal laws and regulations. The department shall give particular consideration to those violations that affect the applicant's ability to deliver safe patient care. (2) To determine whether the applicant has the ability to comply with this chapter and the rules and regulations adopted under this chapter, the department shall consider evidence that shall include all of the following: (A) If any, prior history of operating in this state any other facility licensed pursuant to Section 1250, and the applicant's history of substantial compliance with the requirements imposed under that license, applicable federal laws and regulations, and requirements governing the operators of those facilities. (B) If any, prior history of operating in any other state any facility authorized to receive Medicare Program reimbursement or Medicaid Program reimbursement, and the applicant's history of substantial compliance with that state's requirements, and applicable federal laws, regulations, and requirements. (C) If any, prior history of providing health services as a licensed health professional or an individual or entity contracting with a health care service plan or insurer, and the applicant's history of substantial compliance with state requirements, and applicable federal law, regulations, and requirements. (b) If the applicant has not met the requirements of Section 5917(b) If the transaction by which the applicant has acquired, or plans to acquire, ownership or control of the health facility is not subject to review under Section 5917 or 5923 of the Corporations Code, the department shall obtain a health impact analysis of the transaction in order to determine whether the transaction may create a significant effect on the availability or accessibility of health care services to the affected community and whether the transaction is in the public interest. The department may contract with experts or consultants to assist in reviewing the proposed transaction and shall be entitled to reimbursement from the applicant for reasonable and necessary costs to the department arising from this subdivision. The department shall also consult with the Attorney General in implementing this subdivision. (c) The department may also require the entity described in subdivision (a) to furnish other information or documents for the proper administration and enforcement of the licensing laws. SEC. 2. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.