BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 852
AUTHOR: Quirk
AMENDED: June 25, 2013
HEARING DATE: July 3, 2013
CONSULTANT: Marchand
SUBJECT : Skilled nursing facility construction, alteration, or
addition: review.
SUMMARY : Requires the Office of Statewide Health Planning and
Development to develop and meet reasonable timeframes for review
of health facility construction plans, permits the Office of
Statewide Health Planning and Development to charge a reasonable
fee for meeting the new timeframes, and increases the maximum
application filing fee that the Office of Statewide Health
Planning and Development may charge skilled nursing or
intermediate care facilities to 2 percent of a project's
estimated construction cost.
Existing law:
1.Establishes the Alfred E. Alquist Hospital Facilities Seismic
Safety Act of 1983 (Seismic Safety Act), which requires the
Office of Statewide Health Planning and Development (OSHPD) to
propose proper building standards for earthquake resistance,
and provide an independent review of the design and
construction of hospital buildings.
2.Defines "hospital building," for purposes of the Seismic
Safety Act, as any licensed health facility (which include
general acute care hospitals, special hospitals, skilled
nursing facilities, and intermediate care facilities, among
others).
3.Exempts from this definition skilled nursing and intermediate
care facilities if the building is of single-story, wood-frame
or light steel frame construction. However, these buildings
are subject to plan review and inspection by OSHPD.
4.Requires OSHPD to observe the construction, reconstruction, or
alteration of any hospital building it deems necessary to
comply with the Seismic Safety Act.
5.Requires the health facilities, before adopting any plans for
Continued---
AB 852 | Page 2
the building, to submit the plans to OSHPD for approval.
6.Requires OSHPD to determine an application filing fee to cover
the costs of reviewing the design and construction of health
facilities under the Seismic Safety Act. Prohibits this fee
from exceeding 2 percent of a project's estimated construction
cost for general acute care and special hospitals, and 1.5
percent of a project's estimated cost for skilled nursing and
intermediate care facilities.
7.Permits OSHPD to exempt from its plan review process
construction or alteration projects for hospital buildings, as
well as the exempted single-story skilled nursing and
intermediate care facilities that have an estimated
construction cost of $50,000 or less.
This bill:
1.Requires the Facilities Development Division (FDD) within
OSHPD, for projects not qualifying for rapid review, as
specified, to meet reasonable timeframes developed by OSHPD,
in conjunction with stakeholders, that include all of the
following:
a. Preliminary review of documents submitted to
the office;
b. First review of new projects;
c. Back-checks; and,
d. Amended construction documents.
2.Requires documents submitted to OSHPD for new construction of,
alteration of, or addition to skilled nursing facilities
(SNFs), to include the name and contact information for an
individual designated to be the project coordinator, and to be
reviewed and approved within the timeframes established by
this bill.
3.Requires OSHPD, in order to ensure consistency of application
of the California Building Code standards, to designate a
professional staff member familiar with health facilities
providing skilled nursing care to conduct a peer-review of
projects relating to SNF construction or alteration. Sunsets
this provision on January 1, 2019.
4.Requires OSHPD to charge a reasonable fee for the review and
approval of plans submitted under this bill, and requires this
AB 852 | Page
3
fee to be based on the estimated cost, including costs
associated with the designated professional staff member.
Prohibits the fee from exceeding the reasonable cost of the
entire phased review and approval process for the plans.
Sunsets this provision, and requires all related fees to stop
being assessed, on January 1, 2019.
5.Permits OSHPD, in order to meet the review timeframes
developed pursuant to this bill, to seek outside assistance
through contracts with qualified professional architectural or
engineering firms.
6.Permits OSHPD to publish standard requirements, when feasible
and if resources are available, for design concepts for use by
stakeholders when submitting plans for new construction,
renovation, or replacement. Permits these design concepts to
include, but not be limited to, the following:
a. Reduction in beds;
b. Installation and use of new technology, such
as electronic medical records;
c. Space conversion dedicated to changes in care
delivery models; and,
d. Common replacement of major infrastructure
equipment, including roofing, HVAC, generators and
emergency power systems, water heaters and boilers,
and kitchen and laundry room equipment.
7.Requires OSHPD to work with stakeholders to receive input for,
or assistance with, the establishment of education and
outreach programs directed at reducing document submission
error rates and turnaround times. Requires OSHPD, to the
extent resources are available, to publish on the internet
these requirements, including, but not limited to, the
timeframes established by this bill.
8.Increases the maximum application filing fee that OSHPD may
charge skilled nursing or intermediate care facilities,
currently 1.5 percent of a project's estimated construction
cost, to 2 percent of a project's estimated construction cost,
which is the same maximum filing fee that can be charged to
hospital facilities.
9.Makes various legislative findings and declarations, including
the following:
AB 852 | Page 4
a. Licensed health care facilities are required
to go through a building application and plan check
process under the jurisdiction of OSHPD, and that this
process is subject to inherent delays impacting timely
approvals of projects;
b. Although OSHPD has developed internal policies
that set timeframes for plan review and approval,
these policies are targets rather than enforceable
requirements; and,
c. Improving the efficiency of health care
building plan review and construction efforts will not
only reduce the time to design, review and complete
facility construction, but also lower the cost of the
project and reduce overall cost pressures on the
health care system.
10.States the intent of the Legislature to codify the timeframes
and due dates for completion by OSHPD of the review of
facility construction documents and to require OSHPD to notify
applicants of the anticipated date the review will be
completed and returned to them.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, initial and ongoing fee-supported costs to OSHPD in
the range of $200,000 to $300,000 for increased staff to work
with stakeholders and design professionals on the OSHPD review
process, monitor submissions and publish design standards. The
Assembly Appropriations Committee also noted that this bill
contains an appropriation because the application fee increase
applies to fees continuously appropriated to the Hospital
Building Fund.
PRIOR VOTES :
Assembly Health: 18- 1
Assembly Appropriations:17- 0
Assembly Floor: 75- 2
COMMENTS :
1.Author's statement. SNFs are licensed health care facilities
that care for the state's most fragile and vulnerable
citizens. The infrastructure of these licensed health
facilities are governed by building, fire, and life safety
code requirements regulated primarily by OSHPD. FDD, a
subdivision of OSHPD, monitors construction plans to ensure
conformance to federal and state building requirements. Most
AB 852 | Page
5
nursing facilities are in desperate need of upgrades to
address the rehabilitation and post-hospitalization services
required by their patient population. OSHPD's review process
is a source of frustration for California's skilled nursing
provider community. The most trying aspects of the review
process are: (1) cumbersome and confusing plan review; (2)
duplicative field review and inspection; (3) difficulty in
altering projects to meet compliance. This bill helps make a
cumbersome process more manageable so that important projects
can be completed in a timely manner.
2.Background. According to the sponsor, part of the problem that
this bill is seeking to address is a lack of familiarity on
both the SNF side, as well as on the side of the FDD of OSHPD.
The sponsor states that the majority of the freestanding SNFs
were built in the late 1960s and early 1970s. Very few
facilities have been built in California in the past 20 years.
Because of the age of these facilities, there has been an
increase in the number of renovation projects that have been
submitted to OSHPD, and the lack of familiarity with the
process has led to long delays and increased costs. This bill
seeks to address this issue by requiring OSHPD to designate a
staff member familiar with these types of facilities to
conduct a "peer-review" of projects relating to the
construction or alteration of skilled nursing facilities, and
the hope is that this designated staff member will be able to
assist the facility in navigating the process and helping the
facility meet the requirements in law. Additionally, this
bill will establish timeframes for the various stages of the
plan review process, require OSHPD to meet those timeframes,
and increase the application fee to help pay for the
requirements of this bill.
3.OSHPD plan review timelines. According to OSHPD, it has
implemented timeline goals for review of plans. For remodel
and renovation projects of less than $175,000, the goal is an
initial review of 21 days, with back-checks also completed
within 21 days. (According to OSHPD, back-checks occur when
OSHPD returns project plans to the facility's design team for
correction of code deficiencies. The plans are resubmitted to
OSHPD for a back-check to ensure deficiencies are adequately
corrected.) For remodel and renovation projects of greater
than $175,000, the goal is for the initial review to be
completed in 60 days, back-checks completed within 30 days,
and post-approval documents (changes made after final
AB 852 | Page 6
approval, during the construction process) within 30 days.
For large, complex projects with major structural work, the
goal is for the initial review to be completed within 80 days,
back-checks within 40 days, and post-approval documents within
30 days. OSHPD notes that these goals do not apply to Managed
Projects or Phased Plan Reviews, which have schedules that are
negotiated on a case-by-case basis.
OSHPD states that so far in 2013, it is meeting these goals
about 95 percent of the time for SNFs, and about 94 percent of
the time for all projects combined.
4.Related legislation. SB 563 (Galgiani) requires the person or
entity requesting a copy of a plan maintained by OSHPD to bear
the cost of producing the copy of that plan. SB 563 was
approved by the Senate Health Committee by a vote of 9-0 on
April 24, 2013.
5.Prior legislation. SB 1838 (Perata), Chapter 693, Statute of
2006, authorized OSHPD to establish a training program for
personnel who review hospital building construction and design
plans, exempted projects that cost less than $50,000 from the
plan review process, and required a pre-submittal meeting with
OSHPD review staff on projects costing more than $20 million.
6.Support. This bill is sponsored by the California Association
of Health Facilities (CAHF), which states that current law
requires skilled nursing facilities to receive authorization
from OSHPD for any facility upgrades, changes to address
compliance issues, or routine maintenance of the facility.
CAHF states that skilled nursing facility providers have
experienced some delays with projects that could be avoided if
there was staff designated by OSHPD to coordinate the review
of projects, which would also allow OSHPD to develop staff
with some expertise with the skilled nursing facility provider
model, which is very different from the hospital model. This
bill is also supported by the Congress of California Seniors,
which states that this bill will improve the efficiency for
skilled nursing facility building plan review and construction
efforts through the development of standardized timeframes.
The Congress of California Seniors states that the changes
will not only reduce the time to design, review, and complete
facility construction, but will also lower the cost of the
project and reduce overall cost pressures on the health care
system. The Construction Employers' Association states in
support that any measure which expedites the construction
AB 852 | Page
7
process in skilled nursing facilities is in the best interest
of the facility, and the individuals relaying on the facility,
as well as the construction industry.
7.Drafting and Policy Concerns.
a. Application to just skilled nursing facilities.
According to the author and sponsor, this bill was
intended to apply to just skilled nursing facilities.
However, as drafted, many of the bill's provisions would
apply to construction or alteration projects of any
health facility.
b. Peer-review. This bill requires OSHPD to design a
professional staff member familiar with skilled nursing
facilities to "conduct a peer-review of projects"
relating to skilled nursing facility construction or
alteration. The sponsor indicates that the idea behind
this provision is to have someone from the FDD provide
guidance and consultation to minimize errors throughout
the plan submittal and review process. It is not clear
that "peer-review" is the correct terminology to describe
this objective.
c. Fees. In addition to increasing the maximum
application filing fee for skilled nursing and
intermediate care facility construction and alteration
projects from 1.5 percent to 2 percent of the project's
estimated construction cost, this bill includes a
provision requiring OSHPD to charge "a reasonable fee for
the review and approval of plans" submitted pursuant to
this bill. It prohibits this fee from "exceeding the
reasonable cost of the entire phased review and approval
process for those plans." However, the existing fee
authority, which this bill increases to a maximum of 2
percent of construction costs, is also intended to cover
the costs of this review process. It is unclear how this
additional fee authority would work in conjunction with
the existing application fee provision.
d. Incorrect cross-reference. On page 6, lines 1 and 2,
this bill refers to a "rapid review under Section
129856." According to OSHPD, its rapid review program is
permitted under Section 129875.
AB 852 | Page 8
SUPPORT AND OPPOSITION :
Support: California Association of Health Facilities (sponsor)
Congress of California Seniors
Construction Employers' Association
Oppose:None received.
-- END --