Amended in Senate August 26, 2013

Amended in Senate July 8, 2013

Amended in Assembly April 23, 2013

Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1008

Introduced by Assembly Member Buchanan

February 22, 2013

An act to amend Section 101850 of the Health and Safety Code, relating to health care.

LEGISLATIVE COUNSEL’S DIGEST

AB 1008, as amended, Buchanan. Alameda County Medical Center: privatization of services.

Existing law authorizes the board of supervisors of Alameda County to establish an independent hospital authority strictly and exclusively dedicated to the management, administration, and control of the Alameda Medical Center, and sets forth the powers and duties of the hospital authority, including, but not limited to, the power to contract for services required to meet its obligations.

This bill would prohibit the hospital authority from begin delete privatizing any work performed as of March 31, 2013, by physicians and surgeons employed by the authority end delete begin insert entering into any contract with any private person or entity before January 1, 2024, to replace services end insert begin insert being provided by physicians and surgeons who are employed by the hospital authority and in a recognized collective bargaining unit as of March 31, 2013, with services provided by a private person or entity end insert without clear and convincing evidence that the needed medical care can only be delivered cost-effectively by a private contractor. The bill would require that the authority, prior to begin delete privatization of end delete begin insert entering into a contract for end insert any of those services, negotiate with the representative begin insert of the recognized collective bargaining unit end insert of its physician and surgeon employees over the decision to privatize, and would require unresolved disputes to be submitted to final binding arbitration.

This bill would make legislative findings and declarations as to the necessity of a special statute for resolving the unique needs faced by the county with respect to the operation and administration of the medical center.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 101850 of the Health and Safety Code
is amended to read:

101850.  

The Legislature finds and declares the following:

(a) (1) Due to the challenges facing the Alameda County
Medical Center arising from changes in the public and private
health industries, the Alameda County Board of Supervisors has
determined that a transfer of governance of the Alameda County
Medical Center to an independent governing body, a hospital
authority, is needed to improve the efficiency, effectiveness, and
economy of the community health services provided at the medical
center. The board of supervisors has further determined that the
creation of an independent hospital authority strictly and
exclusively dedicated to the management, administration, and
control of the medical center, in a manner consistent with the
county’s obligations under Section 17000 of the Welfare and
Institutions Code, is the best way to fulfill its commitment to the
medically indigent, special needs, and general populations of
Alameda County. To accomplish this, it is necessary that the board
of supervisors be given authority to create a hospital authority.
Because there is no general law under which this authority could
be formed, the adoption of a special act and the formation of a
special authority is required.

(2) The following definitions shall apply for purposes of this
section:

(A) “The county” means the County of Alameda.

(B) “Governing board” means the governing body of the hospital
authority.

(C) “Hospital authority” means the separate public agency
established by the Board of Supervisors of Alameda County to
manage, administer, and control the Alameda County Medical
Center.

(D) “Medical center” means the Alameda County Medical
Center.

(b) The board of supervisors of the county may, by ordinance,
establish a hospital authority separate and apart from the county
for the purpose of effecting a transfer of the management,
administration, and control of the medical center in accordance
with Section 14000.2 of the Welfare and Institutions Code. A
hospital authority established pursuant to this chapter shall be
strictly and exclusively dedicated to the management,
administration, and control of the medical center within parameters
set forth in this chapter, and in the ordinance, bylaws, and contracts
adopted by the board of supervisors which shall not be in conflict
with this chapter, Section 1442.5 of this code, or Section 17000
of the Welfare and Institutions Code.

(c) A hospital authority established pursuant to this chapter shall
be governed by a board that is appointed, both initially and
continually, by the Board of Supervisors of the County of Alameda.
This hospital authority governing board shall reflect both the
expertise necessary to maximize the quality and scope of care at
the medical center in a fiscally responsible manner and the diverse
interest that the medical center serves. The enabling ordinance
shall specify the membership of the hospital authority governing
board, the qualifications for individual members, the manner of
appointment, selection, or removal of governing board members,
their terms of office, and all other matters that the board of
supervisors deems necessary or convenient for the conduct of the
hospital authority’s activities.

(d) The mission of the hospital authority shall be the
management, administration, and other control, as determined by
the board of supervisors, of the group of public hospitals, clinics,
and programs that comprise the medical center, in a manner that
ensures appropriate, quality, and cost-effective medical care as
required of counties by Section 17000 of the Welfare and
Institutions Code, and, to the extent feasible, other populations,
including special populations in Alameda County.

(e) The board of supervisors shall adopt bylaws for the medical
center that set forth those matters related to the operation of the
medical center by the hospital authority that the board of
supervisors deems necessary and appropriate. The bylaws shall
become operative upon approval by a majority vote of the board
of supervisors. Any changes or amendments to the bylaws shall
be by majority vote of the board of supervisors.

(f) The hospital authority created and appointed pursuant to this
section is a duly constituted governing body within the meaning
of Section 1250 and Section 70035 of Title 22 of the California
Code of Regulations as currently written or subsequently amended.

(g) Unless otherwise provided by the board of supervisors by
way of resolution, the hospital authority is empowered, or the
board of supervisors is empowered on behalf of the hospital
authority, to apply as a public agency for one or more licenses for
the provision of health care pursuant to statutes and regulations
governing licensing as currently written or subsequently amended.

(h) In the event of a change of license ownership, the governing
body of the hospital authority shall comply with the obligations
of governing bodies of general acute care hospitals generally as
set forth in Section 70701 of Title 22 of the California Code of
Regulations, as currently written or subsequently amended, as well
as the terms and conditions of the license. The hospital authority
shall be the responsible party with respect to compliance with these
obligations, terms, and conditions.

(i) (1) Any transfer by the county to the hospital authority of
the administration, management, and control of the medical center,
whether or not the transfer includes the surrendering by the county
of the existing general acute care hospital license and corresponding
application for a change of ownership of the license, shall not
affect the eligibility of the county, or in the case of a change of
license ownership, the hospital authority, to do any of the
following:

(A) Participate in, and receive allocations pursuant to, the
California Healthcare for the Indigent Program (CHIP).

(B) Receive supplemental reimbursements from the Emergency
Services and Supplemental Payments Fund created pursuant to
Section 14085.6 of the Welfare and Institutions Code.

(C) Receive appropriations from the Medi-Cal Inpatient Payment
Adjustment Fund without relieving the county of its obligation to
make intergovernmental transfer payments related to the Medi-Cal
Inpatient Payment Adjustment Fund pursuant to Section 14163 of
the Welfare and Institutions Code.

(D) Receive Medi-Cal capital supplements pursuant to Section
14085.5 of the Welfare and Institutions Code.

(E) Receive any other funds that would otherwise be available
to a county hospital.

(2) Any transfer described in paragraph (1) shall not otherwise
disqualify the county, or in the case of a change in license
ownership, the hospital authority, from participating in any of the
following:

(A) Other funding sources either specific to county hospitals or
county ambulatory care clinics or for which there are special
provisions specific to county hospitals or to county ambulatory
care clinics.

(B) Funding programs in which the county, on behalf of the
medical center and the Alameda County Health Care Services
Agency, had participated prior to the creation of the hospital
authority, or would otherwise be qualified to participate in had the
hospital authority not been created, and administration,
management, and control not been transferred by the county to the
hospital authority, pursuant to this chapter.

(j) A hospital authority created pursuant to this chapter shall be
a legal entity separate and apart from the county and shall file the
statement required by Section 53051 of the Government Code.
The hospital authority shall be a government entity separate and
apart from the county, and shall not be considered to be an agency,
division, or department of the county. The hospital authority shall
not be governed by, nor be subject to, the charter of the county
and shall not be subject to policies or operational rules of the
county, including, but not limited to, those relating to personnel
and procurement.

(k) (1) Any contract executed by and between the county and
the hospital authority shall provide that liabilities or obligations
of the hospital authority with respect to its activities pursuant to
the contract shall be the liabilities or obligations of the hospital
authority, and shall not become the liabilities or obligations of the
county.

(2) Any liabilities or obligations of the hospital authority with
respect to the liquidation or disposition of the hospital authority’s
assets upon termination of the hospital authority shall not become
the liabilities or obligations of the county.

(3) Any obligation of the hospital authority, statutory,
contractual, or otherwise, shall be the obligation solely of the
hospital authority and shall not be the obligation of the county or
the state.

(l) (1) Notwithstanding any other provision of this section, any
transfer of the administration, management, or assets of the medical
center, whether or not accompanied by a change in licensing, shall
not relieve the county of the ultimate responsibility for indigent
care pursuant to Section 17000 of the Welfare and Institutions
Code or any obligation pursuant to Section 1442.5 of this code.

(2) Any contract executed by and between the county and the
hospital authority shall provide for the indemnification of the
county by the hospital authority for liabilities as specifically set
forth in the contract, except that the contract shall include a
provision that the county shall remain liable for its own negligent
acts.

(3) Indemnification by the hospital authority shall not be
construed as divesting the county from its ultimate responsibility
for compliance with Section 17000 of the Welfare and Institutions
Code.

(m) Notwithstanding the provisions of this section relating to
the obligations and liabilities of the hospital authority, a transfer
of control or ownership of the medical center shall confer onto the
hospital authority all the rights and duties set forth in state law
with respect to hospitals owned or operated by a county.

(n) (1) A transfer of the maintenance, operation, and
management or ownership of the medical center to the hospital
authority shall comply with the provisions of Section 14000.2 of
the Welfare and Institutions Code.

(2) A transfer of maintenance, operation, and management or
ownership to the hospital authority may be made with or without
the payment of a purchase price by the hospital authority and
otherwise upon the terms and conditions that the parties may
mutually agree, which terms and conditions shall include those
found necessary by the board of supervisors to ensure that the
transfer will constitute an ongoing material benefit to the county
and its residents.

(3) A transfer of the maintenance, operation, and management
to the hospital authority shall not be construed as empowering the
hospital authority to transfer any ownership interest of the county
in the medical center except as otherwise approved by the board
of supervisors.

(o) The board of supervisors shall retain control over the use of
the medical center physical plant and facilities except as otherwise
specifically provided for in lawful agreements entered into by the
board of supervisors. Any lease agreement or other agreement
between the county and the hospital authority shall provide that
county premises shall not be sublet without the approval of the
board of supervisors.

(p) The statutory authority of a board of supervisors to prescribe
rules that authorize a county hospital to integrate its services with
those of other hospitals into a system of community service that
offers free choice of hospitals to those requiring hospital care, as
set forth in Section 14000.2 of the Welfare and Institutions Code,
shall apply to the hospital authority upon a transfer of maintenance,
operation, and management or ownership of the medical center by
the county to the hospital authority.

(q) The hospital authority shall have the power to acquire and
possess real or personal property and may dispose of real or
personal property other than that owned by the county, as may be
necessary for the performance of its functions. The hospital
authority shall have the power to sue or be sued, to employ
personnel, and to contract for services required to meet its
obligations. begin delete The end delete begin insert Before January 1, 2024, the end insert hospital authority
shall not begin delete privatize any work performed end delete begin insert enter into a contract with
any private person or entity to replace services being provided by
physicians and surgeons who are employed by the hospital
authority and in a recognized collective bargaining unit end insert as of
March 31, 2013, begin delete by physicians and surgeons employed by the
authority end delete begin insert with services provided by a private person or entity end insert
without clear and convincing evidence that the needed medical
care can only be delivered cost-effectively by a private contractor.
Prior to begin delete privatization of end delete begin insert entering into a contract for end insert any of those
services, the authority shall negotiate with the representative begin insert of
the recognized collective bargaining unit end insert of its physician and
surgeon employees over the decision to privatize and, if unable to
resolve any dispute through negotiations, shall submit the matter
to final binding arbitration.

(r) Any agreement between the county and the hospital authority
shall provide that all existing services provided by the medical
center shall continue to be provided to the county through the
medical center subject to the policy of the county and consistent
with the county’s obligations under Section 17000 of the Welfare
and Institutions Code.

(s) A hospital authority to which the maintenance, operation,
and management or ownership of the medical center is transferred
shall be a “district” within the meaning set forth in the County
Employees Retirement Law of 1937 (Chapter 3 (commencing with
Section 31450) of Part 3 of Division 4 of Title 3 of the Government
Code). Employees of a hospital authority are eligible to participate
in the County Employees Retirement System to the extent
permitted by law.

(t) Members of the governing board of the hospital authority
shall not be vicariously liable for injuries caused by the act or
omission of the hospital authority to the extent that protection
applies to members of governing boards of local public entities
generally under Section 820.9 of the Government Code.

(u) The hospital authority shall be a public agency subject to
the Myers-Milias-Brown Act (Chapter 10 (commencing with
Section 3500) of Division 4 of Title 1 of the Government Code).

(v) Any transfer of functions from county employee
classifications to a hospital authority established pursuant to this
section shall result in the recognition by the hospital authority of
the employee organization that represented the classifications
performing those functions at the time of the transfer.

(w) (1) In exercising its powers to employ personnel, as set
forth in subdivision (p), the hospital authority shall implement,
and the board of supervisors shall adopt, a personnel transition
plan. The personnel transition plan shall require all of the
following:

(A) Ongoing communications to employees and recognized
employee organizations regarding the impact of the transition on
existing medical center employees and employee classifications.

(B) Meeting and conferring on all of the following issues:

(i) The timeframe for which the transfer of personnel shall occur.
The timeframe shall be subject to modification by the board of
supervisors as appropriate, but in no event shall it exceed one year
from the effective date of transfer of governance from the board
of supervisors to the hospital authority.

(ii) A specified period of time during which employees of the
county impacted by the transfer of governance may elect to be
appointed to vacant positions with the Alameda County Health
Care Services Agency for which they have tenure.

(iii) A specified period of time during which employees of the
county impacted by the transfer of governance may elect to be
considered for reinstatement into positions with the county for
which they are qualified and eligible.

(iv) Compensation for vacation leave and compensatory leave
accrued while employed with the county in a manner that grants
affected employees the option of either transferring balances or
receiving compensation to the degree permitted employees laid
off from service with the county.

(v) A transfer of sick leave accrued while employed with the
county to hospital authority employment.

(vi) The recognition by the hospital authority of service with
the county in determining the rate at which vacation accrues.

(vii) The possible preservation of seniority, pensions, health
benefits, and other applicable accrued benefits of employees of
the county impacted by the transfer of governance.

(2) Nothing in this subdivision shall be construed as prohibiting
the hospital authority from determining the number of employees,
the number of full-time equivalent positions, the job descriptions,
and the nature and extent of classified employment positions.

(3) Employees of the hospital authority are public employees
for purposes of Division 3.6 (commencing with Section 810) of
Title 1 of the Government Code relating to claims and actions
against public entities and public employees.

(x) Any hospital authority created pursuant to this section shall
be bound by the terms of the memorandum of understanding
executed by and between the county and health care and
management employee organizations that is in effect as of the date
this legislation becomes operative in the county. Upon the
expiration of the memorandum of understanding, the hospital
authority shall have sole authority to negotiate subsequent
memorandums of understanding with appropriate employee
organizations. Subsequent memorandums of understanding shall
be approved by the hospital authority.

(y) The hospital authority created pursuant to this section may
borrow from the county and the county may lend the hospital
authority funds or issue revenue anticipation notes to obtain those
funds necessary to operate the medical center and otherwise provide
medical services.

(z) The hospital authority shall be subject to state and federal
taxation laws that are applicable to counties generally.

(aa) The hospital authority, the county, or both, may engage in
marketing, advertising, and promotion of the medical and health
care services made available to the community at the medical
center.

(bb) The hospital authority shall not be a “person” subject to
suit under the Cartwright Act (Chapter 2 (commencing with Section
16700) of Part 2 of Division 7 of the Business and Professions
Code).

(cc) Notwithstanding Article 4.7 (commencing with Section
1125) of Chapter 1 of Division 4 of Title 1 of the Government
Code related to incompatible activities, no member of the hospital
authority administrative staff shall be considered to be engaged in
activities inconsistent and incompatible with his or her duties as
a result of employment or affiliation with the county.

(dd) (1) The hospital authority may use a computerized
management information system in connection with the
administration of the medical center.

(2) Information maintained in the management information
system or in other filing and records maintenance systems that is
confidential and protected by law shall not be disclosed except as
provided by law.

(3) The records of the hospital authority, whether paper records,
records maintained in the management information system, or
records in any other form, that relate to trade secrets or to payment
rates or the determination thereof, or which relate to contract
negotiations with providers of health care, shall not be subject to
disclosure pursuant to the California Public Records Act (Chapter
5 (commencing with Section 6250) of Division 7 of Title 1 of the
Government Code). The transmission of the records, or the
information contained therein in an alternative form, to the board
of supervisors shall not constitute a waiver of exemption from
disclosure, and the records and information once transmitted shall
be subject to this same exemption. The information, if compelled
pursuant to an order of a court of competent jurisdiction or
administrative body in a manner permitted by law, shall be limited
to in-camera review, which, at the discretion of the court, may
include the parties to the proceeding, and shall not be made a part
of the court file unless sealed.

(ee) (1) Notwithstanding any other law, the governing board
may order that a meeting held solely for the purpose of discussion
or taking action on hospital authority trade secrets, as defined in
subdivision (d) of Section 3426.1 of the Civil Code, shall be held
in closed session. The requirements of making a public report of
actions taken in closed session and the vote or abstention of every
member present may be limited to a brief general description
devoid of the information constituting the trade secret.

(2) The governing board may delete the portion or portions
containing trade secrets from any documents that were finally
approved in the closed session that are provided to persons who
have made the timely or standing request.

(3) Nothing in this section shall be construed as preventing the
governing board from meeting in closed session as otherwise
provided by law.

(ff) Open sessions of the hospital authority shall constitute
official proceedings authorized by law within the meaning of
Section 47 of the Civil Code. The privileges set forth in that section
with respect to official proceedings shall apply to open sessions
of the hospital authority.

(gg) The hospital authority shall be a public agency for purposes
of eligibility with respect to grants and other funding and loan
guarantee programs. Contributions to the hospital authority shall
be tax deductible to the extent permitted by state and federal law.
Nonproprietary income of the hospital authority shall be exempt
from state income taxation.

(hh) Contracts by and between the hospital authority and the
state and contracts by and between the hospital authority and
providers of health care, goods, or services may be let on a nonbid
basis and shall be exempt from Chapter 2 (commencing with
Section 10290) of Part 2 of Division 2 of the Public Contract Code.

(ii) (1) Provisions of the Evidence Code, the Government Code,
including the Public Records Act (Chapter 5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code),
the Civil Code, the Business and Professions Code, and other
applicable law pertaining to the confidentiality of peer review
activities of peer review bodies shall apply to the peer review
activities of the hospital authority. Peer review proceedings shall
constitute an official proceeding authorized by law within the
meaning of Section 47 of the Civil Code and those privileges set
forth in that section with respect to official proceedings shall apply
to peer review proceedings of the hospital authority. If the hospital
authority is required by law or contractual obligation to submit to
the state or federal government peer review information or
information relevant to the credentialing of a participating provider,
that submission shall not constitute a waiver of confidentiality.
The laws pertaining to the confidentiality of peer review activities
shall be together construed as extending, to the extent permitted
by law, the maximum degree of protection of confidentiality.

(2) Notwithstanding any other law, Section 1461 shall apply to
hearings on the reports of hospital medical audit or quality
assurance committees.

(jj) The hospital authority shall carry general liability insurance
to the extent sufficient to cover its activities.

(kk) In the event the board of supervisors determines that the
hospital authority should no longer function for the purposes as
set forth in this chapter, the board of supervisors may, by ordinance,
terminate the activities of the hospital authority and expire the
hospital authority as an entity.

(ll) A hospital authority which is created pursuant to this section
but which does not obtain the administration, management, and
control of the medical center or which has those duties and
responsibilities revoked by the board of supervisors shall not be
empowered with the powers enumerated in this section.

(mm) (1) The county shall establish baseline data reporting
requirements for the medical center consistent with the Medically
Indigent Health Care Reporting System (MICRS) program
established pursuant to Section 16910 of the Welfare and
Institutions Code and shall collect that data for at least one year
prior to the final transfer of the medical center to the hospital
authority established pursuant to this chapter. The baseline data
shall include, but not be limited to, all of the following:

(A) Inpatient days by facility by quarter.

(B) Outpatient visits by facility by quarter.

(C) Emergency room visits by facility by quarter.

(D) Number of unduplicated users receiving services within the
medical center.

(2) Upon transfer of the medical center, the county shall
establish baseline data reporting requirements for each of the
medical center inpatient facilities consistent with data reporting
requirements of the Office of Statewide Health Planning and
Development, including, but not limited to, monthly average daily
census by facility for all of the following:

(A) Acute care, excluding newborns.

(B) Newborns.

(C) Skilled nursing facility, in a distinct part.

(3) From the date of transfer of the medical center to the hospital
authority, the hospital authority shall provide the county with
quarterly reports specified in paragraphs (1) and (2) and any other
data required by the county. The county, in consultation with health
care consumer groups, shall develop other data requirements that
shall include, at a minimum, reasonable measurements of the
changes in medical care for the indigent population of Alameda
County that result from the transfer of the administration,
management, and control of the medical center from the county
to the hospital authority.

(nn) A hospital authority established pursuant to this section
shall comply with the requirements of Sections 53260 and 53261
of the Government Code.

SEC. 2.  

The Legislature finds and declares that a special law
is necessary and that a general law cannot be made applicable
within the meaning of Section 16 of Article IV of the California
Constitution because of the unique needs faced by Alameda County
with respect to the operation and administration of Alameda County
Medical Center.