BILL NUMBER: AB 1952 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 6, 2014
INTRODUCED BY Assembly Member Pan
FEBRUARY 19, 2014
An act to add Article 1.5 (commencing with Section 127447.10) to
Chapter 2.5 of Part 2 of Division 107 of the Health and Safety Code,
relating to health facilities, and making an appropriation
therefor facilities .
LEGISLATIVE COUNSEL'S DIGEST
AB 1952, as amended, Pan. Charity care and Wellness Trust
Fund. Nonprofit hospitals: charity care .
Existing law establishes the State Department of Public
Health Health, under the direction of the State Public
Health Officer, and sets forth its powers and duties,
including, but not limited to, the licensing and regulation of health
facilities. Existing law establishes the Offices of
Statewide Health Planning and Development and sets forth its powers
and duties, including, but not limited to, health planning and
research development.
Existing law requires specified hospitals to maintain an
understandable discount policy and charity care policy, and makes
uninsured patients with high medical costs who are at or below 350%
of the federal poverty level eligible to apply for participation.
This bill would require a nonprofit general acute care
hospital to annually provide charity care or monetary
contributions, or a combination, in an amount
equaling at least of 5% of the hospital's net patient revenue. The
bill would require the S tate Public Health Officer
to assess a penalty against noncomplying hospitals, would
establish the Wellness Trust Nonprofit
Hospital Charity Care Penalty Fund, would require the revenues
collected pursuant to these provisions to be deposited into the fund,
and would continuously appropriate the fund
declare these funds available, upon appropriation by the Legislature,
for the support of the Medi-Cal program.
Vote: 2/3 majority . Appropriation:
yes no . Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Article 1.5 (commencing with Section 127447.10) is
added to Chapter 2.5 of Part 2 of Division 107 of the Health and
Safety Code, to read:
Article 1.5. Charity Care and Wellness Trust Fund
Nonprofit Hospital Charity Care
127447.10. (a) Commencing January 1, 2015, a nonprofit
hospital , pursuant to its charity care policy maintained under
Article 1 (commencing with Section 127400), shall annually
provide, for each fiscal year, an appropriate level of charity care
or appropriate contributions to the Wellness Trust Fund of
an amount equal to at least 5 percent of the hospital's net
patient revenue by providing any of the following:
revenue.
(1) Charity care.
(2) Monetary contributions to the fund.
(3) A combination of charity care and contributions to the fund.
(b) For purposes of satisfying subdivision (a), a hospital shall
not change its existing fiscal year unless the hospital changes its
ownership or corporate structure as a result of a sale or merger.
(c) A determination of the amount of charity care and
contributions to the fund provided by a hospital shall be based on
the most recently completed fiscal year of the hospital.
(d) If a hospital reasonably determines that providing charity
care or contributions to the fund in accordance
with this article in a given fiscal year would result in the hospital
having an annual operating margin of less than 1 percent, the
hospital may petition the office department
to be excused in whole or in part from complying with
subdivision (a) in that fiscal year. The director may excuse
compliance if he or she concurs with the hospital's conclusion that
compliance with subdivision (a) would result in the hospital having
an operating margin of less than 1 percent in the fiscal year at
issue.
(e) This section shall not apply to a hospital that is part of an
integrated nonprofit health system.
(f) Nothing in this article shall invalidate an ordinance of, nor
be construed to prohibit the adoption of an ordinance by, a city,
county, or city and county, unless simultaneous compliance with this
article and the ordinance is impossible.
127447.15. (a) This article shall be administered and enforced by
the State Department of Public Health.
(b) The director shall assess a penalty to a hospital that does
not provide the minimum charity care within a fiscal year as required
by this article.
(c) (1) The penalty shall be at least ____dollars ($___), and
shall not exceed ____ dollars ($___) per fiscal year in which the
hospital is in violation.
(2) Notwithstanding paragraph (1), for a second and each
subsequent fiscal year of violation within a five-year period, the
penalty shall be a sum that is equivalent to at least twice the
hospital's total shortfall in charity care for that fiscal year, but
shall not exceed a sum that is equivalent to ___ percent of the
hospital's net patient revenue.
(d) In determining the amount of the penalty, the director shall
consider all of the following:
(1) The severity of the shortfall in charity care provided by the
hospital.
(2) The good-faith effort of the hospital to reach the required
level of charity care.
127447.15. 127447.20. As used in
this article, the following terms have the following meanings:
(a) "Fund" means the Wellness Trust Fund
Nonprofit Hospital Charity Care Penalty Fund established
pursuant to Section 127447.20. 127447.25.
(b) "Office" means the Office of Statewide Health
Planning and Development. "Department" means the State
Department of Public Health.
(c) "Director" means the Director of the Office of
Statewide Health Planning and Development State Public
Health Officer .
(d) "Hospital" means any health facility licensed pursuant to
subdivision (a) of Section 1250. 1250 that is
owned or operated by one or more nonprofit corporations
or associations in which no part of the net earnings inures, or may
lawfully inure, to the benefit of any private shareholder or
individual. "Hospital" does not include children's hospitals, as
defined in Section 16996 of the Welfare and Institutions Code; or
public hospitals, as defined in paragraph (25) of subdivision (a) of
Section 14105.98 of the Welfare and Institutions Code.
127447.20. 127447.25. (a) The
Wellness Trust Nonprofit Hospital Charity
Care Penalty Fund is hereby established within the General
Fund. Revenues derived from contributions from hospitals
penalties assessed pursuant to this article
shall be deposited into the fund for the purposes of
supporting health care for needy individuals as set forth in this
article . Notwithstanding Section 16305.7 of the Government
Code, any interest and dividends earned on deposits in the fund
shall be retained in the fund for purposes set forth in this article.
(b) All moneys in the fund are hereby continuously
appropriated shall be available for expenditure, upon
appropriation by the Legislature, for the support of the
Medi-Cal program.
(c) It is the intent of the Legislature that moneys in the fund be
used to supplement, and not displace, existing funding for the
Medi-Cal program.
(d) For purposes of this section, "existing funding for the
Medi-Cal program" means the total amount expended from appropriations
by the Legislature for the Medi-Cal program in the fiscal year in
which this section is enacted, or in any subsequent fiscal year,
whichever is greater. "Existing funding for the Medi-Cal program"
does not include any amount appropriated by the Legislature
from the fund pursuant to subdivision (b).
fund.