BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  AB 2557
          Author:   Pan (D), et al.
          Amended:  8/22/14 in Senate
          Vote:     27 - Urgency

           
          PRIOR VOTES NOT RELEVANT

           SENATE HEALTH COMMITTEE :  8-0, 8/29/14
            (Pursuant to Senate Rule 29.10)
          AYES: Hernandez, Morrell, Beall, DeSaulnier, Evans, Monning,  
            Nielsen, Wolk
          NO VOTE RECORDED: De León

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8


           SUBJECT  :    Hospitals: seismic safety

           SOURCE  :     California Hospital Association


           DIGEST  :    This bill permits a hospital located in the Counties  
          of Sacramento, San Mateo, or Santa Barbara or the City of San  
          Jose, that has received an additional extension of the January  
          1, 2008, seismic safety requirements under specified provisions  
          of existing law to January 1, 2015, to request an additional  
          extension until September 1, 2015, in order to obtain either a  
          certificate of occupancy or a construction final from the Office  
          of Statewide Health Planning and Development. 

           ANALYSIS  :    Existing law:

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          1.Establishes timelines for hospital compliance with seismic  
            safety standards, including a requirement that buildings  
            posing a significant risk of collapse and a danger to the  
            public (referred to as SPC -1 buildings) be rebuilt or  
            retrofitted to be capable of withstanding an earthquake, or  
            removed from acute care service, by January 1, 2008, and a  
            requirement that hospital buildings be capable of remaining  
            intact after an earthquake, and must also be capable of  
            continued operation by January 1, 2030.

          2.Allows the Office of Statewide Health Planning and Development  
            (OSHPD) to grant an extension of up to five years to the 2008  
            deadline, which would be January 1, 2013, for hospitals for  
            which compliance will result in a loss of health care  
            capacity, as defined.  Existing law also allows OSHPD to grant  
            various further extensions beyond this, including up to two  
            years, which would be January 1, 2015, for certain hospitals  
            that face construction delays, hospitals that encounter delays  
            due to an attempt to reclassify their buildings to higher  
            seismic status, and hospitals that experience local planning  
            delays.  Existing law also allows certain hospitals that have  
            received five year extensions beyond 2008, to rebuild their  
            buildings by 2020 in lieu of meeting the January 1, 2013  
            deadline for retrofitting.

          3.Requires owners of general acute care hospital buildings that  
            are classified as SPC-1 buildings to submit reports to OSHPD  
            annually describing the status of each building in complying  
            with the January 1, 2013 deadline.

          4.Allows OSHPD to utilize computer modeling based on HAZUS,  
            which is a seismic risks analysis tool, for purposes of  
            determining the structural performance category of general  
            acute care hospital buildings.  

          This bill:

          1.Revises the conditions of deadline extensions granted by OSHPD  
            for hospitals to comply with certain seismic safety  
            requirements by allowing a hospital to continue operating  
            under  a deadline extension if either of the following occurs  
            before the end of the extension:

             A.   A replacement building has been constructed and a  

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               certificate of occupancy has been granted by OSHPD for the  
               replacement building; or

             B.   A retrofit has been performed on the building and a  
               construction final has been obtained by OSHPD. 

          1.Permits a hospital located in the Counties of Sacramento, San  
            Mateo, or Santa Barbara or the City of San Jose, that has  
            received an additional extension of the January 1, 2008,  
            seismic safety requirement under specified provisions of  
            existing law to January 1, 2015, to request an additional  
            extension until September 1, 2015, in order to obtain either a  
            certificate of occupancy or a construction final from OSHPD.

          2.Contains an urgency clause, stating that to prevent the loss  
            of hospital licensure, Medicaid and Medicare funding, and  
            eligibility for Federal Emergency Management Agency assistance  
            following a disaster that would lead to hospital closures and  
            loss of access to health care in these communities, it is  
            necessary for this act to take effect immediately.

          3.Makes legislative findings and declarations that a special law  
            is necessary and that a general law cannot be made applicable  
            because of the unique circumstances facing hospitals in the  
            Counties of Sacramento, San Mateo, and Santa Barbara and the  
            City of San Jose that are working on meeting seismic safety  
            building standards.

           Comments
           
          According to the author, OSHPD recently identified five  
          outstanding hospital projects that are working toward the  
          January 1, 2015 deadline, which, due to extenuating  
          circumstances such as flooding and unforeseeable construction  
          delays, may not be completed on time.  Not meeting the January  
          1, 2015, deadline could result in the hospitals losing their  
          licenses and jeopardizing their ability to participate in  
          Medicare and Medicaid.  This bill provides an eight-month  
          extension to the January 1, 2015 deadline for those hospitals,  
          ensuring their communities have uninterrupted access to health  
          care.
          
           Hospital seismic requirements  .  Following the 1971 San Fernando  
          Valley earthquake, California enacted the Alfred E. Alquist  

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          Hospital Facility Seismic Safety Act of 1973 (Alquist Act),  
          which mandated that all new hospital construction meet stringent  
          seismic safety standards.  In 1994, after the Northridge  
          earthquake, the Legislature passed and the Governor signed SB  
          1953 (Alquist), Chapter 740, Statutes of 1994, which required  
          OSHPD to establish earthquake performance categories for  
          hospitals, and established a January 1, 2008, deadline by which  
          general acute care hospitals must be retrofitted or replaced so  
          that they do not pose a risk of collapse in the event of an  
          earthquake, and a January 1, 2030, deadline by which they must  
          be capable of remaining operational following an earthquake.  SB  
          1953 also allowed most hospitals to qualify for an extension of  
          the January 1, 2008 deadline to January 1, 2013.

          Existing law allows an extension of the 2008 deadline if  
          compliance will result in an interruption of health care  
          services provided by hospitals within the area.  Hospital owners  
          can request extensions in one-year increments up to a maximum of  
          five years after January 1, 2008.  Hospitals may also request  
          extensions of up to five years if acute care services will be  
          moved to an existing conforming building, relocated to a new  
          building, or if the existing building will be retrofitted to  
          designated seismic performance categories.

          In addition to the five-year extension, the Legislature has  
          passed additional bills allowing hospitals to extend the  
          deadlines for retrofitting beyond the 2013 deadline.  SB 1661  
          (Cox, Chapter 679, Statutes of 2006) authorizes an extension of  
          up to an additional two years for hospitals that have already  
          received five-year extensions of the January 1, 2008, seismic  
          safety compliance deadline if specified criteria are met,  
          including that the hospital building is under construction at  
          the time of the request for extension and the hospital is making  
          reasonable progress toward meeting its deadline, but factors  
          beyond the hospital's control make it impossible for the  
          hospital to meet the deadline.  

          SB 306 (Ducheny, Chapter 642, Statutes of 2007) permits a  
          hospital owner to comply with seismic safety deadlines and  
          requirements in current law by replacing all of its buildings  
          subject to seismic retrofit by January 1, 2020, rather than  
          retrofitting by 2013 and replacing them by 2030, if the hospital  
          meets several conditions and OSHPD certifies that the hospital  
          owner lacks the financial capacity to meet seismic standards, as  

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          defined.  Among the conditions a hospital must meet to be  
          eligible for this extension are that it maintains a contract to  
          provide Medi-Cal services, maintains a basic emergency room, and  
          is either in an underserved area, serves an underserved  
          community, is an essential provider of Medi-Cal services, or is  
          a heavy provider of services to Medi-Cal and indigent patients.   
          Eighteen hospitals have qualified for extensions to 2020 under  
          this authority.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  8/29/14)

          California Hospital Association (source) 
          California Association of Nurse Anesthetists
          California State Council, SEIU
          Hospital Corporation of America
          State Building and Construction Trades Council of California

          OPPOSITION  :    (Verified  8/29/14)

          California Nurses Association

           ARGUMENTS IN SUPPORT  :    The California Hospital Association  
          (CHA), the sponsor of this bill, writes that five hospitals will  
          likely not meet the January 1, 2015, seismic deadline  
          established in California law.  According to CHA, many designers  
          and structural engineers consider California hospitals to be the  
          most complex and costly buildings to construct due to all the  
          intricate systems that need to remain operational following an  
          earthquake.  CHA further states that the consequences for these  
          hospitals will be severe and restrict access to care in the  
          surrounding communities.

           ARGUMENTS IN OPPOSITION  :    The California Nurses Association  
          (CNA) writes that if seismic standards cannot be met after  
          extensions have already been granted, hospitals should not  
          continue to admit patients and place them and hospital staff at  
          risk for injury due to seismic non-compliance.  CNA further  
          states earthquakes are a common occurrence in California since  
          the state has over 100 active faults known to produce large  
          earthquakes.  
           

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          JL:nl  8/29/14   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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