BILL ANALYSIS Ó AB 2557 Page 1 ( Without Reference to File ) CONCURRENCE IN SENATE AMENDMENTS AB 2557 (Pan) As Amended August 22, 2014 2/3 vote. Urgency ---------------------------------------------------------------------- |ASSEMBLY: | |(May 23, 2014) |SENATE: | | | ---------------------------------------------------------------------- (vote not relevant) (vote not available) ------------------------------------------------------------------------ |COMMITTEE VOTE: |15-2 |(August 29, 2014) |RECOMMENDATION: |concur | |(Health) | | | | | ------------------------------------------------------------------------ Original Committee Reference: HIGHER ED. SUMMARY : Authorizes the Office of Statewide Health Planning and Development (OSHPD) to grant certain hospitals, who have already received an extension of the January 1, 2008, seismic safety deadline, an additional extension until September 1, 2015. Contains an urgency clause to ensure that the provisions of this bill go into immediate effect upon enactment. The Senate amendments delete the contents of the Assembly approved version of this bill and instead: 1)Clarify that, after January 1, 2008, a general acute care hospital determined to be a potential risk of collapse can only be used for non-acute purposes unless an extension of the deadline has already been granted and either of the following occurs before the end of the extension: a) A replacement building has been constructed and a 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. 2)Authorize OSHPD to grant hospitals located in the Counties of Sacramento, San Mateo, or Santa Barbara or the City of San Jose AB 2557 Page 2 that have received an extension of the January 1, 2008, deadline, an additional extension until September 1, 2015, in order to obtain either a certificate of occupancy from OSHPD for a replacement building, or a construction final from OSHPD for a building on which a retrofit has been performed. EXISTING LAW : 1)Establishes the Alfred E. Alquist Hospital Facilities Seismic Safety Act of 1983 (the Act), to ensure that hospital buildings be designed and constructed to resist the forces generated by earthquakes and requires OSHPD to propose building standards for earthquake resistance and to provide independent review of the design and construction of hospital buildings. 2)Requires hospitals to evaluate and rate all their general acute care hospital buildings for seismic resistance. 3)Creates a 16-member Hospital Building Safety Board appointed by the Director of OSHPD to act as a board of appeals in all matters relating to the administration and enforcement of seismic safety requirements. 4)Provides the ability for hospitals to request and receive a delay in their January 1, 2008, seismic compliance deadline if the hospital can demonstrate that compliance will result in a loss of health care capacity that may not be provided by another hospital within a reasonable distance. Requires the requesting hospital to state why it cannot comply with the deadline. 5)Requires OSHPD, prior to granting an extension of the 2008 deadline, to: a) Provide public notice of a hospital's request for an extension which includes the facility's name, identification number, the status of the request, and the beginning and ending dates of the public comment period, as well as provide copies of extension requests to interested parties within 10 working days; and, b) Allow the public to submit written comments on the extension proposal for at least 45 days from the date of the public notice. 6)Requires OSHPD to notify the Department of Health Services, now AB 2557 Page 3 the Department of Public Health (DPH), of the hospital owners that have received a written notice of violation for failure to comply with either the 2008 requirements or the 2030 requirements. Requires DPH, unless the hospital places its license in voluntary suspense, to suspend or refuse to renew the license of a hospital that has received a notice of violation from OSHPD because of its failure to comply with either of those requirements. AS PASSED BY THE ASSEMBLY , this bill removed Pasadena City College from the list of eligible community college campuses that may participate in the California Community Colleges summer and winter intersessions pilot program. FISCAL EFFECT : According to the Senate Appropriations Committee, pursuant to Rule 28.8, negligible state costs. 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' uninterrupted access to health care. 1)BACKGROUND. The Act establishes a seismic safety building standards program under OSHPD's jurisdiction for hospitals built on or after March 7, 1973. The Act was initiated because of the loss of life incurred due to the collapse of hospitals during the Sylmar earthquake of 1971. Approximately 470 general acute care hospital facilities comprised of 2,673 hospital buildings are impacted by the provisions of the Act. Hospitals built in accordance with the standards of the Act resisted the January 1994 Northridge earthquake with minimal structural damage, while several facilities built prior to the Act experienced major structural damage and had to be evacuated. One of the main provisions of the Act was the development, via regulation, of earthquake or seismic performance categories, specifically the Structural Performance Categories (SPC) and Nonstructural Performance Categories. These include seismic performance categories for new and existing general acute care AB 2557 Page 4 hospital facilities at various levels, i.e., from those capable of providing services to the public after a seismic event to those at significant risk of collapse and that represent a danger to the public. The goal of these regulations is to develop retrofit and repair designs for existing hospital buildings to yield predictable seismic performance, whether at the essential life safety level or post-earthquake continued operations level. Each general acute care hospital facility must be at certain SPC levels by specified timeframes. For example, in the initial law all general acute care hospital facility buildings must be at the SPC 2 ("Life Safety Level") by January 1, 2008, to be in compliance with the regulations, however, provisions were made to allow this deadline to be extended to January 1, 2013, if compliance with the 2008 deadline would result in a diminished capacity of healthcare services to the community. In addition, timeframes for submittal of seismic evaluations, compliance plans, and other seismic performance levels are cited in the seismic evaluation procedure regulations. 2)STATUS OF WAIVERS AND COMPLIANCE. Subsequent legislation affecting the Act has provided for additional seismic compliance extensions. Statewide, many hospitals are on different timelines based on the extension they applied for. The five hospitals subject to the provisions of this bill all have what are commonly known as SB 1661 (Cox), Chapter 679, Statutes of 2006, waivers. SB 1661 requires all general acute care hospitals that have nonconforming SPC-1 buildings to report to OSHPD by June 30, 2009, on the status of their compliance with the seismic safety deadlines. SPC-1 buildings are buildings posing significant risk of collapse and danger to the public. Buildings with an approved extension are permitted to provide acute care service only up to the length of extension granted, the maximum extension that may be granted per statute is January 1, 2020, beyond which the building can no longer provide general acute care services. In order to grant an extension to the hospital, OSHPD must consider the structural integrity of the building, the loss of essential healthcare services to the community should the hospital be closed, and the financial hardship that the hospital may have experienced. The extensions granted to the five hospitals that would be subject to this bill were until January 1, 2015, and all five have complied with the SB 1661 reporting requirements, which state: AB 2557 Page 5 a) The hospital building was under construction at the time of the request for extension; b) The hospital building plans were submitted to OSHPD and were deemed ready for review by OSHPD at least four years prior to the applicable deadline for the building; c) The hospital received a building permit at least two years prior to the applicable deadline for the building; d) The hospital submitted a construction timeline at least two years prior to the applicable deadline for the building demonstrating the hospital's intent to meet the applicable deadline. Requires the timeline to include all of the following: i) The projected construction start date; ii) The projected construction completion date; iii) Identification of the contractor; and, iv) The hospital is making reasonable progress toward meeting the timeline set forth in d) above, but factors beyond the hospital's control make it impossible for the hospital to meet the deadline. STATUS OF CONSTRUCTION 1)Goleta Valley Cottage Hospital (GVCH). The design build contractor for the new hospital building was selected in 2007 and the initial schedule was for the project to commence in January, 2009 and be completed in its entirety by August, 2011. Construction began in January 2009 on the initial phases, which included a temporary parking lot, site excavation and shoring, re-location of utilities and the installation of 2,300 rock columns. According to GVCH, this work was not completed until late 2010 due to poor contractor coordination, lack of manpower, and subcontractor issues. As a result, the new GVCH may not be completed and certainly, will not be occupied until after the deadline. Overall, the project is 93.6% complete through June 2014 and GVCH has expended $95.1 million of its anticipated $124.6 million budget. 2)Regional Medical Center of San Jose (RMC). RMC submitted plans AB 2557 Page 6 for its seismic retrofit and new addition project on August 8, 2008, with SB 1661 incremental plans for structural, architectural, mechanical, electrical and plumbing drawings being submitted in 2010 and 2011. According to RMC they have completed the construction of a new seismically compliant patient tower and connecting corridors but will require additional months beyond the January 1, 2015 deadline to complete renovation work in the non-compliant portions of their non-compliant facilities because their design team and contractors have run into hidden and unknown conditions throughout the demolition and renovation process which has forced them to redesign and resubmit plans to OSHPD for approval, a process which has added months to the project. RMC anticipates completion of the project in March, 2015. 3)Santa Ynez Valley Cottage Hospital (SYVCH). The design build contractor for the replacement and remodel was selected in 2006 and the initial schedule was for the project to commence in December 2007 and be completed in its entirety by April 2009. Construction of the new addition began in January 2008 and was not completed until December 2010. According to SYVCH the remodel phase did not begin in earnest until the new addition was occupied and the project has progressed slowly due to poor contractor coordination, lack of manpower and subcontractor issues and as a result, the remodel phase is at risk for not being completed by the deadline. Overall, the project is approximately 91% complete through June 2014 and SYVCH has expended $13.8 million of its anticipated $15.2 million budget. 4)Sequoia Hospital. Sequoia Hospital in Redwood City has completed the retrofitting of six buildings and the construction of a new patient pavilion. The pavilion is waiting for a certificate of occupancy from OSHPD and a license from DPH. Sequoia Hospital states that the retrofitting of the final two buildings cannot be completed without disrupting access to health care services for the community, until patients are moved into the new pavilion. If construction proceeds as planned, Sequoia Hospital expects the structural work of the two final buildings to be completed prior to the deadline, although some remaining cosmetic and remodeling work may spill into January. OSHPD has indicated they will approve the structural work separate from the remodeling. Sequoia Hospital is seeking an extension to allow the administrative process of OSHPD reviewing and approving the work and DPH issuing a new license to take place without impacting access to care for area patients. AB 2557 Page 7 5)Sutter Memorial Hospital. According to Sutter Memorial Hospital the replacement project is a very complex project that includes construction of an eight story Women's and Children's Center and the remodeling of the existing Sutter General Hospital. Sutter Memorial notes, like many large construction projects, delays have pushed the opening date beyond the anticipated completion. Among the delays, a material defect in a pipe cap led to significant flooding of the Women's and Children's Center building earlier this year. A comprehensive remediation and restoration effort was undertaken to repair damage on several floors and complicated their ability to complete the project on the scheduled timeline, resulting in $8 million in damage and a four-month delay. Sutter Memorial states, to ensure the highest quality and safety of patients, the new facility will not be ready to accommodate the patients from Sutter General Hospital until July 2015. The California Hospital Association (CHA) is the sponsor of this bill and states that many designers and structural engineers consider California hospitals to be the most complex and costly buildings to construct due to the intricate structural, mechanical, plumbing and electrical systems needed to remain operational following an earthquake. CHA notes that these five hospitals have met the benchmarks required by SB 1661 at the cost of millions of dollars but, due to the complex nature of the projects and extenuating circumstances, these five hospital construction projects have been slightly delayed and if this bill is not passed, closure of any of these hospitals would create access to care problems in their communities. The State Building and Construction Trades Council (SBCTC) supports this bill stating that their members know firsthand the importance of ensuring that California hospitals are seismically compliant so that they will remain operational during the most critical time. SBCTC also notes that there is an added level of complexity for hospital construction projects due to the intricate structural, mechanical, plumbing and electrical systems needed to remain operational following an earthquake. The California Nurses Association (CNA) is opposed to this bill because they maintain it has become routine for the California Hospital Association to rush into the Legislature at the last minute asking for special consideration when they could and should have anticipated the need for extensions earlier in the legislative AB 2557 Page 8 year. CNA notes that concerned members of the public and representatives of healthcare workers should be given enough time to assess the veracity of the excuses made by these hospitals and this cannot be done when the bill is rushed through the process. Finally, CNA states 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. Analysis Prepared by : Lara Flynn / HEALTH / (916) 319-2097 FN: 0005591