BILL ANALYSIS Ó AB 81 Page 1 Date of Hearing: April 7, 2015 ASSEMBLY COMMITTEE ON HEALTH Bonta, Chair AB 81 (Wood) - As Introduced January 5, 2015 SUBJECT: Hospitals: seismic safety. SUMMARY: Authorizes a hospital in the City of Willits, that has already received an extension of the January 1, 2008, seismic safety deadline from the Office of Statewide Health Planning and Development (OSHPD), to request an additional extension of the deadline until September 1, 2015. Makes findings and declarations as to the necessity of a special statute for the City of Willits and contains an urgency clause to ensure that the provisions of this bill go into immediate effect upon enactment. EXISTING LAW: 1)Establishes the Alfred E. Alquist Hospital Facilities Seismic Safety Act of 1983, 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)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. AB 81 Page 2 3)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. 4)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. 5)Requires OSHPD to notify the Department of Public Health (DPH), of the hospital owners that have received a written notice of violation for failure to comply with the 2008 requirements. Requires DPH 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, unless the hospital places its license in voluntary suspense. FISCAL EFFECT: This bill has not been analyzed by a fiscal committee. AB 81 Page 3 COMMENTS: 1)PURPOSE OF THIS BILL. According to the author, this bill seeks to extend the seismic safety deadline to provide time to complete construction on a new hospital building that is already 90% complete, and if the deadline for Frank R. Howard Memorial Hospital (HMH) in the city of Willits is not extended, they could lose their license and jeopardize their ability to participate in Medicare and Medicaid, which is about 80% of their inpatient payer mix. The author notes that key services that make HMH unique compared to other hospitals in the surrounding area (around 100 miles or an hour drive away) include a 24-hour emergency department, intensive care, laboratory, imaging, orthopedics, physical rehabilitation, and surgery. 2)BACKGROUND. Existing law establishes a seismic safety building standards program under OSHPD's jurisdiction for hospitals built on or after March 7, 1973. These provisions were 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 existing seismic safety law. Hospitals built in accordance with the standards resisted the January 1994 Northridge earthquake with minimal structural damage, while several facilities built prior to the enforcement of the new standards experienced major structural damage and had to be evacuated. One of the main provisions in existing law 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, or life safety levels, for new and existing general acute care 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 AB 81 Page 4 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. At one time all general acute care hospital facility buildings were required to 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 SPC levels are cited in the seismic evaluation procedure regulations. 3)STATUS OF WAIVERS AND COMPLIANCE. Subsequent legislation has provided for additional seismic compliance extensions. Statewide, many hospitals are on different timelines based on the specific extension. HMH has what is commonly known as an SB 1661 waiver. SB 1661 (Cox), Chapter 679, Statutes of 2006, requires all general acute care hospitals that have non-seismically safe 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 extension granted to HMH was until January 1, 2015, and the hospital complied with the SB 1661 reporting requirements, which state: AB 81 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. 3)SUPPORT. HMH (located in northern Mendocino County) is the sponsor of this bill and states that they are central to the maintenance of access to care in the communities they serve. HMH contends that since 2009 they have been working closely with their contractor to make sure that the new facility under construction was seismically compliant and would be ready for occupancy on or before the January 1, 2015 deadline. However, in mid-September 2014, citing unanticipated construction delays, the contractor provided HMH with a new schedule reflecting completion of construction in the spring of 2015. HMH notes that the circumstances they encountered appear to be much like those experienced by the five hospital projects that were the subject of AB 2557 (Pan), Chapter 821, Statutes of 2014 that extended the deadline to September 1, 2015. Adventist Health, the operator of the hospital, writes that as AB 81 Page 6 part of their hospital system in California, HMH has been designated by the federal government as a Critical Access hospital, which means it is a vitally important link in maintaining access to care in rural areas where hospital services are scarce. 4)PREVIOUS LEGISLATION. a) AB 2557authorized OSHPD to grant five hospitals, who had already received an extension of the January 1, 2008, seismic safety deadline, an additional extension until September 1, 2015. b) SB 90 (Steinberg), Chapter 19, Statutes of 2011, allowed a hospital to seek an extension for seismic compliance for its SPC-1 buildings of up to seven years based on the following elements: the structural integrity of the building; the loss of essential hospital services to the community if the hospital closed; and, financial hardship. c) SB 499 (Ducheny), Chapter 601, Statutes of 2009, required all general acute care hospitals that have SPC-1 buildings to report to OSHPD by November 1, 2010, and annually thereafter, on the status of their compliance with the seismic safety deadlines. d) SB 306 (Ducheny), Chapter 642, Statues of 2007, amended the Alfred E. Alquist Hospital Facilities Seismic Safety Act to permit hospitals to delay compliance with the July 1, 2008 seismic retro deadline, and the 2013 extension, to the year 2020, by filing a declaration with OSHPD that the AB 81 Page 7 owner lacks financial capacity to comply with the law. e) SB 1661 (Cox), Chapter 679, Statutes of 2006, authorized an extension of up to an additional two years for hospitals that had already received extensions of the January 1, 2008 seismic safety compliance deadline if specified criteria were met, and required specified hospital reports to be posted on the OSHPD Website. REGISTERED SUPPORT / OPPOSITION: Support Frank R. Howard Memorial Hospital (sponsor) Adventist Health California Hospital Association Loma Linda University Medical Center Opposition None on file. Analysis Prepared by: Lara Flynn / HEALTH / AB 81 Page 8