BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      AB 81


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          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.








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          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.











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          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  








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            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:









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             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  








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            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  








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               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 /















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