BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 81
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|AUTHOR: |Wood |
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|VERSION: |January 5, 2015 |
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|HEARING DATE: |June 10, 2015 | | |
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|CONSULTANT: |Vince Marchand |
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SUBJECT : Hospitals: seismic safety.
SUMMARY : Permits a hospital in the City of Willits to request an
eight-month deadline extension of a seismic safety requirement
that hospitals be rebuilt or retrofitted to be capable of
withstanding an earthquake, which it is currently required to
meet by January 1, 2015, so that this hospital could have until
September 1, 2015, to meet this seismic safety requirement.
Existing law:
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)Permits 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.
3)Permits a hospital to continue operating under a deadline
AB 81 (Wood) Page 2 of ?
extension if 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.
4)Permits a hospital located in the Counties of Sacramento, San
Mateo, or Santa Barbara, or the City of San Jose, that has
received the additional two year extension to January 1, 2015
described in 2) above, to request an additional extension
until September 1, 2015, to obtain either a certificate of
occupancy from OSHPD for a replacement building, or a
construction final from OSHPD on a retrofitted building.
This bill:
1)Adds a hospital located in the City of Willits to existing
provisions of law that permit hospitals located in the
Counties of Sacramento, San Mateo, or Santa Barbara or the
City of San Jose, that have 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 the City of Willits, 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
City of Willits that are working on meeting seismic safety
building standards.
FISCAL
EFFECT : According to the Assembly Appropriations Committee,
costs to OSHPD to oversee this delay are minor and absorbable.
AB 81 (Wood) Page 3 of ?
PRIOR
VOTES :
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|Assembly Floor: |78 - 0 |
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|Assembly Appropriations Committee: |16 - 0 |
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|Assembly Health Committee: |18 - 0 |
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COMMENTS :
1)Author's statement. According to the author, the Frank R.
Howard Memorial Hospital (HMH) has been in construction and
working to meet the seismic safety requirements. However,
given the rural nature of the area, the construction project
has encountered unforeseen circumstances that delayed
completion of the hospital from meeting the deadline. This
bill seeks to provide an extension to HMH until September 1,
2015, to complete construction on a project that is nearly
completed. This is the same extension given to 5 other
hospitals last year, provided by the passage of AB 2557 (Pan,
Chapter 821, Statutes of 2014). If the deadline is not
extended, HMH could lose its license and even jeopardize its
ability to participate in Medicare and Medicaid program, which
is about 80 percent of their patients this hospital serves.
2)Hospital seismic requirements. Following the 1971 San
Fernando Valley earthquake, California enacted the Alfred E.
Alquist 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.
AB 81 (Wood) Page 4 of ?
Current 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 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.
3)Prior legislation. AB 2557 permitted a hospital located in the
Counties of Sacramento, San Mateo, or Santa Barbara or the
City of San Jose, that had 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
AB 81 (Wood) Page 5 of ?
order to obtain either a certificate of occupancy or a
construction final from the Office of Statewide Health
Planning and Development
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.
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.
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 owner lacks financial capacity to
comply with the law.
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 Web site.
4)Support. This bill is sponsored by the Frank R. Howard
Memorial Hospital (HMH), which states that it is a 25-bed
Critical Access Hospital located in northern Mendocino County.
HMH states that it has been engaged for since 2009 in the
design and construction of a new facility which was planned to
open for occupancy in advance of January 1, 2015. The
contractor's written construction schedule, in place through
the summer of 2014, called for substantial completion of HMH's
new facility in early October 2014, which would have given the
hospital time to open in advance of January 1, 2015. In
mid-September 2014, HMH states that the contractor, citing
unanticipated construction delays, provided HMH with a new
schedule reflecting completion of construction in mid-January
2015, which was later pushed back into the spring. HMH notes
that last year, five hospital construction projects were
identified as working toward the January 1, 2015 deadline, but
AB 81 (Wood) Page 6 of ?
due to extenuating circumstances, were not likely to be
completed in time. Legislation was passed to allow these five
hospitals to request an additional eight-month extension, and
that this bill is seeking to provide HMH with this same
ability. Adventist Health, and Loma Linda University Medical
Center state in support that HMH is an important health care
provider in northern Mendocino County, with more than 80
percent of the hospital's inpatient payor mix is a combination
of Medicare and Medi-Cal, and that non-compliance with seismic
deadlines could cause a hospital to lose its license. The
California Hospital Association states in support 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.
SUPPORT AND OPPOSITION :
Support: Frank R. Howard Memorial Hospital (sponsor)
Adventist Health
California Hospital Association
Loma Linda University Medical Center
Oppose: None received
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