BILL ANALYSIS Ó
AB 232
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
232 (Obernolte)
As Amended September 4, 2015
2/3 vote. Urgency
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|ASSEMBLY: | |(May 14, 2015) |SENATE: |40-0 |(September 10, |
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(vote not relevant)
Original Committee Reference: W., P., & W.
SUMMARY: Authorizes a critical access hospital located in the
City of Tehachapi to submit an application to the Office of
Statewide Health Planning and Development (OSHPD), which, if
approved, would extend the hospital's seismic compliance
deadline to 2020. Contains an urgency clause to ensure that the
provisions of this bill go into immediate effect upon enactment.
The Senate amendments delete the Assembly version of this bill
and instead:
1)Permit a critical access hospital located in the City of
Tehachapi to submit a seismic safety extension application,
pursuant to specified provisions of existing law that allow an
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extension of the deadline until up to January 1, 2020.
2)Require the application submitted pursuant to 1) above to
include a timetable, as required under existing law, detailing
how the hospital intends to meet the requested deadline.
EXISTING STATE LAW:
1)Establishes the Alfred E. Alquist Hospital Facilities Seismic
Safety Act of 1983 (Alquist 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)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.
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5)Allows hospitals that have received extensions to January 1,
2013, of the January 1, 2008 seismic deadline, for their SPC-1
buildings, to request an additional extension of up to seven
years. Establishes a deadline of September 30, 2012, to apply
for this extension.
6)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 seismic safety
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.
EXISTING FEDERAL LAW: Establishes the Medicare Rural Hospital
Flexibility Program to permit states to designate certain health
facilities to be critical access hospitals. Requires critical
access hospitals to meet certain criteria, including that the
facility be a rural public or nonprofit hospital that is located
more than a 35-mile drive from any other hospital or is
certified by the state as being a necessary provider of health
care services to residents in the area.
AS PASSED BY THE ASSEMBLY, this bill extended from 20 days to 30
days, the time period the Legislature has to review a proposed
state park lease agreement before it can be approved by the
State Public Works Board.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS:
1)Purpose of this Bill. According to the author The Tehachapi
Valley Health Care District (TVHD) set out to comply with the
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state's seismic mandate by building a brand new hospital which
is currently under construction. However, in the interim, the
hospital must retrofit existing buildings in order to remain
operational and to ensure continued access to critical health
care services. The author notes that under the current
seismic mandate, this hospital will be unable to continue
operating in its existing hospital buildings beyond January 1,
2016. The author contends that if the hospital is not be
granted an extension to this deadline, the consequences are
severe - including loss of hospital licensure and the
exclusion from federal participation in Medicaid and Medicare.
The author concludes passage of this bill will not only
prevent closure of this hospital, and will also ensure that
residents in this district will continue to have access to
critical health care services that are so needed in this small
rural community.
2)Background.
a) Hospital seismic safety requirements. The Alquist Act
establishes a seismic safety building standards program
under OSHPD's jurisdiction for hospitals built on or after
March 7, 1973. The Alquist 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
Alquist Act. Hospitals built in accordance with the
standards of the Alquist Act resisted the January 1994
Northridge earthquake with minimal structural damage, while
several facilities built prior to the Alquist Act
experienced major structural damage and had to be
evacuated.
One of the main provisions of the Alquist Act was the
development, via regulation, of earthquake or seismic
performance categories, specifically the Structural
Performance Categories (SPCs). These include seismic
performance categories 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 (SPC-5) to those at significant risk of
collapse (SPC-1) and that represent a danger to the public.
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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 (do not significantly
jeopardize life, but may not be repairable or functional
following strong ground motion) 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. The next deadline is the January 1, 2030
deadline for hospitals to remain operational following an
earthquake, and at that time SPC-2 buildings will no longer
be permitted, and all building will have to at least meet
SPC-3, and in many cases, SPC-4 or SPC-5 (the highest
rating). According to OSPHD, only about 10% of remaining
hospital buildings are still classified as SPC-1.
The following are the Alquist Act deadline extensions that
are relevant to Tehachapi Hospital and this bill:
SB 306 (Ducheny), Chapter 642, Statutes of 2007, permitted
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 to SPC-2 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. Tehachapi Hospital applied
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for an extension under SB 306, but the application was
denied by OSHPD due to financial criteria.
SB 608 (Alquist), Chapter 623, Statutes of 2010, provided
for an extension of hospital seismic deadlines, for
hospitals that have already received the five-year
extension to January 1, 2013, of up to three years for
hospitals that document that a local planning delay will
cause them to miss the January 1, 2013 deadline. Tehachapi
Hospital was approved for an extension under SB 608 for the
maximum of three years, to January 1, 2016. This is the
deadline currently facing Tehachapi Hospital.
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.
The deadline for submitting an application under SB 90 was
September 30, 2012. A hospital applying under SB 90, as
part of its application, was required to specify whether it
intended to rebuild, replace, or retrofit the building, and
the amount of time necessary to complete the construction.
Additionally, a hospital seeking an SB 90 extension was
required to submit to OSHPD, as part of its application, a
structural reassessment, known as a HAZUS assessment, for
each of its SPC-1 buildings. Tehachapi Hospital initially
submitted an application for an extension under SB 90 in
2012, but withdrew the application because it intended to
build a new facility rather than retrofit their existing
building to SPC-2 standards.
b) Tehachapi Hospital. Tehachapi Hospital is operated by
the TVHD, and is licensed as a 24-bed general acute care
hospital, of which 19 beds are classified as "swing" beds,
meaning they can also be used for long-term skilled nursing
care. Tehachapi Hospital is located in the City of
Tehachapi, which is about 35 miles southeast of
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Bakersfield. The nearest hospital is Kern Medical Center
in Bakersfield, 38 miles away. Tehachapi Hospital is
designated by DPH as a critical access hospital, which
under federal Medicare law means they are eligible to
receive cost-based reimbursement from Medicare, and is
intended to reduce hospital closures in rural areas. As
discussed above, Tehachapi Hospital was granted extensions
from the original January 1, 2008 deadline to bring their
SPC-1 buildings into SPC-2 compliance. Under its SB 608
extension, they have until January 1, 2016 to bring their
SPC-1 buildings into compliance, or stop providing services
as a general acute care hospital.
According to OSHPD, in March of 2012, Tehachapi Hospital
applied for an extension under SB 90, which would have
provided for an extension of up to seven years beyond the
2013 deadline, or as late as January 1, 2020. Because this
application did not include the required HAZUS assessment,
OSHPD issued a letter to Tehachapi informing the hospital
that their application was in jeopardy of being denied
without the HAZUS assessment. Rather than complete a HAZUS
assessment, Tehachapi Hospital withdrew their request for
an SB 90 extension in June of 2012.
According to TVHD, the reason the hospital withdrew its SB
90 application was because it was planning on building a
new hospital, and because it planned to have this building
completed before their current deadline, determined that an
SB 90 extension was unnecessary. However the hospital
encountered both financial and design challenges as well as
construction delays and the project is now approximately 18
months behind schedule, beyond the January 1, 2016
deadline.
Construction on the new hospital is expected to be finished by
the end of May 2016, and after inspections, setting up the new
hospital, and achieving licensure, the new Tehachapi Hospital
is expected to be operational by sometime in November of 2016.
3)Support. The Association of California Healthcare Districts
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(ACHD) is the sponsor of this bill and states without the
authority granted in this bill Tehachapi Hospital will be
unable to continue operating in its existing hospital as of
January 1, 2016. ACHD notes as a rural critical access
hospital serving a remote rural community located west of the
Mojave Desert in the Tehachapi Mountains, the hospital faces a
greater disadvantage than larger, urban hospitals and has
faced both financial and design challenges. ACHD states the
TVHD is in the midst of constructing the new hospital which is
approximately 50% complete and until recently believed they
were on track to meet the seismic deadlines in statute;
however the TVHD now faces an 18-month project delay,
threatening continued access to critical health care services
in this underserved community.
Adventist Health, the California Hospital Association, and the
District Hospital Leadership Forum all note this bill will
provide an exception for TVHD to resubmit its seismic safety
extension application and acceptable plan to OSHPD in
compliance with retrofit deadlines established under current
law, and this solution will provide the hospital with adequate
time to retrofit the appropriate buildings and allow the
hospital to remain operational until the new hospital is
complete.
4)Related Legislation. AB 81 (Wood), Chapter 63, Statutes of
2015, 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.
5)Previous Legislation.
a) AB 2557 (Pan), Chapter 821, Statutes of 2014, permitted
hospitals located in the Counties of Sacramento, San Mateo,
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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 order to obtain
either a certificate of occupancy or a construction final
from OSHPD.
b) SB 90 allowed a hospital that had already received an
extension to January 1, 2013, to seek an extension for
seismic compliance for its SPC-1 buildings of up to seven
additional years, if the hospital meets several interim
deadlines and requirements. Required OSHPD, in deciding
whether to grant the extension and in deciding how long the
extension should be, to base its decision 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 608 provided for an extension of hospital seismic
deadlines of up to three years for hospitals that document
that a local planning delay will cause them to miss the
January 1, 2013 deadline. Permitted OSHPD to grant an
additional extension of up to two years, beyond the three
years, for projects that do not provide acute care services
and meet other criteria regarding life support systems and
structural risk.
d) 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.
e) SB 306 amended the Alquist 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
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financial capacity to comply with the law.
f) 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.
This bill was substantially amended in the Senate and the
Assembly-approved provisions of this bill were deleted. This
bill, as amended in the Senate is inconsistent with Assembly
actions.
Analysis Prepared by:
Lara Flynn / HEALTH / (916) 319-2097 FN:
0002397