BILL ANALYSIS Ó
AB 232
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(Without Reference to File)
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)
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|COMMITTEE VOTE: |15-0 |(September 11, |RECOMMENDATION: |concur |
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(Health)
Original Committee Reference: W., P., & W.
AB 232
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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
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.
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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)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.
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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: According to the author The Tehachapi Valley Health
Care District (TVHD) set out to comply with the 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.
1)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.
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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.
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
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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 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.
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2)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 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
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is expected to be operational by sometime in November of 2016.
The Association of California Healthcare Districts (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.
Analysis Prepared by:
Lara Flynn / HEALTH / (916) 319-2097 FN:
0002411
AB 232
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