California Legislature—2015–16 Regular Session

Assembly BillNo. 1046

Introduced by Assembly Member Dababneh

February 26, 2015

An act to amend Sections 127340, 127345, 127350, and 127355 of, and to add Section 127365 to, the Health and Safety Code, relating to hospitals.


AB 1046, as introduced, Dababneh. Hospitals: community benefits.

Existing law requires certain private not-for-profit acute hospitals to, every 3 years, complete a community needs assessment, as defined, and to annually adopt and update a community benefits plan, as defined. Existing law exempts certain hospitals from these provisions, including small and rural hospitals. Existing law requires a hospital to file a report on its community benefits plan and the activities undertaken to address community needs with the Statewide Office of Health Planning and Development. Existing law requires the office to make those reports available to the public.

This bill would revise and recast these provisions to, among other things, make changes to the elements that are required to be included in a community benefits plan and delete the exemption from these requirements for small and rural hospitals. The bill would instead require a hospital to adopt a community benefits plan every 3 years, and to submit an update of the activities conducted under the plan to the office annually. The bill would require the office to post on its Internet Web site the updates to community benefits plans received by the office from each hospital. The bill would require a hospital to make updates to its community benefits plan available to the public, upon request, at no charge.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1


Section 127340 of the Health and Safety Code
2 is amended to read:



The Legislature finds and declares all of the following:

4(a) Private not-for-profit hospitals meet certainbegin insert healthend insert needs of
5their communities through the provision of essential health care
6and other services. Public recognition of their unique status has
7led to favorable tax treatment by the government. In exchange,
8nonprofit hospitals assume a social obligation to provide
9community benefits in the public interest.

10(b) Hospitals and the environment in which they operate have
11undergone dramatic changes. The pace of change will accelerate
12in response to health care reform. In light of this, significant public
13benefit would be derived if private not-for-profit hospitals reviewed
14and reaffirmed periodically their commitment to assist in meeting
15their communities’ healthbegin delete careend delete needs by identifying and
16documenting benefits provided to the communities which they

18(c) California’s private not-for-profit hospitals provide a wide
19range of benefits to their communities in addition to those reflected
20in the financial data reported to the state.

begin insert

21These benefits include, but are not limited to, all of the following:

end insert
begin delete

22(d)  Unreported community benefits that are often provided but
23not otherwise reported include, but are not limited to, all of the

25(1)  Community-oriented wellness and health promotion.

26(2)  Prevention services, including, but not limited to, health
27screening, immunizations, school examinations, and disease
28counseling and education.

29(3)  Adult day care.

30(4)  Child care.

31(5)  Medical research.

32(6)  Medical education.

33(7)  Nursing and other professional training.

P3    1(8)  Home-delivered meals to the homebound.

2(9)  Sponsorship of free food, shelter, and clothing to the

4(10)  Outreach clinics in socioeconomically depressed areas.

5(e)  Direct provision of goods and services, as well as preventive
6programs, should be emphasized by hospitals in the development
7of community benefit plans.

end delete
begin insert

8(1) Community health services that may include community
9health education, community-based clinical services, health care
10support services, and social or environmental services.

end insert
begin insert

11(2) Health professions education.

end insert
begin insert

12(3) Subsidized health services, including, but not limited to,
13emergency and trauma, neonatal intensive care, burn and special
14care units, women and children’s services, renal services, hospice,
15home care, adult day care, behavioral health care services, and
16palliative care.

end insert
begin insert

17(4) Research in clinical care, community health, and general
18studies, including health care delivery.

end insert
begin insert

19(5) Financial and in-kind contributions, including grants or
20other funds to not-for-profit health care organizations improving
21community health needs.

end insert
begin insert

22(6) Administrative and operational costs associated with
23conducting community health needs assessments and implementing
24and evaluating community benefits plans.

end insert
begin insert

25(d) Direct provision of health goods and services or partnerships
26to enhance the provision of health goods and services, as well as
27preventive programs, should be emphasized by hospitals in the
28development of community benefits plans.

end insert

SEC. 2.  

Section 127345 of the Health and Safety Code is
30amended to read:



As used in this article, the following terms have the
32following meanings:

33(a) “Community benefits plan” meansbegin delete theend deletebegin insert aend insert written document
34begin delete prepared for annual submission to the Office of Statewide Health
35Planning and Developmentend delete
that shall include, but shall not be
36limited to, a description of the activities that the hospital has
37undertaken in order to address identified communitybegin insert healthend insert needs
38within its mission and financial capacity, and the process by which
39the hospital developed the plan in consultation with the community.

P4    1(b) “Community” means the service areas or patient populations
2for which the hospital provides health care services.

3(c) Solely for the planning and reporting purposes of this article,
4“community benefit” means a hospital’s activities that are intended
5to address communitybegin insert healthend insert needs and priorities primarily through
6disease prevention and improvement of health status, including,
7but not limited to, any of the following:

8(1) Health care services, rendered to vulnerable populations,
9including, but not limited to, charity care and the unreimbursed
10cost of providing services to the uninsured, underinsured, and those
11eligible for Medi-Cal, Medicare,begin delete California Childrens Services
12Program, orend delete
county indigent programsbegin insert, or other means-tested
13government programsend insert

14(2) The unreimbursed cost of services included in subdivision
15(d) of Section 127340.

16(3) Financial or in-kind support of public health programs.

17(4) Donation of funds, property, or other resources that
18contribute tobegin delete aend delete communitybegin delete priorityend deletebegin insert health improvementend insert.

19(5) Health care cost containment.

20(6) Enhancement of access to health care or related services that
21contribute tobegin delete a healthierend delete communitybegin insert health improvementend insert.

22(7) Services offered without regard to financial return because
23they meet a communitybegin insert healthend insert need in the service area of the
24hospital, and other services including health promotion, health
25education,begin insert research,end insert prevention, and social services.

26(8) Food, shelter, clothing, education, transportation, and other
27goods or services that helpbegin delete maintain a person’s healthend deletebegin insert community
28health improvementend insert

29(d) “Communitybegin insert healthend insert needs assessment” means the process
30by which the hospital identifies, for its primary service area as
31determined by the hospital, unmet communitybegin insert healthend insert needs.

32(e) “Communitybegin insert healthend insert needs” means those requisites for
33improvement or maintenance of health status in the community.

34(f) “Hospital” means a private not-for-profit acute hospital
35licensed under subdivision (a), (b), or (f) of Section 1250 and is
36owned by a corporation that has been determined to be exempt
37from taxation under the United States Internal Revenue Code.
38“Hospital” does notbegin delete mean any of the following:end deletebegin insert include a hospital
39that is dedicated to serving children and that does not receive
40direct payment for services to any patient.end insert

begin delete

P5    1(1)  Hospitals that are dedicated to serving children and that do
2not receive direct payment for services to any patient.

3(2)  Small and rural hospitals as defined in Section 124840.

end delete

4(g) “Mission statement” means a hospital’s primary objectives
5for operation as adopted by its governing body.

6(h) “Vulnerable populations” means any population that is
7exposed to medical or financial risk by virtue of being uninsured,
8underinsured, or eligible for Medi-Cal, Medicare,begin delete California
9Childrens Services Program, orend delete
county indigent programsbegin insert, or other
10means-tested programsend insert


SEC. 3.  

Section 127350 of the Health and Safety Code is
12amended to read:



Each hospital shall do all of the following:

begin delete

14(a)  By July 1, 1995, reaffirm its mission statement that requires
15its policies integrate and reflect the public interest in meeting its
16responsibilities as a not-for-profit organization.

end delete
begin delete

17(b)  By January 1, 1996,

end delete

18begin insert(a)end insertbegin insertend insertbegin insertEvery three years, end insertcomplete, either alone, in conjunction
19with other health care providers, or through other organizational
20arrangements, a communitybegin insert healthend insert needs assessment evaluating
21the health needs of the community serviced by the hospital, that
22includes, but is not limited to, a process for consulting with
23community groups and local government officials in the
24identification and prioritization of communitybegin insert healthend insert needs that
25the hospital can address directly, in collaboration with others, or
26through other organizational arrangement.begin delete The community needs
27assessment shall be updated at least once every three years.end delete

begin delete

28(c)  By April 1, 1996, and annually thereafter

end delete

29begin insert(b)end insertbegin insertend insertbegin insertFollowing completion of the community health needs
30assessment every three years,end insert
adoptbegin delete and updateend delete a community
31benefits plan for providing community benefits either alone, in
32conjunction with other health care providers, or through other
33organizational arrangements.

begin delete


end delete

35begin insert(c)end insert Annually submitbegin delete itsend deletebegin insert an update of the activities conducted
36pursuant to theend insert
community benefits plan, including, but not limited
37to, the activities that the hospital has undertaken in order to address
38communitybegin insert healthend insert needs within its mission and financial capacitybegin insert,end insert
39 to the Office of Statewide Health Planning and Development. The
40hospital shall, to the extent practicable, assign and report the
P6    1economic value of community benefits provided in furtherance of
2its plan.begin delete Effective with hospital fiscal years, beginning on or after
3January 1, 1996, eachend delete
begin insert Eachend insert hospital shall file a copy of thebegin delete planend delete
4begin insert updateend insert with the office not later than 150 days after the hospital’s
5fiscal year ends.begin delete The reportsend delete

6begin insert(d)end insertbegin insertend insertbegin insertThe updatesend insert filed by the hospitalsbegin insert with the officeend insert shall be
7made available to the public by the officebegin insert, and, upon request, by
8the hospital, at no chargeend insert
. Hospitals under the common control
9of a single corporation or another entity may file a consolidated
10begin delete reportend deletebegin insert update of its community benefits planend insert.


SEC. 4.  

Section 127355 of the Health and Safety Code is
12amended to read:



The hospital shall include all of the following elements
14in its community benefits plan:

15(a) Mechanisms to evaluate the plan’s effectiveness including,
16but not limited to, a method for soliciting the views of the
17community served by the hospital and identification of community
18groups and local government officials consulted during the
19development of the plan.

20(b) Measurable objectives to be achieved within specified

22(c) Community benefits categorized into the following

begin delete

24(1)  Medical care services.

end delete
begin delete

25(2)  Other benefits for vulnerable populations.

end delete
begin delete

26(3)  Other benefits for the broader community.

end delete
begin delete

27(4)  Health research, education, and training programs.

end delete
begin delete

28(5)  Nonquantifiable benefits.

end delete
begin insert

29(1) Charity care at cost.

end insert
begin insert

30(2) Unreimbursed cost of Medi-Cal, Medicare, county indigent
31programs, or other means-tested government programs.

end insert
begin insert

32(3) Community health improvement services.

end insert
begin insert

33(4) Health research, health professions education, and training

end insert
begin insert

35(5) Subsidized health services, cash, and in-kind contributions
36and other benefits.

end insert
begin insert

37(6) Nonquantifiable benefits.

end insert

SEC. 5.  

Section 127365 is added to the Health and Safety Code,
39to read:

P7    1


The Office of Statewide Health Planning and
2Development shall do all of the following:

3(a) Post on its Internet Web site the community benefits plans
4and updates that are submitted to the office pursuant to subdivision
5(b) or (c) of Section 127350 within 120 days of receipt of those
6plans or updates.

7(b) Identify on its Internet Web site any hospital that did not
8file an update of its community benefits plan on a timely basis.