BILL NUMBER: SB 1076 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 18, 2016
INTRODUCED BY Senator Hernandez
FEBRUARY 16, 2016
An act to amend Section 128740 of, and to add Section 1253.7 to,
the Health and Safety Code, relating to health care.
LEGISLATIVE COUNSEL'S DIGEST
SB 1076, as amended, Hernandez. General acute care hospitals:
observation services.
(1) Existing law establishes the State Department of Public Health
and sets forth its powers and duties, including, but not limited to,
the licensing and regulation of health facilities, including, but
not limited to, general acute care hospitals. A violation of these
provisions is a crime.
Existing law authorizes the department to issue a special permit
authorizing a health facility to offer one or more special services
when specified requirements are met. Existing law requires general
acute care hospitals to apply for supplemental services approval and
requires the department, upon issuance and renewal of a license for
certain health facilities, to separately identify on the license each
supplemental service.
This bill would require a general acute care hospital that
provides observation services, as defined, to comply with the same
staffing standards licensed
nurse-to-patient ratios as supplemental emergency services, as
specified. The bill would require that a patient receiving
observation services receive written notice immediately upon
admission for observation services or placement into observation
status, or immediately following a change from inpatient status to
observation status, notice, as prescribed, that
his or her care is being provided on an outpatient basis.
basis, which may affect the patient's health coverage
reimbursement. The bill would require observation units to be
identified with specified signage, and would clarify that a general
acute care hospital providing services described in the bill would
not be exempt from these requirements because the hospital identifies
those services by a name or term other than that used in the bill.
Because a violation of these provisions by a health facility would be
a crime, the bill would impose a state-mandated local program.
(2) Existing law requires a hospital to report specified summary
financial and utilization data to the Office of Statewide Health
Planning and Development (OSHPD) within 45 days of the end of every
calendar quarter.
This bill would require hospitals to include certain data relating
to observation service visits and total observation service gross
revenues in the reports filed with OSHPD.
(3) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1253.7 is added to the Health and Safety Code,
to read:
1253.7. (a) For purposes of this chapter, "observation services"
means outpatient services provided by a general acute care
hospital, hospital and that have been ordered by a
provider, to those patients who have unstable or uncertain
conditions potentially serious enough to warrant close observation,
but not so serious as to warrant inpatient admission to the hospital.
Observation services may include the use of a bed, monitoring by
nursing and other staff, and any other services that are reasonable
and necessary to safely evaluate a patient's condition or determine
the need for a possible inpatient admission to the hospital.
(b) Notwithstanding subdivisions (d) and (e) of Section 1275,
observation services provided by the general acute care hospital in
an outpatient observation unit, including the services provided in a
freestanding physical plant, as defined in subdivision (h) of Section
1275, shall comply with the same staffing standards, including, but
not limited to, licensed nurse-to-patient ratios, as supplemental
emergency services.
(c) A patient receiving observation services shall receive written
notice immediately upon admission for observation services or
placement into observation status, or immediately following a change
from inpatient status to observation status, that his or her care is
being provided on an outpatient basis, and that this may affect
reimbursement by Medicare, Medi-Cal, or private payers of health care
services, or cost-sharing arrangements through his or her health
care coverage.
(d) Observation units not provided in inpatient beds or attached
to emergency services
(b) When a patient in an inpatient unit of a hospital or in an
observation unit, as defined in subdivision (c), is receiving
observation services, or following a change in a patient's status
from inpatient to observation, the patient shall receive written
notice, as soon as practicable, that he or she is on observation
status. The notice shall state that while on observation status, the
patient's care is being provided on an outpatient basis, which may
affect his or her health care coverage reimbursement.
(c) For purposes of this chapter,
"observation unit" means an area in which observation services are
provided in a setting outside of any inpatient unit and that is not
part of an emergency department of a general acute care hospital. A
hospital may establish one or more observation units that shall
be marked with signage identifying the observation unit
area as an outpatient area. The signage shall use the term
"outpatient" in the title of the designated area to indicate clearly
to all patients and family members that the observation services
provided in the center are not inpatient services.
Identifying an observation unit by a name or term other
than that used in this subdivision does not exempt the general acute
care hospital from compliance with the requirements of this section.
(e) Observation services shall be deemed outpatient or ambulatory
services that are revenue-producing cost centers associated with
hospital-based or satellite services locations that emphasize
outpatient care. Identifying an observation unit by a name or term
other than that used in this subdivision does not exempt the general
acute care hospital from compliance with the requirements of this
section.
(d) Notwithstanding subdivisions (d) and (e) of Section 1275, an
observation unit shall comply with the same licensed nurse-to-patient
ratios as supplemental emergency services. This subdivision is not
intended to alter or amend the effect of any regulation adopted
pursuant to Section 1276.4 as of the effective date of the act that
added this subdivision.
SEC. 2. Section 128740 of the Health and Safety Code is amended to
read:
128740. (a) Commencing with the first calendar quarter of 1992,
the following summary financial and utilization data shall be
reported to the office by each hospital within 45 days of the end of
every calendar quarter. Adjusted reports reflecting changes as a
result of audited financial statements may be filed within four
months of the close of the hospital's fiscal or calendar year. The
quarterly summary financial and utilization data shall conform to the
uniform description of accounts as contained in the Accounting and
Reporting Manual for California Hospitals and shall include all of
the following:
(1) Number of licensed beds.
(2) Average number of available beds.
(3) Average number of staffed beds.
(4) Number of discharges.
(5) Number of inpatient days.
(6) Number of outpatient visits, excluding observation service
visits.
(7) Number of observation service visits and number of hours of
services provided.
(8) Total operating expenses.
(9) Total inpatient gross revenues by payer, including Medicare,
Medi-Cal, county indigent programs, other third parties, and other
payers.
(10) Total outpatient gross revenues by payer, including Medicare,
Medi-Cal, county indigent programs, other third parties, and other
payers.
(11) Total observation service gross revenues by payer, including
Medicare, Medi-Cal, county indigent programs, other third parties,
and other payers.
(12) Deductions from revenue in total and by component, including
the following: Medicare contractual adjustments, Medi-Cal contractual
adjustments, and county indigent program contractual adjustments,
other contractual adjustments, bad debts, charity care, restricted
donations and subsidies for indigents, support for clinical teaching,
teaching allowances, and other deductions.
(13) Total capital expenditures.
(14) Total net fixed assets.
(15) Total number of inpatient days, outpatient visits excluding
observation services, observation services, and discharges by payer,
including Medicare, Medi-Cal, county indigent programs, other third
parties, self-pay, charity, and other payers.
(16) Total net patient revenues by payer including Medicare,
Medi-Cal, county indigent programs, other third parties, and other
payers.
(17) Other operating revenue.
(18) Nonoperating revenue net of nonoperating expenses.
(b) Hospitals reporting pursuant to subdivision (d) of Section
128760 may provide the items in paragraphs (8), (9), (10), (12),
(16), and (18) of subdivision (a) on a group basis, as described in
subdivision (f) of Section 128760.
(c) The office shall make available to any person, at cost, a hard
copy of any hospital report made pursuant to this section and in
addition to hard copies, shall make available at cost, a computer
tape of all reports made pursuant to this section within 105 days of
the end of every calendar quarter.
(d) The office shall adopt guidelines, by regulation, for the
identification, assessment, and reporting of charity care services.
In establishing the guidelines, the office shall consider the
principles and practices recommended by professional health care
industry accounting associations for differentiating between charity
services and bad debts. The office shall further conduct the onsite
validations of health facility accounting and reporting procedures
and records as are necessary to ensure that reported data are
consistent with regulatory guidelines.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.