BILL ANALYSIS                                                                                                                                                                                                    



                                                          AB 525
                                                          Page  1

Date of Hearing:  April 6, 1999

                ASSEMBLY COMMITTEE ON JUDICIARY 
                    Sheila James Kuehl, Chair
      AB 525 (Kuehl and Thomson) - As Amended: April 5, 1999
  
SUBJECT  :  HEALTH BENEFITS:  ACCESS TO REPRODUCTIVE HEALTH  
SERVICES

  KEY ISSUES  :

1)SHOULD HEALTH PLANS WHOSE PROVIDERS RESTRICT ACCESS TO  
  REPRODUCTIVE HEALTH SERVICES BE REQUIRED TO CONTRACT WITH AT  
  LEAST ONE OTHER FACILITY IN THE SAME GEOGRAPHIC AREA THAT  
  PROVIDES SUCH SERVICES IN ORDER TO ENSURE ACCESS TO THESE  
  CRITICALLY NEEDED SERVICES?

2)SHOULD HEALTH PLANS BE REQUIRED TO INFORM CONSUMERS CONCERNING  
  RESTRICTIONS ON ACCESS TO REPRODUCTIVE HEALTH SERVICES SO THAT  
  CONSUMERS CAN MAKE MORE INFORMED DECISIONS WHEN CHOOSING THEIR  
  HEALTH CARE PROVIDERS?

3)SHOULD THE ATTORNEY GENERAL BE GIVEN NEW POWERS TO CONTROL  
  HOSPITAL MERGERS IN NONPROFIT-TO-NONPROFIT TRANSACTIONS AND BE  
  REQUIRED TO CONSIDER THE IMPACT OF SUCH MERGERS ON PATIENT  
  ACCESS TO REPRODUCTIVE HEALTH SERVICES, AS WELL AS EMERGENCY  
  AND INDIGENT CARE SERVICES?

4)SHOULD HEALTH CARE FACILITIES THAT RECEIVE TAXPAYER DOLLARS  
  THROUGH THE CALIFORNIA HEALTH CARE FACILITIES FINANCING  
  AUTHORITY AND THE CAL-MORTGAGE LOAN INSURANCE PROGRAM BE  
  REQUIRED TO GIVE ASSURANCES THAT THE FULL RANGE OF  
  REPRODUCTIVE HEALTH SERVICES WILL BE MADE AVAILABLE IN THE  
  COMMUNITIES THEY SERVE, EITHER THROUGH THEIR OWN FACILITIES OR  
  BY PARTNERING WITH OTHERS WHO WILL PROVIDE THESE SERVICES?

5)SHOULD UNIFORM ANTI-DISCRIMINATION STANDARDS BE APPLIED IN  
  HEALTH INSURANCE AND HEALTH FACILITIES FINANCING PROGRAMS?  

  SUMMARY  :   Seeks to protect patient access to the full range of  
reproductive health services, as well as emergency and indigent  
care services, and prohibits discrimination in health insurance  
and health facilities financing programs.  Specifically,  this  
bill  : 









                                                          AB 525
                                                          Page  2

1)Requires health plans (including commercial HMOs and Medi-Cal  
  managed care plans) whose providers restrict access to  
  reproductive health services to contract with at least one  
  other facility in the same geographic area that provides those  
  services.  It also requires HMOs to ensure that voluntary  
  tubal ligations be made available at the time of labor and  
  delivery when medically appropriate.

2)Requires health plans to inform consumers concerning  
  restrictions on access to reproductive health services,  
  including any hospitals, medical groups and other health care  
  providers which might deny or delay access to these services.

3)Gives the Attorney General (AG) new powers to control hospital  
  mergers in  nonprofit-to-nonprofit transactions.  It also  
  requires the AG's review of hospital mergers to consider the  
  impact of the merger on patient access to the full range of  
  reproductive health services, as well as emergency, urgent  
  care and indigent care services.

4)Requires that, in order to receive taxpayer dollars through  
  the California Health Care Facilities Financing Authority Act  
  and Cal-Mortgage Loan Insurance programs, hospitals and other  
  health care providers licensed to provide reproductive health  
  services must first guarantee they will make available all  
  reproductive health services, either through their own  
  facilities or by partnering with others who will  provide  
  these services.

5)Prohibits discrimination on the basis of race, color,  
  religion, national origin, gender, or sexual orientation in  
  the availability and the type of health insurance coverage  
  offered by indemnity, Knox-Keene, and Medi-Cal managed care  
  plans, as well as in the California Health Care Facilities  
  Financing Authority Act and the Cal-Mortgage Loan Insurance  
  program.

6)Respects religious health care providers' rights to adhere to  
  religious principles and does  not  require religious hospitals  
  to provide services that are inconsistent with their religious  
  beliefs.

  EXISTING LAW  :

1)Provides, under the Knox-Keene Health Care Service Plan Act of  








                                                          AB 525
                                                          Page  3

  1975, for the licensure and regulation of health care service  
  plans (HMOs) by the Commissioner of Corporations.  The  
  Knox-Keene Act requires, among other things, that HMOs must:

   a)   use disclosure forms or other materials containing  
     designated information about the benefits, services and  
     terms of the plan, including the principal benefits and  
     coverage of the plan, and the exceptions, reductions and  
     limitations that apply to the plan.

   b)   describe how participation in the plan may affect the  
     choice of physician, hospital or other health care  
     providers, and other specified information.

   c)   meet certain requirements, including providing to  
     subscribers and enrollees basic health care services.   
     (Health and Safety Code Section 1340  et   seq  .)

2)Provides for the regulation of insurance by the Insurance  
  Commissioner, including disability insurers, insurers issuing  
  policies of disability insurance, and self-insured employee  
  welfare benefit plans that cover hospital, medical or surgical  
  expenses.  It also circumscribes the authority of the  
  Insurance Commissioner in approving disability insurance  
  policies and requires disability insurers to disclose, among  
  other things, the principal benefits and coverage of the plan  
  and the exceptions, reductions, and limitations that apply to  
  the plan.  (Insurance Code Section 10110  et   seq  .)

3)Provides, under the Public Employees' Medical and Hospital  
  Care Act, health benefits plan coverage for public employees  
  and annuitants meeting the eligibility requirements prescribed  
  by the Board of Administration of the Public Employees'  
  Retirement System (CalPERS).  (Government Code Section 22754  
   et   seq  .)

4)Provides for the Medi-Cal program, which is administered by  
  the State Department of Health Services, under which medical  
  benefits are provided to public assistance recipients and  
  certain other low-income persons.  Under existing law,  
  Medi-Cal services may be provided to a beneficiary or eligible  
  applicant by an individual provider, or through a prepaid  
  managed health care plan, pilot project, or fee-for-service  
  case management provider.  (Welfare and Institutions Code  
  Section 14000  et   seq  .) 








                                                          AB 525
                                                          Page  4


5)Requires a nonprofit health facility to provide notice to, and  
  obtain the consent of, the AG prior to the sale, transfer or  
  lease of assets to a  for-profit  or mutual benefit corporation  
  when a material amount of the nonprofit's assets are involved  
  in the transaction.  (Corporations Code Section 5914  et   seq  .)   


6)Empowers, under the California Health Facilities Financing  
  Authority Act, the California Health Facilities Financing  
  Authority (CHFFA) to finance projects of health facilities  
  that are operated by a city, county, a district hospital, or a  
  private, nonprofit corporation or association.  It also  
  authorizes CHFFA to issue revenue bonds for this purpose, and  
  requires borrowers to give reasonable assurance to the  
  authority that the services of the health facility will be  
  made available to all persons residing or employed in the area  
  served by that facility.  (Government Code Section 15430  et   
   seq  .) 

7)Provides, under the California Health Facility Construction  
  Loan Insurance Law (also known as the Cal-Mortgage Loan  
  Insurance Program), for an insurance program for public and  
  nonprofit health facility construction, improvement, and  
  expansion loans.  (Health and Safety Code Section 129000  et   
   seq  .)

8)Does not apply uniform anti-discrimination standards in health  
  insurance and health facilities financing programs.   
 
  FISCAL EFFECT  :  Unknown

  COMMENTS  :  According to the authors, AB 525, also known as the  
"1999 Healthcare Access bill," was introduced to protect patient  
access to a variety of reproductive health care services, as  
well as emergency care and indigent care services.  The authors  
state that in today's managed care environment, more and more  
hospitals are merging and entering into other business deals in  
order to cut costs.  For example, in California, the largest  
owner of hospitals (and the biggest merger participant) is  
Catholic Healthcare West, with 46 facilities statewide.  Tenet  
Healthcare, by comparison, owns 42 acute care hospitals in  
California.

When a health care provider is a religious entity, patient  








                                                          AB 525
                                                          Page  5

access to the full range of reproductive health services can be  
threatened.  Catholic hospitals, for example, must adhere to a  
strict set of ethical guidelines called the Ethical and  
Religious Directives ("the Directives") which severely limit  
access to the full scope of reproductive health services,  
especially to women.  The Directives prohibit Catholic  
facilities from providing services such as fertility treatments,  
contraception, vasectomy and abortion.  Generally, even rape  
victims are refused emergency contraception.  In addition, under  
the Directives, women are prevented from receiving needed tubal  
ligations immediately after delivery, which physicians believe  
is the best time for such a procedure to avoid greater health  
risks associated with multiple surgeries. 

The authors state that when Catholic and non-Catholic hospitals  
merge, these Directives usually are imposed on the non-Catholic  
provider as a condition of sale.  That can mean either the loss  
of critically needed reproductive health services in the  
community or continued restrictions on access.  For example, the  
authors point to the recent merger in Los Angeles between Queen  
of Angels Hospital and Tenet Healthcare, where Tenet,  a  
non-religious provider  , agreed to continue the ban on  
reproductive health services for the next 20 years.  

The authors note that Catholic health networks are not alone in  
limiting access to the full scope of reproductive health care  
services.  According to the authors, other religious entities  
that own hospitals and health facilities also limit access.  For  
example, the authors state that Adventist Health system owns and  
manages 20 hospitals and a number of clinics statewide, none of  
which provide needed access to abortions.

Unfortunately, the authors contend, this access problem extends  
far beyond the hospital doors.  In some cases, religious  
hospitals purchase outpatient facilities, clinics and physician  
networks, blocking all of these facilities and providers from  
delivering needed reproductive health services.  Even doctors  
who are tenants in medical buildings owned by religious  
organizations can be made to follow restrictions on access to  
these  services as a condition of the lease agreement.  They  
also note these policies regrettably fall most harshly on women,  
whose reproductive health service needs more often require  
hospital services. 

  Overview of bill  .  According to the authors, AB 525 seeks to  








                                                          AB 525
                                                          Page  6

prevent further losses in access to  reproductive health  
services in the following five ways:

First:  AB 525 would require all health plans--including  
commercial HMOs and all Medi-Cal managed care plans--to  
guarantee that patients have access to the full range of  
reproductive health services within the HMO's provider network.   
This includes guaranteeing access to voluntary tubal ligations  
at the time of labor and delivery. 

Second:  AB 525 requires all health plans to inform consumers in  
their marketing and enrollment materials about how they may  
access the full scope of reproductive health services and about  
any limitations on access to these services.

Third:  AB 525 gives the AG new authority to scrutinize  
nonprofit-to-nonprofit hospital mergers and to disapprove  
mergers which would have the effect of denying patients access  
to the full range of reproductive health services, as well as  
emergency care and indigent care services.  Currently, the AG  
may not consider the impact on patients of the lack of access to  
these critical health services.  These same standards would be  
added to the AG's scrutiny of nonprofit to for-profit mergers as  
well.

Fourth:  AB 525 requires health facilities that receive taxpayer  
dollars through public bond and loan programs to ensure access  
to all reproductive health services, either through their own  
facilities or by partnering with others who will provide these  
services.

Fifth:  AB 525 prohibits discrimination in all forms of health  
insurance and in public financing of health facilities.  It also  
places an affirmative obligation on the Insurance Commissioner  
and on the California Medical Assistance Commission to ensure  
that health policies and Medi-Cal contracts that they approve  
and/or negotiate prohibit such discrimination.  Currently, there  
are no uniform anti-discrimination provisions in health  
insurance and health facilities financing programs.

  Bill respects rights of religious health care providers  .  The  
authors stress that nothing in AB 525 would force religious  
hospitals to provide services that are inconsistent with their  
religious beliefs.  Rather than require religious health care  
providers to violate their religious tenets, the bill only  








                                                          AB 525
                                                          Page  7

requires that religious hospitals partner with others or  
otherwise arrange for the provision of reproductive health  
services if they elect to receive  bond funds and mortgage loan  
insurance through state financing agencies.

According to the authors, "the Healthcare Access Bill will help  
to assure that women who join HMOs or Medi-Cal managed care  
plans will receive the full, uninterrupted range of reproductive  
health services.  This bill is especially necessary to protect  
the working poor and those who are struggling economically from  
a threatened diminishment of reproductive health service due to  
the mergers of hospitals that have differing health care  
approaches.  AB 525 will not force a single doctor or hospital  
to provide services in which they do not believe.  However, it  
is not acceptable to have rape victims refused emergency  
contraception or to have a mother who has just given birth, and  
whose doctor has advised her to have a tubal ligation, forced to  
undergo a dangerous second surgery.  AB 525 simply guarantees  
that patients will know what's available to them and be able to  
secure the service they need when they need it."

  Background  .  The following examples of the scope of the growing  
problem of restricted access to needed reproductive health  
services, together with some key statistics regarding the  
increased market share of religious health care providers, may  
be helpful in putting this legislation in context.

  The Impact of Restrictive Religious Rules On Health Care In  
California  .  The following examples demonstrate the increasing  
difficulties facing women in California in accessing  
reproductive health services due to the expansion in the number  
of health care providers which abide by religious directives  
that restrict access to these critically needed services. 
                                
? In Lassen County, Lassen Community Hospital, in Susanville, is  
  a "sole provider" hospital for the area.  Although it has a  
  secular name, it is a Catholic Hospital which provides no  
  emergency contraception to rape victims and reportedly refuses  
  to provide a referral to another facility for such help.   
  (Catholics for a Free Choice,  "Caution: Catholic Health  
  Restrictions May Be Hazardous to Your Health," 1999)
  
? In Los Angeles and Orange County, Catholic Healthcare West  
  merged with Unihealth, purchasing eight hospitals.  Unihealth  
  is a secular health system, yet it reportedly eliminated all  








                                                          AB 525
                                                          Page  8

  of its in-vitro fertilization and abortion services as a  
  condition of the merger.  (Los Angeles Times, "Women Protest  
  Church Takeover of Hospital," Nov. 17, 1998) 
 
? In Santa Rosa, a doctor who tried to rent space in a medical  
  office building was apparently told to sign a lease requiring  
  her to adhere to all of the local Bishop's prohibitions on  
  reproductive healthcare because the building is owned by a  
  Catholic Health System.  (Sacramento Bee, "Healthcare Ties  
  That Bind," July 18, 1998)
 
? In Humboldt County, a woman apparently cannot receive a needed  
  tubal ligation at St. Joseph's Hospital unless her medical  
  records show a severe medical condition, a history of suicide,  
  or that the pregnancy "will precipitate mental dysfunction."   
  (St. Joseph Health System, "Policy on Tubal Ligations," St.  
  Joseph Memorandum, August 12, 1996)
 
? In June 1998, the Beach Cities Health District, a government  
  entity, leased space in the South Bay Medical Center to Little  
  Company of Mary, who reportedly provides no reproductive  
  health services and demanded a lease provision that will allow  
  it to terminate its lease if anyone provides prohibited health  
  services, including contraception, anywhere else in the  
  building.  (Los Angeles Weekly, "Higher Calling," July 16,  
  1998)
 
? In Sonoma County, a busy medical group that provides care to  
  more than 100,000 patients was recently purchased by a  
  religious health system, and the group is now reportedly  
  prohibited from providing abortions.  Consumers apparently  
  have no way of knowing of these restrictions when they choose  
  a doctor in that group.  (Sonoma County Independent, "The End  
  of Choice?" Feb. 25 - Mar. 3, 1999)

  Some Key Religious Health Care Statistics  .  The following  
statistics reveal a dramatic increase in the market share of  
religious health care providers, which, in turn, has resulted in  
a significant decline in patient access to the full range of  
reproductive health services.  

? Nationally, Catholic institutions control 600 hospitals,  
  140,000 beds and $40 billion in revenue.  That compares to 300  
  hospitals, 60,000 beds and $14.5 billion in revenue for  
  Colombia/HCA Healthcare.  (San Francisco Daily Journal, "Where  








                                                          AB 525
                                                          Page  9

  Religion and Abortion Collide,"  Feb. 2, 1999)

? Reproductive health services were reduced or eliminated in 35  
  of 71 religious hospital mergers in the country from 1990 to  
  June 1998.  (Sacramento Bee, Forum, "Family Planning, Abortion  
  Tougher to Obtain," March 28, 1999)
 
? In 1998, there were 91 Catholic hospitals designated as "sole  
  provider" hospitals in the country.  Sole provider hospitals  
  receive higher government reimbursement for services because  
  they are the only hospitals serving their communities, but  
  they are not required to provide reproductive health services.  
   (Catholics For a Free Choice, "Caution: Catholic Health  
  Restrictions May Be Hazardous to Your Health," 1999)
 
? The largest hospital operator in California is Catholic  
  Healthcare West, with 46 hospitals, compared to Tenet  
  Healthcare's 42.  (Modern Healthcare, "Unihealth Hospitals to  
  Merge with CHW,"  Oct. 19, 1998)
 
? The largest single borrower of bond proceeds from the  
  California Health Facilities Financing Authority is Catholic  
  Healthcare West.  They have borrowed nearly $1.6 billion.   
  (California Health Facilities Financing Authority Report,   
  July 31, 1998). 

? Of 51 Catholic Hospitals surveyed in California, none  
  permitted emergency contraception to rape victims, 44 reported  
  they will not provide emergency contraception, and 7 reported  
  they had no policy.  (Catholics for a Free Choice, "Caution:  
  Catholic Health Restrictions May Be Hazardous to Your Health,"  
  1999)

  Comparison of this bill with AB 254.   AB 254 (Cedillo), which is  
also scheduled to be heard by the Assembly Judiciary Committee  
on April 6, 1999, contains similar provisions expanding AG  
authority over hospital mergers to include  
nonprofit-to-nonprofit hospital transfers.  This bill's AG  
provisions are complimentary to, and not in conflict with AB  
254.  Although there are some minor variations, the principal  
difference between these two bills is as follows.  This bill  
requires the AG's review of a hospital merger to specifically  
consider the impact of the merger on patient access to the full  
range of reproductive health services, as well as emergency care  
and indigent care services; AB 254 does not contain a similar  








                                                          AB 525
                                                          Page  10

requirement.  Since some of these bills' differences appear to  
create technical conflicts, the authors may wish to adopt  
appropriate chaptering-out language as the bills progress. 

  ARGUMENTS IN SUPPORT  :  The California Women's Law Center (CWLC),  
a co-sponsor of the bill, is a statewide private nonprofit  
organization that works to secure the civil rights of women and  
girls.  CWLC states that the frequency and pervasiveness of the  
expansion of religious health care systems and the affiliations,  
in particular, between Catholic systems and community and  
private hospitals have left virtually no community in California  
unaffected.  When a Catholic hospital affiliates with a  
community or privately controlled facility, usually all medical  
staff, as condition of employment, must agree to abide by the  
Religious and Ethical Directives for Catholic Health Care  
Services.  These directives prohibit contraception,  
sterilization, the distribution of condoms even to prevent the  
spread of AIDS and sexually transmitted diseases, emergency  
contraception for rape victims, most fertility treatments, the  
removal of ectopic pregnancies unless they have become life  
threatening, and abortion.  CWLC notes that the extent to which  
these Directives are actually enforced is a matter of  
negotiation between the local bishop and the health system, not  
between the patient and his or her health care provider.

According to CWLC, the marginalization of these aspects of men's  
and women's health is in direct conflict with the medical trend  
toward integration of services and comprehensive care.   
Moreover, women are being squeezed between the threats of clinic  
violence when they seek services at stand alone family planning  
clinics, and are being denied care at mainstream health  
facilities.  According to CWLC, the impact is often felt most  
harshly in low income neighborhoods and communities of color  
where the proliferation of religious hospitals is spurred by the  
Catholic mission to serve the poor.  Ironically, however, low  
income women, who are least able to travel or pay out of pocket  
for health care, are denied basic services.

CWLC also contends that the denial of these services directly  
conflicts with standards adopted by the American Public Health  
Association.  APHA has recognized the harm created by the denial  
of the full range of reproductive health services.  According to  
CWLC, official APHA policy "urges that mergers and affiliations  
between religious and non-sectarian health systems should not be  
allowed to create obstacles that prevent women, men and  








                                                          AB 525
                                                          Page  11

adolescents from receiving the full range of reproductive health  
services they need."  

Women with private insurance who are in managed care plans also  
have no choices.  When their assigned health care providers  
refuse to provide reproductive healthcare, these women are  
forced not only to travel to other facilities, but also to pay  
for these services out of their pockets.  According to CWLC,  
women pay significantly more out of pocket for their health  
care, 54%, largely due to the lack of access to family planning  
services.  CWLC argues that it is disingenuous to suggest that  
men and women and their physicians can always simply choose to  
go to an alternate site for their health care.

Finally, CWLC notes that many religious hospitals have found  
creative partnerships with other community resources to ensure  
that they truly serve the needs of their communities.  "AB 525  
encourages creative partnerships and collaboration instead of  
denial of care."

The National Health Law Program (NHeLP), a co-sponsor of the  
bill, writes that the vast majority of non-elderly women (80%)  
receiving Medi-Cal are between the ages of 18 and 44, the  
childbearing ages. According to NHeLP, low-income women on  
Medi-Cal are being targeted for Medi-Cal managed care  
enrollment.  "Reproductive health services are a critical part  
of basic, primary care for all women, and for women in this age  
group in particular.  AB 525 will ensure that low-income women,  
men and adolescents enrolled in Medi-Cal managed care plans have  
access to these important services."

NHeLP states that "AB 525 will ensure that Medi-Cal managed care  
and commercial managed care consumers, alike, receive the  
information that they need about the availability of  
reproductive health services in order for them to make their  
health care choices.  Up front, clear information is needed at  
the time that individuals choose their health plans, medical  
groups, and primary care doctors as well as when they are  
seeking needed health care services."  According to NHeLP,  
"[I]ndividuals often assume that
                                                               reproductive health services are going to be available.  Without  
this information, health care consumers will not be aware that  
services may be restricted until they are seeking care.  This is  
often too late to make alternative arrangements."









                                                          AB 525
                                                          Page  12

By requiring health plans whose providers restrict access to  
reproductive health services to contract with at least one other  
facility in the area that provides services, NHeLP contends the  
bill ensures that health plans that serve both Medi-Cal and  
commercial managed care consumers provide accessible choices  
within their plan networks.  "If these services are not easily  
accessible within the health plan network, women often will not  
have access to these services at all.  Low-income health care  
consumers, in particular, do not have the time, income, and  
transportation to seek needed services outside of their health  
plans (for which services would be reimbursed) or outside of  
their communities."  By requiring that services be accessible,  
NHeLP believes the bill ensures coordination of care and  
continuity of care for all of women's primary care  services.

The American College of Obstetricians and Gynecologists (ACOG),  
District IX, which represents over 3,900 California board  
certified physicians, also supports the bill.  According to  
ACOG, many women's health services are being restricted or  
eliminated as a result of the growing number of health care  
facilities in California that are being purchased by religious  
organizations.  "For example, a number of religious  
organizations do not believe in sterilization, as a result tubal  
ligations cannot be performed at the time of labor and delivery.  
 This forces women to locate a hospital and possibly another  
physician if their own doctor does not have privileges at a  
hospital accepting their health insurance and allowing tubal  
ligation."  ACOG states that "an inability to have a post partum  
tubal ligation (sterilization at the time of delivery) means an  
unnecessary second hospitalization, additional recuperation and  
risk of additional anesthetic in the same case."

ACOG also contends that in many religious affiliated medical  
centers, emergency contraceptives are not available for victims  
of sexual assault.  ACOG notes that a 1996 study in American  
Journal of Obstetrics and Gynecology reportedly revealed that 5%  
- 12% of rapes result in pregnancy.  According to ACOG, "[s]ince  
patients' choice of facilities and physicians is often dependent  
on health insurance company contracts, women should be  
guaranteed access to necessary services in reasonable proximity  
to their home.  While we believe that individual conscience  
should be respected, we do not believe that such beliefs should  
be extended to systems of care when it limits access to medical  
care for California women."









                                                          AB 525
                                                          Page  13

Planned Parenthood Affiliates of California (PPAC) supports the  
bill, stating that one of the recent trends in the health care  
industry has been the increasing number of nonprofit hospitals  
that are being acquired by religiously controlled entities, who  
then limit access to women's health care services based on their  
religious beliefs.  According to PPAC, this has resulted in  
women across California seeing rapid erosion of their access to  
basic reproductive health care services, such as contraception,  
fertility treatments, abortion, and tubal ligation and  
vasectomy.  PPAC notes that when the only hospital left in a  
community is controlled by a religious institution that doesn't  
provide these services, women must travel out of their  
community, and often, out of their county of residence, to  
access these services.  PPAC states that this bill would take an  
important first step toward preventing this erosion of services  
by requiring that all health plans guarantee that all patients  
have access to the full range of reproductive health services  
within the HMO's health network.  PPAC believes that AB 525 will  
ensure that reproductive health services, protected by the  
courts and the Legislature, remain available to all California's  
men and women.  

The California Nurses Association supports the bill, stating  
that it assures access to reproductive services through health  
plans and will provide significant economic savings as well as  
social benefits to women and families in general.

The Hedgpeth Group, an organization that works with women's  
health groups and coalitions serving women's and children's  
health and social needs, also supports the bill.  The Hedgpeth  
Group states that "[w]ith the continuing 'merger mania' that is  
affecting hospitals, and with many of those mergers and/or  
takeovers putting existing community hospitals into the Catholic  
Healthcare West system, women are losing access to reproductive  
health services."  According to the Hedgpeth Group, it has  
become apparent over the past several years that the majority of  
women who are being denied access to reproductive health  
services tend to be in populations which already lack sufficient  
health services either because of family location or income.

The Reproductive Rights Coalition-Los Angeles strongly supports  
the bill, stating that it will protect women and men's access to  
vital reproductive health services.  According to the Coalition,  
"[t]his legislation will strengthen the communities' involvement  
in their health care, rights that are critical and long overdue.  








                                                          AB 525
                                                          Page  14

 The perception that health care is just another market  
commodity is a dangerous one and undermines everyone's access to  
health care."  The Coalition states that "AB 525 brings health  
care decision-making back to consumers and the communities in  
which they live."

Women Lawyers Association of Los Angeles (WLA) also strongly  
supports the bill, stating that reproductive health services are  
an essential part of health care to which all individuals should  
be able to obtain access in all communities throughout the  
state.  WLA states that "[w]ith the merger of so many health  
care providers in today's managed care environment, the passage  
of AB 525 is crucial to safeguard against the loss of critically  
needed reproductive health services in the community and against  
restrictions on access to these services in hospitals,  
outpatient facilities, clinics, medical buildings and physician  
networks."  WLA believes that this bill "is an effective and  
well-reasoned measure to protect the imperative need for women's  
access to the full range of health services."  

  ARGUMENTS IN OPPOSITION  :  The California Association of Catholic  
Hospitals (CACH) and the Alliance of Catholic Health Care  
Systems (ACHCS) support those provisions in the bill which seek  
to prohibit discrimination in the provision of health insurance  
and health services.  However, they oppose the other provisions  
in the bill unless it is amended.  CACH and ACHCS set forth five  
main reasons for their opposition.

First, they state that they are "unaware of any objective data  
that support the need for legislation of this scope on this  
issue."  However, as noted above on pages 5-6 of this analysis,  
consumers are facing significant barriers in accessing basic,  
primary care reproductive health services in many communities  
throughout the state as a result of the increase in the number  
of religious health care providers in California. 

Second, they object to the AG oversight provisions in the bill,  
claiming that there is no public policy basis in law or fact for  
the AG's authority to be expanded to review mergers between  
charitable health care organizations.  They also complain that  
requiring the AG to review whether a merger will "perpetuate" a  
significant effect on the availability or accessibility to,  
among other things, abortion, "clearly targets Catholic health  
care institutions."  CACH and ACHCS also argue that  
implementation of the bill presents a conflict of interest for  








                                                          AB 525
                                                          Page  15

the AG, since the AG has the obligation to uphold all of the  
laws of the state, including the constitutional protections  
guaranteeing the free exercise of religion.  It should be noted,  
however, that the AG already has authority to oversee nonprofits  
because of its obligation to ensure that charitable assets are  
protected.  Proponents argue this bill appropriately modifies  
the AG's authority in this area consistent with the state's  
interest in ensuring that health care is available to all  
Californians, including access to critically needed reproductive  
health care, as well as emergency and indigent care services.

Third, CACH and ACHCS argue that the bill's public financing  
provisions are unconstitutional since, they claim, it would  
financially penalize any nonprofit entity that refuses to  
provide or arrange for, among other things, abortion.  They  
believe that these provisions, while appearing neutral, unfairly  
single out for denial of benefits Catholic health care  
institutions that, by virtue of their religious principles, are  
fundamentally opposed to providing or assisting in the provision  
of abortion.  They also argue that the denial of tax-exempt  
financing and bond insurance to Catholic health care  
institutions will lead to increased costs and a diminution in  
charity care.  However, proponents note the purpose of the bill  
is to assure access to reproductive health services; it does not  
dictate the particular methods for making these basic health  
services available, and it allows for creative arrangements  
whereby bond and loan recipients can partner with other groups  
who will provide these services. 

Fourth, they state that the provision in the bill which requires  
voluntary tubal ligations to be available at the time of labor  
and delivery is ambiguous since "[i]t does not clearly identify  
who (i.e., the hospital or the health plan) bears the burden of  
the obligation to make such voluntary tubal ligations available.  
 They also argue that it is inconsistent with medical practice  
since, they claim, "doctors that intend on performing voluntary  
post-delivery tubal ligations on their patients admit them to  
hospitals other than Catholic hospitals."  However, the bill  
does not require each individual hospital make tubal ligations  
available at the time of labor and delivery.  The authors  
explain that the point of this provision in the bill is that,  
with the  increased enrollment in managed care,  health plans   
must be responsible for ensuring the ability of doctors and  
patients to make this choice.









                                                          AB 525
                                                          Page  16

Fifth, CACH and ACHCS oppose the provision which requires health  
plans to notify prospective and current enrollees of the  
facilities and providers that restrict access to reproductive  
health services "because its only practical effect is simply to  
penalize Catholic health care institutions by requiring health  
plans to make such disclosures of a purely negative nature."   
Instead, they argue that this provision in the bill should be  
restructured to provide more information about where such  
services are available, consistent with the intent of the  
legislation.  However, according to the authors, most consumers  
presume that basic primary care includes the full range of  
reproductive health services and that their doctors and the  
hospitals they use will make these services available, only to  
find out later that it is not always the case.  The bill  
requires health plans to give consumers basic information about  
how to access reproductive health services, including any  
limitations on accessing these services, so they can make more  
informed choices when picking their providers.

CACH and ACHCS seek several amendments to the AG provisions in  
the bill, including:  adding a requirement that the AG also  
evalute whether there would be no significant change in the  
availability of reproductive health services, and the long-term  
impact on the availability of the full range of health care  
services if consent to the merger transaction is denied;  
requiring that experts or consultants used by the AG must be  
neutral on the subject matter being reviewed or monitored; and  
prohibiting the AG from seeking reimbursement of contract costs  
of reviewing or monitoring a proposed merger or affiliation  
between two charitable providers.  They also recommend deleting  
the requirement that health plans disclose the identity of  
facilities and providers that restrict access to reproductive  
health services.  However, CACH and ACHCS have agreed to work  
with the author in the hope of addressing their concerns in a  
way which will allow them to modify their position as the bill  
progresses.  

The California Catholic Conference of Bishops (Bishops) oppose  
the bill, stating that "it would curtail the religious freedom  
of Catholic hospitals and narrow women's health concerns to  
reproduction prevention."  The Bishops also argue that the bill  
"may place in jeopardy the ability of these hospitals to  
continue to provide healthcare for the poor as they have done  
for over one hundred years."  According to the Bishops, the bill  
tramples on religious freedom rights by "setting up conditions  








                                                          AB 525
                                                          Page  17

for the operation of Catholic hospitals which would demand a  
complicity in performance of actions that are in violation to  
their religious principles."  The Bishops further state that if  
enacted, "the government would be choosing to disadvantage us by  
impacting non-profit lending and skewing the market dynamics to  
accomplish its goals." 

Sutter Health is opposed to the provisions in the bill which  
would give the AG oversight over hospital mergers in  
nonprofit-to-noprofit transactions.  Sutter argues that the bill  
unnecessarily burdens charity-to-charity transfers and  
unnecessarily increases hospital expenses by requiring hospitals  
to pay filing fees, expert witness fees, publication fees,  
document production fees, consultants' fees and attorney's fees.  
 Sutter also contends that the bill "unnecessarily intrudes the  
Attorney General into a decision vested in hospital boards and  
trustees, who are subject to legally enforceable fiduciary  
duties both before and after a charitable affiliation."   In  
addition, Sutter claims that the bill "would effectively  
preclude managers from advising their own boards by disabling a  
manager who exercises the normal responsibilities of his or her  
office from ever being employed by the transferee charity."   
Finally, Sutter argues that "[t]he web of burdensome  
restrictions and fiscal levies imposed by [this bill's AG  
provisions] simply do not constitute a solution to any  
demonstrated problem."

The Catholic League for Religious and Civil Rights opposes the  
bill, stating that it "would punish Catholic hospitals for  
practicing Church teaching on the sacredness of human life.  It  
would do this by denying funds to Catholic hospitals that are  
collected through the sale of revenue bonds."  According to the  
Catholic League, the bill is "not only inimical to Catholic  
interests and to the First Amendment, it is inimical to the  
public interest as well."   However, proponents note that the  
Catholic League's arguments appear to be misplaced since, as  
noted above, nothing in the bill requires a religious provider  
to provide services inconsistent with their religious beliefs.   
The bill provides that if health care providers wish to take  
advantage of taxpayer dollars through various public financing  
programs, they must provide assurances that reproductive health  
services will be made available in the local community.   
Proponents note the bill does not dictate how these services  
should be made available; it gives flexibility to the health  
facilities by allowing them to enter into creative partnerships  








                                                          AB 525
                                                          Page  18

with other organizations and groups who may deliver or otherwise  
arrange for the provision of these services.

  Related Pending Legislation.   AB 254 (Cedillo), which, as noted  
above, contains similar provisions expanding AG oversight over  
nonprofit-to-nonprofit hospital transfers, is currently  
scheduled to be heard in the Assembly Judiciary Committee on  
April 6, 1999.

AB 351 (Steinberg), which gives the AG similar oversight over  
  HMO mergers  , is also scheduled to be heard in the Assembly  
Judiciary Committee on April 6, 1999.

  Prior Legislation  .  AB 3101 (Isenberg), Ch. 1105, Stats. 1996,  
which provided the AG with greater oversight and regulatory  
authority over the sale or other disposition of assets between  
non-profit and  for-profit  health facilities.

AB 2527 (Cedillo - 1998), which was substantially similar to AB  
254 (discussed above), was vetoed. 

  REGISTERED SUPPORT / OPPOSITION  :   

  Support  

California Women's Law Center (co-sponsor)
National Health Law Program (co-sponsor)
American College of Obstetricians and Gynecologists
Asian Law Alliance
Asians & Pacific Islanders for Reproductive Health
The Birthing Project
California Family Health Council
California National Organization for Women
California Nurses Association
California Primary Care Association
California School Employees Association 
California Women Lawyers
California Women's And Children's Health Coalition
Catholics for a Free Choice
The Feminist Majority
Hadassah (Sacramento Chapter)
The Hedgpeth Group
Maternal and Child Health Access 
National Center For Youth Law
National Council Of Jewish Women








                                                          AB 525
                                                          Page  19

National Latina Health Organization
Natividad Medical Center, Medical Staff
Northern California Lawyers for Civil Justice
The Pacific Institute for Women's Health
Planned Parenthood Affiliates of California
Planned Parenthood of Santa Barbara, Ventura and San Luis Obispo
Reproductive Rights Coalition - Los Angeles
Unitarian Universalist Service Committee, Project Freedom of  
Religion
Women's Health Specialists (Chico, Redding, Sacramento, Santa  
Rosa clinics)
Women Lawyers Association of Los Angeles
various individuals

  Opposition  

Alliance of Catholic Health Care Systems & California  
Association of Catholic Hospitals (unless amended)
California Catholic Conference of Bishops  
  Catholic League for Religious and Civil Rights
Sutter Health (to AG asset transfer provisions)
  
Analysis Prepared by  :    Daniel Pone / JUD. / (916) 319-2334