BILL ANALYSIS
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THIRD READING
Bill No: AB 303
Author: Beall (D), et al
Amended: 9/1/09 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 11-0, 7/8/09
AYES: Alquist, Strickland, Aanestad, Cedillo, Cox,
DeSaulnier, Leno, Maldonado, Negrete McLeod, Pavley, Wolk
SENATE APPROPRIATIONS COMMITTEE : 13-0, 8/27/09
AYES: Kehoe, Cox, Corbett, Denham, Hancock, Leno, Oropeza,
Price, Runner, Walters, Wolk, Wyland, Yee
ASSEMBLY FLOOR : 78-0, 6/2/09 - See last page for vote
SUBJECT : Medi-Cal: designated public hospitals:
seismic safety
requirement
SOURCE : Santa Clara County Board of Supervisors
DIGEST : This bill allows specified county and University
of California disproportionate share hospitals that
contract with the California Medical Assistance Commission
to serve Medi-Cal patients to receive supplemental Medi-Cal
reimbursement from the Construction and Renovation
Reimbursement Program for new capital projects to meet
state seismic safety deadlines for which plans have been
submitted to the state after January 1, 2007 and before
December 31, 2011.
CONTINUED
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ANALYSIS : Existing federal law establishes the Medicaid
program to provide comprehensive health benefits to
low-income persons. Establishes the federal Medicaid
Disproportionate Share Hospital (DSH) program to provide
financial assistance to hospitals that serve large numbers
of Medicaid and uninsured patients.
Existing state law:
1. Establishes the Medi-Cal program as California's
Medicaid program, administered by the Department of
Health Care Services (DHCS), which provides
comprehensive health care coverage for low-income
individuals and their families; pregnant women; elderly,
blind, or disabled persons; nursing home residents; and
refugees who meet specified eligibility criteria.
2. Establishes the Construction and Renovation
Reimbursement Program (CRRP), also referred to as the SB
1732 program, under which DSH hospitals may receive
supplemental Medi-Cal reimbursement for the debt service
incurred on revenue bonds for the construction,
renovation, or replacement of hospital facilities,
including buildings and fixed equipment, for which final
plans have been submitted to Office of Statewide Health
Planning and Development (OSHPD) after September 1, 1988
and prior to June 30, 1994.
3. Establishes seismic safety requirements under the Alfred
E. Alquist Hospital Facilities Seismic Safety Act, and
its amendments, which:
A. Require, after January 1, 2008, any general
acute care hospital building that is determined to
be a potential risk for collapse or significant
loss of life to only be used for nonacute care
hospital purposes. Authorizes a delay to be
granted by OSHPD upon a demonstration that
compliance will result in a loss of health care
capacity that may not be provided by other general
acute care hospitals within a reasonable proximity;
B. Authorizes OSHPD to permit extensions to the
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deadline, if the hospital agrees that by January 1,
2013, basic service or services will be provided by
moving into an existing conforming building,
relocating to a newly built building, or continuing
in the retrofitted building, as specified, and
permits an additional two-year extension under
certain circumstances; and,
C. Requires owners of all acute care inpatient
hospitals, no later than January 1, 2030, to either
demolish, replace, or change to nonacute care use
all hospital buildings not in substantial
compliance with the seismic safety regulations and
standards developed by OSHPD, or seismically
retrofit all acute care inpatient hospital
buildings so that they are in substantial
compliance with the seismic safety regulations and
standards developed by OSHPD.
This bill:
1. Allows specified county and the University of California
(UC) hospitals to receive supplemental reimbursement
from the CRRP, in addition to the rate of payment
provided for in the California Medical Assistance
Commission (CMAC) contract, if the hospital:
A. Contracts with CMAC to provide services to Medi-Cal
patients in the fee-for-service Medi-Cal program.
B. Has or would have satisfied the criteria to be a DSH
hospital for the three most recent years prior to
submitting final plans for an eligible project (DSH
hospitals serve a large number of uninsured and Medi-Cal
patients).
2. Requires a hospital that elects to receive reimbursement
under this bill to submit documentation to the
Department of Health Care Services (DHCS) regarding its
debt service on general obligation or revenue bonds used
for financing the construction, renovation, or
replacement of hospital facilities, including buildings
and fixed equipment.
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3. Establishes as eligible projects those new capital
projects funded by new debt for which final plans have
been submitted to the Office of Statewide Health
Planning and Development (OSHPD) after January 1, 2007,
and prior to December 31, 2011.
4. Limits supplemental reimbursement under this bill to
projects related to meeting seismic safety deadlines.
5. Requires a hospital qualifying for supplemental
reimbursement to remain open for the life of the
supplemental reimbursements provided under this bill.
6. Prohibits expenditures from the General Fund from being
made for the nonfederal share of the supplemental
reimbursement provided for in this bill.
7. Requires DHCS, to the extent that insufficient state
funds are appropriated for the nonfederal share of the
supplemental reimbursement provided for in this bill, to
claim federal expenditures through other funding
mechanisms, including the use of certified public
expenditures (CPEs) or intergovernmental transfers
(IGTs).
8. Provides that no expenditure from the General Fund or
any special fund shall be made for the nonfederal share
for designated public hospitals.
9. Requires DHCS to promptly seek any necessary federal
approvals for the implementation of this bill, and makes
implementation of this bill contingent on federal
approval and federal financial participation being
available.
Background
In response to the 6.7 magnitude Northridge earthquake in
January 1994, the Legislature passed, and then-Governor
Wilson signed into law, SB 1953 (Alquist), Chapter 740,
Statutes of 1994, establishing seismic standards for
hospital buildings as well as deadlines for compliance with
those standards. By January 1, 2008, buildings posing a
significant risk of collapse and a danger to the public
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must be rebuilt or retrofitted to be capable of
withstanding an earthquake, or be removed from acute care
service. By January 1, 2030, hospital buildings must be
capable of remaining intact after an earthquake, and must
also be capable of continued operation and provision of
acute care medical services, or else be changed to
non-acute care use.
OSHPD has classified 948 (35 percent) of California's
hospital buildings as Structural Performance Category-1
(SPC-1) buildings, meaning that they are at risk for
collapse in an earthquake. These buildings must be
retrofitted, replaced, or removed from acute care services
by January 1, 2008 (or 2013 if they receive extensions).
Another 231 buildings (roughly nine percent) are
categorized as SPC-2 buildings, meaning that they are not
at risk of collapse, but may not be reparable or functional
following a strong quake. These buildings must be brought
into compliance with the requirements of SB 1953 by 2030 or
be removed from acute care service. Finally, over 1,536
buildings (56 percent) are categorized as SPC-3, SPC- 4,
and SPC- 5 buildings, meaning that they are considered
capable of providing services following a strong quake and
may be used without restriction beyond 2030.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee analysis:
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11
2011-12 Fund
Debt service payments Unknown
,potentially $75-$150 Federal/
million annually Local/
Special
SUPPORT : (Verified 9/1/09)
Santa Clara County Board of Supervisors (source)
Service Employees International Union
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State Building Trades Council
ARGUMENTS IN SUPPORT : The Santa Clara County Board
(Board) of Supervisors, the sponsor of the bill, state that
this bill allows public hospitals to access federal
supplemental reimbursements for debt service related to
seismic retrofitting. They argue that the importance of
this legislation to the county's public hospital and its
patients cannot be overestimated. They report that the
hospital faces growing demands for its services, but the
number of available beds limits the hospital's ability to
meet this growing need for hospital care. They point out
that this need for increased beds comes at a time when
compliance with the seismic standards presents the risk of
having to close facilities, which reduces the number of
available beds. The Board notes that half of the beds at
Santa Clara Valley Medical Center must be replaced or
retrofitted to meet seismic standards.
Other supporters argue that this bill will addresses a
major seismic compliance obstacle for hospitals that serve
our state's most underserved populations and whose trauma
centers are often the source of primary care for uninsured
individuals.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Tom
Berryhill, Blakeslee, Blumenfield, Brownley, Buchanan,
Caballero, Charles Calderon, Carter, Chesbro, Conway,
Cook, Coto, Davis, De La Torre, De Leon, DeVore, Duvall,
Emmerson, Eng, Evans, Feuer, Fletcher, Fong, Fuentes,
Fuller, Furutani, Gaines, Galgiani, Garrick, Gilmore,
Hagman, Hall, Harkey, Hayashi, Hernandez, Hill, Huber,
Huffman, Jeffries, Jones, Knight, Krekorian, Lieu, Logue,
Bonnie Lowenthal, Ma, Mendoza, Miller, Monning, Nava,
Nestande, Niello, Nielsen, John A. Perez, V. Manuel
Perez, Portantino, Price, Ruskin, Salas, Saldana, Silva,
Skinner, Smyth, Solorio, Audra Strickland, Swanson,
Torlakson, Torres, Torrico, Tran, Villines, Yamada, Bass
NO VOTE RECORDED: Bill Berryhill, Block
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CTW:RJG:do 9/1/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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