BILL ANALYSIS
SB 289
Page 1
Date of Hearing: July 7, 2009
ASSEMBLY COMMITTEE ON HEALTH
Dave Jones, Chair
SB 289 (Ducheny) - As Amended: April 23, 2009
SENATE VOTE : 36-0
SUBJECT : Hospitals: seismic safety: periodic reports.
SUMMARY : Requires owners of hospital buildings that are
classified as nonconforming, SPC-1 buildings, (defined in
regulations as a building that is at risk of collapse in an
earthquake), who have requested extensions of the 2008 deadline
for seismic retrofitting or rebuilding, to include additional
information in statutorily required reports due to the Office of
Statewide Health Planning and Development (OSHPD) by June 30,
2011. Specifically, this bill :
1)Requires owners of hospital buildings that do not meet
existing requirements to avoid risk of collapse in an
earthquake and are classified as nonconforming, SPC-1
buildings, who have requested extensions of the 2008 deadlines
for retrofitting or rebuilding, to include the following
additional information in the reports they are required to
file with OSHPD by June 30, 2011, regarding buildings they
intend to remove from acute care service:
a) The project number or numbers for retrofit or
replacement of each building;
b) The projected construction start date or dates and
projected construction completion date or dates;
c) The number of inpatient beds, by type of unit and type
of service to be provided;
d) For the building or buildings to be removed from acute
care service, the following information:
i) The projected due date or dates the building will be
removed from service;
ii) The inpatient services currently delivered in the
building or buildings; and,
iii) The number of general acute care inpatient beds and
patient days, by type of unit and type of service, for
the years 2008, 2009, and 2010.
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2)Requires hospitals to include in the report to OSHPD the net
change in the number of inpatient beds, by type of unit and
type of service, taking into account buildings to be taken out
of service, retrofitting or replacement of those buildings,
and beds provided in any other buildings used for general
acute care inpatient services by the facility.
3)Requires OSHPD to make information reported by hospitals in
compliance with the June 30, 2011 deadline available on its
Internet Web site within 180 days of receipt of the
information, including the number of inpatient beds, by type
of unit and types of service, provided by facilities operating
buildings that are classified as SPC-2, SPC-3, SPC-4, and
SPC-5.
EXISTING LAW :
1)Establishes and grants OSHPD authority and responsibility for
reviewing and approving all plans relating to construction,
additions to, reconstruction, or alteration of, health care
facilities, as defined. Before adopting any such plans,
requires hospitals to submit the plans to OSHPD for approval
and to pay an application filing fee, as determined by OSHPD,
based on the project's estimated construction cost.
2)Establishes the Alfred E. Alquist Hospital Facilities Seismic
Safety Act of 1983 (Act), and its amendments, as follows:
a) After January 1, 2008, requires any general acute care
hospital building that is determined to be a potential risk
for collapse or significant loss of life in an earthquake
to only be used for nonacute care hospital purposes.
Authorizes OSHPD to grant a delay of up to five years
beyond the 2008 deadline under specified circumstances,
including upon a demonstration by the hospital 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 grant extensions to the deadline
described in 2) a) above if the hospital agrees that by
January 1, 2013, designated 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 for hospitals that have already received
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extensions of the January 1, 2008 deadline, if specified
conditions are met;
c) Permits a hospital owner, in lieu of retrofitting or
rebuilding hospital buildings at risk of collapse by 2013,
to instead replace them by January 1, 2020, if the hospital
owner meets several conditions and OSHPD certifies that the
hospital owner lacks the financial capacity to meet seismic
standards, as defined. Among the conditions the hospital
must meet to be eligible for this extension are that the
hospital:
i) Maintains a Medi-Cal contract with the California
Medical Assistance Commission (CMAC), with exceptions;
ii) Maintains basic emergency medical services if the
hospital provided such services as of July 1, 2007; and,
iii) Meets one of the following:
(1) The hospital is located within a Medically
Underserved Area or a Health Professions Shortage
Area, as specified;
(2) OSHPD determines, by means of a health impact
assessment, that removal of the building or buildings
from service may diminish significantly the
availability or accessibility of health care services
to an underserved community;
(3) CMAC determines that the hospital is an
essential provider of Medi-Cal services in the
hospital's service area; or,
(4) The hospital demonstrates that, based on
annual utilization data submitted to the office for
2006 or later, the hospital had in one year over 30%
of all discharges for either Medi-Cal or indigent
patients in the county in which the hospital is
located;
d) Requires, by January 1, 2030, all hospital buildings to
be capable of remaining intact after an earthquake, and
capable of continued operation and provision of acute care
medical services, and requires owners of all acute care
inpatient hospitals to demolish, replace, or change to a
non-acute care use all hospital buildings not in
substantial compliance.
3)Requires an owner of a general acute care hospital building
that is classified as a SPC-1 building, (who has not requested
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an extension of the 2008 deadline), to submit a report to
OSHPD no later than April 15, 2007, describing the status of
each building in complying with the deadline, and to identify
the following:
a) Each building that is subject to the deadline;
b) The project number or numbers for retrofit or
replacement of each building;
c) The projected construction start date or dates and
projected construction completion date or dates; and,
d) The building or buildings to be removed from acute care
service and the projected date or dates of this action.
4)Existing law requires owners of general acute care hospital
buildings classified as nonconforming SPC-1 buildings who have
requested an extension of the 2008 deadline to submit similar
reports by June 30, 2009, and June 30, 2011.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill will
enable the state to better assess the scope and impact of
hospital closures that may result from enforcement of the
state's hospital seismic safety deadlines, by requiring
hospital owners to provide more specific information
concerning the types of services and numbers of patients
served by buildings that will be removed from acute care
service, rather than retrofitted, by the 2013 deadlines.
The author states that the reports hospitals are required to
file with OSHPD in June of this year will begin to provide the
state with a preliminary look at the impact of the 2013
seismic deadline on hospital services and capacity. The
author indicates the reports will capture information about
new buildings under construction, as well as about buildings
to be removed from service, and thus provide the state with an
accurate picture of the net effects on hospital capacity after
2013.
The author also indicates that her intent is to begin
discussions about hospital seismic deadlines based on the June
2009 reports to OSHPD, as well the second round of reports,
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which are due in June 2011. The author states that the
reports, along with more information about which hospital
buildings may be reclassified to higher status based on newer,
more sophisticated modeling tools, are likely to raise
difficult questions about the impacts of hospital seismic
safety mandates and state budget-related fiscal pressures on
access and quality of care, particularly in underserved
communities. The author notes that recent reports indicate
that several regions of the state will need additional
hospital beds to meet the needs of the growing elderly
population, which additionally needs to be factored into the
assessment of the net impact of the 2013 deadlines.
2)BACKGROUND . California's hospital seismic safety law, SB 1953
(Alquist), Chapter 740, Statutes of 1994, was passed by the
Legislature a few months after the Northridge earthquake. SB
1953 establishes seismic standards for hospital buildings, as
well as, deadlines for compliance with those standards and
requires every hospital building to comply with two deadlines.
By January 1, 2008 (or no later than January 1, 2013, if an
extension has been granted), every hospital building must meet
specific construction standards established to keep these
structures standing after a major earthquake. By January 1,
2030, the law requires all hospital buildings to comply with
standards intended to keep these buildings operational
following a severe quake.
Based on its latest assessment of seismic risk, as of April
2009, OSHPD had classified 948 (35%) of California's hospital
buildings as SPC-1 buildings, meaning that they were 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 have received extensions).
Another 231 buildings (roughly 9%) were 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%) were SPC-3, SPC-
4, and SPC- 5, meaning that they are considered capable of
providing services following a strong quake and may be used
without restriction beyond 2030.
Due to the major strides in earthquake risk engineering that
have occurred in the years since SB 1953 passed, on November
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14, 2007 the California Building Standards Commission approved
the implementation of a state-of-the-art risk technology,
HAZUS (Hazards U.S. Multi-Hazard), to reexamine the seismic
risk of SPC-1 hospital buildings. This reassessment allows
OSHPD to reprioritize SPC-1 hospital buildings based on their
level of seismic risk and if they meet specified criteria,
move the building to SPC-2 category. If reclassified, these
hospital buildings would move from a 2008 and 2013 seismic
deadline to a 2030 deadline. It is estimated that 50% to 60%
of the 1,100 SPC-1 buildings would qualify for the
reclassification under the new HAZUS methodology.
According to OSHPD, the deadline for hospitals to apply for a
reclassification is June 30, 2009. As of April 2009, requests
for reclassification had been submitted for 441 SPC-1
buildings and 148 buildings had been reclassified to SPC-2
status. OSHPD staff informally estimate that 500 SPC-1
buildings will not qualify for reclassification under HAZUS
and will not qualify for the alternative deadline of 2020
permitted under SB 306 (Ducheny), Chapter 642, Statutes of
2008, for hospitals meeting specified hardship criteria as
determined by OSHPD.
3)SB 1661 SEISMIC REPORTING REQUIREMENTS . Most of the current
reporting requirements for hospital seismic safety compliance
were enacted in SB 1661 (Cox), Chapter 679, Statutes of 2006.
SB 1661 authorizes OSHPD to grant SPC-1 hospitals an
additional two-year extension until 2015, and requires all
hospitals with SPC-1 buildings to report to OSHPD on their
progress with seismic safety compliance, regardless of whether
those buildings were planned for acute care, outpatient or
other purposes. Specifically, SB 1661 requires hospitals that
will not meet retrofit or rebuilding deadlines to report to
the state on the building or buildings to be removed from
acute care service and the projected dates of those actions.
The most recent of the reports required under SB 1661 was due
to OSHPD on June 30, 2009 and OSHPD is required to make the
information received available on its Web site within 90 days
of the deadline. The next reporting requirement of SB 1661 is
due June 30, 2011 and is the reporting requirement proposed
for expansion in this bill.
4)SUPPORT . The California Hospital Association (CHA) and the
Hospital Corporation of America (HCA), supporters of this
bill, state that they are concerned that the existing mandated
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reporting due in 2011 focuses on only whether or not a
non-conforming hospital building is going to meet its deadline
or close. CHA and HCA believe that, if a hospital is forced
to close due to the seismic mandate, information should be
collected on the effect of the closures so plans can be made
for alternative access to care for those affected by the
closure.
5)PREVIOUS AND RELATED LEGISLATION .
a) AB 303 (Beall) allows specified county and University of
California disproportionate share hospitals that contract
with CMAC 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. AB 303 is currently in
the Senate Health Committee.
b) AB 411 (Garrick) requires health care district hospitals
which have been denied a request for an extension of the
seismic retrofit deadlines to report to OSHPD the
district's efforts to comply with the seismic deadlines; to
reassess the structural performance of the hospital's
buildings; and to secure passage of local bond financing
for seismic compliance. Requires reporting of specified
information on barriers to passage of proposed hospital
bond financing. AB 411 is currently in the Senate Rules
Committee.
c) AB 523 (Huffman), pending in the Senate, allows OSHPD to
grant a two-year extension of the 2013 seismic deadline for
a hospital building that is owned by a health care
district, but is operated by a third party under a lease
that extends at least through December 31, 2009, based on a
declaration that the district has lacked, and continues to
lack, unrestricted access to the hospital building for
seismic planning purposes during the time of the lease.
Establishes interim deadlines and requirements the hospital
must meet in order to qualify for the extension, as
specified. Contains an urgency clause to ensure that the
provisions of AB 523 go into immediate effect upon
enactment.
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d) SB 306 (Ducheny), Chapter 642, Statutes of 2008, amends
the Act to permit hospitals to delay compliance with the
July 1, 2008 seismic retro deadline, and the 2013
extension, to the year 2020, by filing a declaration with
OSHPD that the owner lacks financial capacity to comply
with the law.
e) SB 1661 (Cox), Chapter 693, Statutes of 2006, authorizes
an extension of up to an additional two years for hospitals
that have already received extensions of the January 1,
2008 seismic safety compliance deadline if specified
criteria are met, and requires specified hospital reports
to be posted on the website of OSHPD.
f) SB 167 (Speier), of 2005, would have amended the Act to
permit delays of the 2008 seismic safety deadline for
specified hospitals that do not exceed maximum allowable
seismic risk, as determined by OSHPD, and expedited the
final compliance deadline to 2020 for hospitals granted the
delay. SB 167 failed passage in the Assembly Health
Committee.
g) AB 1978 (Walters), of 2005, would have extended, from
January 1, 2008 to January 1, 2015, the deadline for any
general acute care hospital building determined to be at
potential risk of collapse, or pose significant loss of
life, to only be used for nonacute care purposes, and
permitted hospitals subject to the 2015 deadline to request
additional extensions to 2020, as specified. AB 1978
failed passage in the Assembly Health Committee.
h) AB 1673 (Nation and Richman), of 2005, would have
repealed provisions of the Act that require specified
hospitals to meet seismic retrofitting requirements by
2008, revised the final 2030 deadline requirement to 2020,
and made the bill contingent upon the enactment of AB 1672
(Nation) relating to electronic medical recordkeeping. AB
1673 failed passage in the Assembly Health Committee.
i) SB 1953 (Alquist), Chapter 740, Statutes of 1994,
requires every hospital building to comply with two
deadlines. By January 1, 2008 (or no later than January 1,
2013, if an extension has been granted), every hospital
building must meet specific construction standards
established to keep these structures standing after a major
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earthquake. By January 1, 2030, the law requires all
hospital buildings to comply with standards intended to
keep these buildings operational following a severe quake.
REGISTERED SUPPORT / OPPOSITION :
Support
California Hospital Association
Hospital Corporation of America
Opposition
None on file.
Analysis Prepared by : Tanya Robinson-Taylor / HEALTH / (916)
319-2097