BILL NUMBER: SB 364 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 22, 2010
AMENDED IN ASSEMBLY AUGUST 31, 2009
AMENDED IN ASSEMBLY AUGUST 20, 2009
AMENDED IN ASSEMBLY JULY 15, 2009
AMENDED IN ASSEMBLY JUNE 23, 2009
AMENDED IN SENATE MAY 6, 2009
AMENDED IN SENATE APRIL 13, 2009
INTRODUCED BY Senator Florez
FEBRUARY 25, 2009
An act to add Section 1285.5 to Article
7.3 (commencing with Section 1323.10) to Chapter 2 of Division 2 of
the Health and Safety Code, relating to health facilities.
LEGISLATIVE COUNSEL'S DIGEST
SB 364, as amended, Florez. Health facilities: cancer
centers. patient impact report.
Under existing law, the State Department of Public Health is
responsible for licensing and regulating health facilities, including
general acute care hospitals. Violation of these provisions is a
crime.
This bill would require the lead agency, the office of the
Attorney General, to either produce a patient impact report or a
negative declaration, as defined, whenever a general acute care
hospital proposes to change its management structure from nonprofit
to for profit or when a nonprofit general acute care hospital
proposes to establish a medical foundation. The bill would specify
when a patient impact report would be required as well as the public
notice, hearing, comment, and challenge procedures that the lead
agency would be required to use in this process. The bill would
prohibit the lead agency approving a conversion for which a patient
impact report has been certified where the report identifies one or
more significant effects on health services that would occur if the
conversion is carried out unless the lead agency makes specified
findings with respect to each significant effect. The bill would also
allow the lead agency to charge an applicant for a conversion a
reasonable fee.
This bill would prohibit an officer, director, or member of a
governing board of a general acute care hospital that is designated
by the National Cancer Institute as a comprehensive cancer center and
that accepts state funds from holding a position as an officer,
director, or member of a governing board of a corporation that either
manufactures or sells tobacco products, as defined, or that has,
within the past 5 years, violated federal or state controlled
substances laws or regulations. By creating a new crime, this bill
would impose a state-mandated local program.
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 no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all
of the following:
(a) The maintenance of quality health services, assurance of the
best possible health care for the public at the lowest cost, and
provision of available and accessible health and medical services for
the people of this state, now and in the future, is a matter of
statewide concern.
(b) It is necessary to provide high-quality health services that
at all times separate medical services from fiscal and administrative
management so that medical decisions will not be unduly influenced
by fiscal and administrative management.
(c) There is a need to understand the relationship between the
maintenance of high-quality health services and the general welfare
of the people of the state, including the ramifications of a
potential nonprofit to for-profit hospital conversion or a nonprofit
hospital seeking to establish a medical foundation.
(d) The capacity and level of service of hospitals is limited. It
is the intent of the Legislature that state government take immediate
steps to identify any critical thresholds for the health and safety
of the people of the state and take all coordinated actions necessary
to prevent such thresholds being reached.
(e) Every citizen has a right to quality health services;
regardless of race, ethnicity, age, gender, or income level.
(f) The interrelationship of policies and practices in health
services requires systematic and concerted efforts by public and
private interests to enhance health services and ensure an acceptable
level of service and to protect the public from possible abuses
stemming from the commercial exploitation of the practice of
medicine.
(g) It is the intent of the Legislature that all agencies of state
government that regulate the activities of private individuals,
corporations, and entities that are found to affect the quality of
health services, regulate those activities so that major
consideration is given to preventing the degradation of services in
the event of a hospital structure conversion, either from nonprofit
to for-profit or a nonprofit hospital seeking to establish a medical
foundation.
SEC. 2. Article 7.3 (commencing with Section
1323.10) is added to Chapter 2 of Division 2 of the Health
and Safety Code , to read:
Article 7.3. Patient Impact Reports
1323.10. (a) This article shall be known and may be cited as the
California Patient Impact Report Act.
(b) The basic purposes of the patient impact report are to do all
of the following:
(1) Inform governmental decisionmakers and the public about the
potential, significant health service effects of proposed activities.
(2) Identify the ways that declines in health services can be
avoided or significantly reduced.
(3) Prevent significant, avoidable damage to health services by
requiring changes in conversions through the use of alternatives or
mitigation measures when the lead agency finds the changes to be
feasible.
(4) Disclose to the public the reasons why a lead agency approved
the conversion in the manner the agency chose if significant health
services effects are involved.
1323.13. For the purposes of this article the following
definitions shall apply:
(a) "Conversion" means a change in the management structure of a
general acute care hospital, as defined in Section 1250, including,
either changing from nonprofit to for-profit structure or a nonprofit
general acute care hospital establishing a medical foundation, that
either will cause a change to health services or is reasonably
foreseeable to cause a change to health services and that is any of
the following:
(1) An activity undertaken by a person or entity that is
supported, in whole or in part, through contracts, grants, subsidies,
loans, or other forms of assistance from one or more public
agencies.
(2) An activity that involves the issuance to a person of a lease,
permit, license, certificate, or other entitlement for use by one or
more public agencies.
(b) "Conversion-specific effect" means all the effects, other than
cumulative effects, on health services resulting from the conversion
of a general acute care hospital.
(c) "Discretionary conversion" means a conversion subject to the
judgmental controls of the lead agency.
(d) "Feasible" means capable of being accomplished in a successful
manner within a reasonable period of time, taking into account
economic, social, and technological factors.
(e) "Lead agency" means the Office of the Attorney General.
(f) "Local agency" means a public agency other than a state
agency, board, or commission. For purposes of this article a
redevelopment agency and a local agency formation commission are
local agencies.
(g) "Negative declaration" means the statement by the lead agency
that a patient impact report does not need to be done for a specified
conversion.
(h) "Patient impact report " means the public document created to
analyze the significant health service effects of a proposed
conversion, to identify alternatives, and to disclose possible ways
to reduce or avoid the possible declines in health services.
(i) "Person" includes a person, firm, association, organization,
partnership, business, trust, corporation, limited liability company,
company, district, county, city and county, city, town, the state,
or any of the agencies or political subdivisions of those entities,
and, to the extent permitted by federal law, the United States, or
any of its agencies or political subdivisions.
(j) "Public agency" includes a state agency, board, or commission,
a county, city and county, city, regional agency, public district,
redevelopment agency, or other political subdivision.
(k) "Responsible agency" means a public agency, other than the
lead agency, that has responsibility for carrying out or approving a
conversion.
(l ) "Significant effect on the health services" means a
substantial, or potentially substantial, adverse change in the level
of service that is provided to the community served by the general
acute care hospital.
(m) "Trustee agency" means a state agency that has jurisdiction by
law over public health services affected by a conversion that are
held in trust for the people of the State of California.
1323.15. Except as otherwise provided, this article shall apply
only to discretionary conversions proposed to be carried out or
approved by the lead agency.
1323.17. (a) Applications for conversion shall be considered for
approval only after the lead agency publishes either a patient impact
report or a negative declaration.
(b) If there is substantial evidence, in light of the whole record
before the lead agency, that the conversion may have a significant
effect on health services, a patient impact report shall be prepared.
(1) The patient impact report shall be an informational document
that will inform the lead agency decision makers and the public
generally of the significant health services effect of a conversion,
identify possible ways to minimize the significant effects, and
describe reasonable alternatives to the conversion.
(2) The patient impact report shall identify any significant
effect on the level of service and patient care provided by the
general acute care hospital after the conversion, identify
alternatives to the conversion, and indicate the manner in which that
significant effect can be mitigated or avoided.
(c) For the purposes of subdivision (b), substantial evidence
includes facts, a reasonable assumption predicated upon facts, or
expert opinion supported by facts. Substantial evidence is not
argument, speculation, unsubstantiated opinion or narrative, evidence
that is clearly inaccurate or erroneous, or evidence of social or
economic impacts that do not contribute to, or are not caused by,
impacts on health services.
(d) The lead agency shall adopt regulations setting forth
objectives, criteria, and procedures for the evaluation of
conversions and the preparation of a patient impact report and
negative declarations pursuant to this article. The lead agency shall
be responsible for determining whether a patient impact report shall
be required for a conversion. That determination shall be final and
conclusive.
(e) If the lead agency determines that a patient impact report is
required for a conversion, the lead agency shall immediately send
notice of that determination by certified mail or an equivalent
procedure to each responsible agency, the Offices of Planning and
Research, and all trustee agencies.
(f) The existence of public controversy over the health services
effects of a conversion shall not require preparation of a patient
impact report if there is no substantial evidence, in light of the
whole record before the lead agency, that the conversion may have a
significant effect on health services.
(g) The determination of whether a patient impact report is needed
shall be made within 30 days from the date on which an application
for a conversion has been received and accepted as complete by the
lead agency. This period may be extended 15 days upon the consent of
the lead agency and the conversion applicant. Patient impact reports
and negative declarations should be prepared as early as feasible in
the planning process. The patient impact report preparation and
review should be coordinated in a timely fashion with other existing
planning, review, and conversion approval processes and should, to
the maximum extent feasible, run concurrently, not consecutively,
with those processes.
1323.19. If the lead agency determines that a patient impact
report is necessary pursuant to Section 1323.17, then the lead agency
shall begin investigation and drafting of a preliminary patient
impact report to determine whether the conversion may have a
significant effect on health services based on substantial evidence
in light of the whole record.
1323.20. (a) A draft patient impact report prepared pursuant to
the requirements of this article shall be prepared directly by, or
under contract to, the lead agency.
(b) When drafting a patient impact report, the lead agency shall
solicit and respond to comments from the public and other agencies
concerned with the conversion.
(c) The lead agency shall include provisions in its patient impact
report procedures for wide public involvement, formal and informal,
consistent with its existing activities and procedures, in order to
receive and evaluate public reaction to health service issues. These
procedures should include, whenever possible, making public health
service information available in electronic format on the Internet,
on an Internet Web site maintained or utilized by the lead agency.
1323.21. (a) The lead agency shall provide public notice pursuant
to subdivision (b) for all of the following:
(1) The determination that no patient impact report is required
and the decision to issue a negative declaration.
(2) When a draft patient impact report is available.
(3) When significant new information is added to a patient impact
report after notice has been given, but prior to certification.
(4) Completion of a patient impact report.
(b) The lead agency shall provide public notice in the following
ways:
(1) By mail to the last known name and address of all
organizations and individuals who have previously requested that
notice in writing. If the agency offers to provide the notices by
e-mail, a person may request that the notices be provided to him or
her by e-mail. The lead agency may require requests for notices to be
annually renewed. The lead agency may charge a fee that is
reasonably related to the costs of providing this service.
(2) Publication at least once in a newspaper of general
circulation in the area affected by the proposed conversion. If more
than one area is affected, the notice shall be published in the
newspaper of largest circulation from among the newspapers of general
circulation in those areas.
(3) Posting on and off the site in the area where the general
acute care hospital proposing the conversion is to be located.
(4) Direct mailing to the owners and patients of the general acute
care hospital.
(5) Posting in the office of the county clerk of each county in
which the general acute care hospital proposing the conversion is
located for a period of at least 30 days. The county clerk shall post
the notices within 24 hours of receipt.
(c) The means of providing notice specified in subdivision (b)
shall not preclude the lead agency from providing additional notice
by other means if the agency so desires, nor shall the requirements
of this section preclude the lead agency from providing the public
notice required by this section at the same time and in the same
manner as public notice otherwise required by law for the conversion.
(d) The public notice shall disclose the following:
(1) A brief description of the proposed conversion and the name
and address of the general acute care hospital at which the
conversion is proposed.
(2) The starting and ending dates for the review period during
which the lead agency will receive comments. If the review period is
shortened, the notice shall disclose that fact.
(3) The date, time, and place of scheduled public meetings or
hearings to be held by the lead agency on the proposed conversion, if
known to the lead agency at the time of notice.
(4) A list of the significant health service effects anticipated
as a result of the conversion, to the extent that those effects are
known to the lead agency at the time of the notice.
(5) The addresses where copies of the draft patient impact report
and all documents referenced in the patient impact report will be
available for public review. This location shall be readily
accessible to the public during the lead agency's normal working
hours.
(e) This section shall not be construed to invalidate an action
because of the alleged inadequacy of the notice, provided that there
has been substantial compliance with the notice content requirements
of this section.
1323.23. (a) Copies of the draft patient impact report shall be
made available by the lead agency to public library systems serving
the area involved. Copies shall also be available in offices of the
lead agency.
(b) The lead agency shall use the State Clearinghouse to
distribute draft patient impact report to state agencies for review
and should use area clearinghouses to distribute the documents to
regional and local agencies.
(c) If the submittal of a patient impact report is determined by
the State Clearinghouse to be complete, the State Clearinghouse shall
distribute the document within three working days from the date of
receipt. The State Clearinghouse shall specify the information that
will be required in order to determine the completeness of the
submittal of a patient impact report.
1323.25. (a) The lead agency shall provide adequate time for
other public agencies and members of the public to review and comment
on a draft patient impact report or negative declaration.
(b) The lead agency may establish time periods for review in their
implementing procedures and shall notify the public and reviewing
agencies of the time for receipt of comments on patient impact
reports.
(c) The public review period for a draft patient impact report
shall not be less than 30 days nor should it be longer than 60 days
except under unusual circumstances. When a draft patient impact
report is submitted to the State Clearinghouse for review by state
agencies, the public review period shall not be less than 45 days,
unless a shorter period, not less than 30 days, is approved by the
State Clearinghouse.
(d) If a draft patient impact report has been submitted to the
State Clearinghouse for review by state agencies, the public review
period shall be at least as long as the review period established by
the State Clearinghouse. The public review period and the state
agency review period may, but are not required to, begin and end at
the same time. Day one of the state review period shall be the date
that the State Clearinghouse distributes the document to state
agencies.
(e) Criteria for shorter review periods by the State Clearinghouse
for documents that must be submitted to the State Clearinghouse
shall be set forth in written guidelines.
(1) Shortened review periods may not be less than 30 days for a
draft patient impact report and 20 days for a negative declaration.
(2) A request for a shortened review period shall be made only in
writing by the decisionmaking body of the lead agency.
(3) A request approved by the State Clearinghouse shall be
consistent with the criteria set forth in the written guidelines.
(4) A shortened review period may not be approved for a proposed
conversion of statewide, regional, or areawide health service
significance.
(5) An approval of a shortened review period shall be given prior
to, and reflected in, the public notice.
(f) A review period for a patient impact report shall not require
a halt in other planning or evaluation activities related to a
conversion. Planning should continue in conjunction with public
health service evaluation.
1323.27. (a) The lead agency shall evaluate comments on health
service issues received from persons who reviewed the draft patient
impact report and shall prepare a written response. The lead agency
shall respond to comments received during the noticed comment period
and any extensions, and may respond to late comments.
(b) There must be good faith, reasoned analysis in response.
Conclusory statements unsupported by factual information will not
suffice.
(c) The written response shall describe the disposition of each
significant health service issue that is raised by the comments. The
responses shall be prepared consistent with Section 15088 of Title 14
of the California Code of Regulations, as those regulations existed
on June 1, 2010.
(d) With respect to the consideration of comments received on a
draft patient impact report, the lead agency shall accept comments
via e-mail and shall treat e-mail comments as equivalent to written
comments.
(e) The response to comments may take the form of a revision to
the draft patient impact report or may be a separate section in the
final patient impact report. Where the response to comments makes
important changes in the information contained in the text of the
draft patient impact report, the lead agency shall do either of the
following:
(1) Revise the text in the body of the patient impact report.
(2) Include marginal notes showing that the information is revised
in the response to comments.
(f) If any public agency or person who is consulted with regard to
a patient impact report fails to comment within a reasonable time as
specified by the lead agency, it shall be assumed, without a request
for a specific extension of time, that the agency or person has no
comment to make. Although the lead agency need not respond to late
comments, the lead agency may choose to respond to them.
(g) Comments received through the consultation process shall be
retained for a reasonable period and available for public inspection
at an address given in the final patient impact report. Comments
which may be received on a draft patient impact report or negative
declaration under preparation shall also be considered and kept on
file.
(h) Every public agency may comment on patient impact report
documents dealing with conversions that affect resources with which
the agency has special expertise regardless of whether its comments
were solicited or whether the effects fall within the legal
jurisdiction of the lead agency.
(i) This section shall not be construed as prohibiting a person
from submitting information or other comments to the lead agency
drafting the patient impact report. The information or other comments
may be submitted in any format, shall be considered by the lead
agency, and may be included, in whole or in part, in a report or
declaration.
1323.29. (a) A draft patient impact report does not require
formal hearings at any stage of the review process.
(b) If the lead agency provides a public hearing on its decision
to carry out or approve a conversion, the agency shall include
patient impact report review as one of the subjects for the hearing.
(c) A public hearing on the health service impact of a conversion
should usually be held when the lead agency determines it would
facilitate the purposes and goals of patient impact report to do so.
The hearing may be held in conjunction with and as a part of normal
planning activities.
(d) A draft patient impact report or negative declaration shall be
used as a basis for discussion at a public hearing. The hearing may
be held at a place where public hearings are regularly conducted by
the lead agency or at another location expected to be convenient to
the public.
(e) Notice of all public hearings shall be given in a timely
manner. This notice may be given in the same form and time as notice
for other regularly conducted public hearings of the lead agency. To
the extent that the lead agency maintains an Internet Web site,
notice of all public hearings shall be made available in electronic
format on that site.
(f) The lead agency may include, in its implementing procedures,
procedures for the conducting of public hearings pursuant to this
section. The procedures may adopt existing notice and hearing
requirements of the lead agency for regularly conducted legislative,
planning, and other activities.
1323.30. (a) Prior to completing the draft patient impact report,
the lead agency may also consult directly with any person or
organization it believes will be concerned with the health service
effects of the conversion. This early consultation may be called
scoping.
(b) The lead agency shall call at least one scooping meeting for a
conversion of statewide, regional, or area wide significance.
(c) If a scoping meeting is held, notice shall be provided to all
of the following:
(1) A county or city that borders on a county or city within which
the conversion is located, unless otherwise designated annually by
agreement between the lead agency and the county or city.
(2) Any responsible agency.
(3) Any public agency that has jurisdiction by law with respect to
the conversion.
(4) An organization or individual who has filed a written request
for the notice.
(d) For an entity, organization, or individual that is required to
be provided notice of a lead agency public meeting, the requirement
for notice of a scoping meeting may be met by including the notice of
a scoping meeting in the public meeting notice.
1323.31. The lead agency shall not approve a conversion for which
a patient impact report has been certified where the report
identifies one or more significant effects on health services that
would occur if the conversion is carried out unless the lead agency
makes one or more of the following findings with respect to each
significant effect:
(a) Changes or alterations have been required in, or incorporated
into, the conversion that mitigate or avoid the significant effects.
(b) Specific economic, legal, social, technological, or other
considerations, including considerations for the provision of
employment opportunities for highly trained workers, make infeasible
the mitigation measures or alternatives identified in the patient
impact report.
(c) Specific overriding economic, legal, social, technological, or
other benefits of the conversion outweigh the significant effects on
health services.
1323.33. (a) Whenever the lead agency has completed a patient
impact report, it shall provide notice of that completion pursuant to
Section 1323.21. The notice of completion shall briefly identify the
general acute care hospital at which the conversion is proposed and
shall indicate that a final patient impact report has been prepared.
Failure to provide the notice required by this section shall not
affect the validity of a conversion.
(b) In addition to other notice required by subdivision (a),
notice of completion of a patient impact report on a conversion shall
be provided to any legislator in whose district the conversion has a
public health service, if the legislator requests the notice.
1323.35. Nothing in this article shall preclude a conversion
applicant or other person from challenging, in an administrative or
judicial proceeding, the legality of a condition of conversion
approval imposed by the lead agency. If any condition of conversion
approval set aside by either an administrative body or court was
necessary to avoid or lessen the likelihood of the occurrence of a
significant effect on health services, the lead agency's approval of
the conversion shall be invalid and a new patient impact report
review process shall be conducted before the conversion can be
reapproved, unless the lead agency substitutes a new condition that
the lead agency finds, after holding a public hearing on the matter,
is equivalent to, or more effective in, lessening or avoiding
significant effects on health services and that does not cause any
potentially significant effect on health services.
1323.37. A lead agency may charge and collect a reasonable fee
from a person proposing a conversion subject to this article in order
to recover the estimated costs incurred by the lead agency in
preparing a negative declaration or a patient impact report for the
conversion and for procedures necessary to comply with this article
on the conversion. Litigation expenses, costs, and fees incurred in
actions alleging noncompliance with this article are not recoverable
under this section.
SECTION 1.
The Legislature finds and declares all of the following:
(a) Cancer research and treatment ensures the development of cures
for many life-threatening diseases.
(b) Consumption of tobacco products, particularly by minors, is a
leading cause of cancer.
(c) California, through the Medi-Cal program, provides several
millions of dollars each year for cancer treatment and research to
general acute care hospitals that are designated by the National
Cancer Institute as comprehensive cancer centers.
(d) California advocates, as a matter of public policy, reduction
in overall tobacco consumption and prohibits tobacco consumption near
public thoroughfares.
(e) General acute care hospitals that are designated as
comprehensive cancer centers also take steps to educate the public
about the dangers of tobacco use.
(f) It is misleading for a general acute care hospital that is
designated as a comprehensive cancer center and that is provided
resources by the state to employ officers and directors who profit
from the sale and distribution of tobacco products.
(g) A general acute care hospital that is designated as a
comprehensive cancer center and that is provided resources by the
state should seek to ensure that its directors and officers do not
profit from the consumption of tobacco products and do not render
services to corporations that have violated federal or state laws.
SEC. 2. Section 1285.5 is added to the Health
and Safety Code, to read:
1285.5. An officer, director, or member of a governing board of a
general acute care hospital that is designated by the National
Cancer Institute as a comprehensive cancer center to conduct cancer
research and treatment and that accepts state funds shall not hold a
position as either of the following:
(a) (1) An officer, director, or member of the board, or a similar
position of a corporation that manufactures or sells tobacco
products.
(2) For purposes of paragraph (1), "a corporation that
manufactures or sells tobacco products" means a corporation or other
entity that owns or operates any of the following:
(A) One or more clinics or health facilities licensed pursuant to
this division that derive revenue from tobacco products.
(B) One or more pharmacies licensed pursuant to Chapter 9
(commencing with Section 4000) of Division 2 of the Business and
Professions Code that derive revenue from tobacco products.
(C) Any entity that derives more than 1 percent of its annual
revenue from tobacco products.
(b) An officer, director, or member of the board, or a similar
position of a corporation that has, within the past five years,
violated federal or state controlled substances laws or regulations.
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.