BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 276|
|Office of Senate Floor Analyses | |
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|327-4478 | |
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THIRD READING
Bill No: AB 276
Author: Alejo (D)
Amended: 8/7/12 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 9-0, 6/27/12
AYES: Hernandez, Harman, Alquist, Anderson, Blakeslee, De
Le�n, DeSaulnier, Rubio, Wolk
SENATE GOVERNANCE & FINANCE COMMITTEE : 8-0, 7/3/12
AYES: Wolk, Dutton, DeSaulnier, Fuller, Hernandez, Kehoe,
La Malfa, Liu
NO VOTE RECORDED: Yee
ASSEMBLY FLOOR : Not relevant
SUBJECT : Central Coast Hospital Authority
SOURCE : Author
DIGEST : This bill permits Monterey County (County) to
establish the Central Coast Hospital Authority (Authority)
to take over management of Natividad Medical Center (NMC),
and requires the County Board of Supervisors to reach
agreement to merge or affiliate with at least one other
health care facility in the County before the Authority can
be established.
ANALYSIS : Existing law:
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1.Requires every county to be a "provider of last resort,"
by supporting all incompetent, poor, indigent persons,
and those incapacitated by age, disease, or accident,
lawfully resident therein, when such persons are not
supported and relieved by their relatives or friends, by
their own means, or by state hospitals or other state or
private institutions.
2.Permits the board of supervisors of each county to
prescribe rules which authorize the county hospital to
integrate its services with those of other hospitals into
a system of community service. Permits the board of
supervisors of any county to transfer the maintenance,
operation and management or ownership of the county
hospital to the University of California or any other
public agency or community nonprofit corporation
empowered to operate a hospital facility upon a finding
that the community services provided by the hospital
could be more efficient, effectively or economically
provided by the transferee than the county.
3.Establishes the Alameda County Hospital Authority as a
separate public entity, established by the Alameda County
Board of Supervisors, to manage the Alameda County
Medical Center.
4.Defines "designated public hospital" as one of a list of
county and UC hospitals, including NMC and the Alameda
County Medical Center.
5.Establishes the Medi-Cal Hospital/Uninsured Care
Demonstration Project Act, which revises hospital
supplemental payment methodologies under Medi-Cal. This
demonstration project provides funding to various
hospitals, including designated public hospitals.
This bill:
1.Permits the County to establish the Authority by
ordinance, and requires the Authority to be a public
entity separate and apart from the County. Prohibits the
Authority from being established until an agreement is
reached to affiliate or consolidate NMC with at least one
other health care facility in the County.
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2.Requires the purpose of the Authority to provide
management and administration for NMC to continue to
serve as a designated public hospital and ensure the
viability of the health care safety net in the County,
and to provide management and administration for the
continued operation of one or more other health care
facilities that may be affiliated or consolidated with
NMC.
3.Requires, in order for the Authority to be established,
the Board of Supervisors of the County and at least one
governing board of another health facility to reach
agreement regarding affiliation or consolidation.
Permits this agreement to include, but not be limited to,
a transfer of the following:
A. Real estate and personal property, and assets and
liabilities from the County and the other health care
facility to the Authority;
B. Employees from the County and the other health
facility to the Authority; and
C. Maintenance, operation, and management or ownership
of NMC, pursuant to provisions of existing law, or of
the other health care facility;
1.Requires the terms and conditions of the agreement to be
binding on the Authority, and requires the Board of
Supervisors of the County, after agreement is reached, to
adopt an ordinance to establish the Authority. Permits
the agreement to be amended from time to time upon the
mutual consent of the Authority and the governing board
of the other health care facility or the Board of
Supervisors, or both.
2.Requires an agreement concerning the transfer of
personnel to include a transition plan that requires all
of the following:
A. Ongoing communication to employees and recognized
employee organizations regarding the impact of the
transition on existing medical center and other health
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care facility employees and employee classifications;
B. Meeting and conferring by the County and the other
health care facility with affected employee bargaining
units on the timeframe for which the transfer of
personnel occurs, and a specified period of time
during which employees of the County affected by the
establishment of the Authority may elect to be
considered for appointment to vacant positions and
exercise reinstatement rights for which they are
qualified and eligible (requires an employee who first
elects to remain with the County, but who subsequently
seeks employment with the Authority within 30 days of
this election, to be subject to the provisions of this
bill); and
C. Acknowledgment that the Authority is bound by the
terms of the memoranda of understanding (MoU) executed
between the County and its exclusive employee
representatives, and between the other health care
facility and its respective employee organizations,
that are or will be in effect as of the date the
County adopts the ordinance that establishes the
Authority. Specifies that subsequent MoU are subject
to approval only by the Authority.
1.Specifies that an agreement for the maintenance,
operation and management or ownership of NMC, whether
accompanied by a change in licensing, shall not relieve
the County of the ultimate responsibility for indigent
care pursuant to provisions of existing law.
2.Exempts the Authority from the jurisdiction of the local
agency formation commission, as specified.
3.Provides for the retention of various rights and benefits
for employees of NMC, including the following:
A. Deems permanent employees of NMC on the effective
date of affiliation as qualified for employment or
retention, and prohibits any other qualifications from
being required (probationary employees retain their
probationary status and rights and do not have to
serve a new probationary period);
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B. Protects seniority rights of NMC employees;
C. Protects NMC employees' job classifications and
descriptions, and at least their existing salaries and
benefits, including accrued vacation and health and
retiree benefits; and
D. Requires the Authority to become a contracting
agency of the Public Employees' Retirement System
(PERS) for the purpose of continuing or providing
membership in PERS for those employees represented by
the exclusive representative of the former NMC
employees who transferred to the Authority.
1.Requires the Authority to do all of the following for 24
months after the term end date of any NMC MoU in
existence when the County establishes the Authority:
A. Continue to recognize each exclusive representative
of each bargaining unit;
B. Continue to provide at least the same level of
employee benefits to employees who were NMC employees;
C. Roll over and continue to be bound by any existing
medical center or agreement covering the terms and
conditions, including the level of wages and benefits,
of those employees for 24 months after the term end
date of any MoU, unless modified by mutual agreement
with each of the exclusive representatives.
1. Prohibits anything in this bill, except for the
transfer agreement described in #5 above, from being
construed as prohibiting the Authority from determining
the number of employees, the number of full-time
equivalent positions, job descriptions, the nature and
extent of classified employment positions, and salaries
of employees.
2. Requires the Authority to be governed by a board of
trustees, consisting of the following nine members,
appointed for staggered terms, of which the Board of
Supervisors of the County appoints five, and the
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governing board of the other medical facility appoints
the remaining four. Permits the Board of Supervisors
and the governing board to modify the size and length
of terms of the board of trustees, as long as it has a
minimum of five members.
3. Provides the Authority with certain powers, including
having the duties and rights of a local unit of
government; to sue and be sued; to purchase, lease,
hold or sell real and personal property of any kind
necessary; to appoint and employ a chief executive
officer and other employees as necessary; to incur
indebtedness and to borrow money and issue tax-free
bonds, including revenue bonds, to provide sufficient
funds for achieving its purposes; to engage in
contracts; to establish nonprofit, for profit, or other
entities necessary to carry out its duties; to request
that the board of supervisors levy a tax on behalf of
the authority as prescribed.
4. Requires the Authority to conform to various
requirements of existing law, including open meeting
laws and other laws that apply to public agencies, and
laws relating to peer review.
5. Requires the Authority to assume the liabilities for
the PERS benefits, workers' compensation, and other
employee benefits and liabilities with respect to
employees of the Authority, unless otherwise agreed to
by the Authority, the County, and the governing board
of the other health care facility.
6. Prohibits the transfer of NMC from the County to the
Authority from affecting the eligibility of the County
to authorize the Authority to do any of the following:
A. Participate in and receive allocation pursuant to
the California Health Care for Indigents Program, as
specified;
B. Participate in and receive allocations of local
revenue fund amounts as may be earmarked by the County
for indigent health care services;
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C. Participate in the financing of, and receive,
Medicaid disproportionate share hospital payments
available to a county hospital or designated public
hospital;
D. Participate in the financing of, and receive,
Medi-Cal supplemental payments made pursuant to
specified provisions of existing law;
E. Participate in the financing of, and receive,
safety net care pool funding, stabilization funding,
delivery system reform incentive pool payments, and
any other funding available to a county provider or
designated public hospital, as specified;
F. Participate in the financing, administration, and
provision of services under the Low Income Health
Program, as specified;
G. Participate in and receive direct grant and payment
allocations under the Medi-Cal Hospital Provider Rate
Improvement Act of 2011, as specified;
H. Receive Medi-Cal capital supplements pursuant to
specified provisions of existing law relating to
qualified disproportionate share hospitals pursuing
capital improvement projects; and
I. Receive any other funds that would otherwise be
available to a county provider or designated public
hospital.
1. Requires the Authority to be responsible for human
resource functions, including position classification,
compensation, hiring and termination. Permits the
Authority to contract with the County or the governing
board of the other health care facility for services
and personnel.
2. Makes various legislative findings and declarations,
including the following:
A. NMC, currently a constituent department of the
County, is a designated public hospital and a critical
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component of the state's health care safety net;
B. The Board of Supervisors of the County has
determined that the needs of the citizens of the
County would best be served if NMC, while continuing
as a designated public hospital, is affiliated or
consolidated with one or more health care facilities
in the County and operated by a separate and distinct
public hospital authority that is separate and apart
from the County;
C. The Board of Supervisors has determined that the
creation of an Authority to manage NMC is the best way
to fulfill the County's commitment to its residents,
including the low-income, medically indigent, and
special needs populations of the County; and
D. Because there is no general law under which this
public hospital authority could be formed for these
purposes, the formation of a special authority by the
Legislature are required.
Background
NMC is a 172-bed acute care hospital owned and operated by
the County. According to the County, it is a successful
designated public safety net provider serving the residents
of the County for more than 126 years, and providing access
to health care for all patients regardless of their ability
to pay. As a county hospital, NMC is currently a
department within the County, and is thus subject to all
the rules, regulations, policies, and oversight inherent in
being within a county governmental structure. The County
states that the Board of Supervisors has determined that
the needs of its citizens will best be served if NMC, while
continuing as a designated safety net hospital and
maintaining its mission, is affiliated or consolidated with
one or more health care facilities in the County, and
operated by a separate and distinct authority separate and
apart from the County. The County argues that in an era of
health care reform and a constantly evolving competitive
health care marketplace, it is necessary that NMC continue
to improve its ability to function with increased
flexibility, responsiveness and innovation.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 8/8/12)
California Nurses Association
Central Alliance for Health
Monterey County Board of Supervisors
Natividad Medical Center Board of Trustees
Service Employees International Union
ARGUMENTS IN SUPPORT : The County supports this bill,
stating that it believes the formation of the Authority is
the best long-term strategic and operational model for the
sustainability of NMC and its affiliation partners. The
NMC Board of Trustees also supports this bill, stating that
the Authority is a unique opportunity to create a "best in
class" health care organization with best practices and
principles in local governance, high-quality care, high
patient/employee satisfaction as well as efficient and
effective business practices. The Services Employees
International Union (SEIU) states in support that its
members who provide care at NMC and its clinics are
dedicated to helping our safety net hospital system prepare
for health care reform, and that this bill can be an
important building block in that preparedness. SEIU states
that this bill also ensures that NMC employees transferring
from County to Authority status will have a seamless
transition of their wages, benefits and contracts, without
loss of rights or status. The California Nurses
Association also supports this bill, stating that it
provides a viable solution to maintain the hospital's
mission of improving the health of the people in the County
through access to affordable, high-quality health care
services.
CTW:RM:n 8/8/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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