BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 276|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: AB 276
Author: Alejo (D)
Amended: 8/22/12 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 (CCHA) 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 CCHA can be established.
Senate Floor Amendments of 8/22/12 revise provisions of the
bill relating to the CCHA's ability to contract with the
Public Employee's Retirement System and the disposition of
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the CCHA's assets and obligations and make technical and
clarifying changes.
ANALYSIS : Existing law:
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 CCHA by ordinance,
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and requires the CCHA to be a public entity separate and
apart from the County. Prohibits the CCHA from being
established until an agreement is reached to affiliate or
consolidate NMC with at least one other health care
facility in the County. Requires the CCHA, pursuant to
the agreement, to take title to all of the medical
center's assets, assume responsibility for the medical
center's obligations and liabilities, and act to
eliminate Monterey County's financial obligation or
responsibility for the CCHA or its operations.
2.Requires the purpose of the CCHA 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 CCHA 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 CCHA;
B. Employees from the County and the other health
facility to the CCHA; 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 CCHA, and requires the Board of
Supervisors of the County, after agreement is reached, to
adopt an ordinance to establish the CCHA. Permits the
agreement to be amended from time to time upon the mutual
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consent of the CCHA 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
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 CCHA 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 CCHA within 30 days of this
election, to be subject to the provisions of this
bill); and
C. Acknowledgment that the CCHA 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 CCHA.
Specifies that subsequent MOU are subject to approval
only by the CCHA.
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 CCHA from the jurisdiction of the local
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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);
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 CCHA to become a contracting agency of
the California Public Employee's Retirement System
(CalPERS) and to provide for medical center employees'
continued membership in CalPERS unless the CCHA and
the employees' exclusive representatives agree to an
alternative pension plan. These provisions to clarify
that they apply only to the extent permitted by state
and federal law and to prohibit the CCHA from
participating in CalPERS if the CalPERS board
determines that participation could jeopardize the
system's tax-qualified or governmental plan status
under federal law. This bill specifies that a
contract between the CCHA and CalPERS must be a
separate contract, not a joint contract with Monterey
County.
1.Requires the CCHA 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 CCHA:
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;
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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 CCHA 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 CCHA 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
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 CCHA 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 CCHA as prescribed. Authorizes the CCHA to pursue
its own credit rating.
4. Requires the CCHA to conform to various requirements
of existing law, including open meeting laws and other
laws that apply to public agencies, and laws relating
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to peer review.
5. Requires the CCHA to assume the liabilities for the
CalPERS benefits, workers' compensation, and other
employee benefits and liabilities with respect to
employees of the CCHA, unless otherwise agreed to by
the CCHA, the County, and the governing board of the
other health care facility.
6. Prohibits the transfer of NMC from the County to the
CCHA from affecting the eligibility of the County to
authorize the CCHA 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;
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;
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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 CCHA to be responsible for human
resource functions, including position classification,
compensation, hiring and termination. Permits the CCHA
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 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 CCHA 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.
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1. Specifies the disposition of the CCHA's assets,
liabilities, and obligations upon the CCHA's
dissolution.
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.
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 CCHA 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
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the CCHA 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 8/24/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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