Amended in Assembly March 6, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1952

Introduced by Assembly Member Pan

February 19, 2014

An act to add Article 1.5 (commencing with Section 127447.10) to Chapter 2.5 of Part 2 of Division 107 of the Health and Safety Code, relating to health begin delete facilities, and making an appropriation therefor end delete begin insert facilities end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 1952, as amended, Pan. begin delete Charity care and Wellness Trust Fund. end delete begin insert Nonprofit hospitals: charity care end insert begin insert . end insert

Existing law establishes the State Department of Public begin delete Health end delete begin insert Health, under the direction of the State Public Health Officer, end insert and sets forth its powers and duties, including, but not limited to, the licensing and regulation of health facilities. begin delete Existing law establishes the Offices of Statewide Health Planning and Development and sets forth its powers and duties, including, but not limited to, health planning and research development. end delete

Existing law requires specified hospitals to maintain an understandable discount policy and charity care policy, and makes uninsured patients with high medical costs who are at or below 350% of the federal poverty level eligible to apply for participation.

This bill would require a begin insert nonprofit end insert general acute care hospital to annually provide charity care begin delete or monetary contributions, or a combination, end delete begin insert in end insert an amount equaling at least of 5% of the hospital’s net patient revenue. The bill begin insert would require the State Public Health Officer to assess a penalty against noncomplying hospitals, end insert would establish the begin delete Wellness Trust end delete begin insert Nonprofit Hospital Charity Care Penalty end insert Fund, would require the revenues collected pursuant to these provisions to be deposited into the fund, and would begin delete continuously appropriate the fund end delete begin insert declare these funds available, upon appropriation by the Legislature, end insert for the support of the Medi-Cal program.

Vote:  begin delete ²⁄₃ end delete begin insert majority end insert . Appropriation:  begin delete yes end delete begin insert no end insert . Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Article 1.5 (commencing with Section 127447.10)
is added to Chapter 2.5 of Part 2 of Division 107 of the Health and
Safety Code, to read:

 

Article 1.5.  begin delete Charity Care and Wellness Trust Fund end delete begin insert Nonprofit
Hospital end insert begin insert Charity Care end insert

 

127447.10.  

(a) Commencing January 1, 2015, a begin insert nonprofit end insert
hospital begin insert , pursuant to its charity care policy maintained under
Article 1 (commencing with Section 127400), end insert shall annually
provide, for each fiscal year, an appropriate level of charity care
begin delete or appropriate contributions to the Wellness Trust Fund of an
amount end delete equal to at least 5 percent of the hospital’s net patient
begin delete revenue by providing any of the following: end delete begin insert revenue. end insert

begin delete

(1) Charity care.

end delete begin delete

(2) Monetary contributions to the fund.

end delete begin delete

(3) A combination of charity care and contributions to the fund.

end delete

(b) For purposes of satisfying subdivision (a), a hospital shall
not change its existing fiscal year unless the hospital changes its
ownership or corporate structure as a result of a sale or merger.

(c) A determination of the amount of charity care and
contributions to the fund provided by a hospital shall be based on
the most recently completed fiscal year of the hospital.

(d) If a hospital reasonably determines that providing charity
care begin delete or contributions to the fund end delete in accordance with this article in
a given fiscal year would result in the hospital having an annual
operating margin of less than 1 percent, the hospital may petition
the begin delete office end delete begin insert department end insert to be excused in whole or in part from
complying with subdivision (a) in that fiscal year. The director
may excuse compliance if he or she concurs with the hospital’s
conclusion that compliance with subdivision (a) would result in
the hospital having an operating margin of less than 1 percent in
the fiscal year at issue.

(e) This section shall not apply to a hospital that is part of an
integrated nonprofit health system.

(f) Nothing in this article shall invalidate an ordinance of, nor
be construed to prohibit the adoption of an ordinance by, a city,
county, or city and county, unless simultaneous compliance with
this article and the ordinance is impossible.

begin insert

begin insert 127447.15. end insert   

(a) This article shall be administered and enforced
by the State Department of Public Health.

(b) The director shall assess a penalty to a hospital that does
not provide the minimum charity care within a fiscal year as
required by this article.

(c) (1) The penalty shall be at least ____dollars ($___), and
shall not exceed ____ dollars ($___) per fiscal year in which the
hospital is in violation.

(2) Notwithstanding paragraph (1), for a second and each
subsequent fiscal year of violation within a five-year period, the
penalty shall be a sum that is equivalent to at least twice the
hospital’s total shortfall in charity care for that fiscal year, but
shall not exceed a sum that is equivalent to ___ percent of the
hospital’s net patient revenue.

(d) In determining the amount of the penalty, the director shall
consider all of the following:

(1) The severity of the shortfall in charity care provided by the
hospital.

(2) The good-faith effort of the hospital to reach the required
level of charity care.

end insert

begin delete 127447.15. end delete
begin insert 127447.20. end insert   

As used in this article, the following terms have
the following meanings:

(a) “Fund” means the begin delete Wellness Trust Fund end delete begin insert Nonprofit Hospital
Charity Care Penalty Fund end insert established pursuant to Section
begin delete 127447.20. end delete begin insert 127447.25. end insert

(b)  begin delete “Office” means the Office of Statewide Health Planning and
Development. end delete begin insert “Department” means the State Department of Public
Health. end insert

(c) “Director” means the begin delete Director of the Office of Statewide
Health Planning and Development end delete begin insert State Public Health Officer end insert .

(d) “Hospital” means any health facility licensed pursuant to
subdivision (a) of Section begin delete 1250. end delete begin insert 1250 that is owned or operated
by one or more nonprofit corporations or associations in which
no part of the net earnings inures, or may lawfully inure, to the
benefit of any private shareholder or individual. “Hospital” does
not include children’s hospitals, as defined in Section 16996 of
the Welfare and Institutions Code; or public hospitals, as defined
in paragraph (25) of subdivision (a) of Section 14105.98 of the
Welfare and Institutions Code. end insert

begin delete 127447.20. end delete
begin insert 127447.25. end insert   

(a) The begin delete Wellness Trust end delete begin insert Nonprofit Hospital Charity
Care Penalty end insert Fund is hereby established within the General Fund.
Revenues derived from begin delete contributions from hospitals end delete begin insert penalties
assessed end insert pursuant to this article shall be deposited into the fund
begin delete for the purposes of supporting health care for needy individuals
as set forth in this article end delete . Notwithstanding Section 16305.7 of the
Government Code, any interest and dividends earned on deposits
in the fund shall be retained in the fund for purposes set forth in
this article.

(b) All moneys in the fund begin delete are hereby continuously appropriated end delete
begin insert shall be available for expenditure, upon appropriation by the
Legislature, end insert for the support of the Medi-Cal program.

(c) It is the intent of the Legislature that moneys in the fund be
used to supplement, and not displace, existing funding for the
Medi-Cal program.

(d) For purposes of this section, “existing funding for the
Medi-Cal program” means the total amount expended from
appropriations by the Legislature for the Medi-Cal program in the
fiscal year in which this section is enacted, or in any subsequent
fiscal year, whichever is greater. “Existing funding for the
Medi-Cal program” does not include any amount appropriated begin insert by
the Legislature end insert from the begin delete fund pursuant to subdivision (b). end delete begin insert fund. end insert