BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 2557
AUTHOR: Pan
AMENDED: August 22, 2014
HEARING DATE: August 29, 2014
CONSULTANT: Marchand
PURSUANT TO SENATE RULE 29.10.
SUBJECT : Hospitals: seismic safety.
SUMMARY : Permits a hospital located in the Counties of
Sacramento, San Mateo, or Santa Barbara or the City of San Jose,
that has received an additional extension of the January 1,
2008, seismic safety requirements under specified provisions of
existing law to January 1, 2015, to request an additional
extension until September 1, 2015, in order to obtain either a
certificate of occupancy or a construction final from the Office
of Statewide Health Planning and Development. Contains an
urgency that will make this bill effective upon enactment.
Existing law:
1.Establishes timelines for hospital compliance with seismic
safety standards, including a requirement that buildings
posing a significant risk of collapse and a danger to the
public (referred to as SPC -1 buildings) be rebuilt or
retrofitted to be capable of withstanding an earthquake, or
removed from acute care service, by January 1, 2008, and a
requirement that hospital buildings be capable of remaining
intact after an earthquake, and must also be capable of
continued operation by January 1, 2030.
2.Allows the Office of Statewide Health Planning and Development
(OSHPD) to grant an extension of up to five years to the 2008
deadline, which would be January 1, 2013, for hospitals for
which compliance will result in a loss of health care
capacity, as defined. Existing law also allows OSHPD to grant
various further extensions beyond this, including up to two
years, which would be January 1, 2015, for certain hospitals
that face construction delays, hospitals that encounter delays
due to an attempt to reclassify their buildings to higher
seismic status, and hospitals that experience local planning
delays. Existing law also allows certain hospitals that have
received five year extensions beyond 2008, to rebuild their
Continued---
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buildings by 2020 in lieu of meeting the January 1, 2013
deadline for retrofitting.
3.Requires owners of general acute care hospital buildings that
are classified as SPC-1 buildings to submit reports to OSHPD
annually describing the status of each building in complying
with the January 1, 2013 deadline.
4.Allows OSHPD to utilize computer modeling based on HAZUS,
which is a seismic risks analysis tool, for purposes of
determining the structural performance category of general
acute care hospital buildings.
This bill:
1.Revises the conditions of deadline extensions granted by OSHPD
for hospitals to comply with certain seismic safety
requirements by allowing a hospital to continue operating
under a deadline extension if either of the following occurs
before the end of the extension:
a. A replacement building has been constructed
and a certificate of occupancy has been granted by
OSHPD for the replacement building; or,
b. A retrofit has been performed on the building
and a construction final has been obtained by OSHPD.
2.Permits a hospital located in the Counties of Sacramento, San
Mateo, or Santa Barbara or the City of San Jose, that has
received an additional extension of the January 1, 2008,
seismic safety requirement under specified provisions of
existing law to January 1, 2015, to request an additional
extension until September 1, 2015, in order to obtain either a
certificate of occupancy or a construction final from OSHPD.
3.Contains an urgency clause, stating that to prevent the loss
of hospital licensure, Medicaid and Medicare funding, and
eligibility for Federal Emergency Management Agency assistance
following a disaster that would lead to hospital closures and
loss of access to health care in these communities, it is
necessary for this act to take effect immediately.
4.Makes legislative findings and declarations that a special law
is necessary and that a general law cannot be made applicable
because of the unique circumstances facing hospitals in the
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Counties of Sacramento, San Mateo, and Santa Barbara and the
City of San Jose that are working on meeting seismic safety
building standards.
FISCAL EFFECT : The current version of this bill has not been
heard by a fiscal committee.
PRIOR VOTES : Prior votes not applicable to the current version
of this bill.
COMMENTS :
1.Author's statement. According to the author, OSHPD recently
identified five outstanding hospital projects that are working
toward the January 1, 2015 deadline, which, due to extenuating
circumstances such as flooding and unforeseeable construction
delays, may not be completed on time. Not meeting the January
1, 2015 deadline could result in the hospitals losing their
licenses and jeopardizing their ability to participate in
Medicare and Medicaid. This bill provides an eight-month
extension to the January 1, 2015 deadline for those hospitals,
ensuring their communities have uninterrupted access to health
care.
2.Hospital seismic requirements. Following the 1971 San
Fernando Valley earthquake, California enacted the Alfred E.
Alquist Hospital Facility Seismic Safety Act of 1973 (Alquist
Act), which mandated that all new hospital construction meet
stringent seismic safety standards. In 1994, after the
Northridge earthquake, the Legislature passed and the Governor
signed SB 1953 (Alquist), Chapter 740, Statutes of 1994, which
required OSHPD to establish earthquake performance categories
for hospitals, and established a January 1, 2008, deadline by
which general acute care hospitals must be retrofitted or
replaced so that they do not pose a risk of collapse in the
event of an earthquake, and a January 1, 2030, deadline by
which they must be capable of remaining operational following
an earthquake. SB 1953 also allowed most hospitals to qualify
for an extension of the January 1, 2008 deadline to January 1,
2013.
Current law allows an extension of the 2008 deadline if
compliance will result in an interruption of health care
services provided by hospitals within the area. Hospital
owners can request extensions in one-year increments up to a
maximum of five years after January 1, 2008. Hospitals may
also request extensions of up to five years if acute care
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services will be moved to an existing conforming building,
relocated to a new building, or if the existing building will
be retrofitted to designated seismic performance categories.
In addition to the five-year extension, the Legislature has
passed additional bills allowing hospitals to extend the
deadlines for retrofitting beyond the 2013 deadline. SB 1661
(Cox) , Chapter 679, Statutes of 2006, authorizes an extension
of up to an additional two years for hospitals that have
already received five-year extensions of the January 1, 2008,
seismic safety compliance deadline if specified criteria are
met, including that the hospital building is under
construction at the time of the request for extension and the
hospital is making reasonable progress toward meeting its
deadline, but factors beyond the hospital's control make it
impossible for the hospital to meet the deadline.
SB 306 (Ducheny), Chapter 642, Statutes of 2007, permits a
hospital owner to comply with seismic safety deadlines and
requirements in current law by replacing all of its buildings
subject to seismic retrofit by January 1, 2020, rather than
retrofitting by 2013 and replacing them by 2030, if the
hospital meets several conditions and OSHPD certifies that the
hospital owner lacks the financial capacity to meet seismic
standards, as defined. Among the conditions a hospital must
meet to be eligible for this extension are that it maintains a
contract to provide Medi-Cal services, maintains a basic
emergency room, and is either in an underserved area, serves
an underserved community, is an essential provider of Medi-Cal
services, or is a heavy provider of services to Medi-Cal and
indigent patients. Eighteen hospitals have qualified for
extensions to 2020 under this authority.
3.Hospitals needing an extension. According to OSHPD, there are
currently 11 hospitals that have received extensions under SB
1661 to January 1, 2015 that have not yet fully completed
their projects. Most of these are nearly finished and will be
done by the end of the year. There are five hospitals,
however, that may not be completed by the end of the year. The
California Hospital Association provided the following
explanations for the five hospitals that need an extension of
the January 1, 2015 deadline for complying with the retrofit
requirements under SB 1661:
a. Goleta Valley Cottage Hospital. The initial schedule was
for the project to commence in January 2009 and be
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completed in its entirety by August 2011. While
construction began in January 2009 on the initial
make-ready phases, this work was not completed until late
2010 due to poor contractor coordination, lack of manpower
and subcontractor issues. The new hospital phase did not
begin until early 2011 and has taken more than twice as
long as expected due primarily to poor contractor
coordination, lack of manpower and subcontractor issues.
Overall, the project is 93.6 percent complete through June
2014 and an extension through September 2015 would allow
the new hospital a better opportunity to achieve full
regulatory compliance.
b. Regional Medical Center of San Jose. The Regional
Medical Center of San Jose has completed the construction
of a new seismically compliant patient tower and connecting
corridors but will require additional months beyond the
January 1, 2015 deadline to complete renovation work in the
non-compliant portions of non-compliant facilities. The
design team and contractors have run into hidden and
unknown conditions throughout the demolition and renovation
process, which has forced the design team to redesign and
resubmit plans to OSHPD for approval, adding months to the
project.
c. Santa Ynez Valley Cottage Hospital in Solvang. The
initial schedule was for the project to commence in
December 2007 and be completed in its entirety by April
2009. Construction of the new addition began in January
2008 and was not completed until December 2010. This was
due to poor contractor coordination, lack of manpower and
subcontractor issues. The remodel phase did not begin in
earnest until the new addition was occupied and the project
has progressed slowly due to poor contractor coordination,
lack of manpower and subcontractor issues. As a result, the
remodel phase is at risk for not being completed by the
deadline. Overall, the project is approximately 91 percent
complete through June 2014, and an extension through
September, 2015, would allow Santa Ynez Valley Cottage
Hospital a better opportunity to achieve full regulatory
compliance.
d. Sequoia Hospital in Redwood City. The retrofitting of
six buildings and the construction of a new patient
pavilion has been completed. The pavilion is waiting for a
certificate of occupancy from OSHPD and a license from
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CDPH. The retrofitting of the final two buildings cannot
be completed without disrupting access to health care
services for the community, until patients are moved into
the new pavilion. If construction proceeds as planned,
Sequoia Hospital expects the structural work of the two
final buildings to be completed prior to the deadline.
Some remaining cosmetic and remodeling work may spill into
January. OSHPD has indicated they will approve the
structural work separate from the remodeling. While
Sequoia Hospital expects the structural work to be
completed by the deadline, it is seeking an extension to
allow the administrative process of OSHPD reviewing and
approving the work and CDPH issuing a new license to take
place without impacting access to care for area patients.
e. Sutter Memorial Hospital in Sacramento. The Sutter
Memorial Hospital replacement project is a very complex
project that includes construction of an eight-story
Women's and Children's Center and the remodeling of the
existing Sutter General Hospital. Of particular challenge
is the operation of Sutter General Hospital as a fully
functioning acute-care center, providing care to 100,000
patients each year, while accomplishing the required
renovation of the hospital. Among the delays, a material
defect in a pipe cap led to significant flooding of the
Women's and Children's Center building earlier this year. A
comprehensive remediation and restoration effort was
undertaken to repair damage on several floors and
complicated our ability to complete this project on the
scheduled timeline, resulting in $8 million in damage and a
four-month delay. Additionally, certain conditions from the
original 1986 construction of Sutter General Hospital
required substantial renovation or upgrades to code, and
resulted in an additional six months to the timeline. The
facility will not be ready to accommodate the patient
capacity from Sutter Memorial Hospital until July 2015.
4.Prior legislation. SB 90 (Steinberg), Chapter 19, Statutes of
2011, allowed a hospital to seek an extension for seismic
compliance for its SPC-1 buildings of up to seven years based
on the following elements: the structural integrity of the
building, the loss of essential hospital services to the
community if the hospital closed, and financial hardship.
SB 499 (Ducheny), Chapter 601, Statutes of 2009, required all
general acute care hospitals that have SPC-1 buildings to report
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to OSHPD by November 1, 2010, and annually thereafter, on the
status of their compliance with the seismic safety deadlines.
SB 306 (Ducheny) Chapter 642, Statues of 2007, amended the Alfred
E. Alquist Hospital Facilities Seismic Safety 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.
SB 1661 (Cox), Chapter 679, Statutes of 2006, authorized an
extension of up to an additional two years for hospitals that had
already received extensions of the January 1, 2008 seismic safety
compliance deadline if specified criteria were met, and required
specified hospital reports to be posted on the OSHPD Web site.
5.Support. The California Hospital Association (CHA) writes
that five hospitals will likely not meet the January 1, 2015
seismic deadline established in California law. According to
CHA, many designers and structural engineers consider
California hospitals to be the most complex and costly
buildings to construct due to all the intricate systems that
need to remain operational following an earthquake. CHA
further states that the consequences for these hospitals will
be severe and restrict access to care in the surrounding
communities..
6.Opposition. The California Nurses Association (CNA) writes
that if seismic standards cannot be met after extensions have
already been granted, hospitals should not continue to admit
patients and place them and hospital staff at risk for injury
due to seismic non-compliance. CNA further states earthquakes
are a common occurrence in California since the state has over
100 active faults known to produce large earthquakes..
SUPPORT AND OPPOSITION :
Support: California Association of Nurse Anesthetists
California Hospital Association
Hospital Corporation of America
State Building and Construction Trades Council of
California
Oppose: California Nurses Association
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