Agenda

Return

C. 47

To:	Board of Supervisors
From:	LEGISLATION COMMITTEE
Date:	June 6, 2017

Contra

Costa

County

Subject:

SB 687 (Skinner): Health Facilities: Emergency Centers: Attorney General

APPROVE	OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR	RECOMMENDATION OF BOARD COMMITTEE

Action of Board On: 06/06/2017

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

Candace Andersen, District II Supervisor
Diane Burgis, District III Supervisor
Karen Mitchoff, District IV Supervisor
Federal D. Glover, District V Supervisor

ABSENT:

John Gioia, District I Supervisor

Contact:

L. DeLaney, 925-335-1097

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: June 6, 2017
David Twa,

BY:	, Deputy

RECOMMENDATION(S):

ADOPT a position of “Support” on SB 687 (Skinner): Health Facilities: Emergency Centers: Attorney General, a bill that would require any non-profit corporation that operates a health facility that includes an emergency center to obtain the consent of the Attorney General prior to a planned elimination or reduction in the level of emergency medical services provided, as recommended by the Legislation Committee.

FISCAL IMPACT:

One-time costs of $340,000 and ongoing costs of $550,000 per year for the Attorney General's Office to research the possible impacts of planned emergency department closures, including costs to contract with expert witnesses (reimbursements). The bill requires costs incurred by the Attorney General to be reimbursed, upon request of the Attorney General, by the non-profit corporation subject to review.

BACKGROUND:

At its May 8, 2017 meeting, the Legislation Committee considered SB 687 (Skinner) and the recommendation to support the bill from Dr. William Walker, Director and Health Officer of Contra Costa Health Services. The Committee voted to support the bill.

The Hospital Council of Northern & Central California provided the Committee with a letter of opposition to SB 687. The letter is Attachment A.

The text of the bill can be found at: http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB687

The Senate Appropriations Committee analysis is provided:

2017 CA S 687: Bill Analysis - 05/17/2017 - Senate Appropriations Committee, Hearing Date 05/15/2017

SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2017 - 2018 Regular Session
SB 687 (Skinner) - Health facilities: emergency centers: Attorney General

Version: May 3, 2017                   Policy Vote: HEALTH 6 - 2, JUD. 5 -   
                                       2                                     
Urgency: No                            Mandate: Yes                          
Hearing Date: May 15, 2017             Consultant: Brendan McCarthy

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

SB 687 would require any non-profit corporation that operates a health facility that includes an emergency center to obtain the consent of the Attorney General prior to a planned elimination or reduction in the level of emergency medical services provided.

Fiscal Impact:

One-time costs of $340,000 and ongoing costs of $550,000 per year for the Attorney General's Office to research the possible impacts of planned emergency department closures, including costs to contract with expert witnesses (reimbursements). The bill requires costs incurred by the Attorney General to be reimbursed, upon request of the Attorney General, by the non-profit corporation subject to review.

Background:

Under current law, the review and consent of the Attorney General is required for any sale or transfer of a health care facility owned or operated by a non-profit corporation whose assets are held in public trust. Current law gives the Attorney General discretion to consent to the sale, give conditional consent, or to withhold consent. Conditional consent from the Attorney General can include requirements such as requiring the continued provision of charity care by the hospital, continued operation of an emergency department, or other requirements to avoid adverse impacts on the health care system in the community. Under current law, the costs incurred by the Attorney General must be reimbursed by the non-profit corporation.

Under current law, the Department of Public Health licenses and regulates health facilities, including general acute care hospitals. In order to operate an emergency department, a hospital must have a general acute care hospital license and must be approved by the Department to provide emergency department services. Under current law and regulation, operation of an emergency department requires the availability of other inpatient services. Therefore, current law does not allow for the licensing of a free-standing emergency department.

Current law also requires a hospital to provide 90 day notice to the Department of Public Health prior to a planned reduction or elimination of the licensed level of emergency services. The Department does not interpret current law as giving it authority to reject the planned reduction or elimination of emergency services.

Proposed Law:

SB 687 would require any non-profit corporation that operates a health facility that includes an emergency center to obtain the consent of the Attorney General prior to a planned elimination or reduction in the level of emergency medical services provided.

Specific provisions of the bill would:

* Require the prior consent of the Attorney General any time a nonprofit corporation proposes to dispose of assets resulting from the reduction or elimination of emergency medical services;

* Make the above provision applicable to a transaction that occurred between January 1, 2016 and the effective date of this bill;

* Pursuant to the requirements above, if the assets were disposed of between January 1, 2017 and the effective date of this bill, require the Attorney General to review that transaction to determine if the transaction was intended to avoid the application of the above provisions. If so, authorize the Attorney General to assess a civil penalty in an amount up to the value of the dispose assets;

* Require an nonprofit corporation that owns or operates a health facility that provides emergency services to obtain the prior consent of the Attorney General prior to a planned reduction in the level of emergency services or elimination of those services;

* Provide the Attorney General with the discretion to consent to, give conditional consent to, or not consent to the planned reduction or elimination of emergency services;

* Require the nonprofit corporation to reimburse the Attorney General for incurred costs;

* Specifically prohibit the Department of Public Health from licensing a stand-alone emergency room or freestanding emergency department.

Related Legislation:

AB 651 (Muratsuchi) would make several changes to the existing process for Attorney General review of the proposed disposition of a health facility by a nonprofit corporation. That bill is pending on the Assembly Floor.

Staff Comments:

Current law provides for review of the sale or other disposition of a health facility by a nonprofit corporation. However, under current law, a nonprofit corporation can simply close a hospital without the consent of the Attorney General. Under this bill, the closure of a hospital with an emergency department would become subject to review by the Attorney General.

Due to changes in the health care marketplace and increasingly stringent seismic safety standards on hospitals, many hospitals in the state are at risk of closure in coming years. While the overall emergency department capacity of the state is likely to remain stable (because emergency departments are an important source of admissions to hospitals), there are likely to be significant localized impacts of emergency department closures.

There is one hospital in the state that closed within the window of retroactivity in this bill. Saddleback Memorial San Clemente was a general acute care hospital with an emergency department. That hospital closed in May of 2016. The hospital is still owned by MemorialCare Health System, a nonprofit health care system.

CONSEQUENCE OF NEGATIVE ACTION:

The County would not have an official position on the bill.