September 2, 2016

TO: Hospital Association of Southern California Board of Directors

FROM: C. Duane Dauner, President/CEO

SUBJECT: CHA REPORT

A. BALLOT INITIATIVES

The “real” political season runs from September 6 to November 8. Top on CHA’s priority list is

Proposition 52, followed by Propositions 55 and 56. CHA is opposed to Proposition 53 (voter

approval of revenue bonds) and Proposition 64 (legalization of marijuana).

A report and request for action will be presented. Hospitals will be given information on

Propositions 52, 55 and 56 with a request that the materials be shared with trustees, medical staff

members, employees and volunteers.

1. Proposition 52: Medi-Cal Funding and Accountability Act of 2016 –

Sponsor/Support

CHA’s ballot initiative, the Medi-Cal Funding and Accountability Act of 2016 (Act),

qualified for the November, 2016, General Election. It was the first initiative to qualify

for the ballot and will appear as the second measure for consideration of long list of 17

statewide initiatives for the voters’ action. Proposition 52 removes the current statutory

sunset date for the hospital fee program, thereby making the program and all of the

statutory provisions permanent.

Among the statutory provisions, this initiative would make permanent the limit on the

amount the state can take for the General Fund, the construct of the fee program (both the

fee side and the payment mechanisms), and the source of data and information used to

develop the program, land of great importance – it prohibits the state from making any

payment cuts to hospitals’ Medi-Cal rates. The Act allows for future changes by the

Legislature with a two-thirds majority and only to further the purposes of the Act,

including obtaining or maintaining federal approval. The Act will protect more than $4

billion ($3 billion to hospitals $1 billion to the state annually.

Attached are two infographics that describe Proposition 52.

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September 2, 2016

2. Proposition 55: The California Children’s Education and Health Care Protection

Act of 2016 – Co-Sponsor/Support

CHA is a co-founder of a coalition to extend the Proposition 30 (2012) income tax

increases for 12 years, which are scheduled to expire on December 31, 2018. The

California Children’s Education and Health Care Protection Act of 2016 would raise and

estimated $5-$11 billion annually in tax revenues –dependent on the state’s economy.

The initiative calls for the majority of the funding to be directed to education (K-12 and

community colleges) according to the current Proposition 98 formula. The balance of the

funding includes allocations to the state’s Rainy Day Fund, the General Fund, and to the

Medi-Cal program for critical, emergency, acute and preventive healthcare services to

children and their families, provided by doctors and hospitals. More than $1 billion is

expected to be raised for hospitals and physicians, with a maximum of $2 billion in any

single year for Medi-Cal.

These new Medi-Cal funds would help reduce the amount of fees being paid by hospitals

in order to maximize federal funds.

Attached is an infographic that describes Proposition 55.

3. Proposition 56: California Healthcare, Research and Prevention Tobacco Tax Act of

2016 – Co-Sponsor/Support

CHA is a founding member of a coalition to reduce the consumption of tobacco products.

The coalition is sponsoring an initiative which increases the tax on tobacco and tobacco

products to an equivalent of $2 per pack including e-cigarettes and vaping devices.

Eighty-two percent of the funding from the initiative would be directed to the Department

of Health Care Services to increase funding for the Medi-Cal program. The balance of

the funding would be used for education, research, tobacco cessation programs and

graduate medical education. The initiative would raise $1.5 billion in new tax revenue.

B. PRIORITY ISSUES

1. Medicaid Managed Care Rule and the Hospital Fee

The Centers for Medicare & Medicaid Services (CMS) issued a final rule aimed at

modernizing the Medicaid and the Children’s Health Insurance Program (CHIP)

regulations to reflect changes in the usage of managed care delivery systems.

The final rule phases out the ability of states to use pass-through payments by allowing

states to direct managed care organization (MCO), pre-paid inpatient health plan (PIHP)

and pre-paid ambulatory health plan (PAHP) expenditures only based on the utilization,

delivery of services to enrollees covered under the contract, or the quality and outcomes

of services. However, because CMS recognizes that pass-through payments are often an

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September 2, 2016

important revenue source for safety-net providers and some commenters requested a

delayed implementation of the provision at §438.6(c), the final rule will allow transition

periods for pass-through payments to hospitals, physicians and nursing facilities to enable

affected providers, states, and managed care plans to transition pass-through payments

into payments tied to services covered under the contract, value-based payment

structures, or delivery system reform initiatives without undermining access for the

beneficiaries they serve.

CHA is working with the Department of Health Care Services (DHCS) to find ways to

implement the new rule with as little disruption to the hospital fee program as possible.

There are still many unanswered questions about the meaning of parts of the rule. At a

very early indication, it appears that there are two potential pathways to implement the

changes needed. The first is to phase out the “pass-through” payments by ten percent per

year starting July 1, 2018. This would leave 90 percent of the funding “status quo” for

the first year of transition, then decreasing each year over the next ten years. The

managed care payments would continue to pass through the plans as they do now, but

would gradually phase this method out over ten years. A new method would need to be

developed for the phased out funding. A concern with leaving the legacy approach in

place is that we would be forced into a new calculation for measuring the size of the

funding pool, which is expected to limit the amount of money that would pass through.

A second option is to transition to a “directed payment” approach. The new rule allows

for DHCS to direct the plans to pay a flat amount (per day), just as the current program

does today. Two concerns with this method are that the days must be current as opposed

to historical, and the payments must be made to “network providers”. CHA and DHCS,

along with the hospital constituent groups, are working on possible solutions to these

potential issues. With this method, the calculation of the total funding is similar to the

current method and there would not be a significant variation in the size of the directed

payments from what has been experienced in the program to date.

There are many other issues and concerns that are being studied and solutions being

explored. As the discussions continue between CHA and DHCS we will keep hospitals

informed.

2. Health Care Workplace Violence

Cal/OSHA released a revised version of the proposed Healthcare Workplace Violence

Prevention Regulations on August 2. The 15-day comment period closed on August 17

and CHA submitted comprehensive comments. Thereafter, Cal/OSHA released a second

revised version of the proposed regulations. CHA will submit comments relating to the

most recent changes. The final proposed regulations will be considered by the

Cal/OSHA Standards Board at its October 20, 2016 meeting. Assuming the final version

is adopted at that time, the regulation would take effect on January 1, 2017. However,

the proposed regulations now have delayed implementation dates for most aspects,

including plan development, hazard identification and correction, training and reporting.

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Given this time line, hospitals and health systems should begin the assessment and

planning process. To assist members, CHA and the Regional Associations are providing

regional roundtables to allow hospitals to share information about the challenges of

implementation efforts, as well as best practices. CHA also is developing a guidebook

that will be available once the regulations are final, and will host a webinar to review the

final regulations.

3. Physician Leadership Program

Due to the tremendous success of the inaugural California Physician Leadership Program,

CHA and the Regional Associations, will begin the second session on October 7, 2016.

We have exceeded our target of 30 physicians and have expanded the class to

accommodate additional participants.

This educational program was created to challenge and grow physician leaders, advance

hospital physician alignment and to assist in the transforming the healthcare delivery

system. We partnered with the USC Marshall School of Business to offer a balance of

academic faculty and industry experts and the program is tailored to the unique California

health care delivery system. The 14-day program takes place on a Friday and Saturday

from October to April, on the USC campus. Physicians can earn up to 105 AMA PRA

Category 1 Credits™ of CME awarded by the USC Keck School of Medicine.

It is not too late to enroll a physician in exclusive certificate program. For more

information, go to: www.calhospital.org/CA-physician-leadership.

C. FEDERAL REPORT -

1. Congressional Update

Congress adjourned for the summer recess from July 16 to September 6 and is in session

until early October. CHA’s advocacy efforts continue to be focused on securing clarity

and relief for the hospital outpatient department payment changes (site neutral) and will

join the American Hospital Association (AHA) Advocacy Day in Washington, DC on

September 13.

2. Regulatory Update

The last year of any administration is always packed. This year the Obama

administration has to put is mark on implementation of the Affordable Care Act (ACA).

The Department of Health & Human Services (HHS) has issued an onslaught of

additional regulations this summer, with more still on the HHS agenda slated to be

completed by the end of the year. Most significant is the implementation of additional

alternative payment models for hospitals, MACRA and revisions to the Medicare

Conditions of Participation. This activity coupled with the legislation around site neutral

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payments has created opportunities for CHA to respond through the rulemaking process.

CHA encourages members to participate in CHA member forums to stay informed of the

changing landscape and how changes may impact your organization.

Announcements regarding CHA member forums and new regulations are featured daily

in CHA News. In addition, all current and pending regulations impacting hospitals and

post-acute care providers, including summaries, power point presentation and dates for

member forums are listed on our website at www.calhospital.org/regulatory-tracker.

Below is a summary of current regulatory activity impacting hospitals and post-acute care

providers.

(a) CY 2017 Outpatient Prospective Payment System Proposed Rule; Site Neutral

Payment Proposal

CMS issued its proposed rule on the calendar year (CY) 2017 outpatient

prospective payment system (OPPS). As expected, CMS proposed policies to

implement Section 603 of the Bipartisan Budget Act of 2015, which effects site

neutral payments for new off-campus provider-based hospital outpatient

departments under the Medicare program. A detailed summary of the proposed

rule is available at www.calhospital.org/cy2017-opps-proposed-summary.

That law requires that, with the exception of dedicated emergency department

services, services furnished in off-campus hospital outpatient departments

(HOPDs) that began billing under the OPPS on or after November 2, 2015 no

longer be paid under the OPPS; instead there would be no payment made directly

to the hospital by Medicare for CY 2017. In the proposed rule CMS proposes

that:

(i) Existing off-campus HOPDs that expand their services to include new

clinical families would now receive the lower site-neutral rate for those

services (the non-facility rate under the Medicare Physician Fee

Schedule);

(ii) Any existing off-campus HOPD that relocates after November 2 would

lose its excepted or “grandfathered” status and be subject to site-neutral

payments; and

(iii) Only if a hospital, in its entirety, has a change of ownership and the new

owners accept the existing Medicare provider agreement from the prior

owner, would the hospital’s off-campus HOPDs be able to maintain their

excepted status. Individual excepted off-campus HOPDs would not be

permitted to be transferred from one hospital to another and maintain their

excepted status.

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CHA has concerns with the implementing policy included in the proposed rule

and is working with national stakeholders, including the AHA and federal

lawmakers, to safeguard appropriate payment and allow for expanded access to

community-based outpatient services. CHA held a member forum on the Section

603 provisions to solicit member input for our comments, which are due

September 6. www.calhospital.org/sites/main/files/file-

attachments/section_603_member_forum_presentation_final.pdf.

In addition, the proposed rule includes a number of other policies, including a

proposed update to OPPS rates, which CMS estimates will result in a 1.6 percent

payment increase for hospitals paid under the OPPS in CY 2017. CMS proposes

25 new comprehensive ambulatory payment classifications (C-APCs), many of

which are major surgery APCs within the various existing C-APC clinical

families. CMS also proposes refinements to its packaging policies as well as its

policies on device-intensive procedures.

The proposed rule also makes changes to quality and performance programs, as

well as changes to the Medicare EHR Incentive program for hospitals and critical

access hospitals (CAH).

(b) FFY 2017 Inpatient Prospective Payment System Final Rule

CMS issued its FFY 2017 inpatient prospective payment system final rule,

providing an annual rate update of 0.95 percent to hospitals paid under IPPS.

Among the other policies finalized in the rule, CMS addressed its proposals

related to the use of Worksheet S-10 in the methodology for distributing Medicare

disproportionate share hospital (DSH) uncompensated care payments and

implementation of the Notice of Observation Treatment and Implications for Care

Eligibility (NOTICE) Act of 2015, as described in more detail below.

CMS Does Not Finalize Use of S-10 Data in Medicare DSH Methodology

In response to advocacy by CHA and other stakeholders, CMS postponed its

proposal to incorporate Worksheet S-10 data into Factor 3 computing for FFY

2018 and is proceeding with revisions to the worksheet’s cost report instructions.

CMS notes in the final rule that it expects data from the revised Worksheet S-10

to be available for use in the near future, and no later than FFY 2021. When

computing Factor 3 in FFY 2018 and subsequent years, CMS intends to explore

whether an alternative proxy for uncompensated care could be used until it

determines that data from the revised Worksheet S-10 can be used for this

purpose. CMS had proposed a three-year transition, beginning in FFY 2018 with

a combination of Worksheet S-10 and proxy data, and ending in FFY 2020 when

only Worksheet S-10 data would have been used to compute the uncompensated

care payment amounts distributed.

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September 2, 2016

CHA is pleased that CMS will postpone implementation of S-10 data in the DSH

methodology. In comments on the proposed rule and in a meeting with CMS

leadership, as well as HHS Secretary Burwell’s staff, CHA urged CMS not to

finalize its proposal and instead ensure the accuracy of the uncompensated care

data reported on Worksheet S-10 through a hospital-specific data audit. CHA

also urged the agency to revise the worksheet’s instructions and educate providers

and contractors on its use, to promote shared understanding and consistent

reporting.

(c) NOTICE Act Implementation and the Medicare Outpatient Observation Notice

(MOON)

The Office of Management and Budget (OMB) will accept comments on the

updated Medicare Outpatient Observation Notice (MOON) and instructions

through September 1, according to information now posted with the updated

MOON. The NOTICE Act requires hospitals and CAHs to provide written and

oral notification to Medicare beneficiaries receiving observation services as

outpatients for more than 24 hours. CHA hosted a member forum on August 23

to review and discuss CHA draft comments on the notice. A copy of that

presentation is on our website at http://www.calhospital.org/resource/cha-

member-forum-medicare-outpatient-observation-notice-moon. Under the final

rule, the notification requirements will take effect no later than 90 calendar days

after the updated MOON is approved by OMB. The MOON and instructions are

available at https://www.cms.gov/Regulations-and-

Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing-Items/CMS-

10611.html.

The California state legislature passed a related piece of legislation SB 1076

Hernandez (D-Azusa), which requires notification of specified patients who are

on observation status. The bill would require hospitals to provide a written notice

to a patient on observation status and is being cared for in an inpatient unit of a

hospital or in an observation unit, or following a change in a patient’s status from

inpatient to observation, as soon as practicable. The notice shall state that while

on observation status, the patient’s care is being provided on an outpatient basis,

which may affect his or her health care coverage reimbursement. If enacted, the

provisions of SB 1076 would take effect January 1, 2017. CHA does not believe

as written that this legislation would conflict with the federal regulatory

requirements of the NOTICE Act as described above. SB1076 is on the

Governor’s desk.

(d) Proposed Bundled Payment Model for Cardiac Care, Updates to CJR

CMS issued a proposed rule that would implement a new mandatory episode-

based bundled payment model for cardiac care and expanding the current

Comprehensive Care for Joint Replacement (CJR) model to include surgical

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September 2, 2016

treatments for hip and femur fractures beyond hip replacement. In addition, CMS

proposes to implement a new model to test incentive payments for cardiac

rehabilitation services.

Similar to the CJR model, the new episode-based payment models would hold the

hospital in which a Medicare fee-for-service (FFS) patient is admitted for a heart

attack; bypass surgery or surgical hip or femur fracture treatment accountable for

cost and quality for the inpatient stay and 90 days post-discharge. CMS proposes

that the first performance period for the models would be July 1, 2017, through

December 31, 2018.

CMS proposes to test the cardiac care model in 98 randomly selected

metropolitan statistical areas (MSAs). While CMS provides an analysis of which

MSAs are eligible to be selected, the agency does not plan to release the

selections until the final rule is issued. CMS has listed the following California

MSAs as included in the pool for possible random selection: Chico, Fresno, Los

Angeles-Long Beach-Anaheim, Modesto, Redding, Riverside-San Bernardino-

Ontario, Sacramento-Roseville-Arden Arcade, Salinas, San Diego-Carlsbad, San

Francisco-Oakland-Hayward, San Jose-Sunnyvale-Santa Clara, San Luis Obispo-

Paso Robles-Arroyo Grande, Santa Maria-Santa Barbara, Santa Rosa, Visalia-

Porterville and Yuba City. CMS proposes to test the hip and femur fracture

episodes in the same 67 MSAs as the CJR program. The current California MSAs

subject to the CJR program include Los Angeles-Long Beach-Anaheim, Modesto

and San Francisco-Oakland-Hayward.

As with previous bundled payment programs, all providers continue to receive

FFS payments during the model testing period. However, hospitals will be

provided a hospital-specific target price based on a blend of historical and

regional data for the episode of care, to be reconciled with actual spending at the

end of the performance year. Hospitals with spending under the target would be

eligible to receive the savings from Medicare, while those with spending over the

target price would be required to pay back Medicare. CMS proposes to phase in

implementation of risk, including no repayment for losses and a 5 percent cap on

gains in the first performance year. Hospitals also will be assessed on quality

measures; hospitals that provide higher quality care will be eligible for a greater

share of savings.

In addition, CMS proposes to test the impact of providing incentive payments for

cardiac rehabilitation and intensive cardiac rehabilitation services in the 90-day

period post-discharge. The cardiac rehabilitation incentive model would compare

the impact of the incentive in 45 MSAs selected for the cardiac episode-based

bundled payment models with 45 MSAs not selected to participate in the bundled

payment models. CMS would pay an initial payment of $25 per the first eleven

rehabilitation services, and $175 per service after the initial eleven, with limits on

sessions per Medicare coverage.

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September 2, 2016

Finally, CMS proposes to provide new tracks for the CJR model and the proposed

cardiac episode-based bundled payment models that would allow partnering

physicians to qualify for advanced alternative payment model (APM) incentives

under the Medicare Access and CHIP Reauthorization Act. In addition, CMS

intends to build on the Bundled Payments for Care Improvement Initiative by

creating a new voluntary bundled payment model in 2018 that also would

potentially expand options for advanced APMs.

CHA will host a member forum to provide an overview of the proposed rule and

to solicit member input for comments, which are due October 3. The member

forum is scheduled for September 16 from 10-11:30 a.m. (PT). To register, visit

www.surveymonkey.com/r/cardiacbundle. A CHA summary highlighting key

provisions of the proposed rule, along with a more detailed summary prepared by

Health Policy Alternatives as well as additional resources is available at

www.calhospital.org/resource/episode-payment-model-resources is available at

www.calhospital.org/epm-proposed-summary.

CHA also encourages CJR providers to attend CHA’s Implementing CJR Seminar

– a hold a one-day intensive program on October 25 in Los Angeles to provide

health care teams with the knowledge needed to manage patient care, foster

physician alignment and develop effective partnerships with post-acute care

providers. To learn more, visit www.calhospital.org/implementing-cjr.

(e) CMS Issues Overall Star Ratings on Hospital Compare

CMS released its new hospital star ratings on the Hospital Compare website.

CMS states that these ratings reflect comprehensive quality information about

hospital care, summarizing 64 quality measures into a rating system of one to five

stars. However, CHA and hospital associations nationwide have opposed the

ratings system as it ignores social determinants of health, such as the hospital’s

community and patient income, unfairly penalizing teaching hospitals and those

serving higher numbers of the poor. The star ratings conflict with other rating and

ranking systems, causing confusion for patients and their families, and a recent

analysis by an independent expert found that the assumptions upon which the

current model is based are flawed. CHA, along with other state associations and

AHA, urged CMS to work with hospitals to validate the methodology or withhold

publication. CHA remains committed to sharing quality and safety information

and — through the Hospital Quality Institute — aims to accelerate the rate of

patient safety and quality care improvement for all Californians.

(f) Temporary Suspension of Two-Midnight Claims Review Update

Earlier this year, CMS announced a temporary suspension of reviews of claims

spanning less than two midnights by quality improvement organizations (QIOs),

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September 2, 2016

with the intent to improve program standardization. CMS has now clarified the

instructions for medical review of claims affected by this suspension, and intends

to limit these reviews to a six-month look-back period from the date of admission.

CHA and other state hospital associations raised concerns that the delays in the

reviews were limiting hospitals’ ability to rebill a denied claim. In a recently

released FAQ, CMS states that Medicare FFS claims that are outside the six-

month look-back period will be paid under Part A, regardless of whether they

were formally denied. Claims that are outside the six-month look-back period,

but were not formally denied, also will be paid under Part A. Claims within the

six-month look-back period that were not formally denied will be reviewed when

CMS resumes QIO reviews. Those in the same time frame that were formally

denied are being re-reviewed by the QIO to determine whether the initial review

decision was consistent with the two-midnight policy in effect at the time of the

hospital admission. CHA remains concerned that, despite this change, the QIOs

are still challenged in meeting their deadlines for timely reviews. CHA is

currently reviewing this detailed guidance and seeks member input on the

operational concerns it may raise for hospitals. The FAQ is available at

http://qioprogram.org/review-claims-affected-temporary-suspension-bfcc-qio-

short-stay-reviews-faqs.

(g) Proposed Rule Updated Medicare Claims Appeal Process

HHS has issued a proposed rule that would make changes to the Medicare claims

appeal process. The changes are intended to address the backlog of appeals

currently pending at the Office of Medicare Hearings and Appeals. Among the

proposals is provision to permit the chair of the Departmental Appeals Board to

designate certain decisions as precedential. Additionally, to help address the

backlog of appeals, CMS proposes to permit attorney adjudicators to issue

decisions on appeals when the decision can be issued without an Administrative

Law Judge (ALJ) conducting a hearing under regulations. Other proposals include

clarifying the application of the Part 405 rules to other appeals processes

established in regulations, such as the Medicare Advantage program grievance

and appeals rules and Quality Improvement Organization reconsiderations and

appeals.

CHA commented on the proposed rule, expressing disappointment that the

proposed rule is limited in scope and lacks meaningful reforms that would

significantly impact the current backlog of 750,000 claims as of April 30. CHA

continues to support the Medicare Audit Improvement Act of 2015 (H.R. 2156),

which would meaningfully impact the current flow of claims coming through the

appeal process. CHA does not support the agency’s proposal for selecting

precedential decisions. Further, CHA opposes the agency’s proposal to eliminate

the 90-day deadline for issuing an administrative law judge decision, as CHA

believes the agency has significantly overreached its regulatory authority and that

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September 2, 2016

the proposal is inconsistent with current law. CHA’s comments are available at

www.calhospital.org/cha-news-article/cha-comments-proposed-rule-updating-

medicare-claims-appeal-process.

(h) CMS Informational Bulletin on Medicaid Managed Care Pass-Through

Payments

CMS recently issued an informational bulletin to address questions regarding the

ability of states to increase or add new pass-through payments under Medicaid

managed care plan contracts and capitation rates, and to describe CMS’ plan for

monitoring the transition of pass-through payments to approaches for provider

payment under Medicaid managed care programs that are based on the delivery of

services, utilization, and the outcomes and quality of the delivered services. A

May final rule updating Medicaid managed care requirements provides for a 10-

year phase-out of these payments. The bulletin is available at

www.medicaid.gov/federal-policy-guidance/downloads/cib072916.pdf.

(i) FFY 2017 Medicare Payment System Final Rules

In addition to the FFY 2017 IPPS final rule, CMS finalized a number of other

prospective payment system (PPS) regulations for FFY 2017. Summaries of the

final rules will be posted to CHA’s federal regulatory tracker when available at

www.calhospital.org/publication/cha-regulatory-tracker. Below are links to each

of the final rules:

(i) FFY 2017 LTCH PPS Final Rule: http://www.calhospital.org/cha-news-

article/cms-issues-final-rule-updating-ltch-pps-ffy-2017

(ii) FFY 2017 IRF PPS Final Rule: http://www.calhospital.org/cha-news-

article/cms-issues-inpatient-rehabilitation-facility-pps-final-rule

(iii) FFY 2017 SNF PPS Final Rule: http://www.calhospital.org/cha-news-

article/cms-issues-skilled-nursing-facility-pps-final-rule

(iv) FFY 2017 Hospice Wage Index Final Rule:

http://www.calhospital.org/cha-news-article/cms-issues-hospice-final-rule

D. STATE REPORT

1. 2015-2016 Legislative Sessions

The Legislature completed its work on August 31 for the second year of the two-year

session, with the Senate and Assembly debating hundreds of proposals in the final week

of the session. The following report includes the final actions for the 2016 legislative

session. The focus of attention will now move to the actions of the Governor, who has

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September 2, 2016

until midnight on October 2 to sign, veto or allow bills to become law without his

signature.

2. CHA Sponsored Legislation

AB 1300 (Assemblymember Sebastian Ridley-Thomas, D-Los Angeles) would specify

that trained emergency room physicians and psychiatric professionals in non-designated

hospitals, when probable cause exists, have the authority to write/initiate an up to 72-hour

involuntary hold. It also would codify that the 5150 application form is valid in all

counties regardless if it is an original or a copy; clarify that all designated facilities are

required to accept, within their clinical capability and capacity, all individuals for whom

it is designated; and authorize improved sharing of patient information when emergency

services are provided. AB 1300 remained in the Senate Rules Committee.

CHA Co-Sponsored SB 867 (Senator Richard Roth, D-Riverside) would extend the

operative date of the Maddy Emergency Services Fund to January 1, 2027, and authorize

each county to establish an emergency services fund for reimbursement of costs related to

emergency medical services. SB 867 was signed by the Governor on August 19 (Chapter

147).

3. CHA Opposed Legislation

Oppose, Unless Amended AB 1843 (Assemblymember Mark Stone, D-Scotts Valley)

would prohibit all California employers from soliciting or using any information related

to an applicant’s juvenile criminal history record, from arrests to adjudications. Recent

amendments would allow health facilities to obtain juvenile adjudication information

related to sex or drug-related crimes, but not all felonies. AB 1843 is awaiting action on

the Governor’s desk.

Opposed, Unless Amended AB 2272 (Assemblymember Tony Thurmond, D-Richmond)

would require Cal/OSHA to develop, by June 1, 2018, rules to regulate plume — noxious

airborne contaminants generated as byproducts from specific devices used during

surgical, diagnostic and therapeutic procedures — and the evacuation of plume when it is

generated in acute care hospitals. AB 2272 is awaiting action on the Governor’s desk.

AB 2467 (Assemblymember Jimmy Gomez, D-Los Angeles) would require private

nonprofit general acute care hospitals, acute psychiatric hospitals, private for-profit

general acute care hospitals, hospital groups and hospital-affiliated medical foundations

to annually submit an executive compensation report for every executive employee

whose annual compensation exceeds $250,000 per year. As amended in committee, the

measure would require the collection and reporting of ethnicity, race, gender, sexual

orientation and gender identity information. AB 2467 failed passage by the full Assembly

on June 2.

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September 2, 2016

SB 503 (Senator Ed Hernandez, D-Azusa) would address deficiencies in current law

identified by a judge in a recent court decision for the treatment of unrepresented patients

who lack capacity to make medical decisions. The bill would allow skilled nursing

facilities (SNFs) to continue to obtain consent for the care of a patient by using an

interdisciplinary team process, if the SNF provides a specified written notice to the

patient. The bill also requires that, prior to administering an antipsychotic drug to a SNF

patient, the SNF convene a hearing with the patient, the ordering physician, an

independent physician, a patient advocate and an interpreter (if necessary) to review the

medication order. The independent physician and advocate must meet a list of

qualifications; the physician must also issue a written decision. The advocate also must

meet a list of qualifications. The patient may not be billed for the services of the

independent physician, advocate or interpreter. California Department of Public Health

(CDPH), the bill sponsor, decided not to move the bill forward this year. SB 503 was

held in the Assembly Health Committee.

SB 938 (Senator Hannah-Beth Jackson, D-Santa Barbara) would require a patient with a

major neurocognitive disorder who has a conservator to ask a court for judicial approval

each time a physician orders a new or different antidepressant, sleeping pill, anti-anxiety

medication, antipsychotic or other psychotherapeutic drug. While well intentioned, this

bill would jeopardize patients’ access to timely and appropriate medical care, clog the

court system and result in higher medical and legal costs for these patients and their

families. CHA is working with a coalition — including the Alzheimer’s Association and

California Psychiatric Association — to narrow the bill’s scope and provide protections

for hospitals. CHA issued an Advocacy Alert on SB 938 on August 18. CHA urged

hospital leaders to call their Assembly Members to request a “No” vote on SB 938.

SB 938 was referred to the Assembly Inactive File on August 29.

4. CHA Support Legislation

AB 1306 (Assemblymember Autumn Burke, D-Inglewood) as amended by the author, no

longer includes the corporate practice ban, which would have prohibited CNMs from

being employed by a corporation (such as a hospital) or other “artificial legal entity.”

CHA supports AB 1306’s premise — that California’s more than 1,200 CNMs should

have authority to practice to the full extent of their certification, education and training.

As advanced practice registered nurses, CNMs’ scope of practice allows them to provide

comprehensive management of women’s health care, focusing primarily on pregnancy,

childbirth and the postpartum period. Their scope of practice also includes care of the

newborn, family planning and other gynecological needs throughout the life cycle.

Would remove the physician supervision requirement, allowing CNMs greater

independence in meeting the health care needs of the millions of individuals added to

California’s health care system by the ACA, facilitating timely access to quality care AB

1306 failed passage by the full Assembly on August 31.

AB 1518 (Committee on Aging and Long-Term Care) would increase access to the home

and community-based Medi-Cal Nursing Facility/Acute Hospital Waiver by increasing

HASC Board of Directors – CHA Report Page 14

September 2, 2016

the number of authorized waiver slots and requiring an expedited authorization process

for patients in acute care hospitals who are awaiting discharge to a SNF. AB 1518 was

placed on the Senate Inactive file.

AB 1568 (Assemblymember Rob Bonta, D-Alameda) along with SB 815 (Senator Ed

Hernandez, D-Azusa), would implement California’s section 1115(a) demonstration

waiver, titled “California’s Medi-Cal 2020 Demonstration.” The waiver renewal –

effective December 30, 2015, through December 31, 2020 – includes $6.2 billion of

initial federal funding to support the state’s Medi-Cal program. The waiver implements

the following programs: Public Hospital Redesign and Incentives in Medi-Cal, Global

Payment Program, Dental Transformation Initiative and Whole Person Care Pilots. The

waiver also contains several independent analyses of the Medi-Cal program and

evaluations of the waiver programs, including an assessment of access in the Medi-Cal

managed care program and studies of uncompensated care in California hospitals. AB

1568 was signed by the Governor July 1 (Chapter 42).

AB 1607 (Assembly Budget Committee) would extend the hospital quality assurance fee

by one year, to January 1, 2018. AB 1607 was signed by the Governor June 27 (Chapter

27).

AB 2024 (Assemblymember Jim Wood, D-Healdsburg) would authorize a CAH to

employ physicians, surgeons and doctors of podiatric medicine and charge for

professional services rendered by those medical professionals if the medical staff

concurs, by an affirmative vote, that such employment is in the best interest of the

communities the hospital serves. It would prohibit the CAH from directing or interfering

with the professional judgment of a physician or surgeon. AB 2024 is awaiting action on

the Governor’s desk.

SB 66 (Senator Connie Leyva, D-Chino/Mike McGuire, D-Healdsburg) would require

the Department of Consumer Affairs to make available, upon request by the Office of the

Chancellor of the California Community Colleges, information on every licensee so that

the Office of the Chancellor can better measure employment outcomes of students who

participate in career technical education programs and make recommendations as to how

these programs may be improved. The bill also urges the Chancellor to align these

measures with the performance accountability measures of the federal Workforce

Innovation and Opportunity Act. SB 66 is awaiting action on the Governor’s desk.

SB 323 (Senator Ed Hernandez, D-Azusa) would allow nurse practitioners to practice to

the full extent of their education and training to ensure access to health care delivery

systems for millions of Californians who now have access to coverage under the ACA.

SB 323 was not heard in the Assembly Business and Professions Committee June 28.

SB 815 (Senator Ed Hernandez, D-Azusa), along with AB 1568 (Bonta, D-Alameda),

would implement California’s section 1115(a) demonstration waiver, titled “California’s

Medi-Cal 2020 Demonstration.” The waiver renewal – effective December 30, 2015

HASC Board of Directors – CHA Report Page 15

September 2, 2016

through December 31, 2020 – includes $6.2 billion of initial federal funding to support

the state’s Medi-Cal program. The waiver implements the following programs: Public

Hospital Redesign and Incentives in Medi-Cal, Global Payment Program, Dental

Transformation Initiative and Whole Person Care Pilots. The waiver also contains several

independent analyses of the Medi-Cal program and evaluations of the waiver programs,

including an assessment of access in the Medi-Cal managed care program and studies of

uncompensated care in California hospitals. SB 815 was signed by the Governor July 25

(Chapter 111).

SB 1177 (Senator Cathleen Galgiani, D-Stockton) would authorize the healing arts board

of the Department of Consumer Affairs’ Substance Abuse Coordination Committee to

establish a physician and surgeon health and wellness program for the early identification

and appropriate interventions to support a physician or surgeon in his or her rehabilitation

from substance abuse. SB 1177 is awaiting action on the Governor’s desk.

SB 1273 (Senator John Moorlach, R-Costa Mesa) would clarify that California counties

may use funds from the Mental Health Services Act to provide outpatient stabilization

services to individuals voluntarily receiving those services, even when those who are

receiving services involuntarily are treated at the same facility. The Department of Health

Care Services (DHCS) issued a memo on July 20, 2016, which clarified and supported

the bill’s intention. SB 1273 was referred to the Assembly Inactive File on August 29.

5. Follow, Hot Legislation

AB 72 Assemblymember Rob Bonta, D-Alameda /Assemblymember Susan Bonilla, D-

Concord/Assemblymember Brian Dahle, R-Bieber/Assemblymember

Gonzalez/Assemblymember Brian Maienschein, R-San Diego/Assemblymember Jim

Wood, D-Healdsburg) addresses surprise billing for covered services at a contracting

health facility from a non-contracting individual health professional. AB 72 is similar to

AB 533 (Bonta, D-Alameda). This bill would require health plans to reimburse the non-

contracting health professional the greater of the average contracted rate or 125 percent

of the amount Medicare reimburses on a FFS basis for the same or similar services in the

general geographic region in which the services were rendered. Recent amendments to

the bill have placed obligations on health plans when reporting average contract rates and

maintaining network adequacy requirements. AB 72 is the new version of AB 533. AB

72 is awaiting action on the Governor’s desk.

AB 508 (Assemblymember Christina Garcia, D-Bell Gardens) would have established

the California Maternal Quality Care Collaborative (CMQCC) within CDPH. The bill has

been amended to require CDPH to prepare and submit to the Legislature an annual report

on maternal mortality and morbidity in California, including an analysis of maternal

deaths and severe maternal morbidity. The bill also would require CDPH to consider

existing resources, including opportunities for partnerships with other entities and the use

of physician volunteers. AB 508 was held in the Senate Judiciary Committee.

HASC Board of Directors – CHA Report Page 16

September 2, 2016

AB 533 (Assemblymember Rob Bonta, D-Alameda) attempts to address “surprise

billing” by out-of-network providers. The introduced version of the bill contained

ambiguities that could have been interpreted to impose obligations on network hospitals

to provide information they do not have and/or cannot obtain for noncontracted

physicians. Amended April 15 for clarification, the bill would apply only to

noncontracting individual health professionals, not to hospitals. AB 533 was placed on

the Assembly Inactive file August 31.

AB 1978 (Assemblymember Lorena Gonzalez, D-San Diego) would require Cal/OSHA

to develop a standard for workplace violence for janitorial workers as well as four-hour

training for any supervisor of janitorial workers. Would also create a registry for

janitorial contractors. AB 1978 is awaiting action on the Governor’s desk.

AB 2424 (Assemblymember Jimmy Gomez, D-Los Angeles) would create the

Community-based Health Improvement and Innovation Fund within the state treasury. A

target level of annual statewide investment from the fund would be established as a set

dollar amount per capita, to be allocated to the CDPH to support community-based

prevention of priority chronic health conditions throughout the state, including in the

form of competitive grants. AB 2424 was held on Suspense in the Senate Appropriations

Committee August 11.

AB 2439 (Assemblymember Adrin Nazarian, D-Sherman Oaks) would create a CDPH

pilot program to select four or fewer hospital emergency departments to offer HIV tests

to patients. CHA originally opposed the bill as an unfunded mandate and inappropriate

setting to conduct HIV tests, but removed opposition with amendments that made

hospital participation in the pilot program voluntary. AB 2439 is awaiting action on the

Governor’s desk.

AB 2640 (Assemblymember Mike Gipson, D-Carson) would add to the significant body

of existing laws on HIV testing and would require every medical provider who orders an

HIV test to provide information to specified patients about methods that prevent or

reduce the risk of contracting HIV, including pre-exposure prophylaxis and post-

exposure prophylaxis, consistent with guidance of the federal Centers for Disease Control

and Prevention.” CHA opposed this bill on the grounds that it codifies the practice of

medicine into law; however, an agreement was reached with the author to ensure

physician discretion is preserved. Recent amendments address CHA’s concerns. Our

position on AB 2640 is Neutral As, Amended. AB 2640 is awaiting action on the

Governor’s desk.

SB 586 (Senator Ed Hernandez, D-Azusa) would authorize DHCS, no sooner than July 1,

2017, to establish a Whole Child Model program, under which managed care plans

served by a county organized health system or regional health authority in designated

counties would provide California Children’s Services (CCS) services under a capitated

payment model to Medi-Cal eligible CCS children and youth. SB 586 extends the sunset

date on the CCS “carve out” to January 1, 2022, and until the evaluation required under

HASC Board of Directors – CHA Report Page 17

September 2, 2016

the Whole Child Model program has been completed. SB 586 is awaiting action on the

Governor’s desk.

SB 1065 (Senator William Monning, D-Carmel) would require the court of appeal, in an

appeal of an order dismissing or denying a petition to compel arbitration involving a

claim under the Elder and Dependent Adult Civil Protection Act in which a party has

been granted a court preference, to issue its decision no later than 100 days after the

notice of appeal is filed, except as specified. Would also require the Judicial Council to

adopt rules implementing this provision and shortening the time within which a party

may file a notice of appeal in these cases. We have taken a Neutral position on SB 1065.

SB 1065 is awaiting action on the Governor’s desk.

Neutral as Amended, SB 1076 (Senator Ed Hernandez, D-Azusa) would create the

regulatory structure for hospitals wishing to provide observation services in a dedicated

unit. The bill states that observation patients may also be cared for in an inpatient unit or

in the emergency department. The observation unit must maintain the same nurse staffing

ratios as the emergency department. The bill clarifies that observation services are

triggered by a physician order, rather than potentially applying to all outpatient services.

The bill also requires patient notification when the patient is moved to observation status.

SB 1076 is awaiting action on the Governor’s desk.

SB 1195 (Senator Jerry Hill, D-San Mateo) provides requirements and procedures for the

Director of Consumer Affairs to review a decision or other action by a board under the

Department about a restraint of trade. Among other things, would prohibit the Board of

Nursing executive director from being a licensee of the board. SB 1195 was placed on the

Senate Inactive File on June 2.

SB 1365 (Senator Ed Hernandez, D-Azusa) would require a hospital that offers a service

in a hospital-based outpatient clinic to provide a notice to each patient when that service

is available in a non-hospital-based location. CHA took a Neutral position on that bill.

SB 1365 is awaiting action on the Governor’s desk.

Attached is a copy of the Key State Issues, dated September 2, 2016. It reflects final action by

the Legislature. Several bills are on the Governor’s desk awaiting action.

The 2017 session was highly successful. A report will be presented during the meeting.

CDD:rf

Attachments

PROPOSITION 52

6.7 Million Children

$3 Billion Federal Government (CMS)

$1 Billion State General Fund

$4 Billion Hospital Fee Payments to State

$6 Billion $3 Billion - Hospitals; $3 Billion - CMS

● Hospitals contribute money; state retains ¼

4.5 Million Low Income Working Families

● Federal government matches ¾ of contributions

● Politicians can’t divert the funds without a vote of the people

● No cost to consumers ● No new taxes

● Universally supported (Labor, business, Democratic and Republican parties, health care providers, elected officials – 1,000 in all

● Proven since 2009

WHAT MAKES PROPOSITION 52 WORK?

YES ON 52

1.8 Million Seniors

Hospital Services for

TESTED●TRIED●TRUE

Bill No. Author Location/Action CHA Position Staff Contact

Civil Actions

SB 1065 Monning

(D-Carmel)

Would require the court of appeal, in an appeal of an

order dismissing or denying a petition to compel

arbitration involving a claim under the Elder and

Dependent Adult Civil Protection Act in which a party

has been granted a court preference, to issue its

decision no later than 100 days after the notice of

appeal is filed, except as specified. Would also require

the Judicial Council to adopt rules implementing this

provision and shortening the time within which a party

may file a notice of appeal in these cases.

Awaiting action on the

Governor’s desk.

Neutral Jackie Garman/

Connie Delgado

Disaster Preparedness

AB 1562 Kim

(R-Fullerton)

Would provide a one-day window to purchase disaster

preparedness supplies without paying sales tax, giving

hospitals and medical centers the opportunity to

purchase a variety of items — such as evacuation

equipment, communications equipment and medical

supplies — with a tax break. The one-day sales tax

would also assist businesses in encouraging individual

and family preparedness among their employees,

which is foundational to organizational preparedness.

Additionally, this measure was amended to add a

sunset date of 2018 and would apply only to state

taxes.

Held on Suspense in

Assembly

Appropriations

Committee May 27.

Support Cheri Hummel/

Kathryn Scott

Emergency Services

SB 867 Roth

(D-Riverside)

Would extend the operative date of the Maddy

Emergency Services Fund to Jan. 1, 2027, and

authorize each county to establish an emergency

services fund for reimbursement of costs related to

emergency medical services.

Signed by the

Governor Aug. 19

(Chapter 147).

Co-sponsor BJ Bartleson/

Connie Delgado

AB 1774 Bonilla

(D-Concord)

Would repeal the laws requiring a clinical laboratory to

be licensed and inspected by CDPH, including the

licensing fee. Would also make other conforming

changes.

Held on Suspense in

Assembly

Appropriations

Committee May 27.

Support Cathy Martin/

Alex Hawthorne

AB 1843 Stone

(D-Scotts Valley)

Would prohibit all California employers from soliciting

or using any information related to an applicant’s

juvenile criminal history record, from arrests to

adjudications. Recent amendments would allow health

facilities to obtain juvenile adjudication information

related to sex or drug-related crimes, but not all

felonies.

Awaiting action on the

Governor’s desk.

Oppose,

Unless

Amended

Kathryn Scott/

Gail Blanchard-

Saiger

On Aug. 31, the Legislature completed the second year of its two-year session. This

report includes the final actions for the 2016 legislative session. Attention will now

focus on the Governor, who has until midnight on Sept. 30 to sign or veto bills, or

allow bills to become law without his signature. For an online version of this report

that can be filtered by topic and is updated daily, visit www.calhospital.org/key-state-

issues.

September 2, 2016

Health Facilities

California Hospital Association Key State Issues

Bill No. Author Location/Action CHA Position Staff Contact

AB 2743 Eggman

(D-Stockton)

Would require the California Department of Public

Health to establish and administer a pilot program to

create a website-based acute psychiatric bed registry

to collect, aggregate and display information about the

availability of acute psychiatric beds in psychiatric

health facilities in 10 counties.

Held on Suspense in

Assembly

Appropriations

Committee May 27.

Oppose Sheree Lowe/

Alex Hawthorne

SB 1076 Hernandez

(D-Azusa)

Would create the regulatory structure for hospitals

wishing to provide observation services in a dedicated

unit. The bill states that observation patients may also

be cared for in an inpatient unit or in the ED. The

observation unit must maintain the same nurse

staffing ratios as the ED. The bill clarifies that

observation services are triggered by a physician

order, rather than potentially applying to all outpatient

services. The bill also requires patient notification

when the patient is moved to observation status.

Awaiting action on the

Governor’s desk.

Neutral, As

Amended

Debby Rogers/

Connie Delgado

Labor

AB 1978 Gonzalez

(D-San Diego)

Would require Cal/OSHA to develop a standard for

workplace violence for janitorial workers as well as

four-hour training for any supervisor of janitorial

workers. Would also create a registry for janitorial

contractors.

Awaiting action on the

Governor’s desk.

Follow, Hot Gail Blanchard-

Saiger/ Kathryn

Scott

AB 2272 Thurmond

(D-Richmond)

Would require Cal/OSHA to develop, by June 1, 2018,

rules to regulate plume — noxious airborne

contaminants generated as byproducts from specific

devices used during surgical, diagnostic and

therapeutic procedures — and the evacuation of

plume when generated in acute care hospitals.

Awaiting action on the

Governor’s desk.

Oppose,

Unless

Amended

Gail Blanchard-

Saiger/ Kathryn

Scott

AB 2467 Gomez

(D-Los Angeles)

Would require private nonprofit general acute care

hospitals, acute psychiatric hospitals, private for-profit

general acute care hospitals, hospital groups and

hospital-affiliated medical foundations to annually

submit an executive compensation report for every

executive employee whose annual compensation

exceeds $250,000 per year. As amended in

committee, the measure would require the collection

and reporting of ethnicity, race, gender, sexual

orientation and gender identity information.

Failed passage on

Assembly Floor June 2.

Oppose Gail Blanchard-

Saiger/ Kathryn

Scott

SB 878 Leyva

(D-Chino)

Would require employers operating retail

establishments or restaurants, including cafeterias, to

provide at least seven days' notice of an employee’s

work schedule and further require additional pay to

employees when the employer alters that schedule

within the seven-day period.

Held on Suspense in

Senate Appropriations

Committee May 27.

Follow, Hot Gail Blanchard-

Saiger/ Kathryn

Scott

Health Facilities (continued)

Page 2

California Hospital Association Key State Issues

Bill No. Author Location/Action CHA Position Staff Contact

Managed Health Care

AB 72 Bonta

(D-Alameda)

Addresses surprise billing for covered services at a

contracting health facility from a noncontracting

individual health professional. AB 72 is similar to AB

533 (Bonta, D-Alameda). This bill would require health

plans to reimburse the noncontracting health

professional the greater of either the average

contracted rate or 125 percent of the amount Medicare

reimburses on a fee-for-service basis for the same or

similar services in the general geographic region in

which the services were rendered. AB 72 is the new

version of AB 533.

Awaiting action on the

Governor’s desk.

Neutral Deepa Prasad/

Alex Hawthorne

AB 533 Bonta

(D-Alameda)

Attempts to address “surprise billing” by out-of-network

providers. The introduced version of the bill contained

ambiguities that could have been interpreted to

impose obligations on network hospitals to provide

information they do not have and/or cannot obtain for

noncontracted physicians. Amended April 15 for

clarification, the bill would apply only to noncontracting

individual health professionals, not to hospitals.

Placed on Assembly

Inactive file Aug. 31.

Neutral, As

Amended

Deepa Prasad/

Alex Hawthorne

SB 932 Hernandez

(D-Azusa)

Would prohibit numerous provisions in contracts

between hospitals and health plans, as well as expand

the authority of the Department of Managed Health

Care to approve any merger, consolidation, acquisition

or purchase of control, directly or indirectly, between

any entity and any health care service plan.

Held on Suspense in

Senate Appropriations

Committee May 27.

Oppose Deepa Prasad/

Alex Hawthorne

Medi-Cal

AB 1568 Bonta

(D-Alameda)

Along with SB 815 (Hernandez, D-Azusa), would

implement California’s section 1115(a) demonstration

waiver, titled “California’s Medi-Cal 2020

Demonstration.” The waiver renewal – effective Dec.

30, 2015 through Dec. 31, 2020 – includes $6.2 billion

of initial federal funding to support the state’s Medi-Cal

program. The waiver implements the following

programs: Public Hospital Redesign and Incentives in

Medi-Cal, Global Payment Program, Dental

Transformation Initiative and Whole Person Care

Pilots. The waiver also contains several independent

analyses of the Medi-Cal program and evaluations of

the waiver programs, including an assessment of

access in the Medi-Cal managed care program and

studies of uncompensated care in California hospitals.

Signed by the

Governor July 1

(Chapter 42).

Support Anne McLeod/

Barbara Glaser

AB 1607 Assembly Budget

Committee

Would extend the hospital quality assurance fee by

one year, to Jan. 1, 2018. 

Signed by the

Governor June 27

(Chapter 27).

Support Anne McLeod/

Barbara Glaser

SB 586 Hernandez

(D-Azusa)

Would authorize DHCS, no sooner than July 1, 2017,

to establish a Whole Child Model program, under

which managed care plans served by a county

organized health system or regional health authority in

designated counties would provide California

Children’s Services (CCS) services under a capitated

payment model to Medi-Cal eligible CCS children and

youth. SB 586 extends the sunset date on the CCS

“carve out” to January 1, 2022, and until the evaluation

required under the Whole Child Model program has

been completed.  

Awaiting action on the

Governor’s desk.

Follow, Hot Amber Kemp/

Barbara Glaser

Page 3

California Hospital Association Key State Issues

Bill No. Author Location/Action CHA Position Staff Contact

Medi-Cal (continued)

SB 815 Hernandez

(D-Azusa)

Along with AB 1568 (Bonta, D-Alameda), would

implement California’s section 1115(a) demonstration

waiver, titled “California’s Medi-Cal 2020

Demonstration.” The waiver renewal – effective Dec.

30, 2015 through Dec. 31, 2020 – includes $6.2 billion

of initial federal funding to support the state’s Medi-Cal

program. The waiver implements the following

programs: Public Hospital Redesign and Incentives in

Medi-Cal, Global Payment Program, Dental

Transformation Initiative and Whole Person Care

Pilots. The waiver also contains several independent

analyses of the Medi-Cal program and evaluations of

the waiver programs, including an assessment of

access in the Medi-Cal managed care program and

studies of uncompensated care in California hospitals.

Signed by the

Governor July 25

(Chapter 111).

Support Anne McLeod/

Barbara Glaser

Medical Staff

AB 2024 Wood

(D-Healdsburg)

Would authorize a critical access hospital to employ

physicians, surgeons and doctors of podiatric

medicine and charge for professional services

rendered by those medical professionals if the medical

staff concurs, by an affirmative vote, that such

employment is in the best interest of the communities

the hospital serves. It would prohibit the critical access

hospital from directing or interfering with the

professional judgment of a physician or surgeon.

Awaiting action on the

Governor’s desk.

Support Peggy Wheeler/

David Perrott/

Barbara Glaser

SB 1177 Galgiani

(D-Stockton)

Would authorize the healing arts board of the

Department of Consumer Affairs’ Substance Abuse

Coordination Committee to establish a physician and

surgeon health and wellness program for the early

identification and appropriate interventions to support

a physician or surgeon in his or her rehabilitation from

substance abuse.

Awaiting action on the

Governor’s desk.

Support David Perrott/

Connie Delgado

Mental Health

AB 1300 Ridley-Thomas

(D-Los Angeles)

Would specify that trained emergency room

physicians and psychiatric professionals in non-

designated hospitals, when probable cause exists,

have the authority to write/initiate an up to 72-hour

involuntary hold. It would also codify that the 5150

application form is valid in all counties regardless if it is

an original or a copy; clarify that all designated

facilities are required to accept, within their clinical

capability and capacity, all individuals for whom it is

designated; and authorize improved sharing of patient

information when emergency services are provided.

AB 1300 passed the Senate Health Committee June

29 and was referred to Senate Rules Committee. It

will most likely remain in Senate Rules Committee.

Referred to Senate

Rules Committee.

Sponsor Sheree Lowe/

Barbara Glaser

Page 4

California Hospital Association Key State Issues

Bill No. Author Location/Action CHA Position Staff Contact

Mental Health (continued)

SB 938 Jackson

(D-Santa

Barbara)

Would require a patient with a major neurocognitive

disorder who has a conservator to ask a court for

judicial approval each time a physician orders a new

or different antidepressant, sleeping pill, anti-anxiety

medication, antipsychotic or other psychotherapeutic

drug. While well intentioned, this bill would jeopardize

patients’ access to timely and appropriate medical

care, clog the court system and result in higher

medical and legal costs for these patients and their

families. CHA is working with a coalition — including

the Alzheimer’s Association and California Psychiatric

Association — to narrow the bill’s scope and provide

protections for hospitals.

Placed on Assembly

Inactive file Aug. 29.

Oppose Sheree Lowe/

Alex Hawthorne

SB 1273 Moorlach

(R-Costa Mesa)

Would clarify that California’s counties may use funds

from the Mental Health Services Act to provide

outpatient stabilization services to individuals

voluntarily receiving those services, even when those

who are receiving services involuntarily are treated at

the same facility. The Department of Health Care

Services issued a memo on July 20, 2016, which

clarified and supported the bill’s intention.

Placed on Assembly

Inactive file Aug. 29.

Support Sheree Lowe/

Alex Hawthorne

Nursing Services

AB 1306 Burke

(D-Inglewood)

As amended by the author, no longer includes the

corporate practice ban, which would have prohibited

CNMs from being employed by a corporation (such as

a hospital) or other “artificial legal entity.” CHA

supports AB 1306’s premise — that California’s more

than 1,200 CNMs should have authority to practice to

the full extent of their certification, education and

training. As advanced practice registered nurses,

CNMs’ scope of practice allows them to provide

comprehensive management of women’s health care,

focusing primarily on pregnancy, childbirth and the

postpartum period. Their scope of practice also

includes care of the newborn, family planning and

other gynecological needs throughout the life cycle.

Would remove the physician supervision requirement,

allowing CNMs greater independence in meeting the

health care needs of the millions of individuals added

to California’s health care system by the Affordable

Care Act, facilitating timely access to quality care.

Failed passage by full

Assembly Aug. 31.

Support Jackie Garman/

BJ Bartleson/

David Perrott/

Connie Delgado

SB 323 Hernandez

(D-Azusa)

Would allow nurse practitioners to practice to the full

extent of their education and training to ensure access

to health care delivery systems for millions of

Californians who now have access to coverage under

the Affordable Care Act.

Held in the Assembly

Business and

Professions Committee

June 28.

Support BJ Bartleson/

Connie Delgado

SB 1195 Hill

(D-San Mateo)

Provides requirements and procedures for the Director

of Consumer Affairs to review a decision or other

action by a board under the Department about a

restraint of trade. Among other things, would prohibit

the Board of Nursing executive director from being a

licensee of the board.

Placed on Senate

Inactive File June 2.

Follow, Hot BJ Bartleson/

Connie Delgado

Page 5

California Hospital Association Key State Issues

Bill No. Author Location/Action CHA Position Staff Contact

Professional Workforce Education

SB 66 Leyva (D-Chino)/

McGuire (D-

Healdsburg)

As amended, would require the Department of

Consumer Affairs to make available, upon request by

the Office of the Chancellor of the California

Community Colleges, information on every licensee so

that the Office of the Chancellor can better measure

employment outcomes of students who participate in

career technical education programs and make

recommendations as to how these programs may be

improved. The bill also urges the Chancellor to align

these measures with the performance accountability

measures of the federal Workforce Innovation and

Opportunity Act.

Awaiting action on the

Governor’s desk.

Support Cathy Martin/

Alex Hawthorne

Public Health

AB 508 Garcia

(D-Bell Gardens)

Would have established the California Maternal

Quality Care Collaborative (CMQCC) within CDPH.

As amended, would require CDPH to prepare and

submit to the Legislature an annual report on maternal

mortality and morbidity in California, including an

analysis of maternal deaths and severe maternal

morbidity. The bill would also require CDPH to

consider existing resources, including opportunities for

partnerships with other entities and the use of

physician volunteers.

Held in Senate

Judiciary Committee.

Follow, Hot David Perrott/

Alex Hawthorne

AB 2424 Gomez

(D-Los Angeles)

Would create the Community-based Health

Improvement and Innovation Fund within the state

treasury. A target level of annual statewide investment

from the fund would be established as a set dollar

amount per capita, to be allocated to the California

Department of Public Health to support community-

based prevention of priority chronic health conditions

throughout the state, including in the form of

competitive grants. 

Held on Suspense in

the Senate

Appropriations

Committee Aug. 11.

Follow Amber Kemp/

Kathryn Scott

AB 2439 Nazarian

(D-Sherman

Oaks)

Would create a California Department of Public Health

(CDPH) pilot program to select four or fewer hospital

emergency departments to offer HIV tests to patients.

CHA originally opposed the bill as an unfunded

mandate and inappropriate setting to conduct HIV

tests, but removed opposition with amendments that

made hospital participation in the pilot program

voluntary.

Awaiting action on the

Governor’s desk.

Follow, Hot David Perrott/

Debby Rogers/

Alex Hawthorne

AB 2640 Gipson

(D-Carson)

Would add to the significant body of existing laws on

HIV testing and would require every medical provider

who orders an HIV test to provide information to

specified patients about methods that prevent or

reduce the risk of contracting HIV, including pre-

exposure prophylaxis and post-exposure prophylaxis,

consistent with guidance of the federal Centers for

Disease Control and Prevention. CHA opposed this bill

on the grounds that it codifies the practice of medicine

into law; however, an agreement was reached with the

author to ensure physician discretion is preserved.

CHA had opposed this bill on the grounds that it

codifies the practice of medicine into law; however, an

agreement was reached with the author to ensure

physician discretion is preserved. Recent

amendments address CHA’s concerns.

Awaiting action on the

Governor’s desk.

Neutral, as

Amended

David Perrott/

Debby Rogers/

Alex Hawthorne

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California Hospital Association Key State Issues

Bill No. Author Location/Action CHA Position Staff Contact

Reimbursement

SB 1365 Hernandez

(D-Azusa)

Would require a hospital that offers a service in a

hospital-based outpatient clinic to provide a notice to

each patient when that service is available in a non-

hospital-based location.

Awaiting action on the

Governor’s desk.

Neutral Amber Ott/

Barbara Glaser

Skilled-Nursing Facilities

AB 1518 (Committee on

Aging and Long-

Term Care)

Would increase access to the home and community-

based Medi-Cal Nursing Facility/Acute Hospital Waiver

by increasing the number of authorized waiver slots

and requiring an expedited authorization process for

patients in acute care hospitals who are awaiting

discharge to a skilled-nursing facility.

Placed on Senate

Inactive File.

Support Pat Blaisdell/

Jackie Garman/

Barbara Glaser

SB 503 Hernandez

(D-Azusa)

As amended June 30, this bill would address

deficiencies in current law identified by a judge in a

recent court decision for the treatment of

unrepresented patients who lack capacity to make

medical decisions. The bill would allow skilled nursing

facilities (SNFs) to continue to obtain consent for the

care of a patient by using an interdisciplinary team

process, if the SNF provides a specified written notice

to the patient. The bill also requires that, prior to

administering an antipsychotic drug to a SNF patient,

the SNF convene a hearing with the patient, the

ordering physician, an independent physician, a

patient advocate and an interpreter (if necessary) to

review the medication order. The independent

physician and advocate must meet a list of

qualifications; the physician must also issue a written

decision. The patient may not be billed for the services

of the independent physician, advocate or interpreter.

CDPH, the bill sponsor, decided not to move the bill

forward this year.

Held in Assembly

Health Committee.

Oppose,

Unless

Amended

Lois Richardson/

Alex Hawthorne

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