SECTIONS 127340-127360 - California Statutes

HEALTH AND SAFETY CODE

SECTION 127340-127360

127340. The Legislature finds and declares all of the following:
(a) Private not-for-profit hospitals meet certain needs of their
communities through the provision of essential health care and other
services. Public recognition of their unique status has led to
favorable tax treatment by the government. In exchange, nonprofit
hospitals assume a social obligation to provide community benefits in
the public interest.
(b) Hospitals and the environment in which they operate have
undergone dramatic changes. The pace of change will accelerate in
response to health care reform. In light of this, significant public
benefit would be derived if private not-for-profit hospitals reviewed
and reaffirmed periodically their commitment to assist in meeting
their communities' health care needs by identifying and documenting
benefits provided to the communities which they serve.
(c) California's private not-for-profit hospitals provide a wide
range of benefits to their communities in addition to those reflected
in the financial data reported to the state.
(d) Unreported community benefits that are often provided but not
otherwise reported include, but are not limited to, all of the
following:
(1) Community-oriented wellness and health promotion.
(2) Prevention services, including, but not limited to, health
screening, immunizations, school examinations, and disease counseling
and education.
(3) Adult day care.
(4) Child care.
(5) Medical research.
(6) Medical education.
(7) Nursing and other professional training.
(8) Home-delivered meals to the homebound.
(9) Sponsorship of free food, shelter, and clothing to the
homeless.
(10) Outreach clinics in socioeconomically depressed areas.
(e) Direct provision of goods and services, as well as preventive
programs, should be emphasized by hospitals in the development of
community benefit plans.

127345. As used in this article, the following terms have the
following meanings:
(a) "Community benefits plan" means the written document prepared
for annual submission to the Office of Statewide Health Planning and
Development that shall include, but shall not be limited to, a
description of the activities that the hospital has undertaken in
order to address identified community needs within its mission and
financial capacity, and the process by which the hospital developed
the plan in consultation with the community.
(b) "Community" means the service areas or patient populations for
which the hospital provides health care services.
(c) Solely for the planning and reporting purposes of this
article, "community benefit" means a hospital's activities that are
intended to address community needs and priorities primarily through
disease prevention and improvement of health status, including, but
not limited to, any of the following:
(1) Health care services, rendered to vulnerable populations,
including, but not limited to, charity care and the unreimbursed cost
of providing services to the uninsured, underinsured, and those
eligible for Medi-Cal, Medicare, California Childrens Services
Program, or county indigent programs.
(2) The unreimbursed cost of services included in subdivision (d)
of Section 127340.
(3) Financial or in-kind support of public health programs.
(4) Donation of funds, property, or other resources that
contribute to a community priority.
(5) Health care cost containment.
(6) Enhancement of access to health care or related services that
contribute to a healthier community.
(7) Services offered without regard to financial return because
they meet a community need in the service area of the hospital, and
other services including health promotion, health education,
prevention, and social services.
(8) Food, shelter, clothing, education, transportation, and other
goods or services that help maintain a person's health.
(d) "Community needs assessment" means the process by which the
hospital identifies, for its primary service area as determined by
the hospital, unmet community needs.
(e) "Community needs" means those requisites for improvement or
maintenance of health status in the community.
(f) "Hospital" means a private not-for-profit acute hospital
licensed under subdivision (a), (b), or (f) of Section 1250 and is
owned by a corporation that has been determined to be exempt from
taxation under the United States Internal Revenue Code. "Hospital"
does not mean any of the following:
(1) Hospitals that are dedicated to serving children and that do
not receive direct payment for services to any patient.
(2) Small and rural hospitals as defined in Section 124840.
(g) "Mission statement" means a hospital's primary objectives for
operation as adopted by its governing body.
(h) "Vulnerable populations" means any population that is exposed
to medical or financial risk by virtue of being uninsured,
underinsured, or eligible for Medi-Cal, Medicare, California
Childrens Services Program, or county indigent programs.

127350. Each hospital shall do all of the following:
(a) By July 1, 1995, reaffirm its mission statement that requires
its policies integrate and reflect the public interest in meeting its
responsibilities as a not-for-profit organization.
(b) By January 1, 1996, complete, either alone, in conjunction
with other health care providers, or through other organizational
arrangements, a community needs assessment evaluating the health
needs of the community serviced by the hospital, that includes, but
is not limited to, a process for consulting with community groups and
local government officials in the identification and prioritization
of community needs that the hospital can address directly, in
collaboration with others, or through other organizational
arrangement. The community needs assessment shall be updated at least
once every three years.
(c) By April 1, 1996, and annually thereafter adopt and update a
community benefits plan for providing community benefits either
alone, in conjunction with other health care providers, or through
other organizational arrangements.
(d) Annually submit its community benefits plan, including, but
not limited to, the activities that the hospital has undertaken in
order to address community needs within its mission and financial
capacity to the Office of Statewide Health Planning and Development.
The hospital shall, to the extent practicable, assign and report the
economic value of community benefits provided in furtherance of its
plan. Effective with hospital fiscal years, beginning on or after
January 1, 1996, each hospital shall file a copy of the plan with the
office not later than 150 days after the hospital's fiscal year
ends. The reports filed by the hospitals shall be made available to
the public by the office. Hospitals under the common control of a
single corporation or another entity may file a consolidated report.

127355. The hospital shall include all of the following elements in
its community benefits plan:
(a) Mechanisms to evaluate the plan's effectiveness including, but
not limited to, a method for soliciting the views of the community
served by the hospital and identification of community groups and
local government officials consulted during the development of the
plan.
(b) Measurable objectives to be achieved within specified
timeframes.
(c) Community benefits categorized into the following framework:
(1) Medical care services.
(2) Other benefits for vulnerable populations.
(3) Other benefits for the broader community.
(4) Health research, education, and training programs.
(5) Nonquantifiable benefits.

127360. Nothing in this article shall be construed to authorize or
require specific formats for hospital needs assessments, community
benefit plans, or reports until recommendations pursuant to former
Section 127365, as added by Chapter 1023 of the Statutes of 1996, are
considered and enacted by the Legislature.
Nothing in this article shall be used to justify the tax-exempt
status of a hospital under state law. Nothing in this article shall
preclude the office from requiring hospitals to directly report their
charity activities.