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CHA Opposes AB 503; Legislation Would Cripple Critical Health Care Services, Conflicts with ACA

Nearly Identical bill, AB 975, Was Soundly Defeated 28-38 by Assembly in 2013

SACRAMENTO, Calif., March 17, 2014 /PRNewswire-USNewswire/ -- The California Hospital Association (CHA) today announced its opposition to AB 503 (Wieckowski/Bonta).  The bill is nearly identical to 2013's AB 975, which was debated and soundly defeated in the Assembly last year.  It is an unreasonable and costly attempt to redefine charity care for all hospitals, and community benefit standards of nonprofit hospitals in California.  The bill would negatively impact the implementation of the Affordable Care Act (ACA) and would result in cuts to a wide variety of community health care services.

"The minor differences in AB 503 are even more harmful than last year's bill because they would cripple community benefit programs provided by nonprofit hospitals in diverse communities across the state," said CHA President/CEO C. Duane Dauner.  "Every nonprofit hospital is serving its community in a transparent and effective way.  Instead of replaying worn out allegations, we need to move forward to ensure implementation of the ACA and safeguard access to affordable quality care."

Dauner noted that the ACA's community benefit standards were modeled after California's current law, which has been in place since 1994.  "At a time when nonprofit hospitals are navigating through an uncertain landscape, now is not the time to replace California's proven law that reflects the state's diversity with a centralized, bureaucratic, one-size-fits-all mandate."          

Proponents claim that AB 503 is needed for hospitals to justify their tax exempt status, and that there are no means by which to track community benefit investments.  That's inaccurate. According to public filings with the Internal Revenue Service (IRS), nonprofit hospitals in California provide approximately $5 billion in total societal benefit every year.  Moreover, all nonprofit hospitals are required to conduct community needs assessments and develop community benefit plans with local stakeholder input.  These plans are submitted annually to the California Office of Statewide Health Planning and Development (OSHDP) and posted online at: http://www.oshpd.ca.gov/HID/SubmitData/CommunityBenefit/.

California's community benefit law allows hospitals to develop community benefit programs tailored to the unique needs of the diverse populations they serve.  The law also requires hospitals to report on measurable objectives within specified timeframes, while providing full access and transparency to the report.  California nonprofit hospitals fund a wide range of community benefit programs designed for underserved communities including health mobile vans; medical recoupment beds for homeless patients; outpatient clinics in low-income neighborhoods; dental clinics for children; maternal and child care programs; and elder care.

In Sacramento, Dignity Health, Kaiser-Permanente, and Sutter Health jointly fund community benefit programs like Sacramento Covered, which helps low-income families obtain health insurance, and WellSpace Health, which operates a shelter for those who are temporarily homeless. These types of programs provide the coverage and services vulnerable residents need in the Sacramento community.  Without these services, many of these individuals would not get the care they need to manage chronic conditions or prevent hospitalization.

"Most communities, like Sacramento County in this region, lack a real blanket of care for low-income people," said Dr. Jonathan Porteus, CEO of WellSpace Health.  "Community benefit is the thing that's helped us, more than anything, build that blanket of care."  Click here to view a video that highlights this successful program. Link to Video

In Orange County, St. Joseph Health funds Healthy Smiles, a nonprofit community organization that operates a stationary dental clinic in Garden Grove as well as a mobile clinic that visits area schools to perform screenings and provide fluoride treatments for those who otherwise would go without care.

The mission, said Dulce Medina of Healthy Smiles, is "to actually make an impact and have the community change its behavior and we cannot do that without prevention and education.  And that is why community benefit dollars are extremely important for us."  Click here to view a video that highlights this successful program. Link to Video 

"AB 503's requirement that 90 percent of a nonprofit hospital's community benefit spending must be redirected to narrowly defined charity care and community health projects will result in program closures or dramatic cuts to many important community programs that don't fit into these new definitions," Dauner noted.  "AB 503 is bad public policy masquerading as a solution for which no problem exists."

SOURCE California Hospital Association

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