Bill Text: CA SB483 | 2015-2016 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: General acute care hospitals: observation services.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2016-02-01 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB483 Detail]

Download: California-2015-SB483-Introduced.html

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BILL NUMBER: SB 483	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Beall

                        FEBRUARY 26, 2015

   An act to amend Section 128740 of, and to add Section 1253.7 to,
the Health and Safety Code, relating to health care.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 483, as introduced, Beall. General acute care hospitals:
observation services.
   (1) Existing law establishes the State Department of Public Health
and sets forth its powers and duties, including, but not limited to,
the licensing and regulation of health facilities, including, but
not limited to, general acute care hospitals. A violation of these
provisions is a crime.
   Existing law authorizes the department to issue a special permit
authorizing a health facility to offer one or more special services
when specified requirements are met. Existing law requires general
acute care hospitals to apply for supplemental services approval and
requires the department to, upon issuance and renewal of a license
for certain health facilities, separately identify on the license
each supplemental service. Existing law requires a hospital to report
specified summary financial and utilization data to the Office of
Statewide Health Planning and Development (OSHPD) within 45 days of
the end of the every calendar quarter.
   This bill would require a general acute care hospital that
provides observation services, as defined, to apply for approval from
the department to provide these services as supplemental services.
The bill would require the department to adopt standards and
regulations for a hospital providing observation services as an
approved supplemental service under the general acute care hospital's
license. The bill would require hospitals to include certain data
relating to observation service visits and total observation service
gross revenues in the reports filed with OSHPD.
   (2) Because a violation of these provisions by a health facility
would be a crime, the bill would impose a state-mandated local
program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1253.7 is added to the Health and Safety Code,
to read:
   1253.7.  (a) (1) For purposes of this chapter, "observation
services" means outpatient services provided by a general acute care
hospital to those patients described in subdivision (e) who have
unstable or uncertain conditions potentially serious enough to
warrant close observation, but not so serious as to warrant inpatient
admission to the hospital. Observation services may include the use
of a bed, monitoring by nursing and other staff, and any other
services that are reasonable and necessary to safely evaluate a
patient's condition or determine the need for a possible inpatient
admission to the hospital.
   (2) For purposes of this chapter, "observation unit" means an area
where observation services are provided in a setting outside of an
inpatient unit of a general acute care hospital.
   (b) Observation services may be provided for a period of no more
than 24 hours.
   (c) A general acute care hospital that provides observation
services in an observation unit shall apply for approval from the
department, pursuant to subdivision (a) of Section 1253.6, to provide
services in an observation unit as a supplemental service.
   (d)  The department shall adopt standards and regulations,
pursuant to subdivision (a) of Section 1275, for providing
observation services in an observation unit as a supplemental service
under the general acute care hospital's license.
   (e) Observation services may be ordered by an appropriately
licensed practitioner only for any of the following:
   (1) A patient who has received triage services in the emergency
department but has not been admitted as an inpatient.
   (2) A patient who has received outpatient surgical services and
procedures.
   (3) A patient who has been admitted as an inpatient and is
discharged to receive observation services.
   (4) A patient previously seen in a physician's office or
outpatient clinic.
   (f) Notwithstanding subdivisions (d) and (e) of Section 1275,
observation services provided by the general acute care hospital in
an observation unit, including the services provided in a
freestanding physical plant, as defined in subdivision (g) of Section
1275, shall comply with the same staffing standards, including, but
not limited to, licensed nurse-to-patient ratios, as supplemental
emergency services.
   (g) A patient receiving observation services shall receive written
notice that his or her care is being provided on an outpatient
basis, and that this may impact reimbursement by Medicare, Medi-Cal,
or private payers of health care services, or cost-sharing
arrangements through his or her health care coverage.
   (h) Observation units shall be marked with signage identifying the
area as an outpatient area. The signage shall use the term
"outpatient" in the title of the area to clearly indicate to all
patients and family members that the observation services provided in
the center are not inpatient services.
   (i) Observation services shall be deemed outpatient or ambulatory
services that are revenue-producing cost centers associated with
hospital-based or satellite service locations that emphasize
outpatient care. Identifying an observation unit by a name or term
other than that used in this subdivision does not exempt the general
acute care hospital from the requirement to obtain approval from the
department to provide observation services as a distinct supplemental
service when observation services are provided in a setting outside
of an inpatient unit of a general acute care hospital.
  SEC. 2.  Section 128740 of the Health and Safety Code is amended to
read:
   128740.  (a) Commencing with the first calendar quarter of 1992,
the following summary financial and utilization data shall be
reported to the office by each hospital within 45 days of the end of
every calendar quarter. Adjusted reports reflecting changes as a
result of audited financial statements may be filed within four
months of the close of the hospital's fiscal or calendar year. The
quarterly summary financial and utilization data shall conform to the
uniform description of accounts as contained in the Accounting and
Reporting Manual for California Hospitals and shall include all of
the following:
   (1) Number of licensed beds.
   (2) Average number of available beds.
   (3) Average number of staffed beds.
   (4) Number of discharges.
   (5) Number of inpatient days.
   (6) Number of outpatient visits  , excluding observation
service visits . 
   (7) Number of observation service visits and number of hours of
services provided.  
   (7) 
    (8)  Total operating expenses. 
   (8)
    (9)  Total inpatient gross revenues by payer, including
Medicare, Medi-Cal, county indigent programs, other third parties,
and other payers. 
   (9) 
    (10)  Total outpatient gross revenues by payer,
including Medicare, Medi-Cal, county indigent programs, other third
parties, and other payers. 
   (11) Total observation service gross revenues by payer, including
Medicare, Medi-Cal, county indigent programs, other third parties,
and other payers.  
   (10) 
    (12)  Deductions from revenue in total and by component,
including the following: Medicare contractual adjustments, Medi-Cal
contractual adjustments, and county indigent program contractual
adjustments, other contractual adjustments, bad debts, charity care,
restricted donations and subsidies for indigents, support for
clinical teaching, teaching allowances, and other deductions.

   (11) 
    (13)  Total capital expenditures. 
   (12) 
    (14)  Total net fixed assets. 
   (13) 
    (15)  Total number of inpatient days, outpatient visits
 ,   exc   luding observation services,
observation services, and discharges by payer, including
Medicare, Medi-Cal, county indigent programs, other third parties,
self-pay, charity, and other payers. 
   (14) 
    (16)  Total net patient revenues by payer including
Medicare, Medi-Cal, county indigent programs, other third parties,
and other payers. 
   (15) 
    (17)  Other operating revenue. 
   (16) 
    (18)  Nonoperating revenue net of nonoperating expenses.

   (b) Hospitals reporting pursuant to subdivision (d) of Section
128760 may provide the items in paragraphs  (7), (8), (9),
(10), (14), (15), and (16)   (8), (9), (10), (12), (16),
(17), and (18)  of subdivision (a) on a group basis, as
described in subdivision (d) of Section 128760.
   (c) The office shall make available at cost, to any person, a hard
copy of any hospital report made pursuant to this section and in
addition to hard copies, shall make available at cost, a computer
tape of all reports made pursuant to this section within 105 days of
the end of every calendar quarter.
   (d) The office shall adopt by regulation guidelines for the
identification, assessment, and reporting of charity care services.
In establishing the guidelines, the office shall consider the
principles and practices recommended by professional health care
industry accounting associations for differentiating between charity
services and bad debts. The office shall further conduct the onsite
validations of health facility accounting and reporting procedures
and records as are necessary to assure that reported data are
consistent with regulatory guidelines. 
   This section shall become operative January 1, 1992. 
  SEC. 3.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.