| 1 | | - | Amended IN Assembly April 10, 2025 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 1113Introduced by Assembly Member Mark GonzlezFebruary 20, 2025 An act to amend Section 131021 of the Health and Safety Code, relating to public health. add Article 4.15 (commencing with Section 14138.35) to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code, relating to public social services.LEGISLATIVE COUNSEL'S DIGESTAB 1113, as amended, Mark Gonzlez. Health emergencies. Federally qualified health centers.Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services, including federally qualified health center (FQHC) services as described by federal law. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.This bill would require each FQHC to have an annual mission spend ratio, as defined, of no less than 90% and would provide a methodology for calculation of that ratio, as specified, until the State Department of Public Health (department) has adopted a methodology for this purpose. The bill would require the department to adopt that methodology, as specified, sufficient for implementation by January 1, 2027. By June 30, 2026, and annually thereafter by June 30, the bill would require each FQHC or its parent corporation to report to the department total revenues collected in a form to be determined by the department. The bill would require each report to include, among other things, the FQHC or parent corporations filed Internal Revenue Service (IRS) Form 990, 990-PF, 990-EZ, or 1120, from the most recent taxable year, as specified. The bill would require each FQHC to submit an annual registration fee in an amount to be determined by the department and adjusted as necessary to fund these provisions. The bill would require the department to calculate and prepare a report of each FQHCs mission spend ratio no later than 90 days after the deadline for receipt of each FQHCs submission, and transmit the report to the State Department of Health Care Services. The bill would require the department to conduct an audit of the financial information reported by FQHCs every 3 years, in a manner and form prescribed by the department, as specified.This bill would prescribe various fines for failure of an FQHC to comply with the above-described reporting and mission spend ratio requirements, including an administrative fine imposed by the department of $5,000 for a first violation and $10,000 for each subsequent month that an FQHC fails to submit an annual report. The bill would require those penalties to be deposited into the Mission Spend Ratio Penalty Account, which is subject to appropriation by the Legislature, within the Special Deposit Fund. If an FQHC disputes a determination or assessment, the bill would require the FQHC to simultaneously submit a request for appeal to both the department and the State Department of Health Care Services within 30 days of the FQHCs receipt of the determination or assessment, as specified. The bill would require the department to submit, among other things, its responsive arguments to the FQHC and the State Department of Health Care Services within 30 days of the departments receipt of the FQHCs request for appeal. The bill would require the State Department of Health Care Services to hear a timely appeal and issue a decision, as prescribed.This bill would authorize an FQHC to apply to the department for a waiver, for a term of one year from the date of issuance, to provide a temporary pause of the above-described reporting and mission spend ratio requirements or for an alternative mission spend ratio requirement on the basis of unexpected or exceptional circumstances or the FQHCs economic condition. The bill would prescribe various types of information to be reported by an FQHC to obtain a waiver. The bill would authorize an FQHC to apply to renew a waiver at any time no fewer than 180 days before the expiration of the existing waiver.This bill would exempt an FQHC participating in a bona fide labor-management cooperation committee from the above-described requirements. The bill would require the department to adopt all regulations necessary to implement these provisions and would authorize the department to implement, interpret, or make specific these provisions, in whole or in part, by means of information notices, all-county letters, or other similar instructions without taking regulatory action. The bill would define various terms for purposes of these provisions.Existing law establishes the State Department of Public Health (department) to implement various programs throughout the state relating to public health and requires the department and the Office of Emergency Services, in coordination with other state agencies, to establish a personal protective equipment stockpile. Existing law also establishes the Personal Protective Equipment Advisory Committee (committee), consisting of representatives of various industries, as prescribed, to make recommendations to the department for the development of guidelines for the procurement, management, and distribution of PPE, as specified. Existing law requires the Director of Emergency Services to appoint the representatives that make up the committee.This bill would instead require the State Public Health Officer to appoint representatives to the committee.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all of the following:(a) Federally qualified health centers (FQHCs) are fundamental to the California health care safety net, as their mission is to provide primary and preventive care to low-income and underserved populations.(b) It is the intent of the Legislature to ensure that an appropriate proportion of each FQHCs revenue is spent on program services expenses directly related to the FQHCs mission to provide essential primary and preventive care to low-income and underserved populations.(c) (1) The Legislature recognizes the critical intersection between workforce development and delivery of high-quality care, and further recognizes that an FQHCs participation in a statewide, multiemployer bona fide labor-management cooperation committee (LMCC) reflects institutional commitment to seeking partnerships and leveraging funding opportunities to achieve these twin objectives.(2) Bona fide LMCCs are a specific form of labor-management partnership which in general have been shown to promote cost savings as well as improve staff retention and patient care. The intent of this legislation is to support these same goals for FQHCs that are not part of LMCCs by directing a greater share of spending towards FQHCs mission to provide quality care to vulnerable populations.(d) It is the intent of this legislation to create a reasonable minimum standard of mission-directed spending as a proportion of revenue (mission spend ratio) to ensure FQHC patient service delivery is prioritized over management and overhead spending, while still allowing an FQHC to maintain ongoing, sound financial footing. It is the intent of the Legislature to apply the mission spend ratio to all FQHCs except those participating in a bona fide LMCC.SEC. 2. Article 4.15 (commencing with Section 14138.35) is added to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code, to read: Article 4.15. Federally Qualified Health Center Mission Spend Ratio14138.35. For purposes of this article, the following definitions apply:(a) Bona fide labor-management cooperation committee or bona fide LMCC means a statewide, multiemployer joint labor-management committee that is established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) and meets the following criteria:(1) The bona fide LMCC is not involved in the governance of an FQHC but exists to promote worker training, workforce expansion, and support for workers during training.(2) The bona fide LMCC has the following composition:(A) Fifty percent of the committee consists of representatives of organized labor unions that represent health center workers in the state.(B) Fifty percent of the committee consists of representatives of FQHCs located in the state.(3) The membership of the bona fide LMCC includes one or more labor organizations that are certified or recognized as the exclusive bargaining representative of applicable workers at FQHCs in the state.(b) Department means the State Department of Public Health.(c) Federally qualified health center or FQHC means any community or public federally qualified health center as that term is defined in Section 1396d of Title 42 of the United States Code, including FQHC look-alikes.(d) FQHC look-alike means an organization that does not receive an FQHC award, but is designated by the federal Health Resources and Services Administration as meeting FQHC program requirements, as set forth in Sections 1395x(aa)(4)(B) and 1396d(l)(2)(B) of Title 42 of the United States Code. For purposes of this article, an FQHC look-alike is considered an FQHC and all references to FQHCs apply with equal force to FQHC look-alikes.(e) (1) Mission-directed expenses means expenses associated with activities that further an FQHCs patient services mission and for which the FQHC was created to conduct.(2) Mission-directed expenses shall include all of the following:(A) The total compensation for all staff employed by the FQHC, including salaries, wages, and employee benefits, but excluding all compensation for executive and administrative officers and employees. Employee benefits shall include payroll benefits, paid time off, health insurance, life insurance, pension and retirement, and workers compensation insurance.(B) The cost of consumable supplies that are used to provide patient care.(C) Outside patient care services, which shall be expenses associated with patient care services purchased under contract from any entity, including a hospital, laboratory, or physician group.(D) Professional liability insurance.(E) Continuing education, which shall be the total cost of providing continuing education classes for health care professionals.(F) Capital expenditures that directly relate to patient care services, including rent, mortgage interest, depreciation, property taxes, property insurance, utilities, and other capital expenditures determined by the department.(3) Mission-directed expenses shall not include any of the following:(A) Administrative costs, including compensation paid to management and executive officers and employees, all costs to management companies, administrative service companies, home office expenses for parent companies and holding companies, legal expenses, trade association fees and dues, insurance costs, licensing fees, and all administrative costs and profits paid to contractors or related party entities for staffing services, ancillary services, support services, or other services.(B) Capital expenditures that relate to administrative, overall operations or management purposes, including rent, mortgage interest, depreciation, property taxes, property insurance, utilities, and other capital expenditures determined by the department.(C) Profits, including net income and any profit paid to related parties on leases and property, and any profits paid to management companies.(f) Mission spend ratio means the percent of an FQHCs total revenue from all payer sources in a calendar year expended on mission-directed expenses.(g) Related party means an organization related to the FQHC or that is under common ownership or control, as those terms are defined in Section 413.17(b) of Title 42 of the Code of Federal Regulations. A related party may include a management organization, owners of real estate, entities that provide staffing, any parent companies, holding companies, sister organizations, and others.14138.36. (a) Each FQHC shall have an annual mission spend ratio of no less than 90 percent.(1) Until the department has adopted a methodology for this purpose pursuant to paragraph (3), an FQHCs total revenue from all payer sources means the FQHCs total revenue for the calendar year, calculated consistent with Line 12 of Part I of Internal Revenue Service IRS Form 990, as set out in the form and instructions applicable to the 2024 taxable year.(2) Until the department has adopted a methodology for this purpose pursuant to paragraph (3), for the calculation of the mission spend ratio of each FQHC in the 2026 calendar year, mission-directed expenses shall be the total program service expenses reported under Line 25 of Column B of Part IX of IRS Form 990, as set out in the form and instructions applicable to the 2024 taxable year.(3) For the calculation of the mission spend ratio of each FQHC in the 2027 calendar year and all subsequent years, the department shall adopt a methodology to determine the expenses associated with activities that further an FQHCs patient services mission, consistent with this section. If the department has not adopted a methodology pursuant to this paragraph sufficient for implementation by January 1, 2027, then the methodology set forth in paragraph (2) shall continue to be used until the department has adopted a methodology pursuant to this paragraph.(b) By June 30, 2026, and annually thereafter by June 30, each FQHC or its parent corporation shall report total revenues collected from all revenue sources, along with the portion of revenues that are expended on all mission-directed expenses, to the department in a form to be determined by the department. Each report shall include, at a minimum:(1) The FQHC or parent corporations filed IRS Form 990, 990-PF, 990-EZ, or 1120, from the most recent taxable year, with all attachments and schedules as applicable, in the same form as filed with the IRS, along with a list identifying which FQHCs activities are included in the information on the IRS form.(2) A copy of the annual report filed for each FQHC with the Department of Health Care Access and Information pursuant to Section 1216 of the Health and Safety Code.(3) A certification signed by a duly authorized official of the FQHC or its parent corporation that certifies that, to the best of the officials knowledge and information, each statement and amount in the accompanying report is believed to be true and correct.(4) For any FQHC that is required to prepare an annual financial statement pursuant to Section 12586 of the Government Code, certification from an independent certified public accountant that the report submitted has been audited in conformity with generally accepted auditing standards.(c) Each FQHC shall submit an annual registration fee in an amount to be determined by the department and adjusted as necessary to fund the activities set forth in this article.(d) (1) No later than 90 days after the deadline for receipt of each FQHCs submission, the department shall calculate the mission spend ratio for each FQHC and prepare a report of the mission spend ratios of every FQHC. The department shall transmit the report to the subunit of the State Department of Health Care Services responsible for conducting Change in Scope-of-Service Request (CSOSR) audits.(2) The department shall publish the report of the mission spend ratios of every FQHC on its internet website.(e) The department shall conduct an audit of the financial information reported by FQHCs pursuant to this section every three years, in a manner and form prescribed by the department, to ensure the accuracy of the information reported and compliance with the requirements of this section. These audits may also include any audits of contractors or related party entities.(f) Notwithstanding any other provision to the contrary, the requirements of this section shall not apply to any FQHC participating in a bona fide LMCC.14138.37. (a) There is hereby continued in the Special Deposit Fund, established pursuant to Section 16370 of the Government Code, the Mission Spend Ratio Penalty Account, which shall be subject to appropriation by the Legislature. The account shall contain all moneys deposited pursuant to subdivisions (b) and (c).(b) The department shall impose sanctions for the failure to comply with the reporting provisions set forth in Section 14138.36, in the form of an administrative fine of five thousand dollars ($5,000) for a first violation and ten thousand dollars ($10,000) for each subsequent month that an FQHC fails to submit the annual reports required by that section.(c) (1) If the department determines that an FQHC has not met the required mission spend ratio for any reporting year, the department shall assess an administrative penalty equal to the difference between the amount of the FQHC spent on mission-directed expenses and 90 percent of the FQHCs total revenue that year.(2) Any penalties paid pursuant to this subdivision shall not be considered mission-directed expenses for the calculation of the FQHCs mission spend ratio in the year the penalty was incurred.(3) If the FQHC does not dispute the determination or assessment, the penalties shall be paid in full to the department within 30 days of receipt of a notice of penalty and deposited into the Mission Spend Ratio Penalty Account.(4) (A) If the FQHC disputes the determination or assessment made pursuant to this subdivision, the FQHC shall, within 30 days of the FQHCs receipt of the determination or assessment, simultaneously submit a request for appeal to both the department and the State Department of Health Care Services. The request shall include a detailed statement describing the reason for appeal and include all supporting documents the FQHC will present at the hearing.(B) Within 30 days of the departments receipt of the FQHCs request for appeal, the department shall submit, to both the FQHC and the State Department of Health Care Services, its responsive arguments and all supporting documents that the department will present at the hearing.(C) The State Department of Health Care Services shall hear a timely appeal and issue a decision as follows:(i) The hearing shall commence within 60 days from the date of receipt by the State Department of Health Care Services of the FQHCs timely request for appeal.(ii) The State Department of Health Care Services shall issue a decision within 120 days from the date of receipt by the State Department of Health Care Services of the FQHCs timely request for appeal.(iii) The decision of the State Department of Health Care Services hearing officer, when issued, shall be the final decision of the State Department of Public Health.(D) The appeals process set forth in this paragraph shall be exempt from Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500), of Part 1 of Division 3 of Title 2 of the Government Code. The provisions of Sections 100171 and 131071 of the Health and Safety Code do not apply to appeals under this paragraph.(d) (1) An FQHC may apply to the department for a waiver providing a temporary pause of the requirements of Section 14138.36 or for an alternative mission spend ratio requirement to that set forth in subdivision (a) of Section 14138.36, on the basis of unexpected or exceptional circumstances or the FQHCs economic condition. The issuance and terms of the waiver pursuant to this subdivision shall be solely and exclusively within the authority of the department. A waiver issued pursuant to this subdivision shall be for a term of one year from the date of issuance.(2) To obtain a waiver based on unexpected or exceptional circumstances, an FQHC shall detail the following circumstances experienced by the FQHC:(A) When the FQHC first learned of the unexpected or exceptional circumstances.(B) Why the FQHC could not have anticipated those circumstances arising.(C) Actions the FQHC took to address those circumstances.(D) Expenses incurred as a result of addressing those circumstances.(E) When the FQHC expects those circumstances to be resolved.(F) Preventive steps the FQHC is taking to ensure that those circumstances do not unexpectedly arise in the future.(3) To obtain a waiver based on economic condition, an FQHC shall demonstrate that compliance with Section 14138.36 would raise doubts about the FQHCs ability to continue as a going concern under generally accepted accounting principles. The evidence shall include documentation of the FQHCs financial condition, the financial condition of any parent or affiliated entity, and evidence of the actual or potential direct financial impact of compliance with Section 14138.36.(4) Consideration of an FQHCs ability to continue as a going concern shall include the following factors regarding the FQHC or any affiliated entity:(A) Actual or likely closure of the FQHC or any affiliated entity.(B) Actual or likely closure of patient services or programs.(C) Actual or likely loss of jobs.(D) Whether the FQHC is small, rural, frontier, or serves a rural catchment area.(E) Whether closure of the FQHC would significantly impact access to services in the region or service area.(F) Whether the FQHC is in financial distress that results or is likely to result in the closure of the FQHC or any affiliated entity, closure of patient services or programs, or loss of jobs. Factors to consider in determining financial distress include, but are not limited to, the FQHCs prior and projected performance on financial metrics, including the amount of cash on hand, and whether the FQHC has, or is projected to experience, negative operating margins.(5) Requests for a waiver pursuant to this subdivision shall be submitted in writing to the department.(6) The department shall notify the FQHC of the decision on the waiver request in writing.(7) An FQHC may apply to renew a waiver issued pursuant to this subdivision at any time no fewer than 180 days before the expiration of the existing waiver.(e) This section shall not apply to any FQHC participating in a bona fide LMCC.14138.38. The department shall adopt all regulations necessary to implement this article. Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this article, in whole or in part, by means of information notices, all-county letters, or other similar instructions without taking regulatory action.SEC. 3. The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.SECTION 1.Section 131021 of the Health and Safety Code is amended to read:131021.(a)The Legislature finds that having access to a statewide stockpile of personal protective equipment in the event of a pandemic, wildfire smoke event, or other health emergency is vital to the health and safety of its health care and essential workers, as well as the general population, which both relies on this workforce and is susceptible to disease transmission should members of this workforce needlessly be infected with transmissible disease.(b)The following definitions apply for purposes of this section:(1)Department means the State Department of Public Health.(2)Office means the Office of Emergency Services.(3)Agricultural worker means a person employed in any of the following:(A)An agricultural occupation, as defined in Wage Order No. 14 of the Industrial Welfare Commission.(B)An industry preparing agricultural products for the market, on the farm, as defined in Wage Order No. 13 of the Industrial Welfare Commission.(C)An industry handling products after harvest, as defined in Wage Order No. 8 of the Industrial Welfare Commission.(4)Essential workers means primary and secondary school workers, workers at detention facilities, as defined in Section 9500 of the Penal Code, in-home support providers, childcare providers, government workers whose work with the public continues throughout the crisis, and workers in other positions that the State Public Health Officer or the Director of Emergency Services deems vital to public health and safety, as well as economic and national security, including, but not limited to, agricultural workers.(5)Health care worker means any worker who provides direct patient care and services directly supporting patient care, including, but not limited, to physicians, pharmacists, clinicians, nurses, aides, technicians, janitorial and housekeeping staff, food services workers, and nonmanagerial administrative staff.(6)Personal protective equipment or PPE means protective equipment for eyes, face, head, and extremities, protective clothing, respiratory devices, and protective shields and barriers, including, but not limited to, N95 and other filtering facepiece respirators, elastomeric air-purifying respirators with appropriate particulate filters or cartridges, powered air purifying respirators, disinfecting and sterilizing devices and supplies, medical gowns and apparel, face masks, surgical masks, face shields, gloves, shoe coverings, and the equipment identified by or otherwise necessary to comply with Section 5199 of Title 8 of the California Code of Regulations.(7)Provider means a licensed clinic, as described in Chapter 1 (commencing with Section 1200), an outpatient setting, as described in Chapter 1.3 (commencing with Section 1248) of, a health facility as described in Chapter 2 (commencing with Section 1250) of, or a county medical facility, as described in Chapter 2.5 (commencing with Section 1440) of, Division 2, a home health agency, a physicians office, a professional medical corporation, a medical partnership, a medical foundation, a rural health clinic, as defined in Section 1395x(aa)(2) of Title 42 of the United States Code, or a federally qualified health center, as defined in Section 1395x(aa)(4) of Title 42 of the United States Code, and any other entity that provides medical services in California.(8)Stockpile means the personal protective equipment stockpile created pursuant to subdivision (c).(c)Within one year of the effective date of this section, the department and office, in coordination with other state agencies, shall establish a PPE stockpile, upon appropriation and as necessary.(d) The department shall also establish guidelines for procurement, management, and distribution of PPE from the department. The department and office shall consider the recommendations of the Personal Protective Equipment Advisory Committee created pursuant to subdivision (f) in developing these guidelines. At a minimum, the guidelines shall take into account all of the following:(1)The various types of PPE that may be required during a pandemic or other health emergency, including, but not limited to, wildfire smoke events.(2)The shelf life of each type of PPE that may be obtained from the department and how to restock a portion of each type of PPE to ensure the procurements consist of unexpired PPE.(3)The amount of each type of PPE that would be required for all health care workers and essential workers in the state during a 90-day pandemic or other health emergency, including, but not limited to, wildfire smoke events.(4)Lessons learned from previous pandemics and state emergencies, including, but not limited to, supply procurement, management, and distribution.(5)Guidance on how to define essential workers based upon different hazards.(6)Geographical distribution of PPE storage.(7)Guidance on how to establish policies and standards for PPE surge capacity to ensure that workers have access to an adequate supply of PPE during a pandemic or other health emergency, including, but not limited to, wildfire smoke events.(8)The policies and funding that would be required for the state to establish a PPE stockpile.(9)How distribution from any procurement shall be prioritized in the event that there is insufficient PPE to meet the needs of providers or employers of essential workers, including consideration of the following:(A)The provider or employer is in a location with a high share of low-income residents.(B)The provider or employer is in a medically underserved area, as designated by the United States Department of Health and Human Services, Health Resources and Services Administration.(C)The provider or employer disproportionately serves a medically underserved population, as designated by the United States Department of Health and Human Services, Health Resources and Services Administration.(D)The provider or employer is in a county with a high infection rate or high hospitalization rate related to the declared emergency.(e)The development of the guidelines shall be informed by the recommendations of the Personal Protective Equipment Advisory Committee pursuant to subdivision (f). The guidelines shall not establish policies or standards that are less protective or prescriptive than any federal, state, or local law on PPE standards.(f)The Personal Protective Equipment Advisory Committee is hereby established. The advisory committee shall consist of the following:(1)One representative of an association representing multiple types of hospitals and health systems.(2)One representative of an association representing skilled nursing facilities.(3)One representative of an association representing primary care clinics.(4)One representative of a statewide association representing physicians.(5)Two representatives of labor organizations that represent health care workers.(6)Two representatives of labor organizations that represent nonagricultural essential workers, as defined by paragraph (4) of subdivision (b).(7)One representative of a labor organization that represents agricultural workers, as defined by paragraph (3) of subdivision (b).(8)One representative of an organization that represents agricultural employers.(9)One representative from the personal protective equipment manufacturing industry.(10)One consumer representative.(11)One representative from an association representing counties.(12)One representative from the State Department of Public Health.(13)One representative from the Office of Emergency Services.(14)One representative from the Emergency Medical Services Authority.(15)One representative from the State Department of Social Services.(g)The State Public Health Officer or their designee shall appoint the representatives from paragraphs (1) to (11), inclusive, of subdivision (f).(h)The Personal Protective Equipment Advisory Committee shall make recommendations to the office and department necessary to develop the guidelines required pursuant to subdivision (d).(i)Nothing in this section alters an employers duty to provide respirators as required by Section 5141.1 of Title 8 of the California Code of Regulations.(j)The department shall report to the Legislature, within six months of the effective date of the amendments to this section made by the act adding this subdivision, with regard to the amount of PPE in the stockpile, the amount of PPE from the stockpile that has been used, and the amount of anticipated future usage. The report shall be made pursuant to Section 9795 of the Government Code. |
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| 1 | + | CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 1113Introduced by Assembly Member Mark GonzlezFebruary 20, 2025 An act to amend Section 131021 of the Health and Safety Code, relating to public health. LEGISLATIVE COUNSEL'S DIGESTAB 1113, as introduced, Mark Gonzlez. Health emergencies.Existing law establishes the State Department of Public Health (department) to implement various programs throughout the state relating to public health and requires the department and the Office of Emergency Services, in coordination with other state agencies, to establish a personal protective equipment stockpile. Existing law also establishes the Personal Protective Equipment Advisory Committee (committee), consisting of representatives of various industries, as prescribed, to make recommendations to the department for the development of guidelines for the procurement, management, and distribution of PPE, as specified. Existing law requires the Director of Emergency Services to appoint the representatives that make up the committee.This bill would instead require the State Public Health Officer to appoint representatives to the committee.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 131021 of the Health and Safety Code is amended to read:131021. (a) The Legislature finds that having access to a statewide stockpile of personal protective equipment in the event of a pandemic, wildfire smoke event, or other health emergency is vital to the health and safety of its health care and essential workers, as well as the general population, which both relies on this workforce and is susceptible to disease transmission should members of this workforce needlessly be infected with transmissible disease.(b) The following definitions apply for purposes of this section:(1) Department means the State Department of Public Health.(2) Office means the Office of Emergency Services.(3) Agricultural worker means a person employed in any of the following:(A) An agricultural occupation, as defined in Wage Order No. 14 of the Industrial Welfare Commission.(B) An industry preparing agricultural products for the market, on the farm, as defined in Wage Order No. 13 of the Industrial Welfare Commission.(C) An industry handling products after harvest, as defined in Wage Order No. 8 of the Industrial Welfare Commission.(4) Essential workers means primary and secondary school workers, workers at detention facilities, as defined in Section 9500 of the Penal Code, in-home support providers, childcare providers, government workers whose work with the public continues throughout the crisis, and workers in other positions that the State Public Health Officer or the Director of the Office of Emergency Services deems vital to public health and safety, as well as economic and national security, including, but not limited to, agricultural workers.(5) Health care worker means any worker who provides direct patient care and services directly supporting patient care, including, but not limited, to physicians, pharmacists, clinicians, nurses, aides, technicians, janitorial and housekeeping staff, food services workers, and nonmanagerial administrative staff.(6) Personal protective equipment or PPE means protective equipment for eyes, face, head, and extremities, protective clothing, respiratory devices, and protective shields and barriers, including, but not limited to, N95 and other filtering facepiece respirators, elastomeric air-purifying respirators with appropriate particulate filters or cartridges, powered air purifying respirators, disinfecting and sterilizing devices and supplies, medical gowns and apparel, face masks, surgical masks, face shields, gloves, shoe coverings, and the equipment identified by or otherwise necessary to comply with Section 5199 of Title 8 of the California Code of Regulations.(7) Provider means a licensed clinic, as described in Chapter 1 (commencing with Section 1200), an outpatient setting, as described in Chapter 1.3 (commencing with Section 1248) of, a health facility as described in Chapter 2 (commencing with Section 1250) of, or a county medical facility, as described in Chapter 2.5 (commencing with Section 1440) of, Division 2, a home health agency, a physicians office, a professional medical corporation, a medical partnership, a medical foundation, a rural health clinic, as defined in Section 1395x(aa)(2) of Title 42 of the United States Code, or a federally qualified health center, as defined in Section 1395x(aa)(4) of Title 42 of the United States Code, and any other entity that provides medical services in California.(8) Stockpile means the personal protective equipment stockpile created pursuant to subdivision (c).(c) Within one year of the effective date of this section, the department and office, in coordination with other state agencies, shall establish a PPE stockpile, upon appropriation and as necessary.(d) The department shall also establish guidelines for procurement, management, and distribution of PPE from the department. The department and office shall consider the recommendations of the Personal Protective Equipment Advisory Committee created pursuant to subdivision (f) in developing these guidelines. At a minimum, the guidelines shall take into account all of the following:(1) The various types of PPE that may be required during a pandemic or other health emergency, including, but not limited to, wildfire smoke events.(2) The shelf life of each type of PPE that may be obtained from the department and how to restock a portion of each type of PPE to ensure the procurements consist of unexpired PPE.(3) The amount of each type of PPE that would be required for all health care workers and essential workers in the state during a 90-day pandemic or other health emergency, including, but not limited to, wildfire smoke events.(4) Lessons learned from previous pandemics and state emergencies, including, but not limited to, supply procurement, management, and distribution.(5) Guidance on how to define essential workers based upon different hazards.(6) Geographical distribution of PPE storage.(7) Guidance on how to establish policies and standards for PPE surge capacity to ensure that workers have access to an adequate supply of PPE during a pandemic or other health emergency, including, but not limited to, wildfire smoke events.(8) The policies and funding that would be required for the state to establish a PPE stockpile.(9) How distribution from any procurement shall be prioritized in the event that there is insufficient PPE to meet the needs of providers or employers of essential workers, including consideration of the following:(A) The provider or employer is in a location with a high share of low-income residents.(B) The provider or employer is in a medically underserved area, as designated by the United States Department of Health and Human Services, Health Resources and Services Administration.(C) The provider or employer disproportionately serves a medically underserved population, as designated by the United States Department of Health and Human Services, Health Resources and Services Administration.(D) The provider or employer is in a county with a high infection rate or high hospitalization rate related to the declared emergency.(e) The development of the guidelines shall be informed by the recommendations of the Personal Protective Equipment Advisory Committee pursuant to subdivision (f). The guidelines shall not establish policies or standards that are less protective or prescriptive than any federal, state, or local law on PPE standards.(f) The Personal Protective Equipment Advisory Committee is hereby established. The advisory committee shall consist of the following:(1) One representative of an association representing multiple types of hospitals and health systems.(2) One representative of an association representing skilled nursing facilities.(3) One representative of an association representing primary care clinics.(4) One representative of a statewide association representing physicians.(5) Two representatives of labor organizations that represent health care workers.(6) Two representatives of labor organizations that represent nonagricultural essential workers, as defined by paragraph (4) of subdivision (b).(7) One representative of a labor organization that represents agricultural workers, as defined by paragraph (3) of subdivision (b).(8) One representative of an organization that represents agricultural employers.(9) One representative from the personal protective equipment manufacturing industry.(10) One consumer representative.(11) One representative from an association representing counties.(12) One representative from the State Department of Public Health.(13) One representative from the Office of Emergency Services.(14) One representative from the Emergency Medical Services Authority.(15) One representative from the State Department of Social Services.(g) The Director of the Office of Emergency Services State Public Health Officer or their designee shall appoint the representatives from paragraphs (1) through to (11), inclusive, of subdivision (f).(h) The Personal Protective Equipment Advisory Committee shall make recommendations to the office and department necessary to develop the guidelines required pursuant to subdivision (d).(i) Nothing in this section alters an employers duty to provide respirators as required by Section 5141.1 of Title 8 of the California Code of Regulations.(j) The department shall report to the Legislature, within six months of the effective date of the amendments to this section made by the act adding this subdivision, with regard to the amount of PPE in the stockpile, the amount of PPE from the stockpile that has been used, and the amount of anticipated future usage. The report shall be made pursuant to Section 9795 of the Government Code. |
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| 28 | | - | Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services, including federally qualified health center (FQHC) services as described by federal law. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.This bill would require each FQHC to have an annual mission spend ratio, as defined, of no less than 90% and would provide a methodology for calculation of that ratio, as specified, until the State Department of Public Health (department) has adopted a methodology for this purpose. The bill would require the department to adopt that methodology, as specified, sufficient for implementation by January 1, 2027. By June 30, 2026, and annually thereafter by June 30, the bill would require each FQHC or its parent corporation to report to the department total revenues collected in a form to be determined by the department. The bill would require each report to include, among other things, the FQHC or parent corporations filed Internal Revenue Service (IRS) Form 990, 990-PF, 990-EZ, or 1120, from the most recent taxable year, as specified. The bill would require each FQHC to submit an annual registration fee in an amount to be determined by the department and adjusted as necessary to fund these provisions. The bill would require the department to calculate and prepare a report of each FQHCs mission spend ratio no later than 90 days after the deadline for receipt of each FQHCs submission, and transmit the report to the State Department of Health Care Services. The bill would require the department to conduct an audit of the financial information reported by FQHCs every 3 years, in a manner and form prescribed by the department, as specified.This bill would prescribe various fines for failure of an FQHC to comply with the above-described reporting and mission spend ratio requirements, including an administrative fine imposed by the department of $5,000 for a first violation and $10,000 for each subsequent month that an FQHC fails to submit an annual report. The bill would require those penalties to be deposited into the Mission Spend Ratio Penalty Account, which is subject to appropriation by the Legislature, within the Special Deposit Fund. If an FQHC disputes a determination or assessment, the bill would require the FQHC to simultaneously submit a request for appeal to both the department and the State Department of Health Care Services within 30 days of the FQHCs receipt of the determination or assessment, as specified. The bill would require the department to submit, among other things, its responsive arguments to the FQHC and the State Department of Health Care Services within 30 days of the departments receipt of the FQHCs request for appeal. The bill would require the State Department of Health Care Services to hear a timely appeal and issue a decision, as prescribed.This bill would authorize an FQHC to apply to the department for a waiver, for a term of one year from the date of issuance, to provide a temporary pause of the above-described reporting and mission spend ratio requirements or for an alternative mission spend ratio requirement on the basis of unexpected or exceptional circumstances or the FQHCs economic condition. The bill would prescribe various types of information to be reported by an FQHC to obtain a waiver. The bill would authorize an FQHC to apply to renew a waiver at any time no fewer than 180 days before the expiration of the existing waiver.This bill would exempt an FQHC participating in a bona fide labor-management cooperation committee from the above-described requirements. The bill would require the department to adopt all regulations necessary to implement these provisions and would authorize the department to implement, interpret, or make specific these provisions, in whole or in part, by means of information notices, all-county letters, or other similar instructions without taking regulatory action. The bill would define various terms for purposes of these provisions.Existing law establishes the State Department of Public Health (department) to implement various programs throughout the state relating to public health and requires the department and the Office of Emergency Services, in coordination with other state agencies, to establish a personal protective equipment stockpile. Existing law also establishes the Personal Protective Equipment Advisory Committee (committee), consisting of representatives of various industries, as prescribed, to make recommendations to the department for the development of guidelines for the procurement, management, and distribution of PPE, as specified. Existing law requires the Director of Emergency Services to appoint the representatives that make up the committee.This bill would instead require the State Public Health Officer to appoint representatives to the committee. |
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| 30 | | - | Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services, including federally qualified health center (FQHC) services as described by federal law. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. |
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| 31 | | - | |
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| 32 | | - | This bill would require each FQHC to have an annual mission spend ratio, as defined, of no less than 90% and would provide a methodology for calculation of that ratio, as specified, until the State Department of Public Health (department) has adopted a methodology for this purpose. The bill would require the department to adopt that methodology, as specified, sufficient for implementation by January 1, 2027. By June 30, 2026, and annually thereafter by June 30, the bill would require each FQHC or its parent corporation to report to the department total revenues collected in a form to be determined by the department. The bill would require each report to include, among other things, the FQHC or parent corporations filed Internal Revenue Service (IRS) Form 990, 990-PF, 990-EZ, or 1120, from the most recent taxable year, as specified. The bill would require each FQHC to submit an annual registration fee in an amount to be determined by the department and adjusted as necessary to fund these provisions. The bill would require the department to calculate and prepare a report of each FQHCs mission spend ratio no later than 90 days after the deadline for receipt of each FQHCs submission, and transmit the report to the State Department of Health Care Services. The bill would require the department to conduct an audit of the financial information reported by FQHCs every 3 years, in a manner and form prescribed by the department, as specified. |
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| 33 | | - | |
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| 34 | | - | This bill would prescribe various fines for failure of an FQHC to comply with the above-described reporting and mission spend ratio requirements, including an administrative fine imposed by the department of $5,000 for a first violation and $10,000 for each subsequent month that an FQHC fails to submit an annual report. The bill would require those penalties to be deposited into the Mission Spend Ratio Penalty Account, which is subject to appropriation by the Legislature, within the Special Deposit Fund. If an FQHC disputes a determination or assessment, the bill would require the FQHC to simultaneously submit a request for appeal to both the department and the State Department of Health Care Services within 30 days of the FQHCs receipt of the determination or assessment, as specified. The bill would require the department to submit, among other things, its responsive arguments to the FQHC and the State Department of Health Care Services within 30 days of the departments receipt of the FQHCs request for appeal. The bill would require the State Department of Health Care Services to hear a timely appeal and issue a decision, as prescribed. |
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| 35 | | - | |
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| 36 | | - | This bill would authorize an FQHC to apply to the department for a waiver, for a term of one year from the date of issuance, to provide a temporary pause of the above-described reporting and mission spend ratio requirements or for an alternative mission spend ratio requirement on the basis of unexpected or exceptional circumstances or the FQHCs economic condition. The bill would prescribe various types of information to be reported by an FQHC to obtain a waiver. The bill would authorize an FQHC to apply to renew a waiver at any time no fewer than 180 days before the expiration of the existing waiver. |
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| 38 | | - | This bill would exempt an FQHC participating in a bona fide labor-management cooperation committee from the above-described requirements. The bill would require the department to adopt all regulations necessary to implement these provisions and would authorize the department to implement, interpret, or make specific these provisions, in whole or in part, by means of information notices, all-county letters, or other similar instructions without taking regulatory action. The bill would define various terms for purposes of these provisions. |
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| 28 | + | Existing law establishes the State Department of Public Health (department) to implement various programs throughout the state relating to public health and requires the department and the Office of Emergency Services, in coordination with other state agencies, to establish a personal protective equipment stockpile. Existing law also establishes the Personal Protective Equipment Advisory Committee (committee), consisting of representatives of various industries, as prescribed, to make recommendations to the department for the development of guidelines for the procurement, management, and distribution of PPE, as specified. Existing law requires the Director of Emergency Services to appoint the representatives that make up the committee.This bill would instead require the State Public Health Officer to appoint representatives to the committee. |
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| 52 | | - | The people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all of the following:(a) Federally qualified health centers (FQHCs) are fundamental to the California health care safety net, as their mission is to provide primary and preventive care to low-income and underserved populations.(b) It is the intent of the Legislature to ensure that an appropriate proportion of each FQHCs revenue is spent on program services expenses directly related to the FQHCs mission to provide essential primary and preventive care to low-income and underserved populations.(c) (1) The Legislature recognizes the critical intersection between workforce development and delivery of high-quality care, and further recognizes that an FQHCs participation in a statewide, multiemployer bona fide labor-management cooperation committee (LMCC) reflects institutional commitment to seeking partnerships and leveraging funding opportunities to achieve these twin objectives.(2) Bona fide LMCCs are a specific form of labor-management partnership which in general have been shown to promote cost savings as well as improve staff retention and patient care. The intent of this legislation is to support these same goals for FQHCs that are not part of LMCCs by directing a greater share of spending towards FQHCs mission to provide quality care to vulnerable populations.(d) It is the intent of this legislation to create a reasonable minimum standard of mission-directed spending as a proportion of revenue (mission spend ratio) to ensure FQHC patient service delivery is prioritized over management and overhead spending, while still allowing an FQHC to maintain ongoing, sound financial footing. It is the intent of the Legislature to apply the mission spend ratio to all FQHCs except those participating in a bona fide LMCC.SEC. 2. Article 4.15 (commencing with Section 14138.35) is added to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code, to read: Article 4.15. Federally Qualified Health Center Mission Spend Ratio14138.35. For purposes of this article, the following definitions apply:(a) Bona fide labor-management cooperation committee or bona fide LMCC means a statewide, multiemployer joint labor-management committee that is established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) and meets the following criteria:(1) The bona fide LMCC is not involved in the governance of an FQHC but exists to promote worker training, workforce expansion, and support for workers during training.(2) The bona fide LMCC has the following composition:(A) Fifty percent of the committee consists of representatives of organized labor unions that represent health center workers in the state.(B) Fifty percent of the committee consists of representatives of FQHCs located in the state.(3) The membership of the bona fide LMCC includes one or more labor organizations that are certified or recognized as the exclusive bargaining representative of applicable workers at FQHCs in the state.(b) Department means the State Department of Public Health.(c) Federally qualified health center or FQHC means any community or public federally qualified health center as that term is defined in Section 1396d of Title 42 of the United States Code, including FQHC look-alikes.(d) FQHC look-alike means an organization that does not receive an FQHC award, but is designated by the federal Health Resources and Services Administration as meeting FQHC program requirements, as set forth in Sections 1395x(aa)(4)(B) and 1396d(l)(2)(B) of Title 42 of the United States Code. For purposes of this article, an FQHC look-alike is considered an FQHC and all references to FQHCs apply with equal force to FQHC look-alikes.(e) (1) Mission-directed expenses means expenses associated with activities that further an FQHCs patient services mission and for which the FQHC was created to conduct.(2) Mission-directed expenses shall include all of the following:(A) The total compensation for all staff employed by the FQHC, including salaries, wages, and employee benefits, but excluding all compensation for executive and administrative officers and employees. Employee benefits shall include payroll benefits, paid time off, health insurance, life insurance, pension and retirement, and workers compensation insurance.(B) The cost of consumable supplies that are used to provide patient care.(C) Outside patient care services, which shall be expenses associated with patient care services purchased under contract from any entity, including a hospital, laboratory, or physician group.(D) Professional liability insurance.(E) Continuing education, which shall be the total cost of providing continuing education classes for health care professionals.(F) Capital expenditures that directly relate to patient care services, including rent, mortgage interest, depreciation, property taxes, property insurance, utilities, and other capital expenditures determined by the department.(3) Mission-directed expenses shall not include any of the following:(A) Administrative costs, including compensation paid to management and executive officers and employees, all costs to management companies, administrative service companies, home office expenses for parent companies and holding companies, legal expenses, trade association fees and dues, insurance costs, licensing fees, and all administrative costs and profits paid to contractors or related party entities for staffing services, ancillary services, support services, or other services.(B) Capital expenditures that relate to administrative, overall operations or management purposes, including rent, mortgage interest, depreciation, property taxes, property insurance, utilities, and other capital expenditures determined by the department.(C) Profits, including net income and any profit paid to related parties on leases and property, and any profits paid to management companies.(f) Mission spend ratio means the percent of an FQHCs total revenue from all payer sources in a calendar year expended on mission-directed expenses.(g) Related party means an organization related to the FQHC or that is under common ownership or control, as those terms are defined in Section 413.17(b) of Title 42 of the Code of Federal Regulations. A related party may include a management organization, owners of real estate, entities that provide staffing, any parent companies, holding companies, sister organizations, and others.14138.36. (a) Each FQHC shall have an annual mission spend ratio of no less than 90 percent.(1) Until the department has adopted a methodology for this purpose pursuant to paragraph (3), an FQHCs total revenue from all payer sources means the FQHCs total revenue for the calendar year, calculated consistent with Line 12 of Part I of Internal Revenue Service IRS Form 990, as set out in the form and instructions applicable to the 2024 taxable year.(2) Until the department has adopted a methodology for this purpose pursuant to paragraph (3), for the calculation of the mission spend ratio of each FQHC in the 2026 calendar year, mission-directed expenses shall be the total program service expenses reported under Line 25 of Column B of Part IX of IRS Form 990, as set out in the form and instructions applicable to the 2024 taxable year.(3) For the calculation of the mission spend ratio of each FQHC in the 2027 calendar year and all subsequent years, the department shall adopt a methodology to determine the expenses associated with activities that further an FQHCs patient services mission, consistent with this section. If the department has not adopted a methodology pursuant to this paragraph sufficient for implementation by January 1, 2027, then the methodology set forth in paragraph (2) shall continue to be used until the department has adopted a methodology pursuant to this paragraph.(b) By June 30, 2026, and annually thereafter by June 30, each FQHC or its parent corporation shall report total revenues collected from all revenue sources, along with the portion of revenues that are expended on all mission-directed expenses, to the department in a form to be determined by the department. Each report shall include, at a minimum:(1) The FQHC or parent corporations filed IRS Form 990, 990-PF, 990-EZ, or 1120, from the most recent taxable year, with all attachments and schedules as applicable, in the same form as filed with the IRS, along with a list identifying which FQHCs activities are included in the information on the IRS form.(2) A copy of the annual report filed for each FQHC with the Department of Health Care Access and Information pursuant to Section 1216 of the Health and Safety Code.(3) A certification signed by a duly authorized official of the FQHC or its parent corporation that certifies that, to the best of the officials knowledge and information, each statement and amount in the accompanying report is believed to be true and correct.(4) For any FQHC that is required to prepare an annual financial statement pursuant to Section 12586 of the Government Code, certification from an independent certified public accountant that the report submitted has been audited in conformity with generally accepted auditing standards.(c) Each FQHC shall submit an annual registration fee in an amount to be determined by the department and adjusted as necessary to fund the activities set forth in this article.(d) (1) No later than 90 days after the deadline for receipt of each FQHCs submission, the department shall calculate the mission spend ratio for each FQHC and prepare a report of the mission spend ratios of every FQHC. The department shall transmit the report to the subunit of the State Department of Health Care Services responsible for conducting Change in Scope-of-Service Request (CSOSR) audits.(2) The department shall publish the report of the mission spend ratios of every FQHC on its internet website.(e) The department shall conduct an audit of the financial information reported by FQHCs pursuant to this section every three years, in a manner and form prescribed by the department, to ensure the accuracy of the information reported and compliance with the requirements of this section. These audits may also include any audits of contractors or related party entities.(f) Notwithstanding any other provision to the contrary, the requirements of this section shall not apply to any FQHC participating in a bona fide LMCC.14138.37. (a) There is hereby continued in the Special Deposit Fund, established pursuant to Section 16370 of the Government Code, the Mission Spend Ratio Penalty Account, which shall be subject to appropriation by the Legislature. The account shall contain all moneys deposited pursuant to subdivisions (b) and (c).(b) The department shall impose sanctions for the failure to comply with the reporting provisions set forth in Section 14138.36, in the form of an administrative fine of five thousand dollars ($5,000) for a first violation and ten thousand dollars ($10,000) for each subsequent month that an FQHC fails to submit the annual reports required by that section.(c) (1) If the department determines that an FQHC has not met the required mission spend ratio for any reporting year, the department shall assess an administrative penalty equal to the difference between the amount of the FQHC spent on mission-directed expenses and 90 percent of the FQHCs total revenue that year.(2) Any penalties paid pursuant to this subdivision shall not be considered mission-directed expenses for the calculation of the FQHCs mission spend ratio in the year the penalty was incurred.(3) If the FQHC does not dispute the determination or assessment, the penalties shall be paid in full to the department within 30 days of receipt of a notice of penalty and deposited into the Mission Spend Ratio Penalty Account.(4) (A) If the FQHC disputes the determination or assessment made pursuant to this subdivision, the FQHC shall, within 30 days of the FQHCs receipt of the determination or assessment, simultaneously submit a request for appeal to both the department and the State Department of Health Care Services. The request shall include a detailed statement describing the reason for appeal and include all supporting documents the FQHC will present at the hearing.(B) Within 30 days of the departments receipt of the FQHCs request for appeal, the department shall submit, to both the FQHC and the State Department of Health Care Services, its responsive arguments and all supporting documents that the department will present at the hearing.(C) The State Department of Health Care Services shall hear a timely appeal and issue a decision as follows:(i) The hearing shall commence within 60 days from the date of receipt by the State Department of Health Care Services of the FQHCs timely request for appeal.(ii) The State Department of Health Care Services shall issue a decision within 120 days from the date of receipt by the State Department of Health Care Services of the FQHCs timely request for appeal.(iii) The decision of the State Department of Health Care Services hearing officer, when issued, shall be the final decision of the State Department of Public Health.(D) The appeals process set forth in this paragraph shall be exempt from Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500), of Part 1 of Division 3 of Title 2 of the Government Code. The provisions of Sections 100171 and 131071 of the Health and Safety Code do not apply to appeals under this paragraph.(d) (1) An FQHC may apply to the department for a waiver providing a temporary pause of the requirements of Section 14138.36 or for an alternative mission spend ratio requirement to that set forth in subdivision (a) of Section 14138.36, on the basis of unexpected or exceptional circumstances or the FQHCs economic condition. The issuance and terms of the waiver pursuant to this subdivision shall be solely and exclusively within the authority of the department. A waiver issued pursuant to this subdivision shall be for a term of one year from the date of issuance.(2) To obtain a waiver based on unexpected or exceptional circumstances, an FQHC shall detail the following circumstances experienced by the FQHC:(A) When the FQHC first learned of the unexpected or exceptional circumstances.(B) Why the FQHC could not have anticipated those circumstances arising.(C) Actions the FQHC took to address those circumstances.(D) Expenses incurred as a result of addressing those circumstances.(E) When the FQHC expects those circumstances to be resolved.(F) Preventive steps the FQHC is taking to ensure that those circumstances do not unexpectedly arise in the future.(3) To obtain a waiver based on economic condition, an FQHC shall demonstrate that compliance with Section 14138.36 would raise doubts about the FQHCs ability to continue as a going concern under generally accepted accounting principles. The evidence shall include documentation of the FQHCs financial condition, the financial condition of any parent or affiliated entity, and evidence of the actual or potential direct financial impact of compliance with Section 14138.36.(4) Consideration of an FQHCs ability to continue as a going concern shall include the following factors regarding the FQHC or any affiliated entity:(A) Actual or likely closure of the FQHC or any affiliated entity.(B) Actual or likely closure of patient services or programs.(C) Actual or likely loss of jobs.(D) Whether the FQHC is small, rural, frontier, or serves a rural catchment area.(E) Whether closure of the FQHC would significantly impact access to services in the region or service area.(F) Whether the FQHC is in financial distress that results or is likely to result in the closure of the FQHC or any affiliated entity, closure of patient services or programs, or loss of jobs. Factors to consider in determining financial distress include, but are not limited to, the FQHCs prior and projected performance on financial metrics, including the amount of cash on hand, and whether the FQHC has, or is projected to experience, negative operating margins.(5) Requests for a waiver pursuant to this subdivision shall be submitted in writing to the department.(6) The department shall notify the FQHC of the decision on the waiver request in writing.(7) An FQHC may apply to renew a waiver issued pursuant to this subdivision at any time no fewer than 180 days before the expiration of the existing waiver.(e) This section shall not apply to any FQHC participating in a bona fide LMCC.14138.38. The department shall adopt all regulations necessary to implement this article. Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this article, in whole or in part, by means of information notices, all-county letters, or other similar instructions without taking regulatory action.SEC. 3. The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.SECTION 1.Section 131021 of the Health and Safety Code is amended to read:131021.(a)The Legislature finds that having access to a statewide stockpile of personal protective equipment in the event of a pandemic, wildfire smoke event, or other health emergency is vital to the health and safety of its health care and essential workers, as well as the general population, which both relies on this workforce and is susceptible to disease transmission should members of this workforce needlessly be infected with transmissible disease.(b)The following definitions apply for purposes of this section:(1)Department means the State Department of Public Health.(2)Office means the Office of Emergency Services.(3)Agricultural worker means a person employed in any of the following:(A)An agricultural occupation, as defined in Wage Order No. 14 of the Industrial Welfare Commission.(B)An industry preparing agricultural products for the market, on the farm, as defined in Wage Order No. 13 of the Industrial Welfare Commission.(C)An industry handling products after harvest, as defined in Wage Order No. 8 of the Industrial Welfare Commission.(4)Essential workers means primary and secondary school workers, workers at detention facilities, as defined in Section 9500 of the Penal Code, in-home support providers, childcare providers, government workers whose work with the public continues throughout the crisis, and workers in other positions that the State Public Health Officer or the Director of Emergency Services deems vital to public health and safety, as well as economic and national security, including, but not limited to, agricultural workers.(5)Health care worker means any worker who provides direct patient care and services directly supporting patient care, including, but not limited, to physicians, pharmacists, clinicians, nurses, aides, technicians, janitorial and housekeeping staff, food services workers, and nonmanagerial administrative staff.(6)Personal protective equipment or PPE means protective equipment for eyes, face, head, and extremities, protective clothing, respiratory devices, and protective shields and barriers, including, but not limited to, N95 and other filtering facepiece respirators, elastomeric air-purifying respirators with appropriate particulate filters or cartridges, powered air purifying respirators, disinfecting and sterilizing devices and supplies, medical gowns and apparel, face masks, surgical masks, face shields, gloves, shoe coverings, and the equipment identified by or otherwise necessary to comply with Section 5199 of Title 8 of the California Code of Regulations.(7)Provider means a licensed clinic, as described in Chapter 1 (commencing with Section 1200), an outpatient setting, as described in Chapter 1.3 (commencing with Section 1248) of, a health facility as described in Chapter 2 (commencing with Section 1250) of, or a county medical facility, as described in Chapter 2.5 (commencing with Section 1440) of, Division 2, a home health agency, a physicians office, a professional medical corporation, a medical partnership, a medical foundation, a rural health clinic, as defined in Section 1395x(aa)(2) of Title 42 of the United States Code, or a federally qualified health center, as defined in Section 1395x(aa)(4) of Title 42 of the United States Code, and any other entity that provides medical services in California.(8)Stockpile means the personal protective equipment stockpile created pursuant to subdivision (c).(c)Within one year of the effective date of this section, the department and office, in coordination with other state agencies, shall establish a PPE stockpile, upon appropriation and as necessary.(d) The department shall also establish guidelines for procurement, management, and distribution of PPE from the department. The department and office shall consider the recommendations of the Personal Protective Equipment Advisory Committee created pursuant to subdivision (f) in developing these guidelines. At a minimum, the guidelines shall take into account all of the following:(1)The various types of PPE that may be required during a pandemic or other health emergency, including, but not limited to, wildfire smoke events.(2)The shelf life of each type of PPE that may be obtained from the department and how to restock a portion of each type of PPE to ensure the procurements consist of unexpired PPE.(3)The amount of each type of PPE that would be required for all health care workers and essential workers in the state during a 90-day pandemic or other health emergency, including, but not limited to, wildfire smoke events.(4)Lessons learned from previous pandemics and state emergencies, including, but not limited to, supply procurement, management, and distribution.(5)Guidance on how to define essential workers based upon different hazards.(6)Geographical distribution of PPE storage.(7)Guidance on how to establish policies and standards for PPE surge capacity to ensure that workers have access to an adequate supply of PPE during a pandemic or other health emergency, including, but not limited to, wildfire smoke events.(8)The policies and funding that would be required for the state to establish a PPE stockpile.(9)How distribution from any procurement shall be prioritized in the event that there is insufficient PPE to meet the needs of providers or employers of essential workers, including consideration of the following:(A)The provider or employer is in a location with a high share of low-income residents.(B)The provider or employer is in a medically underserved area, as designated by the United States Department of Health and Human Services, Health Resources and Services Administration.(C)The provider or employer disproportionately serves a medically underserved population, as designated by the United States Department of Health and Human Services, Health Resources and Services Administration.(D)The provider or employer is in a county with a high infection rate or high hospitalization rate related to the declared emergency.(e)The development of the guidelines shall be informed by the recommendations of the Personal Protective Equipment Advisory Committee pursuant to subdivision (f). The guidelines shall not establish policies or standards that are less protective or prescriptive than any federal, state, or local law on PPE standards.(f)The Personal Protective Equipment Advisory Committee is hereby established. The advisory committee shall consist of the following:(1)One representative of an association representing multiple types of hospitals and health systems.(2)One representative of an association representing skilled nursing facilities.(3)One representative of an association representing primary care clinics.(4)One representative of a statewide association representing physicians.(5)Two representatives of labor organizations that represent health care workers.(6)Two representatives of labor organizations that represent nonagricultural essential workers, as defined by paragraph (4) of subdivision (b).(7)One representative of a labor organization that represents agricultural workers, as defined by paragraph (3) of subdivision (b).(8)One representative of an organization that represents agricultural employers.(9)One representative from the personal protective equipment manufacturing industry.(10)One consumer representative.(11)One representative from an association representing counties.(12)One representative from the State Department of Public Health.(13)One representative from the Office of Emergency Services.(14)One representative from the Emergency Medical Services Authority.(15)One representative from the State Department of Social Services.(g)The State Public Health Officer or their designee shall appoint the representatives from paragraphs (1) to (11), inclusive, of subdivision (f).(h)The Personal Protective Equipment Advisory Committee shall make recommendations to the office and department necessary to develop the guidelines required pursuant to subdivision (d).(i)Nothing in this section alters an employers duty to provide respirators as required by Section 5141.1 of Title 8 of the California Code of Regulations.(j)The department shall report to the Legislature, within six months of the effective date of the amendments to this section made by the act adding this subdivision, with regard to the amount of PPE in the stockpile, the amount of PPE from the stockpile that has been used, and the amount of anticipated future usage. The report shall be made pursuant to Section 9795 of the Government Code. |
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| 38 | + | The people of the State of California do enact as follows:SECTION 1. Section 131021 of the Health and Safety Code is amended to read:131021. (a) The Legislature finds that having access to a statewide stockpile of personal protective equipment in the event of a pandemic, wildfire smoke event, or other health emergency is vital to the health and safety of its health care and essential workers, as well as the general population, which both relies on this workforce and is susceptible to disease transmission should members of this workforce needlessly be infected with transmissible disease.(b) The following definitions apply for purposes of this section:(1) Department means the State Department of Public Health.(2) Office means the Office of Emergency Services.(3) Agricultural worker means a person employed in any of the following:(A) An agricultural occupation, as defined in Wage Order No. 14 of the Industrial Welfare Commission.(B) An industry preparing agricultural products for the market, on the farm, as defined in Wage Order No. 13 of the Industrial Welfare Commission.(C) An industry handling products after harvest, as defined in Wage Order No. 8 of the Industrial Welfare Commission.(4) Essential workers means primary and secondary school workers, workers at detention facilities, as defined in Section 9500 of the Penal Code, in-home support providers, childcare providers, government workers whose work with the public continues throughout the crisis, and workers in other positions that the State Public Health Officer or the Director of the Office of Emergency Services deems vital to public health and safety, as well as economic and national security, including, but not limited to, agricultural workers.(5) Health care worker means any worker who provides direct patient care and services directly supporting patient care, including, but not limited, to physicians, pharmacists, clinicians, nurses, aides, technicians, janitorial and housekeeping staff, food services workers, and nonmanagerial administrative staff.(6) Personal protective equipment or PPE means protective equipment for eyes, face, head, and extremities, protective clothing, respiratory devices, and protective shields and barriers, including, but not limited to, N95 and other filtering facepiece respirators, elastomeric air-purifying respirators with appropriate particulate filters or cartridges, powered air purifying respirators, disinfecting and sterilizing devices and supplies, medical gowns and apparel, face masks, surgical masks, face shields, gloves, shoe coverings, and the equipment identified by or otherwise necessary to comply with Section 5199 of Title 8 of the California Code of Regulations.(7) Provider means a licensed clinic, as described in Chapter 1 (commencing with Section 1200), an outpatient setting, as described in Chapter 1.3 (commencing with Section 1248) of, a health facility as described in Chapter 2 (commencing with Section 1250) of, or a county medical facility, as described in Chapter 2.5 (commencing with Section 1440) of, Division 2, a home health agency, a physicians office, a professional medical corporation, a medical partnership, a medical foundation, a rural health clinic, as defined in Section 1395x(aa)(2) of Title 42 of the United States Code, or a federally qualified health center, as defined in Section 1395x(aa)(4) of Title 42 of the United States Code, and any other entity that provides medical services in California.(8) Stockpile means the personal protective equipment stockpile created pursuant to subdivision (c).(c) Within one year of the effective date of this section, the department and office, in coordination with other state agencies, shall establish a PPE stockpile, upon appropriation and as necessary.(d) The department shall also establish guidelines for procurement, management, and distribution of PPE from the department. The department and office shall consider the recommendations of the Personal Protective Equipment Advisory Committee created pursuant to subdivision (f) in developing these guidelines. At a minimum, the guidelines shall take into account all of the following:(1) The various types of PPE that may be required during a pandemic or other health emergency, including, but not limited to, wildfire smoke events.(2) The shelf life of each type of PPE that may be obtained from the department and how to restock a portion of each type of PPE to ensure the procurements consist of unexpired PPE.(3) The amount of each type of PPE that would be required for all health care workers and essential workers in the state during a 90-day pandemic or other health emergency, including, but not limited to, wildfire smoke events.(4) Lessons learned from previous pandemics and state emergencies, including, but not limited to, supply procurement, management, and distribution.(5) Guidance on how to define essential workers based upon different hazards.(6) Geographical distribution of PPE storage.(7) Guidance on how to establish policies and standards for PPE surge capacity to ensure that workers have access to an adequate supply of PPE during a pandemic or other health emergency, including, but not limited to, wildfire smoke events.(8) The policies and funding that would be required for the state to establish a PPE stockpile.(9) How distribution from any procurement shall be prioritized in the event that there is insufficient PPE to meet the needs of providers or employers of essential workers, including consideration of the following:(A) The provider or employer is in a location with a high share of low-income residents.(B) The provider or employer is in a medically underserved area, as designated by the United States Department of Health and Human Services, Health Resources and Services Administration.(C) The provider or employer disproportionately serves a medically underserved population, as designated by the United States Department of Health and Human Services, Health Resources and Services Administration.(D) The provider or employer is in a county with a high infection rate or high hospitalization rate related to the declared emergency.(e) The development of the guidelines shall be informed by the recommendations of the Personal Protective Equipment Advisory Committee pursuant to subdivision (f). The guidelines shall not establish policies or standards that are less protective or prescriptive than any federal, state, or local law on PPE standards.(f) The Personal Protective Equipment Advisory Committee is hereby established. The advisory committee shall consist of the following:(1) One representative of an association representing multiple types of hospitals and health systems.(2) One representative of an association representing skilled nursing facilities.(3) One representative of an association representing primary care clinics.(4) One representative of a statewide association representing physicians.(5) Two representatives of labor organizations that represent health care workers.(6) Two representatives of labor organizations that represent nonagricultural essential workers, as defined by paragraph (4) of subdivision (b).(7) One representative of a labor organization that represents agricultural workers, as defined by paragraph (3) of subdivision (b).(8) One representative of an organization that represents agricultural employers.(9) One representative from the personal protective equipment manufacturing industry.(10) One consumer representative.(11) One representative from an association representing counties.(12) One representative from the State Department of Public Health.(13) One representative from the Office of Emergency Services.(14) One representative from the Emergency Medical Services Authority.(15) One representative from the State Department of Social Services.(g) The Director of the Office of Emergency Services State Public Health Officer or their designee shall appoint the representatives from paragraphs (1) through to (11), inclusive, of subdivision (f).(h) The Personal Protective Equipment Advisory Committee shall make recommendations to the office and department necessary to develop the guidelines required pursuant to subdivision (d).(i) Nothing in this section alters an employers duty to provide respirators as required by Section 5141.1 of Title 8 of the California Code of Regulations.(j) The department shall report to the Legislature, within six months of the effective date of the amendments to this section made by the act adding this subdivision, with regard to the amount of PPE in the stockpile, the amount of PPE from the stockpile that has been used, and the amount of anticipated future usage. The report shall be made pursuant to Section 9795 of the Government Code. |
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| 70 | | - | (c) (1) The Legislature recognizes the critical intersection between workforce development and delivery of high-quality care, and further recognizes that an FQHCs participation in a statewide, multiemployer bona fide labor-management cooperation committee (LMCC) reflects institutional commitment to seeking partnerships and leveraging funding opportunities to achieve these twin objectives. |
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| 71 | | - | |
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| 72 | | - | (2) Bona fide LMCCs are a specific form of labor-management partnership which in general have been shown to promote cost savings as well as improve staff retention and patient care. The intent of this legislation is to support these same goals for FQHCs that are not part of LMCCs by directing a greater share of spending towards FQHCs mission to provide quality care to vulnerable populations. |
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| 73 | | - | |
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| 74 | | - | (d) It is the intent of this legislation to create a reasonable minimum standard of mission-directed spending as a proportion of revenue (mission spend ratio) to ensure FQHC patient service delivery is prioritized over management and overhead spending, while still allowing an FQHC to maintain ongoing, sound financial footing. It is the intent of the Legislature to apply the mission spend ratio to all FQHCs except those participating in a bona fide LMCC. |
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| 75 | | - | |
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| 76 | | - | SEC. 2. Article 4.15 (commencing with Section 14138.35) is added to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code, to read: Article 4.15. Federally Qualified Health Center Mission Spend Ratio14138.35. For purposes of this article, the following definitions apply:(a) Bona fide labor-management cooperation committee or bona fide LMCC means a statewide, multiemployer joint labor-management committee that is established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) and meets the following criteria:(1) The bona fide LMCC is not involved in the governance of an FQHC but exists to promote worker training, workforce expansion, and support for workers during training.(2) The bona fide LMCC has the following composition:(A) Fifty percent of the committee consists of representatives of organized labor unions that represent health center workers in the state.(B) Fifty percent of the committee consists of representatives of FQHCs located in the state.(3) The membership of the bona fide LMCC includes one or more labor organizations that are certified or recognized as the exclusive bargaining representative of applicable workers at FQHCs in the state.(b) Department means the State Department of Public Health.(c) Federally qualified health center or FQHC means any community or public federally qualified health center as that term is defined in Section 1396d of Title 42 of the United States Code, including FQHC look-alikes.(d) FQHC look-alike means an organization that does not receive an FQHC award, but is designated by the federal Health Resources and Services Administration as meeting FQHC program requirements, as set forth in Sections 1395x(aa)(4)(B) and 1396d(l)(2)(B) of Title 42 of the United States Code. For purposes of this article, an FQHC look-alike is considered an FQHC and all references to FQHCs apply with equal force to FQHC look-alikes.(e) (1) Mission-directed expenses means expenses associated with activities that further an FQHCs patient services mission and for which the FQHC was created to conduct.(2) Mission-directed expenses shall include all of the following:(A) The total compensation for all staff employed by the FQHC, including salaries, wages, and employee benefits, but excluding all compensation for executive and administrative officers and employees. Employee benefits shall include payroll benefits, paid time off, health insurance, life insurance, pension and retirement, and workers compensation insurance.(B) The cost of consumable supplies that are used to provide patient care.(C) Outside patient care services, which shall be expenses associated with patient care services purchased under contract from any entity, including a hospital, laboratory, or physician group.(D) Professional liability insurance.(E) Continuing education, which shall be the total cost of providing continuing education classes for health care professionals.(F) Capital expenditures that directly relate to patient care services, including rent, mortgage interest, depreciation, property taxes, property insurance, utilities, and other capital expenditures determined by the department.(3) Mission-directed expenses shall not include any of the following:(A) Administrative costs, including compensation paid to management and executive officers and employees, all costs to management companies, administrative service companies, home office expenses for parent companies and holding companies, legal expenses, trade association fees and dues, insurance costs, licensing fees, and all administrative costs and profits paid to contractors or related party entities for staffing services, ancillary services, support services, or other services.(B) Capital expenditures that relate to administrative, overall operations or management purposes, including rent, mortgage interest, depreciation, property taxes, property insurance, utilities, and other capital expenditures determined by the department.(C) Profits, including net income and any profit paid to related parties on leases and property, and any profits paid to management companies.(f) Mission spend ratio means the percent of an FQHCs total revenue from all payer sources in a calendar year expended on mission-directed expenses.(g) Related party means an organization related to the FQHC or that is under common ownership or control, as those terms are defined in Section 413.17(b) of Title 42 of the Code of Federal Regulations. A related party may include a management organization, owners of real estate, entities that provide staffing, any parent companies, holding companies, sister organizations, and others.14138.36. (a) Each FQHC shall have an annual mission spend ratio of no less than 90 percent.(1) Until the department has adopted a methodology for this purpose pursuant to paragraph (3), an FQHCs total revenue from all payer sources means the FQHCs total revenue for the calendar year, calculated consistent with Line 12 of Part I of Internal Revenue Service IRS Form 990, as set out in the form and instructions applicable to the 2024 taxable year.(2) Until the department has adopted a methodology for this purpose pursuant to paragraph (3), for the calculation of the mission spend ratio of each FQHC in the 2026 calendar year, mission-directed expenses shall be the total program service expenses reported under Line 25 of Column B of Part IX of IRS Form 990, as set out in the form and instructions applicable to the 2024 taxable year.(3) For the calculation of the mission spend ratio of each FQHC in the 2027 calendar year and all subsequent years, the department shall adopt a methodology to determine the expenses associated with activities that further an FQHCs patient services mission, consistent with this section. If the department has not adopted a methodology pursuant to this paragraph sufficient for implementation by January 1, 2027, then the methodology set forth in paragraph (2) shall continue to be used until the department has adopted a methodology pursuant to this paragraph.(b) By June 30, 2026, and annually thereafter by June 30, each FQHC or its parent corporation shall report total revenues collected from all revenue sources, along with the portion of revenues that are expended on all mission-directed expenses, to the department in a form to be determined by the department. Each report shall include, at a minimum:(1) The FQHC or parent corporations filed IRS Form 990, 990-PF, 990-EZ, or 1120, from the most recent taxable year, with all attachments and schedules as applicable, in the same form as filed with the IRS, along with a list identifying which FQHCs activities are included in the information on the IRS form.(2) A copy of the annual report filed for each FQHC with the Department of Health Care Access and Information pursuant to Section 1216 of the Health and Safety Code.(3) A certification signed by a duly authorized official of the FQHC or its parent corporation that certifies that, to the best of the officials knowledge and information, each statement and amount in the accompanying report is believed to be true and correct.(4) For any FQHC that is required to prepare an annual financial statement pursuant to Section 12586 of the Government Code, certification from an independent certified public accountant that the report submitted has been audited in conformity with generally accepted auditing standards.(c) Each FQHC shall submit an annual registration fee in an amount to be determined by the department and adjusted as necessary to fund the activities set forth in this article.(d) (1) No later than 90 days after the deadline for receipt of each FQHCs submission, the department shall calculate the mission spend ratio for each FQHC and prepare a report of the mission spend ratios of every FQHC. The department shall transmit the report to the subunit of the State Department of Health Care Services responsible for conducting Change in Scope-of-Service Request (CSOSR) audits.(2) The department shall publish the report of the mission spend ratios of every FQHC on its internet website.(e) The department shall conduct an audit of the financial information reported by FQHCs pursuant to this section every three years, in a manner and form prescribed by the department, to ensure the accuracy of the information reported and compliance with the requirements of this section. These audits may also include any audits of contractors or related party entities.(f) Notwithstanding any other provision to the contrary, the requirements of this section shall not apply to any FQHC participating in a bona fide LMCC.14138.37. (a) There is hereby continued in the Special Deposit Fund, established pursuant to Section 16370 of the Government Code, the Mission Spend Ratio Penalty Account, which shall be subject to appropriation by the Legislature. The account shall contain all moneys deposited pursuant to subdivisions (b) and (c).(b) The department shall impose sanctions for the failure to comply with the reporting provisions set forth in Section 14138.36, in the form of an administrative fine of five thousand dollars ($5,000) for a first violation and ten thousand dollars ($10,000) for each subsequent month that an FQHC fails to submit the annual reports required by that section.(c) (1) If the department determines that an FQHC has not met the required mission spend ratio for any reporting year, the department shall assess an administrative penalty equal to the difference between the amount of the FQHC spent on mission-directed expenses and 90 percent of the FQHCs total revenue that year.(2) Any penalties paid pursuant to this subdivision shall not be considered mission-directed expenses for the calculation of the FQHCs mission spend ratio in the year the penalty was incurred.(3) If the FQHC does not dispute the determination or assessment, the penalties shall be paid in full to the department within 30 days of receipt of a notice of penalty and deposited into the Mission Spend Ratio Penalty Account.(4) (A) If the FQHC disputes the determination or assessment made pursuant to this subdivision, the FQHC shall, within 30 days of the FQHCs receipt of the determination or assessment, simultaneously submit a request for appeal to both the department and the State Department of Health Care Services. The request shall include a detailed statement describing the reason for appeal and include all supporting documents the FQHC will present at the hearing.(B) Within 30 days of the departments receipt of the FQHCs request for appeal, the department shall submit, to both the FQHC and the State Department of Health Care Services, its responsive arguments and all supporting documents that the department will present at the hearing.(C) The State Department of Health Care Services shall hear a timely appeal and issue a decision as follows:(i) The hearing shall commence within 60 days from the date of receipt by the State Department of Health Care Services of the FQHCs timely request for appeal.(ii) The State Department of Health Care Services shall issue a decision within 120 days from the date of receipt by the State Department of Health Care Services of the FQHCs timely request for appeal.(iii) The decision of the State Department of Health Care Services hearing officer, when issued, shall be the final decision of the State Department of Public Health.(D) The appeals process set forth in this paragraph shall be exempt from Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500), of Part 1 of Division 3 of Title 2 of the Government Code. The provisions of Sections 100171 and 131071 of the Health and Safety Code do not apply to appeals under this paragraph.(d) (1) An FQHC may apply to the department for a waiver providing a temporary pause of the requirements of Section 14138.36 or for an alternative mission spend ratio requirement to that set forth in subdivision (a) of Section 14138.36, on the basis of unexpected or exceptional circumstances or the FQHCs economic condition. The issuance and terms of the waiver pursuant to this subdivision shall be solely and exclusively within the authority of the department. A waiver issued pursuant to this subdivision shall be for a term of one year from the date of issuance.(2) To obtain a waiver based on unexpected or exceptional circumstances, an FQHC shall detail the following circumstances experienced by the FQHC:(A) When the FQHC first learned of the unexpected or exceptional circumstances.(B) Why the FQHC could not have anticipated those circumstances arising.(C) Actions the FQHC took to address those circumstances.(D) Expenses incurred as a result of addressing those circumstances.(E) When the FQHC expects those circumstances to be resolved.(F) Preventive steps the FQHC is taking to ensure that those circumstances do not unexpectedly arise in the future.(3) To obtain a waiver based on economic condition, an FQHC shall demonstrate that compliance with Section 14138.36 would raise doubts about the FQHCs ability to continue as a going concern under generally accepted accounting principles. The evidence shall include documentation of the FQHCs financial condition, the financial condition of any parent or affiliated entity, and evidence of the actual or potential direct financial impact of compliance with Section 14138.36.(4) Consideration of an FQHCs ability to continue as a going concern shall include the following factors regarding the FQHC or any affiliated entity:(A) Actual or likely closure of the FQHC or any affiliated entity.(B) Actual or likely closure of patient services or programs.(C) Actual or likely loss of jobs.(D) Whether the FQHC is small, rural, frontier, or serves a rural catchment area.(E) Whether closure of the FQHC would significantly impact access to services in the region or service area.(F) Whether the FQHC is in financial distress that results or is likely to result in the closure of the FQHC or any affiliated entity, closure of patient services or programs, or loss of jobs. Factors to consider in determining financial distress include, but are not limited to, the FQHCs prior and projected performance on financial metrics, including the amount of cash on hand, and whether the FQHC has, or is projected to experience, negative operating margins.(5) Requests for a waiver pursuant to this subdivision shall be submitted in writing to the department.(6) The department shall notify the FQHC of the decision on the waiver request in writing.(7) An FQHC may apply to renew a waiver issued pursuant to this subdivision at any time no fewer than 180 days before the expiration of the existing waiver.(e) This section shall not apply to any FQHC participating in a bona fide LMCC.14138.38. The department shall adopt all regulations necessary to implement this article. Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this article, in whole or in part, by means of information notices, all-county letters, or other similar instructions without taking regulatory action. |
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| 77 | | - | |
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| 78 | | - | SEC. 2. Article 4.15 (commencing with Section 14138.35) is added to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code, to read: |
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| 79 | | - | |
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| 80 | | - | ### SEC. 2. |
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| 81 | | - | |
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| 82 | | - | Article 4.15. Federally Qualified Health Center Mission Spend Ratio14138.35. For purposes of this article, the following definitions apply:(a) Bona fide labor-management cooperation committee or bona fide LMCC means a statewide, multiemployer joint labor-management committee that is established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) and meets the following criteria:(1) The bona fide LMCC is not involved in the governance of an FQHC but exists to promote worker training, workforce expansion, and support for workers during training.(2) The bona fide LMCC has the following composition:(A) Fifty percent of the committee consists of representatives of organized labor unions that represent health center workers in the state.(B) Fifty percent of the committee consists of representatives of FQHCs located in the state.(3) The membership of the bona fide LMCC includes one or more labor organizations that are certified or recognized as the exclusive bargaining representative of applicable workers at FQHCs in the state.(b) Department means the State Department of Public Health.(c) Federally qualified health center or FQHC means any community or public federally qualified health center as that term is defined in Section 1396d of Title 42 of the United States Code, including FQHC look-alikes.(d) FQHC look-alike means an organization that does not receive an FQHC award, but is designated by the federal Health Resources and Services Administration as meeting FQHC program requirements, as set forth in Sections 1395x(aa)(4)(B) and 1396d(l)(2)(B) of Title 42 of the United States Code. For purposes of this article, an FQHC look-alike is considered an FQHC and all references to FQHCs apply with equal force to FQHC look-alikes.(e) (1) Mission-directed expenses means expenses associated with activities that further an FQHCs patient services mission and for which the FQHC was created to conduct.(2) Mission-directed expenses shall include all of the following:(A) The total compensation for all staff employed by the FQHC, including salaries, wages, and employee benefits, but excluding all compensation for executive and administrative officers and employees. Employee benefits shall include payroll benefits, paid time off, health insurance, life insurance, pension and retirement, and workers compensation insurance.(B) The cost of consumable supplies that are used to provide patient care.(C) Outside patient care services, which shall be expenses associated with patient care services purchased under contract from any entity, including a hospital, laboratory, or physician group.(D) Professional liability insurance.(E) Continuing education, which shall be the total cost of providing continuing education classes for health care professionals.(F) Capital expenditures that directly relate to patient care services, including rent, mortgage interest, depreciation, property taxes, property insurance, utilities, and other capital expenditures determined by the department.(3) Mission-directed expenses shall not include any of the following:(A) Administrative costs, including compensation paid to management and executive officers and employees, all costs to management companies, administrative service companies, home office expenses for parent companies and holding companies, legal expenses, trade association fees and dues, insurance costs, licensing fees, and all administrative costs and profits paid to contractors or related party entities for staffing services, ancillary services, support services, or other services.(B) Capital expenditures that relate to administrative, overall operations or management purposes, including rent, mortgage interest, depreciation, property taxes, property insurance, utilities, and other capital expenditures determined by the department.(C) Profits, including net income and any profit paid to related parties on leases and property, and any profits paid to management companies.(f) Mission spend ratio means the percent of an FQHCs total revenue from all payer sources in a calendar year expended on mission-directed expenses.(g) Related party means an organization related to the FQHC or that is under common ownership or control, as those terms are defined in Section 413.17(b) of Title 42 of the Code of Federal Regulations. A related party may include a management organization, owners of real estate, entities that provide staffing, any parent companies, holding companies, sister organizations, and others.14138.36. (a) Each FQHC shall have an annual mission spend ratio of no less than 90 percent.(1) Until the department has adopted a methodology for this purpose pursuant to paragraph (3), an FQHCs total revenue from all payer sources means the FQHCs total revenue for the calendar year, calculated consistent with Line 12 of Part I of Internal Revenue Service IRS Form 990, as set out in the form and instructions applicable to the 2024 taxable year.(2) Until the department has adopted a methodology for this purpose pursuant to paragraph (3), for the calculation of the mission spend ratio of each FQHC in the 2026 calendar year, mission-directed expenses shall be the total program service expenses reported under Line 25 of Column B of Part IX of IRS Form 990, as set out in the form and instructions applicable to the 2024 taxable year.(3) For the calculation of the mission spend ratio of each FQHC in the 2027 calendar year and all subsequent years, the department shall adopt a methodology to determine the expenses associated with activities that further an FQHCs patient services mission, consistent with this section. If the department has not adopted a methodology pursuant to this paragraph sufficient for implementation by January 1, 2027, then the methodology set forth in paragraph (2) shall continue to be used until the department has adopted a methodology pursuant to this paragraph.(b) By June 30, 2026, and annually thereafter by June 30, each FQHC or its parent corporation shall report total revenues collected from all revenue sources, along with the portion of revenues that are expended on all mission-directed expenses, to the department in a form to be determined by the department. Each report shall include, at a minimum:(1) The FQHC or parent corporations filed IRS Form 990, 990-PF, 990-EZ, or 1120, from the most recent taxable year, with all attachments and schedules as applicable, in the same form as filed with the IRS, along with a list identifying which FQHCs activities are included in the information on the IRS form.(2) A copy of the annual report filed for each FQHC with the Department of Health Care Access and Information pursuant to Section 1216 of the Health and Safety Code.(3) A certification signed by a duly authorized official of the FQHC or its parent corporation that certifies that, to the best of the officials knowledge and information, each statement and amount in the accompanying report is believed to be true and correct.(4) For any FQHC that is required to prepare an annual financial statement pursuant to Section 12586 of the Government Code, certification from an independent certified public accountant that the report submitted has been audited in conformity with generally accepted auditing standards.(c) Each FQHC shall submit an annual registration fee in an amount to be determined by the department and adjusted as necessary to fund the activities set forth in this article.(d) (1) No later than 90 days after the deadline for receipt of each FQHCs submission, the department shall calculate the mission spend ratio for each FQHC and prepare a report of the mission spend ratios of every FQHC. The department shall transmit the report to the subunit of the State Department of Health Care Services responsible for conducting Change in Scope-of-Service Request (CSOSR) audits.(2) The department shall publish the report of the mission spend ratios of every FQHC on its internet website.(e) The department shall conduct an audit of the financial information reported by FQHCs pursuant to this section every three years, in a manner and form prescribed by the department, to ensure the accuracy of the information reported and compliance with the requirements of this section. These audits may also include any audits of contractors or related party entities.(f) Notwithstanding any other provision to the contrary, the requirements of this section shall not apply to any FQHC participating in a bona fide LMCC.14138.37. (a) There is hereby continued in the Special Deposit Fund, established pursuant to Section 16370 of the Government Code, the Mission Spend Ratio Penalty Account, which shall be subject to appropriation by the Legislature. The account shall contain all moneys deposited pursuant to subdivisions (b) and (c).(b) The department shall impose sanctions for the failure to comply with the reporting provisions set forth in Section 14138.36, in the form of an administrative fine of five thousand dollars ($5,000) for a first violation and ten thousand dollars ($10,000) for each subsequent month that an FQHC fails to submit the annual reports required by that section.(c) (1) If the department determines that an FQHC has not met the required mission spend ratio for any reporting year, the department shall assess an administrative penalty equal to the difference between the amount of the FQHC spent on mission-directed expenses and 90 percent of the FQHCs total revenue that year.(2) Any penalties paid pursuant to this subdivision shall not be considered mission-directed expenses for the calculation of the FQHCs mission spend ratio in the year the penalty was incurred.(3) If the FQHC does not dispute the determination or assessment, the penalties shall be paid in full to the department within 30 days of receipt of a notice of penalty and deposited into the Mission Spend Ratio Penalty Account.(4) (A) If the FQHC disputes the determination or assessment made pursuant to this subdivision, the FQHC shall, within 30 days of the FQHCs receipt of the determination or assessment, simultaneously submit a request for appeal to both the department and the State Department of Health Care Services. The request shall include a detailed statement describing the reason for appeal and include all supporting documents the FQHC will present at the hearing.(B) Within 30 days of the departments receipt of the FQHCs request for appeal, the department shall submit, to both the FQHC and the State Department of Health Care Services, its responsive arguments and all supporting documents that the department will present at the hearing.(C) The State Department of Health Care Services shall hear a timely appeal and issue a decision as follows:(i) The hearing shall commence within 60 days from the date of receipt by the State Department of Health Care Services of the FQHCs timely request for appeal.(ii) The State Department of Health Care Services shall issue a decision within 120 days from the date of receipt by the State Department of Health Care Services of the FQHCs timely request for appeal.(iii) The decision of the State Department of Health Care Services hearing officer, when issued, shall be the final decision of the State Department of Public Health.(D) The appeals process set forth in this paragraph shall be exempt from Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500), of Part 1 of Division 3 of Title 2 of the Government Code. The provisions of Sections 100171 and 131071 of the Health and Safety Code do not apply to appeals under this paragraph.(d) (1) An FQHC may apply to the department for a waiver providing a temporary pause of the requirements of Section 14138.36 or for an alternative mission spend ratio requirement to that set forth in subdivision (a) of Section 14138.36, on the basis of unexpected or exceptional circumstances or the FQHCs economic condition. The issuance and terms of the waiver pursuant to this subdivision shall be solely and exclusively within the authority of the department. A waiver issued pursuant to this subdivision shall be for a term of one year from the date of issuance.(2) To obtain a waiver based on unexpected or exceptional circumstances, an FQHC shall detail the following circumstances experienced by the FQHC:(A) When the FQHC first learned of the unexpected or exceptional circumstances.(B) Why the FQHC could not have anticipated those circumstances arising.(C) Actions the FQHC took to address those circumstances.(D) Expenses incurred as a result of addressing those circumstances.(E) When the FQHC expects those circumstances to be resolved.(F) Preventive steps the FQHC is taking to ensure that those circumstances do not unexpectedly arise in the future.(3) To obtain a waiver based on economic condition, an FQHC shall demonstrate that compliance with Section 14138.36 would raise doubts about the FQHCs ability to continue as a going concern under generally accepted accounting principles. The evidence shall include documentation of the FQHCs financial condition, the financial condition of any parent or affiliated entity, and evidence of the actual or potential direct financial impact of compliance with Section 14138.36.(4) Consideration of an FQHCs ability to continue as a going concern shall include the following factors regarding the FQHC or any affiliated entity:(A) Actual or likely closure of the FQHC or any affiliated entity.(B) Actual or likely closure of patient services or programs.(C) Actual or likely loss of jobs.(D) Whether the FQHC is small, rural, frontier, or serves a rural catchment area.(E) Whether closure of the FQHC would significantly impact access to services in the region or service area.(F) Whether the FQHC is in financial distress that results or is likely to result in the closure of the FQHC or any affiliated entity, closure of patient services or programs, or loss of jobs. Factors to consider in determining financial distress include, but are not limited to, the FQHCs prior and projected performance on financial metrics, including the amount of cash on hand, and whether the FQHC has, or is projected to experience, negative operating margins.(5) Requests for a waiver pursuant to this subdivision shall be submitted in writing to the department.(6) The department shall notify the FQHC of the decision on the waiver request in writing.(7) An FQHC may apply to renew a waiver issued pursuant to this subdivision at any time no fewer than 180 days before the expiration of the existing waiver.(e) This section shall not apply to any FQHC participating in a bona fide LMCC.14138.38. The department shall adopt all regulations necessary to implement this article. Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this article, in whole or in part, by means of information notices, all-county letters, or other similar instructions without taking regulatory action. |
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| 83 | | - | |
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| 84 | | - | Article 4.15. Federally Qualified Health Center Mission Spend Ratio14138.35. For purposes of this article, the following definitions apply:(a) Bona fide labor-management cooperation committee or bona fide LMCC means a statewide, multiemployer joint labor-management committee that is established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) and meets the following criteria:(1) The bona fide LMCC is not involved in the governance of an FQHC but exists to promote worker training, workforce expansion, and support for workers during training.(2) The bona fide LMCC has the following composition:(A) Fifty percent of the committee consists of representatives of organized labor unions that represent health center workers in the state.(B) Fifty percent of the committee consists of representatives of FQHCs located in the state.(3) The membership of the bona fide LMCC includes one or more labor organizations that are certified or recognized as the exclusive bargaining representative of applicable workers at FQHCs in the state.(b) Department means the State Department of Public Health.(c) Federally qualified health center or FQHC means any community or public federally qualified health center as that term is defined in Section 1396d of Title 42 of the United States Code, including FQHC look-alikes.(d) FQHC look-alike means an organization that does not receive an FQHC award, but is designated by the federal Health Resources and Services Administration as meeting FQHC program requirements, as set forth in Sections 1395x(aa)(4)(B) and 1396d(l)(2)(B) of Title 42 of the United States Code. For purposes of this article, an FQHC look-alike is considered an FQHC and all references to FQHCs apply with equal force to FQHC look-alikes.(e) (1) Mission-directed expenses means expenses associated with activities that further an FQHCs patient services mission and for which the FQHC was created to conduct.(2) Mission-directed expenses shall include all of the following:(A) The total compensation for all staff employed by the FQHC, including salaries, wages, and employee benefits, but excluding all compensation for executive and administrative officers and employees. Employee benefits shall include payroll benefits, paid time off, health insurance, life insurance, pension and retirement, and workers compensation insurance.(B) The cost of consumable supplies that are used to provide patient care.(C) Outside patient care services, which shall be expenses associated with patient care services purchased under contract from any entity, including a hospital, laboratory, or physician group.(D) Professional liability insurance.(E) Continuing education, which shall be the total cost of providing continuing education classes for health care professionals.(F) Capital expenditures that directly relate to patient care services, including rent, mortgage interest, depreciation, property taxes, property insurance, utilities, and other capital expenditures determined by the department.(3) Mission-directed expenses shall not include any of the following:(A) Administrative costs, including compensation paid to management and executive officers and employees, all costs to management companies, administrative service companies, home office expenses for parent companies and holding companies, legal expenses, trade association fees and dues, insurance costs, licensing fees, and all administrative costs and profits paid to contractors or related party entities for staffing services, ancillary services, support services, or other services.(B) Capital expenditures that relate to administrative, overall operations or management purposes, including rent, mortgage interest, depreciation, property taxes, property insurance, utilities, and other capital expenditures determined by the department.(C) Profits, including net income and any profit paid to related parties on leases and property, and any profits paid to management companies.(f) Mission spend ratio means the percent of an FQHCs total revenue from all payer sources in a calendar year expended on mission-directed expenses.(g) Related party means an organization related to the FQHC or that is under common ownership or control, as those terms are defined in Section 413.17(b) of Title 42 of the Code of Federal Regulations. A related party may include a management organization, owners of real estate, entities that provide staffing, any parent companies, holding companies, sister organizations, and others.14138.36. (a) Each FQHC shall have an annual mission spend ratio of no less than 90 percent.(1) Until the department has adopted a methodology for this purpose pursuant to paragraph (3), an FQHCs total revenue from all payer sources means the FQHCs total revenue for the calendar year, calculated consistent with Line 12 of Part I of Internal Revenue Service IRS Form 990, as set out in the form and instructions applicable to the 2024 taxable year.(2) Until the department has adopted a methodology for this purpose pursuant to paragraph (3), for the calculation of the mission spend ratio of each FQHC in the 2026 calendar year, mission-directed expenses shall be the total program service expenses reported under Line 25 of Column B of Part IX of IRS Form 990, as set out in the form and instructions applicable to the 2024 taxable year.(3) For the calculation of the mission spend ratio of each FQHC in the 2027 calendar year and all subsequent years, the department shall adopt a methodology to determine the expenses associated with activities that further an FQHCs patient services mission, consistent with this section. If the department has not adopted a methodology pursuant to this paragraph sufficient for implementation by January 1, 2027, then the methodology set forth in paragraph (2) shall continue to be used until the department has adopted a methodology pursuant to this paragraph.(b) By June 30, 2026, and annually thereafter by June 30, each FQHC or its parent corporation shall report total revenues collected from all revenue sources, along with the portion of revenues that are expended on all mission-directed expenses, to the department in a form to be determined by the department. Each report shall include, at a minimum:(1) The FQHC or parent corporations filed IRS Form 990, 990-PF, 990-EZ, or 1120, from the most recent taxable year, with all attachments and schedules as applicable, in the same form as filed with the IRS, along with a list identifying which FQHCs activities are included in the information on the IRS form.(2) A copy of the annual report filed for each FQHC with the Department of Health Care Access and Information pursuant to Section 1216 of the Health and Safety Code.(3) A certification signed by a duly authorized official of the FQHC or its parent corporation that certifies that, to the best of the officials knowledge and information, each statement and amount in the accompanying report is believed to be true and correct.(4) For any FQHC that is required to prepare an annual financial statement pursuant to Section 12586 of the Government Code, certification from an independent certified public accountant that the report submitted has been audited in conformity with generally accepted auditing standards.(c) Each FQHC shall submit an annual registration fee in an amount to be determined by the department and adjusted as necessary to fund the activities set forth in this article.(d) (1) No later than 90 days after the deadline for receipt of each FQHCs submission, the department shall calculate the mission spend ratio for each FQHC and prepare a report of the mission spend ratios of every FQHC. The department shall transmit the report to the subunit of the State Department of Health Care Services responsible for conducting Change in Scope-of-Service Request (CSOSR) audits.(2) The department shall publish the report of the mission spend ratios of every FQHC on its internet website.(e) The department shall conduct an audit of the financial information reported by FQHCs pursuant to this section every three years, in a manner and form prescribed by the department, to ensure the accuracy of the information reported and compliance with the requirements of this section. These audits may also include any audits of contractors or related party entities.(f) Notwithstanding any other provision to the contrary, the requirements of this section shall not apply to any FQHC participating in a bona fide LMCC.14138.37. (a) There is hereby continued in the Special Deposit Fund, established pursuant to Section 16370 of the Government Code, the Mission Spend Ratio Penalty Account, which shall be subject to appropriation by the Legislature. The account shall contain all moneys deposited pursuant to subdivisions (b) and (c).(b) The department shall impose sanctions for the failure to comply with the reporting provisions set forth in Section 14138.36, in the form of an administrative fine of five thousand dollars ($5,000) for a first violation and ten thousand dollars ($10,000) for each subsequent month that an FQHC fails to submit the annual reports required by that section.(c) (1) If the department determines that an FQHC has not met the required mission spend ratio for any reporting year, the department shall assess an administrative penalty equal to the difference between the amount of the FQHC spent on mission-directed expenses and 90 percent of the FQHCs total revenue that year.(2) Any penalties paid pursuant to this subdivision shall not be considered mission-directed expenses for the calculation of the FQHCs mission spend ratio in the year the penalty was incurred.(3) If the FQHC does not dispute the determination or assessment, the penalties shall be paid in full to the department within 30 days of receipt of a notice of penalty and deposited into the Mission Spend Ratio Penalty Account.(4) (A) If the FQHC disputes the determination or assessment made pursuant to this subdivision, the FQHC shall, within 30 days of the FQHCs receipt of the determination or assessment, simultaneously submit a request for appeal to both the department and the State Department of Health Care Services. The request shall include a detailed statement describing the reason for appeal and include all supporting documents the FQHC will present at the hearing.(B) Within 30 days of the departments receipt of the FQHCs request for appeal, the department shall submit, to both the FQHC and the State Department of Health Care Services, its responsive arguments and all supporting documents that the department will present at the hearing.(C) The State Department of Health Care Services shall hear a timely appeal and issue a decision as follows:(i) The hearing shall commence within 60 days from the date of receipt by the State Department of Health Care Services of the FQHCs timely request for appeal.(ii) The State Department of Health Care Services shall issue a decision within 120 days from the date of receipt by the State Department of Health Care Services of the FQHCs timely request for appeal.(iii) The decision of the State Department of Health Care Services hearing officer, when issued, shall be the final decision of the State Department of Public Health.(D) The appeals process set forth in this paragraph shall be exempt from Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500), of Part 1 of Division 3 of Title 2 of the Government Code. The provisions of Sections 100171 and 131071 of the Health and Safety Code do not apply to appeals under this paragraph.(d) (1) An FQHC may apply to the department for a waiver providing a temporary pause of the requirements of Section 14138.36 or for an alternative mission spend ratio requirement to that set forth in subdivision (a) of Section 14138.36, on the basis of unexpected or exceptional circumstances or the FQHCs economic condition. The issuance and terms of the waiver pursuant to this subdivision shall be solely and exclusively within the authority of the department. A waiver issued pursuant to this subdivision shall be for a term of one year from the date of issuance.(2) To obtain a waiver based on unexpected or exceptional circumstances, an FQHC shall detail the following circumstances experienced by the FQHC:(A) When the FQHC first learned of the unexpected or exceptional circumstances.(B) Why the FQHC could not have anticipated those circumstances arising.(C) Actions the FQHC took to address those circumstances.(D) Expenses incurred as a result of addressing those circumstances.(E) When the FQHC expects those circumstances to be resolved.(F) Preventive steps the FQHC is taking to ensure that those circumstances do not unexpectedly arise in the future.(3) To obtain a waiver based on economic condition, an FQHC shall demonstrate that compliance with Section 14138.36 would raise doubts about the FQHCs ability to continue as a going concern under generally accepted accounting principles. The evidence shall include documentation of the FQHCs financial condition, the financial condition of any parent or affiliated entity, and evidence of the actual or potential direct financial impact of compliance with Section 14138.36.(4) Consideration of an FQHCs ability to continue as a going concern shall include the following factors regarding the FQHC or any affiliated entity:(A) Actual or likely closure of the FQHC or any affiliated entity.(B) Actual or likely closure of patient services or programs.(C) Actual or likely loss of jobs.(D) Whether the FQHC is small, rural, frontier, or serves a rural catchment area.(E) Whether closure of the FQHC would significantly impact access to services in the region or service area.(F) Whether the FQHC is in financial distress that results or is likely to result in the closure of the FQHC or any affiliated entity, closure of patient services or programs, or loss of jobs. Factors to consider in determining financial distress include, but are not limited to, the FQHCs prior and projected performance on financial metrics, including the amount of cash on hand, and whether the FQHC has, or is projected to experience, negative operating margins.(5) Requests for a waiver pursuant to this subdivision shall be submitted in writing to the department.(6) The department shall notify the FQHC of the decision on the waiver request in writing.(7) An FQHC may apply to renew a waiver issued pursuant to this subdivision at any time no fewer than 180 days before the expiration of the existing waiver.(e) This section shall not apply to any FQHC participating in a bona fide LMCC.14138.38. The department shall adopt all regulations necessary to implement this article. Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this article, in whole or in part, by means of information notices, all-county letters, or other similar instructions without taking regulatory action. |
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| 85 | | - | |
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| 86 | | - | Article 4.15. Federally Qualified Health Center Mission Spend Ratio |
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| 87 | | - | |
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| 88 | | - | Article 4.15. Federally Qualified Health Center Mission Spend Ratio |
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| 89 | | - | |
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| 90 | | - | 14138.35. For purposes of this article, the following definitions apply:(a) Bona fide labor-management cooperation committee or bona fide LMCC means a statewide, multiemployer joint labor-management committee that is established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) and meets the following criteria:(1) The bona fide LMCC is not involved in the governance of an FQHC but exists to promote worker training, workforce expansion, and support for workers during training.(2) The bona fide LMCC has the following composition:(A) Fifty percent of the committee consists of representatives of organized labor unions that represent health center workers in the state.(B) Fifty percent of the committee consists of representatives of FQHCs located in the state.(3) The membership of the bona fide LMCC includes one or more labor organizations that are certified or recognized as the exclusive bargaining representative of applicable workers at FQHCs in the state.(b) Department means the State Department of Public Health.(c) Federally qualified health center or FQHC means any community or public federally qualified health center as that term is defined in Section 1396d of Title 42 of the United States Code, including FQHC look-alikes.(d) FQHC look-alike means an organization that does not receive an FQHC award, but is designated by the federal Health Resources and Services Administration as meeting FQHC program requirements, as set forth in Sections 1395x(aa)(4)(B) and 1396d(l)(2)(B) of Title 42 of the United States Code. For purposes of this article, an FQHC look-alike is considered an FQHC and all references to FQHCs apply with equal force to FQHC look-alikes.(e) (1) Mission-directed expenses means expenses associated with activities that further an FQHCs patient services mission and for which the FQHC was created to conduct.(2) Mission-directed expenses shall include all of the following:(A) The total compensation for all staff employed by the FQHC, including salaries, wages, and employee benefits, but excluding all compensation for executive and administrative officers and employees. Employee benefits shall include payroll benefits, paid time off, health insurance, life insurance, pension and retirement, and workers compensation insurance.(B) The cost of consumable supplies that are used to provide patient care.(C) Outside patient care services, which shall be expenses associated with patient care services purchased under contract from any entity, including a hospital, laboratory, or physician group.(D) Professional liability insurance.(E) Continuing education, which shall be the total cost of providing continuing education classes for health care professionals.(F) Capital expenditures that directly relate to patient care services, including rent, mortgage interest, depreciation, property taxes, property insurance, utilities, and other capital expenditures determined by the department.(3) Mission-directed expenses shall not include any of the following:(A) Administrative costs, including compensation paid to management and executive officers and employees, all costs to management companies, administrative service companies, home office expenses for parent companies and holding companies, legal expenses, trade association fees and dues, insurance costs, licensing fees, and all administrative costs and profits paid to contractors or related party entities for staffing services, ancillary services, support services, or other services.(B) Capital expenditures that relate to administrative, overall operations or management purposes, including rent, mortgage interest, depreciation, property taxes, property insurance, utilities, and other capital expenditures determined by the department.(C) Profits, including net income and any profit paid to related parties on leases and property, and any profits paid to management companies.(f) Mission spend ratio means the percent of an FQHCs total revenue from all payer sources in a calendar year expended on mission-directed expenses.(g) Related party means an organization related to the FQHC or that is under common ownership or control, as those terms are defined in Section 413.17(b) of Title 42 of the Code of Federal Regulations. A related party may include a management organization, owners of real estate, entities that provide staffing, any parent companies, holding companies, sister organizations, and others. |
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| 54 | + | 131021. (a) The Legislature finds that having access to a statewide stockpile of personal protective equipment in the event of a pandemic, wildfire smoke event, or other health emergency is vital to the health and safety of its health care and essential workers, as well as the general population, which both relies on this workforce and is susceptible to disease transmission should members of this workforce needlessly be infected with transmissible disease.(b) The following definitions apply for purposes of this section:(1) Department means the State Department of Public Health.(2) Office means the Office of Emergency Services.(3) Agricultural worker means a person employed in any of the following:(A) An agricultural occupation, as defined in Wage Order No. 14 of the Industrial Welfare Commission.(B) An industry preparing agricultural products for the market, on the farm, as defined in Wage Order No. 13 of the Industrial Welfare Commission.(C) An industry handling products after harvest, as defined in Wage Order No. 8 of the Industrial Welfare Commission.(4) Essential workers means primary and secondary school workers, workers at detention facilities, as defined in Section 9500 of the Penal Code, in-home support providers, childcare providers, government workers whose work with the public continues throughout the crisis, and workers in other positions that the State Public Health Officer or the Director of the Office of Emergency Services deems vital to public health and safety, as well as economic and national security, including, but not limited to, agricultural workers.(5) Health care worker means any worker who provides direct patient care and services directly supporting patient care, including, but not limited, to physicians, pharmacists, clinicians, nurses, aides, technicians, janitorial and housekeeping staff, food services workers, and nonmanagerial administrative staff.(6) Personal protective equipment or PPE means protective equipment for eyes, face, head, and extremities, protective clothing, respiratory devices, and protective shields and barriers, including, but not limited to, N95 and other filtering facepiece respirators, elastomeric air-purifying respirators with appropriate particulate filters or cartridges, powered air purifying respirators, disinfecting and sterilizing devices and supplies, medical gowns and apparel, face masks, surgical masks, face shields, gloves, shoe coverings, and the equipment identified by or otherwise necessary to comply with Section 5199 of Title 8 of the California Code of Regulations.(7) Provider means a licensed clinic, as described in Chapter 1 (commencing with Section 1200), an outpatient setting, as described in Chapter 1.3 (commencing with Section 1248) of, a health facility as described in Chapter 2 (commencing with Section 1250) of, or a county medical facility, as described in Chapter 2.5 (commencing with Section 1440) of, Division 2, a home health agency, a physicians office, a professional medical corporation, a medical partnership, a medical foundation, a rural health clinic, as defined in Section 1395x(aa)(2) of Title 42 of the United States Code, or a federally qualified health center, as defined in Section 1395x(aa)(4) of Title 42 of the United States Code, and any other entity that provides medical services in California.(8) Stockpile means the personal protective equipment stockpile created pursuant to subdivision (c).(c) Within one year of the effective date of this section, the department and office, in coordination with other state agencies, shall establish a PPE stockpile, upon appropriation and as necessary.(d) The department shall also establish guidelines for procurement, management, and distribution of PPE from the department. The department and office shall consider the recommendations of the Personal Protective Equipment Advisory Committee created pursuant to subdivision (f) in developing these guidelines. At a minimum, the guidelines shall take into account all of the following:(1) The various types of PPE that may be required during a pandemic or other health emergency, including, but not limited to, wildfire smoke events.(2) The shelf life of each type of PPE that may be obtained from the department and how to restock a portion of each type of PPE to ensure the procurements consist of unexpired PPE.(3) The amount of each type of PPE that would be required for all health care workers and essential workers in the state during a 90-day pandemic or other health emergency, including, but not limited to, wildfire smoke events.(4) Lessons learned from previous pandemics and state emergencies, including, but not limited to, supply procurement, management, and distribution.(5) Guidance on how to define essential workers based upon different hazards.(6) Geographical distribution of PPE storage.(7) Guidance on how to establish policies and standards for PPE surge capacity to ensure that workers have access to an adequate supply of PPE during a pandemic or other health emergency, including, but not limited to, wildfire smoke events.(8) The policies and funding that would be required for the state to establish a PPE stockpile.(9) How distribution from any procurement shall be prioritized in the event that there is insufficient PPE to meet the needs of providers or employers of essential workers, including consideration of the following:(A) The provider or employer is in a location with a high share of low-income residents.(B) The provider or employer is in a medically underserved area, as designated by the United States Department of Health and Human Services, Health Resources and Services Administration.(C) The provider or employer disproportionately serves a medically underserved population, as designated by the United States Department of Health and Human Services, Health Resources and Services Administration.(D) The provider or employer is in a county with a high infection rate or high hospitalization rate related to the declared emergency.(e) The development of the guidelines shall be informed by the recommendations of the Personal Protective Equipment Advisory Committee pursuant to subdivision (f). The guidelines shall not establish policies or standards that are less protective or prescriptive than any federal, state, or local law on PPE standards.(f) The Personal Protective Equipment Advisory Committee is hereby established. The advisory committee shall consist of the following:(1) One representative of an association representing multiple types of hospitals and health systems.(2) One representative of an association representing skilled nursing facilities.(3) One representative of an association representing primary care clinics.(4) One representative of a statewide association representing physicians.(5) Two representatives of labor organizations that represent health care workers.(6) Two representatives of labor organizations that represent nonagricultural essential workers, as defined by paragraph (4) of subdivision (b).(7) One representative of a labor organization that represents agricultural workers, as defined by paragraph (3) of subdivision (b).(8) One representative of an organization that represents agricultural employers.(9) One representative from the personal protective equipment manufacturing industry.(10) One consumer representative.(11) One representative from an association representing counties.(12) One representative from the State Department of Public Health.(13) One representative from the Office of Emergency Services.(14) One representative from the Emergency Medical Services Authority.(15) One representative from the State Department of Social Services.(g) The Director of the Office of Emergency Services State Public Health Officer or their designee shall appoint the representatives from paragraphs (1) through to (11), inclusive, of subdivision (f).(h) The Personal Protective Equipment Advisory Committee shall make recommendations to the office and department necessary to develop the guidelines required pursuant to subdivision (d).(i) Nothing in this section alters an employers duty to provide respirators as required by Section 5141.1 of Title 8 of the California Code of Regulations.(j) The department shall report to the Legislature, within six months of the effective date of the amendments to this section made by the act adding this subdivision, with regard to the amount of PPE in the stockpile, the amount of PPE from the stockpile that has been used, and the amount of anticipated future usage. The report shall be made pursuant to Section 9795 of the Government Code. |
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| 94 | | - | 14138.35. For purposes of this article, the following definitions apply: |
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| 95 | | - | |
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| 96 | | - | (a) Bona fide labor-management cooperation committee or bona fide LMCC means a statewide, multiemployer joint labor-management committee that is established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) and meets the following criteria: |
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| 97 | | - | |
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| 98 | | - | (1) The bona fide LMCC is not involved in the governance of an FQHC but exists to promote worker training, workforce expansion, and support for workers during training. |
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| 99 | | - | |
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| 100 | | - | (2) The bona fide LMCC has the following composition: |
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| 101 | | - | |
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| 102 | | - | (A) Fifty percent of the committee consists of representatives of organized labor unions that represent health center workers in the state. |
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| 103 | | - | |
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| 104 | | - | (B) Fifty percent of the committee consists of representatives of FQHCs located in the state. |
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| 105 | | - | |
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| 106 | | - | (3) The membership of the bona fide LMCC includes one or more labor organizations that are certified or recognized as the exclusive bargaining representative of applicable workers at FQHCs in the state. |
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| 107 | | - | |
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| 108 | | - | (b) Department means the State Department of Public Health. |
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| 109 | | - | |
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| 110 | | - | (c) Federally qualified health center or FQHC means any community or public federally qualified health center as that term is defined in Section 1396d of Title 42 of the United States Code, including FQHC look-alikes. |
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| 111 | | - | |
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| 112 | | - | (d) FQHC look-alike means an organization that does not receive an FQHC award, but is designated by the federal Health Resources and Services Administration as meeting FQHC program requirements, as set forth in Sections 1395x(aa)(4)(B) and 1396d(l)(2)(B) of Title 42 of the United States Code. For purposes of this article, an FQHC look-alike is considered an FQHC and all references to FQHCs apply with equal force to FQHC look-alikes. |
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| 113 | | - | |
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| 114 | | - | (e) (1) Mission-directed expenses means expenses associated with activities that further an FQHCs patient services mission and for which the FQHC was created to conduct. |
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| 115 | | - | |
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| 116 | | - | (2) Mission-directed expenses shall include all of the following: |
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| 117 | | - | |
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| 118 | | - | (A) The total compensation for all staff employed by the FQHC, including salaries, wages, and employee benefits, but excluding all compensation for executive and administrative officers and employees. Employee benefits shall include payroll benefits, paid time off, health insurance, life insurance, pension and retirement, and workers compensation insurance. |
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| 119 | | - | |
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| 120 | | - | (B) The cost of consumable supplies that are used to provide patient care. |
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| 121 | | - | |
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| 122 | | - | (C) Outside patient care services, which shall be expenses associated with patient care services purchased under contract from any entity, including a hospital, laboratory, or physician group. |
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| 123 | | - | |
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| 124 | | - | (D) Professional liability insurance. |
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| 125 | | - | |
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| 126 | | - | (E) Continuing education, which shall be the total cost of providing continuing education classes for health care professionals. |
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| 127 | | - | |
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| 128 | | - | (F) Capital expenditures that directly relate to patient care services, including rent, mortgage interest, depreciation, property taxes, property insurance, utilities, and other capital expenditures determined by the department. |
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| 129 | | - | |
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| 130 | | - | (3) Mission-directed expenses shall not include any of the following: |
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| 131 | | - | |
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| 132 | | - | (A) Administrative costs, including compensation paid to management and executive officers and employees, all costs to management companies, administrative service companies, home office expenses for parent companies and holding companies, legal expenses, trade association fees and dues, insurance costs, licensing fees, and all administrative costs and profits paid to contractors or related party entities for staffing services, ancillary services, support services, or other services. |
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| 133 | | - | |
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| 134 | | - | (B) Capital expenditures that relate to administrative, overall operations or management purposes, including rent, mortgage interest, depreciation, property taxes, property insurance, utilities, and other capital expenditures determined by the department. |
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| 135 | | - | |
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| 136 | | - | (C) Profits, including net income and any profit paid to related parties on leases and property, and any profits paid to management companies. |
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| 137 | | - | |
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| 138 | | - | (f) Mission spend ratio means the percent of an FQHCs total revenue from all payer sources in a calendar year expended on mission-directed expenses. |
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| 139 | | - | |
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| 140 | | - | (g) Related party means an organization related to the FQHC or that is under common ownership or control, as those terms are defined in Section 413.17(b) of Title 42 of the Code of Federal Regulations. A related party may include a management organization, owners of real estate, entities that provide staffing, any parent companies, holding companies, sister organizations, and others. |
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| 141 | | - | |
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| 142 | | - | 14138.36. (a) Each FQHC shall have an annual mission spend ratio of no less than 90 percent.(1) Until the department has adopted a methodology for this purpose pursuant to paragraph (3), an FQHCs total revenue from all payer sources means the FQHCs total revenue for the calendar year, calculated consistent with Line 12 of Part I of Internal Revenue Service IRS Form 990, as set out in the form and instructions applicable to the 2024 taxable year.(2) Until the department has adopted a methodology for this purpose pursuant to paragraph (3), for the calculation of the mission spend ratio of each FQHC in the 2026 calendar year, mission-directed expenses shall be the total program service expenses reported under Line 25 of Column B of Part IX of IRS Form 990, as set out in the form and instructions applicable to the 2024 taxable year.(3) For the calculation of the mission spend ratio of each FQHC in the 2027 calendar year and all subsequent years, the department shall adopt a methodology to determine the expenses associated with activities that further an FQHCs patient services mission, consistent with this section. If the department has not adopted a methodology pursuant to this paragraph sufficient for implementation by January 1, 2027, then the methodology set forth in paragraph (2) shall continue to be used until the department has adopted a methodology pursuant to this paragraph.(b) By June 30, 2026, and annually thereafter by June 30, each FQHC or its parent corporation shall report total revenues collected from all revenue sources, along with the portion of revenues that are expended on all mission-directed expenses, to the department in a form to be determined by the department. Each report shall include, at a minimum:(1) The FQHC or parent corporations filed IRS Form 990, 990-PF, 990-EZ, or 1120, from the most recent taxable year, with all attachments and schedules as applicable, in the same form as filed with the IRS, along with a list identifying which FQHCs activities are included in the information on the IRS form.(2) A copy of the annual report filed for each FQHC with the Department of Health Care Access and Information pursuant to Section 1216 of the Health and Safety Code.(3) A certification signed by a duly authorized official of the FQHC or its parent corporation that certifies that, to the best of the officials knowledge and information, each statement and amount in the accompanying report is believed to be true and correct.(4) For any FQHC that is required to prepare an annual financial statement pursuant to Section 12586 of the Government Code, certification from an independent certified public accountant that the report submitted has been audited in conformity with generally accepted auditing standards.(c) Each FQHC shall submit an annual registration fee in an amount to be determined by the department and adjusted as necessary to fund the activities set forth in this article.(d) (1) No later than 90 days after the deadline for receipt of each FQHCs submission, the department shall calculate the mission spend ratio for each FQHC and prepare a report of the mission spend ratios of every FQHC. The department shall transmit the report to the subunit of the State Department of Health Care Services responsible for conducting Change in Scope-of-Service Request (CSOSR) audits.(2) The department shall publish the report of the mission spend ratios of every FQHC on its internet website.(e) The department shall conduct an audit of the financial information reported by FQHCs pursuant to this section every three years, in a manner and form prescribed by the department, to ensure the accuracy of the information reported and compliance with the requirements of this section. These audits may also include any audits of contractors or related party entities.(f) Notwithstanding any other provision to the contrary, the requirements of this section shall not apply to any FQHC participating in a bona fide LMCC. |
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| 143 | | - | |
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| 144 | | - | |
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| 145 | | - | |
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| 146 | | - | 14138.36. (a) Each FQHC shall have an annual mission spend ratio of no less than 90 percent. |
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| 147 | | - | |
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| 148 | | - | (1) Until the department has adopted a methodology for this purpose pursuant to paragraph (3), an FQHCs total revenue from all payer sources means the FQHCs total revenue for the calendar year, calculated consistent with Line 12 of Part I of Internal Revenue Service IRS Form 990, as set out in the form and instructions applicable to the 2024 taxable year. |
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| 149 | | - | |
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| 150 | | - | (2) Until the department has adopted a methodology for this purpose pursuant to paragraph (3), for the calculation of the mission spend ratio of each FQHC in the 2026 calendar year, mission-directed expenses shall be the total program service expenses reported under Line 25 of Column B of Part IX of IRS Form 990, as set out in the form and instructions applicable to the 2024 taxable year. |
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| 151 | | - | |
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| 152 | | - | (3) For the calculation of the mission spend ratio of each FQHC in the 2027 calendar year and all subsequent years, the department shall adopt a methodology to determine the expenses associated with activities that further an FQHCs patient services mission, consistent with this section. If the department has not adopted a methodology pursuant to this paragraph sufficient for implementation by January 1, 2027, then the methodology set forth in paragraph (2) shall continue to be used until the department has adopted a methodology pursuant to this paragraph. |
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| 153 | | - | |
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| 154 | | - | (b) By June 30, 2026, and annually thereafter by June 30, each FQHC or its parent corporation shall report total revenues collected from all revenue sources, along with the portion of revenues that are expended on all mission-directed expenses, to the department in a form to be determined by the department. Each report shall include, at a minimum: |
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| 155 | | - | |
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| 156 | | - | (1) The FQHC or parent corporations filed IRS Form 990, 990-PF, 990-EZ, or 1120, from the most recent taxable year, with all attachments and schedules as applicable, in the same form as filed with the IRS, along with a list identifying which FQHCs activities are included in the information on the IRS form. |
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| 157 | | - | |
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| 158 | | - | (2) A copy of the annual report filed for each FQHC with the Department of Health Care Access and Information pursuant to Section 1216 of the Health and Safety Code. |
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| 159 | | - | |
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| 160 | | - | (3) A certification signed by a duly authorized official of the FQHC or its parent corporation that certifies that, to the best of the officials knowledge and information, each statement and amount in the accompanying report is believed to be true and correct. |
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| 161 | | - | |
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| 162 | | - | (4) For any FQHC that is required to prepare an annual financial statement pursuant to Section 12586 of the Government Code, certification from an independent certified public accountant that the report submitted has been audited in conformity with generally accepted auditing standards. |
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| 163 | | - | |
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| 164 | | - | (c) Each FQHC shall submit an annual registration fee in an amount to be determined by the department and adjusted as necessary to fund the activities set forth in this article. |
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| 165 | | - | |
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| 166 | | - | (d) (1) No later than 90 days after the deadline for receipt of each FQHCs submission, the department shall calculate the mission spend ratio for each FQHC and prepare a report of the mission spend ratios of every FQHC. The department shall transmit the report to the subunit of the State Department of Health Care Services responsible for conducting Change in Scope-of-Service Request (CSOSR) audits. |
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| 167 | | - | |
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| 168 | | - | (2) The department shall publish the report of the mission spend ratios of every FQHC on its internet website. |
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| 169 | | - | |
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| 170 | | - | (e) The department shall conduct an audit of the financial information reported by FQHCs pursuant to this section every three years, in a manner and form prescribed by the department, to ensure the accuracy of the information reported and compliance with the requirements of this section. These audits may also include any audits of contractors or related party entities. |
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| 171 | | - | |
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| 172 | | - | (f) Notwithstanding any other provision to the contrary, the requirements of this section shall not apply to any FQHC participating in a bona fide LMCC. |
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| 173 | | - | |
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| 174 | | - | 14138.37. (a) There is hereby continued in the Special Deposit Fund, established pursuant to Section 16370 of the Government Code, the Mission Spend Ratio Penalty Account, which shall be subject to appropriation by the Legislature. The account shall contain all moneys deposited pursuant to subdivisions (b) and (c).(b) The department shall impose sanctions for the failure to comply with the reporting provisions set forth in Section 14138.36, in the form of an administrative fine of five thousand dollars ($5,000) for a first violation and ten thousand dollars ($10,000) for each subsequent month that an FQHC fails to submit the annual reports required by that section.(c) (1) If the department determines that an FQHC has not met the required mission spend ratio for any reporting year, the department shall assess an administrative penalty equal to the difference between the amount of the FQHC spent on mission-directed expenses and 90 percent of the FQHCs total revenue that year.(2) Any penalties paid pursuant to this subdivision shall not be considered mission-directed expenses for the calculation of the FQHCs mission spend ratio in the year the penalty was incurred.(3) If the FQHC does not dispute the determination or assessment, the penalties shall be paid in full to the department within 30 days of receipt of a notice of penalty and deposited into the Mission Spend Ratio Penalty Account.(4) (A) If the FQHC disputes the determination or assessment made pursuant to this subdivision, the FQHC shall, within 30 days of the FQHCs receipt of the determination or assessment, simultaneously submit a request for appeal to both the department and the State Department of Health Care Services. The request shall include a detailed statement describing the reason for appeal and include all supporting documents the FQHC will present at the hearing.(B) Within 30 days of the departments receipt of the FQHCs request for appeal, the department shall submit, to both the FQHC and the State Department of Health Care Services, its responsive arguments and all supporting documents that the department will present at the hearing.(C) The State Department of Health Care Services shall hear a timely appeal and issue a decision as follows:(i) The hearing shall commence within 60 days from the date of receipt by the State Department of Health Care Services of the FQHCs timely request for appeal.(ii) The State Department of Health Care Services shall issue a decision within 120 days from the date of receipt by the State Department of Health Care Services of the FQHCs timely request for appeal.(iii) The decision of the State Department of Health Care Services hearing officer, when issued, shall be the final decision of the State Department of Public Health.(D) The appeals process set forth in this paragraph shall be exempt from Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500), of Part 1 of Division 3 of Title 2 of the Government Code. The provisions of Sections 100171 and 131071 of the Health and Safety Code do not apply to appeals under this paragraph.(d) (1) An FQHC may apply to the department for a waiver providing a temporary pause of the requirements of Section 14138.36 or for an alternative mission spend ratio requirement to that set forth in subdivision (a) of Section 14138.36, on the basis of unexpected or exceptional circumstances or the FQHCs economic condition. The issuance and terms of the waiver pursuant to this subdivision shall be solely and exclusively within the authority of the department. A waiver issued pursuant to this subdivision shall be for a term of one year from the date of issuance.(2) To obtain a waiver based on unexpected or exceptional circumstances, an FQHC shall detail the following circumstances experienced by the FQHC:(A) When the FQHC first learned of the unexpected or exceptional circumstances.(B) Why the FQHC could not have anticipated those circumstances arising.(C) Actions the FQHC took to address those circumstances.(D) Expenses incurred as a result of addressing those circumstances.(E) When the FQHC expects those circumstances to be resolved.(F) Preventive steps the FQHC is taking to ensure that those circumstances do not unexpectedly arise in the future.(3) To obtain a waiver based on economic condition, an FQHC shall demonstrate that compliance with Section 14138.36 would raise doubts about the FQHCs ability to continue as a going concern under generally accepted accounting principles. The evidence shall include documentation of the FQHCs financial condition, the financial condition of any parent or affiliated entity, and evidence of the actual or potential direct financial impact of compliance with Section 14138.36.(4) Consideration of an FQHCs ability to continue as a going concern shall include the following factors regarding the FQHC or any affiliated entity:(A) Actual or likely closure of the FQHC or any affiliated entity.(B) Actual or likely closure of patient services or programs.(C) Actual or likely loss of jobs.(D) Whether the FQHC is small, rural, frontier, or serves a rural catchment area.(E) Whether closure of the FQHC would significantly impact access to services in the region or service area.(F) Whether the FQHC is in financial distress that results or is likely to result in the closure of the FQHC or any affiliated entity, closure of patient services or programs, or loss of jobs. Factors to consider in determining financial distress include, but are not limited to, the FQHCs prior and projected performance on financial metrics, including the amount of cash on hand, and whether the FQHC has, or is projected to experience, negative operating margins.(5) Requests for a waiver pursuant to this subdivision shall be submitted in writing to the department.(6) The department shall notify the FQHC of the decision on the waiver request in writing.(7) An FQHC may apply to renew a waiver issued pursuant to this subdivision at any time no fewer than 180 days before the expiration of the existing waiver.(e) This section shall not apply to any FQHC participating in a bona fide LMCC. |
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| 175 | | - | |
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| 176 | | - | |
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| 177 | | - | |
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| 178 | | - | 14138.37. (a) There is hereby continued in the Special Deposit Fund, established pursuant to Section 16370 of the Government Code, the Mission Spend Ratio Penalty Account, which shall be subject to appropriation by the Legislature. The account shall contain all moneys deposited pursuant to subdivisions (b) and (c). |
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| 179 | | - | |
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| 180 | | - | (b) The department shall impose sanctions for the failure to comply with the reporting provisions set forth in Section 14138.36, in the form of an administrative fine of five thousand dollars ($5,000) for a first violation and ten thousand dollars ($10,000) for each subsequent month that an FQHC fails to submit the annual reports required by that section. |
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| 181 | | - | |
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| 182 | | - | (c) (1) If the department determines that an FQHC has not met the required mission spend ratio for any reporting year, the department shall assess an administrative penalty equal to the difference between the amount of the FQHC spent on mission-directed expenses and 90 percent of the FQHCs total revenue that year. |
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| 183 | | - | |
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| 184 | | - | (2) Any penalties paid pursuant to this subdivision shall not be considered mission-directed expenses for the calculation of the FQHCs mission spend ratio in the year the penalty was incurred. |
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| 185 | | - | |
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| 186 | | - | (3) If the FQHC does not dispute the determination or assessment, the penalties shall be paid in full to the department within 30 days of receipt of a notice of penalty and deposited into the Mission Spend Ratio Penalty Account. |
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| 187 | | - | |
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| 188 | | - | (4) (A) If the FQHC disputes the determination or assessment made pursuant to this subdivision, the FQHC shall, within 30 days of the FQHCs receipt of the determination or assessment, simultaneously submit a request for appeal to both the department and the State Department of Health Care Services. The request shall include a detailed statement describing the reason for appeal and include all supporting documents the FQHC will present at the hearing. |
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| 189 | | - | |
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| 190 | | - | (B) Within 30 days of the departments receipt of the FQHCs request for appeal, the department shall submit, to both the FQHC and the State Department of Health Care Services, its responsive arguments and all supporting documents that the department will present at the hearing. |
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| 191 | | - | |
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| 192 | | - | (C) The State Department of Health Care Services shall hear a timely appeal and issue a decision as follows: |
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| 193 | | - | |
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| 194 | | - | (i) The hearing shall commence within 60 days from the date of receipt by the State Department of Health Care Services of the FQHCs timely request for appeal. |
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| 195 | | - | |
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| 196 | | - | (ii) The State Department of Health Care Services shall issue a decision within 120 days from the date of receipt by the State Department of Health Care Services of the FQHCs timely request for appeal. |
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| 197 | | - | |
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| 198 | | - | (iii) The decision of the State Department of Health Care Services hearing officer, when issued, shall be the final decision of the State Department of Public Health. |
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| 199 | | - | |
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| 200 | | - | (D) The appeals process set forth in this paragraph shall be exempt from Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500), of Part 1 of Division 3 of Title 2 of the Government Code. The provisions of Sections 100171 and 131071 of the Health and Safety Code do not apply to appeals under this paragraph. |
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| 201 | | - | |
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| 202 | | - | (d) (1) An FQHC may apply to the department for a waiver providing a temporary pause of the requirements of Section 14138.36 or for an alternative mission spend ratio requirement to that set forth in subdivision (a) of Section 14138.36, on the basis of unexpected or exceptional circumstances or the FQHCs economic condition. The issuance and terms of the waiver pursuant to this subdivision shall be solely and exclusively within the authority of the department. A waiver issued pursuant to this subdivision shall be for a term of one year from the date of issuance. |
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| 203 | | - | |
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| 204 | | - | (2) To obtain a waiver based on unexpected or exceptional circumstances, an FQHC shall detail the following circumstances experienced by the FQHC: |
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| 205 | | - | |
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| 206 | | - | (A) When the FQHC first learned of the unexpected or exceptional circumstances. |
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| 207 | | - | |
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| 208 | | - | (B) Why the FQHC could not have anticipated those circumstances arising. |
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| 209 | | - | |
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| 210 | | - | (C) Actions the FQHC took to address those circumstances. |
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| 211 | | - | |
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| 212 | | - | (D) Expenses incurred as a result of addressing those circumstances. |
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| 213 | | - | |
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| 214 | | - | (E) When the FQHC expects those circumstances to be resolved. |
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| 215 | | - | |
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| 216 | | - | (F) Preventive steps the FQHC is taking to ensure that those circumstances do not unexpectedly arise in the future. |
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| 217 | | - | |
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| 218 | | - | (3) To obtain a waiver based on economic condition, an FQHC shall demonstrate that compliance with Section 14138.36 would raise doubts about the FQHCs ability to continue as a going concern under generally accepted accounting principles. The evidence shall include documentation of the FQHCs financial condition, the financial condition of any parent or affiliated entity, and evidence of the actual or potential direct financial impact of compliance with Section 14138.36. |
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| 219 | | - | |
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| 220 | | - | (4) Consideration of an FQHCs ability to continue as a going concern shall include the following factors regarding the FQHC or any affiliated entity: |
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| 221 | | - | |
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| 222 | | - | (A) Actual or likely closure of the FQHC or any affiliated entity. |
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| 223 | | - | |
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| 224 | | - | (B) Actual or likely closure of patient services or programs. |
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| 225 | | - | |
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| 226 | | - | (C) Actual or likely loss of jobs. |
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| 227 | | - | |
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| 228 | | - | (D) Whether the FQHC is small, rural, frontier, or serves a rural catchment area. |
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| 229 | | - | |
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| 230 | | - | (E) Whether closure of the FQHC would significantly impact access to services in the region or service area. |
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| 231 | | - | |
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| 232 | | - | (F) Whether the FQHC is in financial distress that results or is likely to result in the closure of the FQHC or any affiliated entity, closure of patient services or programs, or loss of jobs. Factors to consider in determining financial distress include, but are not limited to, the FQHCs prior and projected performance on financial metrics, including the amount of cash on hand, and whether the FQHC has, or is projected to experience, negative operating margins. |
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| 233 | | - | |
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| 234 | | - | (5) Requests for a waiver pursuant to this subdivision shall be submitted in writing to the department. |
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| 235 | | - | |
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| 236 | | - | (6) The department shall notify the FQHC of the decision on the waiver request in writing. |
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| 237 | | - | |
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| 238 | | - | (7) An FQHC may apply to renew a waiver issued pursuant to this subdivision at any time no fewer than 180 days before the expiration of the existing waiver. |
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| 239 | | - | |
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| 240 | | - | (e) This section shall not apply to any FQHC participating in a bona fide LMCC. |
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| 241 | | - | |
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| 242 | | - | 14138.38. The department shall adopt all regulations necessary to implement this article. Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this article, in whole or in part, by means of information notices, all-county letters, or other similar instructions without taking regulatory action. |
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| 243 | | - | |
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| 244 | | - | |
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| 245 | | - | |
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| 246 | | - | 14138.38. The department shall adopt all regulations necessary to implement this article. Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this article, in whole or in part, by means of information notices, all-county letters, or other similar instructions without taking regulatory action. |
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| 247 | | - | |
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| 248 | | - | SEC. 3. The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application. |
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| 249 | | - | |
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| 250 | | - | SEC. 3. The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application. |
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| 251 | | - | |
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| 252 | | - | SEC. 3. The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application. |
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| 253 | | - | |
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| 254 | | - | ### SEC. 3. |
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| 255 | | - | |
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| 256 | | - | |
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| 257 | | - | |
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| 258 | | - | |
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| 259 | | - | |
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| 260 | | - | (a)The Legislature finds that having access to a statewide stockpile of personal protective equipment in the event of a pandemic, wildfire smoke event, or other health emergency is vital to the health and safety of its health care and essential workers, as well as the general population, which both relies on this workforce and is susceptible to disease transmission should members of this workforce needlessly be infected with transmissible disease. |
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| 261 | | - | |
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| 262 | | - | |
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| 58 | + | 131021. (a) The Legislature finds that having access to a statewide stockpile of personal protective equipment in the event of a pandemic, wildfire smoke event, or other health emergency is vital to the health and safety of its health care and essential workers, as well as the general population, which both relies on this workforce and is susceptible to disease transmission should members of this workforce needlessly be infected with transmissible disease. |
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