CA Senate Bill (SB) 810 California's Single-payer health care Page
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| Article 1. General Provisions | ||
| Article 2. California Healthcare Premium Commission | ||
| Article 3. Governmental Payments | ||
| Article 5. Subrogation | ||
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BILL NUMBER: SB 810 INTRODUCED UK's Healthcare
INTRODUCED BY Senator Leno FEBRUARY 18, 2011
An act to add Division 114 (commencing with Section 140000) to the
Health and Safety Code, relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
SB 810, as introduced, Leno.
California's Single-payer health care coverage.
Existing law does not provide a system of universal health care
coverage for California residents. Existing law provides for the
creation of various programs to provide health care services to
persons who have limited incomes and meet various eligibility
requirements. These programs include the Healthy Families Program
administered by the Managed Risk Medical Insurance Board, and the
Medi-Cal program administered by the State Department of Health Care
Services. Existing law provides for the regulation of health care
service plans by the Department of Managed Health Care and health
insurers by the Department of Insurance. Existing law establishes the
California Health Benefit Exchange to facilitate the purchase of
qualified health plans through the Exchange by qualified individuals
and small employers by January, 1, 2014.
This bill would establish the California Healthcare System to be
administered by the newly created California Healthcare Agency under
the control of a Healthcare Commissioner appointed by the Governor
and subject to confirmation by the Senate. The bill would make all
California residents eligible for specified health care benefits
under the California Healthcare System, which would, on a
single-payer basis, negotiate for or set fees for health care
services provided through the system and pay claims for those
services. The bill would require the commissioner to seek all
necessary waivers, exemptions, agreements, or legislation to allow
various existing federal, state, and local health care payments to be
paid to the California Healthcare System, which would then assume
responsibility for all benefits and services previously paid for with
those funds.
The bill would create the Healthcare Policy Board to establish
policy on medical issues and various other matters relating to the
system.
The bill would create the Office of Patient Advocacy within
the agency to represent the interests of health care consumers
relative to the system.
The bill would create within the agency the
Office of Health Planning to plan for the health care needs of the
population, and the Office of Health Care Quality, headed by a chief
medical officer, to support the delivery of high quality care and
promote provider and patient satisfaction.
The bill would create the
Office of Inspector General for the California Healthcare System
within the Attorney General's office, which would have various
oversight powers. The bill would prohibit health care service plan
contracts or health insurance policies from being issued for services
covered by the California Healthcare System, subject to
appropriation by the Legislature, and would authorize the collection
of penalty moneys for deposit into the fund.
The bill would create
the Healthcare Fund and the Payments Board to administer the finances
of the California Healthcare System.
The bill would create the
California Healthcare Premium Commission (Premium Commission) to
determine the cost of the California Healthcare System and to develop
a premium structure for the system that complies with specified
standards.
The bill would require the Premium Commission to recommend
a premium structure to the Governor and the Legislature on or before
January 1, 2014, and to make a draft recommendation to the Governor,
the Legislature, and the public 90 days before submitting its final
premium structure recommendation.
The bill would specify that only
its provisions relating to the Premium Commission would become
operative on January 1, 2012, with its remaining provisions becoming
operative on the date the Secretary of California Health and Human
Services notifies the Legislature, as specified, that sufficient
funding exists to implement the California Healthcare System or the
date the secretary receives the necessary federal waiver under the
federal Patient Protection and Affordable Care Act, whichever is
later.
The bill would extend the application of certain insurance fraud
laws to providers of services and products under the system, thereby
imposing a state-mandated local program by revising the definition of
a crime. The bill would enact other related provisions relative to
budgeting, regional entities, federal preemption, subrogation,
collective bargaining agreements, compensation of health care
providers, conflict of interest, patient grievances, and independent
medical review.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Division 114 (commencing with Section 140000) is added
to the Health and Safety Code, to read:
DIVISION 114. CALIFORNIA UNIVERSAL HEALTHCARE ACT
140000. There is hereby established in state government the
California Healthcare System, which shall be administered by the
California Healthcare Agency, an independent agency under the control
of the Healthcare Commissioner.
140000.6. No health care service plan contract or health
insurance policy, except for the California Healthcare System plan,
may be sold in California for services provided by the system.
140001. This division shall be known and may be cited as the
California Universal Healthcare Act.
140002. This division shall be liberally construed to accomplish
its purposes.
140003. The California Healthcare Agency is hereby created and
designated as the single state agency with full power to supervise
every phase of the administration of the California Healthcare System
and to receive grants-in-aid made by the United States government,
by the state, or by other sources in order to secure full compliance
with the applicable provisions of state and federal law.
140004. The California Healthcare Agency shall be comprised of
the following entities:
(a) The Healthcare Policy Board.
(b) The Office of Patient Advocacy.
(c) The Office of Health Planning.
(d) The Office of Health Care Quality.
(e) The Healthcare Fund.
(f) The Public Advisory Committee.
(g) The Payments Board.
(h) Partnerships for Health.
140005. The Legislature finds and declares all of the following:
(a) An estimated 6.6 million Californians were uninsured in 2006,
representing over 20 percent of the nonelderly population.
(b) In California, 763,000 children are currently uninsured, and
an additional 300,000 are significantly at risk for losing their
coverage.
(c) Health care spending has continuously grown two to three times
faster than California's economy, while health insurance premiums
have grown significantly faster than overall health care spending.
(d) Since 2000, health care costs have outpaced increases in wages
by a ratio of four to one.
(e) One-third of California's state budget is devoted to health
care, including direct public programs as well as employee health
benefits. The imbalanced growth in health spending relative to
economic growth which drives public revenues greatly hinders
California's ability to maintain a balanced budget.
(f) On average, the United States spends more than twice as much
as all other industrial nations on health care, both per person and
as a percentage of its gross domestic product. Additionally, the rate
of health care inflation significantly outpaces other industrial
nations.
(g) Despite this high spending, United States healthcare outcomes
consistently rank at the bottom of all industrial nations and the
United States Institute of Medicine has declared an epidemic of
substandard health-care throughout the nation.
(h) Instead of effectively containing costs, costs have been
increasingly shifted to working Californians in the form of a
continual decline in employer-offered coverage, dramatic increases in
premiums, copayments, and deductibles, declining clinical quality,
overall reductions in benefits, and inappropriate utilization review
procedures that deny patients access to needed care.
(i) As a result, one-half of all bankruptcies in the United States
now relate to medical costs, though three-fourths of bankrupted
families had health care coverage at the time of sustaining the
injury or illness.
(j) More than one-half of all Americans report forgoing
recommended health care because of the cost, and Americans are more
likely to report difficulty seeing a doctor on the day they sought.
(k) Health plans and insurers compete to construct patient pools
consisting of the healthiest segments of the population, leaving
higher risk patients to public programs or uninsured.
(l) Segregating patients into groups based on actuarial
assessments of their medical risk guarantees the continuation of
entrenched health care disparities in access and quality, and drives
health care resources toward healthier populations who least need it
for whom more care often does more harm than good.
(m) The Institute of Medicine estimates that 18,000 people die
annually in the United States because of lack of access to care and
that 30,000 die from over treatment.
(n) The RAND Institute estimates that one-third of clinical
procedures performed are of questionable clinical benefit.
(o) Quantitative analyses performed by the Congressional Budget
Office, the General Accounting Office, the Lewin Group, and the
Legislative Analyst's Office indicate that under a single-payer
health care coverage system, the amount currently spent for health
care is adequate to finance comprehensive high quality health care
coverage for every resident of the state.
(p) According to these reports and numerous other studies, by
simplifying administration, achieving bulk purchase discounts on
pharmaceuticals, reducing the use of emergency facilities for primary
care, and better managing health care resources, California could
divert billions of dollars toward direct health care.
(q) Enactment of a single-payer universal health care system would
create 2.6 million jobs in the United States, while infusing three
hundred seventeen billion dollars ($317,000,000,000) in new business
and public revenues and one hundred billion dollars
($100,000,000,000) in wages into the United States economy according
to a recent study by the Institute for Health and Socioeconomic
Policy.
(r) Single-payer health care, exhibited by Medicare and the
Veterans Administration, along with virtually every other industrial
nation in the world, is a well tested model that has been proven to
contain the growth in health care spending while promoting quality
improvements and maintaining comprehensive coverage.
140005.1.
(a) It is the intent of the Legislature to establish a
system of universal health care coverage in this state that provides
all residents with comprehensive health care benefits, guarantees a
single standard of care for all residents, stabilizes the growth in
health care spending, and improves the quality of health care for all
residents.
(b) It is the intent of the Legislature that, in order to ensure
an adequate supply and distribution of direct care providers in the
state, a just and fair return for providers electing to be
compensated by the health care system, and a uniform system of
payments, the state shall actively supervise and regulate a system of
payments whereby groups of fee-for-service physicians are authorized
to select representatives of their specialties to negotiate with the
health care system, pursuant to Section 140209. Nothing in this
division shall be construed to allow collective action against the
health care system.
140006. This division shall have all of the following purposes:
(a) To provide affordable and comprehensive health care coverage
with a single standard of care for all California residents.
(b) To control health care costs and the growth of health care
spending, subject to the obligation described in subdivision (a).
(c) To achieve measurable improvement in the quality of care and
the efficiency of care delivery.
(d) To prevent disease and disability and to improve or maintain
health and functionality.
(e) To increase health care provider, consumer, employee, and
employer satisfaction with the health care system.
(f) To implement policies that strengthen and improve culturally
and linguistically sensitive care and sensitive care provided to
disabled persons.
(g) To develop an integrated population-based health care database
to support health care planning.
(h) To provide information and care in an appropriate and
accessible format.
140007. As used in this division, the following terms have the
following meanings:
(a) "Agency" means the California Healthcare Agency.
(b) "Clinic" means an organized outpatient health facility that
provides direct medical, surgical, dental, optometric, or podiatric
advice, services, or treatment to patients who remain less than 24
hours, and that may also provide diagnostic or therapeutic services
to patients in the home as an alternative to care provided at the
clinic facility, and includes those facilities defined under Sections
1200 and 1200.1.
(c) "Commissioner" means the Healthcare Commissioner.
(d) "Direct care provider" means any licensed health care
professional that provides health care services through direct
contact with a patient, either in person or using approved
telemedicine modalities as identified in Section 2290.5 of the
Business and Professions Code.
(e) "Essential community provider" means a health facility that
has served as part of the state's health care safety net for
low-income and traditionally underserved populations in California
and that is one of the following:
(1) A "community clinic" as defined under subparagraph (A) of
paragraph (1) of subdivision (a) of Section 1204.
(2) A "free clinic" as defined under subparagraph (B) of paragraph
(1) of subdivision (a) of Section 1204.
(3) A "federally qualified health center" as defined under Section
1395x (aa)(4) or 1396d (l)(2)(B) of Title 42 of the United States
Code.
(4) A "rural health clinic" as defined under Section 1395x (aa)(2)
or 1396d (l)(1) of Title 42 of the United States Code.
(5) Any clinic conducted, maintained, or operated by a federally
recognized Indian tribe or tribal organization, as defined in Section
1603 of Title 25 of the United States Code.
(6) Any clinic exempt from licensure under subdivision (h) of
Section 1206.
(f) "Health care provider" means any professional person, medical
group, independent practice association, organization, health
facility, or other person or institution licensed or authorized by
the state to deliver or furnish health care services.
(g) "Health facility" means any facility, place, or building that
is organized, maintained, and operated for the diagnosis, care,
prevention, and treatment of human illness, physical or mental,
including convalescence and rehabilitation and including care during
and after pregnancy, or for any one or more of these purposes, for
one or more persons, and includes those facilities defined under
subdivision (d) of Section 15432 of the Government Code.
(h) "Hospital" means all health facilities to which persons may be
admitted for a 24-hour stay or longer, as defined in Section 1250,
with the exception of nursing, skilled nursing, intermediate care,
and congregate living health facilities.
(i) "Integrated health care delivery system" means a provider
organization that meets both of the following criteria:
(1) Is fully integrated operationally and clinically to provide a
broad range of health care services, including preventative care,
prenatal and well-baby care, immunizations, screening diagnostics,
emergency services, hospital and medical services, surgical services,
and ancillary services.
(2) Is compensated using capitation or facility budgets, except
for copayments, for the provision of health care services.
(j) "Large employer" means a person, firm, proprietary or
nonprofit corporation, partnership, public agency, or association
that is actively engaged in business or service, that, on at least 50
percent of its working days during the preceding calendar year
employed at least 50 employees, or, if the employer was not in
business during any part of the preceding calendar year, employed at
least 50 employees on at least 50 percent of its working days during
the preceding calendar quarter.
(k) "Premium Commission" means the California Healthcare Premium
Commission.
(l) "Primary care provider" means a direct care provider that is a
family physician, internist, general practitioner, pediatrician, an
obstetrician-gynecologist, or a family nurse practitioner or
physician assistant practicing under supervision as defined in the
California codes, or essential community providers who employ primary
care providers.
(m) "Small employer" means a person, firm, proprietary or
nonprofit corporation, partnership, public agency, or association
that is actively engaged in business or service and that, on at least
50 percent of its working days during the preceding calendar year
employed at least two but no more than 49 employees, or, if the
employer was not in business during any part of the preceding
calendar year, employed at least two but no more than 49 eligible
employees on at least 50 percent of its working days during the
preceding calendar quarter.
(n) "System" means the California Healthcare System.
140008. The definitions contained in Section 140007 shall govern
the construction of this division, unless the context requires
otherwise.
140100.
(a)
(1) The commissioner shall be appointed by the
Governor on or before July 1 of the fiscal year following the date
that this section becomes operative pursuant to Section 140700,
subject to confirmation by the Senate. If in session, the Senate
shall act on the appointment within 30 days of the appointment date.
If the Senate does not act on the appointment within that period, the
nominee shall be deemed confirmed and may take office. If the Senate
is not in session at the time of the appointment, the Senate shall
act on the appointment within 30 days of the commencement of the next
legislative session. If the Senate does not act on the appointment
within that period, the appointee shall be deemed confirmed and may
take office.
(2) If the Senate by a vote fails to confirm the nominee for
commissioner, the Governor shall make a new appointment within 30
days of the Senate's vote. The appointment is subject to confirmation
by the Senate, and the procedures described in paragraph (1) shall
apply to the confirmation process.
(b) The commissioner is exempt from the State Civil Service Act
(Part 2 (commencing with Section 18500) of Division 5 of Title 2 of
the Government Code).
(c) The commissioner may not be a state legislator or a Member of
the United States Congress while holding the position of
commissioner.
(d) The commissioner shall not have been employed in any capacity
by a for-profit insurance, pharmaceutical, or medical equipment
company that sells products to the system for a period of two years
prior to appointment as commissioner.
(e) For two years after completing service in the system, the
commissioner may not receive payments of any kind from, or be
employed in any capacity or act as a paid consultant to, a for-profit
insurance, pharmaceutical, or medical equipment company that sells
products to the system.
(f) The compensation and benefits of the commissioner shall be
established by the California Citizens Compensation Commission in
accordance with Section 8 of Article III of the California
Constitution.
(g) The commissioner shall be subject to Title 9 (commencing with
Section 81000) of the Government Code.
140101.
(a) The commissioner shall be the chief officer of the
agency and shall administer all aspects of the agency.
(b) The commissioner shall be responsible for the performance of
all duties, the exercise of all power and jurisdiction, and the
assumption and discharge of all responsibilities vested by law in the
agency. The commissioner shall perform all duties imposed upon him
or her by this division and other laws related to health care, and
shall enforce the execution of any law related to the system, and
shall enforce the execution of those provisions and laws to promote
their underlying aims and purposes. These broad powers shall include,
but are not limited to, the power to establish the system's budget
and to set rates, to establish the system's goals, standards, and
priorities, to hire, terminate, and fix the compensation of agency
personnel, to make allocations and reallocations to the health
planning regions, and to promulgate generally binding regulations
concerning any and all matters related to the implementation of this
division and its purposes.
(c) The commissioner shall appoint a deputy commissioner, the
Director of the Healthcare Fund, the patient advocate of the Office
of Patient Advocacy, the chief medical officer, the Director of the
Payments Board, the Director of the Office of Health Planning, the
Director of the Partnerships for Health, the regional health planning
directors, the chief enforcement counsel, and legal counsel in any
action brought by or against the commissioner under or pursuant to
any provision of any law under the commissioner's jurisdiction, or in
which the commissioner joins or intervenes as to a matter within the
commissioner's jurisdiction, as a friend of the court or otherwise,
and stenographic reporters to take and transcribe the testimony in
any formal hearing or investigation before the commissioner or before
a person authorized by the commissioner.
(d) The commissioner, in accordance with the State Civil Service
Act (Part 2 (commencing with Section 18500) of Division 5 of Title 2
of the Government Code), may appoint and fix the compensation of
clerical, inspection, investigation, evaluation, and auditing
personnel as may be necessary to implement this division.
(e) The personnel of the agency shall perform duties as assigned
to them by the commissioner. The commissioner shall designate certain
employees by rule or order that are to take and subscribe to the
constitutional oath within 15 days after their appointments, and to
file that oath with the Secretary of State. The commissioner shall
also designate those employees that are to be subject to Title 9
(commencing with Section 81000) of the Government Code.
(f) The commissioner shall adopt a seal bearing the inscription:
"Commissioner, California Healthcare Agency, State of California."
The seal shall be affixed to, or imprinted on, all orders and
certificates issued by him or her and other instruments as he or she
directs. All courts shall take notice of this seal.
(g) The administration of the agency shall be supported from the
Healthcare Fund created pursuant to Section 140200.
(h) The commissioner, as a general rule, shall publish or make
available for public inspection any information filed with or
obtained by the agency, unless the commissioner finds that this
availability or publication is contrary to law. No provision of this
division authorizes the commissioner or any of the commissioner's
assistants, clerks, or deputies to disclose any information withheld
from public inspection except among themselves or when necessary or
appropriate in a proceeding or investigation under this division or
to other federal or state regulatory agencies. No provision of this
division either creates or derogates from any privilege that exists
at common law or otherwise when documentary or other evidence is
sought under a subpoena directed to the commissioner or any of his or
her assistants, clerks, and deputies.
(i) It is unlawful for the commissioner or any of his or her
assistants, clerks, or deputies to use for personal benefit any
information that is filed with, or obtained by, the commissioner and
that is not then generally available to the public.
(j) The commissioner shall avoid political activity that may
create the appearance of political bias or impropriety. Prohibited
activities shall include, but not be limited to, leadership of, or
employment by, a political party or a political organization; public
endorsement of a political candidate; contribution of more than five
hundred dollars ($500) to any one candidate in a calendar year or a
contribution in excess of an aggregate of one thousand dollars
($1,000) in a calendar year for all political parties or
organizations; and attempting to avoid compliance with this
prohibition by making contributions through a spouse or other family
member.
(k) The commissioner shall not participate in making or in any way
attempt to use his or her official position to influence a
governmental decision in which he or she knows or has reason to know
that he or she or a family member, business partner, or colleague has
a financial interest.
(l) The commissioner, in pursuit of his or her duties, shall have
unlimited access to all nonconfidential and all nonprivileged
documents in the custody and control of the agency.
(m) The Attorney General shall render to the commissioner opinions
upon all questions of law, relating to the construction or
interpretation of any law under the commissioner's jurisdiction or
arising in the administration thereof, that may be submitted to the
Attorney General by the commissioner and, upon the commissioner's
request, shall act as the attorney for the commissioner in actions
and proceedings brought by or against the commissioner or under or
pursuant to any provision of any law under the commissioner's
jurisdiction.
140102. The commissioner shall do all of the following:
(a) Oversee the establishment, as part of the administration of
the agency, of all of the following:
(1) The Healthcare Policy Board, pursuant to Section 140103.
(2) The Office of Patient Advocacy, pursuant to Section 140105.
(3) The Office of Health Planning, pursuant to Section 140602.
(4) The Office of Healthcare Quality, pursuant to Section 140605.
(5) The Healthcare Fund, pursuant to Section 140200.
(6) The Public Advisory Committee, pursuant to Section 140104.
(7) The Payments Board, pursuant to Section 140208.
(8) Partnerships for Health.
(b) Determine goals, standards, guidelines, and priorities for the
system.
(c) Establish health planning regions, pursuant to Section 140112.
(d) Oversee the establishment of locally based integrated service
networks, including those that provide services through medical
technologies such as telemedicine, that include physicians in
fee-for-service, solo and group practice, essential community, and
ancillary care providers and facilities in order to pool and align
resources and form interdisciplinary teams that share responsibility
and accountability for patient care and provide a continuum of
coordinated high quality primary to tertiary care to all California
residents while preserving patient choice. This shall be accomplished
in collaboration with the chief medical officer, the Director of the
Office of Health Planning, the regional medical officers, the
regional planning boards, and the patient advocate.
(e) Annually assess projected revenues and expenditures and assure
financial solvency of the system pursuant to Section 140203.
(f) Develop the system's budget pursuant to Section 140206 to
ensure adequate funding to meet the health care needs of the
population. Review all budgets and locations annually to ensure they
address disparities in service availability and health care outcomes
and for sufficiency of rates, fees, and prices.
(g) Establish a capital management framework for the system
pursuant to Section 140216, including, but not limited to, a
standardized process and format for the development and submission of
regional operating and regional capital budget requests and ensure a
smooth transition to system oversight.
(h) Establish standards and criteria for the development and
submission of provider operating and capital budget requests.
(i) Establish standards and criteria for the allocation of funds
from the Healthcare Fund as described in Chapter 3 (commencing with
Section 140200).
(j) During transition and annually thereafter, determine the
appropriate level for a reserve fund for the system and implement
policies needed to establish the appropriate reserve.
(k) Establish an enrollment system that ensures all eligible
California residents, including those who travel out of state; those
who have disabilities that limit their mobility, hearing, or vision
or their mental or cognitive capacity; those who cannot read; and
those who do not speak or write English, are aware of their right to
health care and are formally enrolled in the system. The commissioner
may contract with a third party for eligibility and enrollment
services if the commissioner finds that doing so would meet the
system's goals and standards, and result in greater efficiency and
cost savings to the system.
(l) Establish an electronic claims and payments system for the
system where all claims under the system shall be filed and paid, and
implement, to the extent permitted by federal law, standardized
claims and reporting methods. The commissioner may contract with a
third party for claims and payment services if the commissioner finds
that doing so would meet the system's goals and standards, and
result in greater efficiency and cost savings to the system.
(m) Establish a system of secure electronic medical records that
comply with state and federal privacy laws and that are compatible
across the system.
(n) Establish an electronic referral system that is accessible to
providers and to patients.
(o) Establish standards based on clinical efficacy to guide
delivery of care and a process to identify areas where no such
standards exist, set priorities and a timetable for their
development, and ensure a smooth transition to clinical
decisionmaking under statewide standards.
(p) Implement policies to ensure that all Californians receive
culturally and linguistically sensitive care, pursuant to Section
140604, and that all disabled Californians receive care in accordance
with the federal Americans with Disabilities Act (42 U.S.C. Sec.
12101 et seq.) and Section 504 of the federal Rehabilitation Act of
1973 (29 U.S.C. Sec. 794) and develop mechanisms and incentives to
achieve these purposes and a means to monitor the effectiveness of
efforts to achieve these purposes.
(q) Create a systematic approach to the measurement, management,
and accountability for care quality and access, including a system of
performance contracts that contain measurable goals and outcomes and
appropriate statewide and regional health care databases to assure
the delivery of quality care to all patients.
(r) Establish standards for mandatory reporting by health care
providers and penalties for failure to report.
(s) Develop methods and a framework to measure the performance of
health care coverage and health delivery system upper level managers,
including a system of performance contracts that contain measurable
goals and outcomes.
(t) Implement policies to ensure that all residents of this
state have access to medically appropriate, coordinated mental health
services.
(u) Ensure the establishment of policies that support the public
health.
(v) Meet regularly with the chief medical officer, the patient
advocate for the Office of Patient Advocacy, the Public Advisory
Committee, the Director of the Office of Health Planning, the
Director of the Payments Board, the Director of the Partnerships for
Health, regional planning directors, and regional medical officers to
review the impact of the agency and its policies on the health of
the population and on satisfaction with the system.
(w) Negotiate for or set rates, fees, and prices involving any
aspect of the system and establish procedures thereto.
(x) Establish a formulary based on clinical efficacy for all
prescription drugs and durable and nondurable medical equipment for
use by the system.
(y) Establish guidelines for prescribing medications and durable
medical equipment that are not included in the system's formularies.
(z) Utilize the purchasing power of the state to negotiate price
discounts for prescription drugs and durable and nondurable medical
equipment for use by the system.
(aa) Ensure that use of state purchasing power achieves the lowest
possible prices for the system without adversely affecting needed
pharmaceutical research.
(ab) Create incentives and guidelines for research needed to meet
the goals of the system and disincentives for research that does not
achieve the system goals.
(ac) Implement eligibility standards for the system, including
guidelines to prevent an influx of persons to the state for the
purpose of obtaining medical care.
(ad) Determine an appropriate level of, and provide support during
the transition for, training and job placement for persons who are
displaced from employment as a result of the initiation of the
system.
(ae) Oversee the establishment of a system for resolution of
disputes pursuant to Sections 140608 and 140610.
(af) Investigate the costs and benefits to the health of the
population of advances in information technology, including those
that support data collection, analysis, and distribution.
(ag) Ensure that consumers of health care have access to
information needed to support their choice of a physician.
(ah) Collaborate with the licensing entities of health facilities
to ensure that facility performance is monitored and that deficient
practices are recognized and corrected in a timely fashion and that
consumers and providers of health care have access to information
needed to support their choice of facility.
(ai) Establish an Internet Web site that provides information to
the public about the system that includes, but is not limited to,
information that supports choice of providers and facilities and
informs the public about meetings of state and regional health
planning boards and activities of the Partnerships for Health.
(aj) Procure funds, including loans, for the system, enter into
leases, and obtain insurance for the system and its employees and
agents.
(ak) Collaborate with state and local authorities, including
regional planning directors, to plan for needed earthquake retrofits
in a manner that does not disrupt patient care.
(al ) Establish a process that is accessible to all
Californians for the system to receive the concerns, opinions, ideas,
and recommendation of the public regarding all aspects of the
system.
(am) Annually report to the Legislature and the Governor, on or
before October of each year and at other times pursuant to this
division, on the performance of the system, its fiscal condition and
need for rate adjustments, consumer copayments or consumer deductible
payments, recommendations for statutory changes, receipt of payments
from the federal government and other sources, whether current year
goals and priorities are met, future goals, and priorities, and major
new technology or prescription drugs or other circumstances that may
affect the cost of health care.
140103.
(a) The commissioner shall establish a Healthcare Policy
Board and shall serve as the president of the board.
(b) The board shall do all of the following:
(1) Establish goals and priorities for the system, including
research and capital investment priorities.
(2) Establish the scope of services to be provided to the
population in accordance with Chapter 5 (commencing with Section
140500).
(3) Establish guidelines for evaluating the performance of the
system, its officers, health planning regions, and health care
providers.
(4) Establish guidelines for ensuring public input on the system's
policy, standards, and goals.
(c) The board shall consist of the following members:
(1) The commissioner.
(2) The deputy commissioner.
(3) The Director of the Healthcare Fund.
(4) The patient advocate of the Office of Patient Advocacy.
(5) The chief medical officer.
(6) The Director of the Office of Health Planning.
(7) The Director of the Partnerships for Health.
(8) The Director of the Payments Board.
(9) The State Public Health Officer.
(10) One member of the Public Advisory Committee who shall serve
on a rotating basis to be determined by the Public Advisory
Committee.
(11) Two representatives from regional planning boards.
(A) A regional representative shall serve a term of one year and
terms shall be rotated in order to allow every region to be
represented within a five-year period.
(B) A regional planning director shall appoint the regional
representative to serve on the board.
(d) It is unlawful for the board members or any of their
assistants, clerks, or deputies to use for personal benefit any
information that is filed with or obtained by the board and that is
not then generally available to the public.
140104.
(a) The commissioner shall establish the Public Advisory
Committee to advise the Healthcare Policy Board on all matters of
policy for the system.
(b) Members of the Public Advisory Committee shall include all of
the following:
(1) Four physicians all of whom shall be board certified in their
field and at least one of whom shall be a psychiatrist. The Senate
Committee on Rules and the Governor shall each appoint one member.
The Speaker of the Assembly shall appoint two of these members, both
of whom shall be primary care providers.
(2) One registered nurse, to be appointed by the Senate Committee
on Rules.
(3) One licensed vocational nurse, to be appointed by the Senate
Committee on Rules.
(4) One licensed allied health practitioner, to be appointed by
the Speaker of the Assembly.
(5) One mental health care provider, to be appointed by the Senate
Committee on Rules.
(6) One dentist, to be appointed by the Governor.
(7) One representative of private hospitals, to be appointed by
the Governor.
(8) One representative of public hospitals, to be appointed by the
Governor.
(9) One representative of an integrated health care delivery
system, to be appointed by the Governor.
(10) Four consumers of health care. The Governor shall appoint two
of these members, one of whom shall be a member of the disability
community. The Senate Committee on Rules shall appoint a member who
is 65 years of age or older. The Speaker of the Assembly shall
appoint the fourth member.
(11) One representative of organized labor, to be appointed by the
Speaker of the Assembly.
(12) One representative of essential community providers, to be
appointed by the Senate Committee on Rules.
(13) One union member, to be appointed by the Senate Committee on
Rules.
(14) One representative of small business, to be appointed by the
Governor.
(15) One representative of large business, to be appointed by the
Speaker of the Assembly.
(16) One pharmacist, to be appointed by the Speaker of the
Assembly.
(c) In making appointments pursuant to this section, the Governor,
the Senate Committee on Rules, and the Speaker of the Assembly shall
make good faith efforts to assure that their appointments, as a
whole, reflect, to the greatest extent feasible, the social and
geographic diversity of the state.
(d) Any member appointed by the Governor, the Senate Committee on
Rules, or the Speaker of the Assembly shall serve a four-year term.
These members may be reappointed for succeeding four-year terms.
(e) Vacancies that occur shall be filled within 30 days after the
occurrence of the vacancy, and shall be filled in the same manner in
which the vacating member was initially selected or appointed. The
commissioner shall notify the appropriate appointing authority of any
expected vacancies on the board.
(f) Members of the Public Advisory Committee shall serve without
compensation, but shall be reimbursed for actual and necessary
expenses incurred in the performance of their duties to the extent
that reimbursement for those expenses is not otherwise provided or
payable by another public agency or agencies, and shall receive one
hundred dollars ($100) for each full day of attending meetings of the
committee. For purposes of this section, "full day of attending a
meeting" means presence at, and participation in, not less than 75
percent of the total meeting time of the committee during any
particular 24-hour period.
(g) The Public Advisory Committee shall meet at least six times a
year in a place convenient to the public. All meetings of the board
shall be open to the public, pursuant to the Bagley-Keene Open
Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1
of Part 1 of Division 3 of Title 2 of the Government Code).
(h) The Public Advisory Committee shall elect a chair who shall
serve for two years and who may be reelected for an additional two
years.
(i) Appointed committee members shall have worked in the field
they represent on the committee for a period of at least two years
prior to being appointed to the committee.
(j) The Public Advisory Committee shall elect a member to serve on
the Healthcare Policy Board. The elected member shall serve for one
year, and may be recalled by the Public Advisory Committee for cause.
In that case, a new member shall be elected to serve on that board.
The Public Advisory Committee representative shall represent to the
board the views of the committee members.
(k) It is unlawful for the committee members or any of their
assistants, clerks, or deputies to use for personal benefit any
information that is filed with, or obtained by, the committee and
that is not generally available to the public.
140105.
(a)
(1) There is within the agency an Office of Patient
Advocacy to represent the interests of the consumers of health care.
The goal of the office shall be to help residents of the state secure
the health care services and benefits to which they are entitled
under the laws administered by the agency and to advocate on behalf
of and represent the interests of consumers in governance bodies
created by this division and in other forums.
(2) The office shall be headed by a patient advocate appointed by
the commissioner.
(3) The patient advocate shall establish an office in the City of
Sacramento and other offices throughout the state that shall provide
convenient access to residents.
(b) The patient advocate shall do all the following:
(1) Administer all aspects of the Office of Patient Advocacy.
(2) Assure that services of the Office of Patient Advocacy are
available to all California residents.
(3) Serve on the Healthcare Policy Board and participate in the
regional Partnerships for Health.
(4) Oversee the establishment and maintenance of the grievance
process pursuant to Sections 140608 and 140610.
(5) Participate in the grievance process and independent medical
review system on behalf of consumers pursuant to Section 140610.
(6) Receive, evaluate, and respond to consumer complaints about
the system.
(7) Provide a means to receive recommendations from the public
about ways to improve the system and hold public hearings at least
once annually to discuss problems and receive recommendations from
the public.
(8) Develop educational and informational guides for consumers
describing their rights and responsibilities and informing them about
effective ways to exercise their rights to secure health care
services and to participate in the system. The guides shall be easy
to read and understand, available in English and other languages,
including Braille and formats suitable for those with hearing
limitations, and shall be made available to the public by the agency,
including access on the agency's Internet Web site and through
public outreach and educational programs, and displayed in provider
offices and health care facilities.
(9) Establish a toll-free telephone number, including a TDD
number, to receive complaints regarding the agency and its services.
Those with hearing and speech limitations may use the California
Relay Service's toll-free telephone numbers to contact the Office of
Patient Advocacy. The agency's Internet Web site shall have complaint
forms and instructions on their use.
(10) Report annually to the public, the commissioner, and the
Legislature about the consumer perspective on the performance of the
system, including recommendations for needed improvements.
(c) Nothing in this division shall prohibit a consumer or class of
consumers or the patient advocate from seeking relief through the
judicial system.
(d) The patient advocate in pursuit of his or her duties shall
have unlimited access to all nonconfidential and all nonprivileged
documents in the custody and control of the agency.
(e) It is unlawful for the patient advocate or any of his or her
assistants, clerks, or deputies to use for personal benefit any
information that is filed with, or obtained by, the agency and that
is not then generally available to the public.
140106.
(a) There is within the Office of the Attorney General an
Office of the Inspector General for the California Healthcare
System. The Inspector General shall be appointed by the Governor and
subject to Senate confirmation.
(b) The Inspector General shall have broad powers to investigate,
audit, and review the financial and business records of individuals,
public and private agencies and institutions, and private
corporations that provide services or products to the system, the
costs of which are reimbursed by the system.
(c) The Inspector General shall investigate allegations of
misconduct on the part of an employee or appointee of the agency and
on the part of any health care provider of services that are
reimbursed by the system and shall report any findings of misconduct
to the Attorney General.
(d) The Inspector General shall investigate patterns of medical
practice that may indicate fraud and abuse related to over or under
utilization or other inappropriate utilization of medical products
and services.
(e) The Inspector General shall arrange for the collection and
analysis of data needed to investigate the inappropriate utilization
of these products and services.
(f) The Inspector General shall conduct additional reviews or
investigations of financial and business records when requested by
the Governor or by any Member of the Legislature and shall report
findings of the review or investigation to the Governor and the
Legislature.
(g) The Inspector General shall establish a telephone hotline for
anonymous reporting of allegations of failure to make health
insurance premium payments established by this division. The
Inspector General shall investigate information provided to the
hotline and shall report any findings of misconduct to the Attorney
General.
(h) The Inspector General shall annually report recommendations
for improvements to the system or the agency to the Governor, the
Legislature, and the commissioner.
140107. The provisions of the Insurance Frauds Prevention Act
(Chapter 12 (commencing with Section 1871) of Part 2 of Division 1 of
the Insurance Code), and the provisions of Article 6 (commencing
with Section 650) of Chapter 1 of Division 2 of the Business and
Professions Code shall be applicable to health care providers who
receive payments for services through the system under this division.
140108.
(a) Nothing contained in this division is intended to
repeal any legislation or regulation governing the professional
conduct of any person licensed by the State of California or any
legislation governing the licensure of any facility licensed by the
State of California.
(b) All federal legislation and regulations governing referral
fees and fee-splitting, including, but not limited to, Sections
1320a-7b and 1395nn of Title 42 of the United States Code, shall be
applicable to all health care providers of services reimbursed under
this division, whether or not the health care provider is paid with
funds coming from the federal government.
140110.
(a) The system shall be operational no later than two
years after the date this division, other than Article 2 (commencing
with Section 140230) of Chapter 3, becomes operative, as described in
Section 140700.
(b) The commissioner shall assess health plans and insurers for
care provided by the system in those cases in which a person's health
care coverage extends into the time period in which the new system
is operative.
(c) The commissioner shall implement means to assist persons who
are displaced from employment as a result of the initiation of the
system, including determination of the period of time during which
assistance shall be provided and possible sources of funds, including
funds from the system, to support retraining and job placement. That
support shall be provided for a period of five years from the date
that this division becomes operative.
140111.
(a) The commissioner shall appoint a transition advisory
group, which shall include, but not be limited to, the following
members:
(1) The commissioner.
(2) The patient advocate of the Office of Patient Advocacy.
(3) The chief medical officer.
(4) The Director of the Office of Health Planning.
(5) The Director of the Healthcare Fund.
(6) The State Public Health Officer.
(7) Experts in health care financing and health care
administration.
(8) Direct care providers.
(9) Representatives of retirement boards.
(10) Employer and employee representatives.
(11) Hospital, integrated health care delivery system, essential
community provider, and long-term care facility representatives.
(12) Representatives from state departments and regulatory bodies
that shall or may relinquish some or all parts of their delivery of
health care services to the system.
(13) Representatives of counties.
(14) Consumers of health care services.
(b) The transition advisory group shall advise the commissioner
on all aspects of the implementation of this division.
(c) The transition advisory group shall make recommendations to
the commissioner, the Governor, and the Legislature on how to
integrate health care delivery services and responsibilities relating
to the delivery of the services of the following departments and
agencies into the system:
(1) The State Department of Health Care Services.
(2) The Department of Managed Health Care.
(3) The Department of Aging.
(4) The Department of Developmental Services.
(5) The Health and Welfare Data Center.
(6) The State Department of Mental Health.
(7) The State Department of Alcohol and Drug Programs.
(8) The Department of Rehabilitation.
(9) The Emergency Medical Services Authority.
(10) The Managed Risk Medical Insurance Board.
(11) The Office of Statewide Health Planning and Development.
(12) The Department of Insurance.
(13) The State Department of Public Health.
(d) The transition advisory group shall make recommendations to
the Governor, the Legislature, and the commissioner regarding
research needed to support transition to the system.
140112.
(a) The transition advisory group shall make
recommendations to the commissioner relative to how the system shall
be regionalized for the purposes of local and community-based
planning for the delivery of high quality cost-effective care and
efficient service delivery.
(b) The commissioner, in consultation with the Director of the
Office of Health Planning, shall establish up to 10 health planning
regions composed of geographically contiguous counties grouped on the
basis of the following considerations:
(1) Patterns of utilization of health care services.
(2) Health care resources, including workforce resources.
(3) Health needs of the population, including public health needs.
(4) Geography.
(5) Population and demographic characteristics.
(6) Other considerations as determined by the commissioner, the
Director of the Office of Health Planning, or the chief medical
officer.
(c) The commissioner shall appoint a director for each region.
Regional planning directors shall serve at the will of the
commissioner and may serve up to two eight-year terms to coincide
with the terms of the commissioner.
(d) Each regional planning director shall appoint a regional
medical officer.
(e) Compensation for officers of the system and appointees who are
exempt from the civil service shall be established by the California
Citizens Commission in accordance with Section 8 of Article III of
the California Constitution, and shall take into consideration
regional differences in the cost of living.
(f) The regional planning director and the regional medical
officer shall be subject to Title 9 (commencing with Section 81000)
of the Government Code and shall comply with the qualifications for
office described in subdivisions (c), (d), and (e) of Section 140100
and subdivisions (j) and (k) of Section 140101.
140113.
(a) Regional planning directors shall administer the
health planning region. The regional planning director shall be
responsible for all duties, the exercise of all powers and
jurisdiction, and the assumptions and discharge of all
responsibilities vested by law in the regional agency. The regional
planning director shall perform all duties imposed upon him or her by
this division and by other laws related to health care, and shall
enforce execution of those provisions and laws to promote their
underlying aims and purposes.
(b) The regional planning director shall reside in the region in
which he or she serves.
(c) The regional planning director shall do all of the following:
(1) Establish and administer a regional office of the state
agency. Each regional office shall include, at minimum, an office of
each of the following: Patient Advocacy, Health Care Quality, Health
Planning, and Partnerships for Health.
(2) Appoint regional planning board members and serve as president
of the board.
(3) Identify and prioritize regional health care needs and goals,
in collaboration with the regional medical officer, regional health
care providers, the regional planning board, and regional director of
Partnerships for Health pursuant to the priorities and goals of the
system established by the commissioner.
(4) Regularly assess projected revenues and expenditures to ensure
fiscal solvency of the regional planning system and advise the
commissioner of potential revenue shortfalls and the possible need
for cost controls.
(5) Assure that regional administrative costs meet standards
established by the division and seek innovative means to lower the
costs of administration of the regional planning office and those of
regional providers.
(6) Plan for the delivery of, and equal access to, high quality
and culturally and linguistically sensitive care and such care for
disabled persons that meets the needs of all regional residents
pursuant to standards established by the commissioner.
(7) Seek innovative and systemic means to improve care quality and
efficiency of care delivery and to achieve access to programs for
all state residents.
(8) Recommend means to implement policies established by the
commissioner to provide support to persons displaced from employment
as a result of the initiation of the new system.
(9) Make needed revenue sharing arrangements so that
regionalization does not limit a patient's choice of provider.
(10) Implement procedures established by the commissioner for the
resolution of disputes.
(11) Implement processes established by the commissioner and
recommend needed changes to permit the public to share concerns,
provide ideas, opinions, and recommendations regarding all aspects of
the system's policies.
(12) Report regularly to the public and, at intervals determined
by the commissioner and pursuant to this division, to the
commissioner on the status of the regional planning system, including
evaluating access to care, quality of care delivered, and provider
performance, and other issues related to regional health care needs,
and recommending needed improvements.
(13) Identify or establish guidelines for providers to identify,
maintain, and provide to the regional planning director inventories
of regional health care assets.
(14) Establish and maintain regional health care databases that
are coordinated with other regional and statewide databases.
(15) In collaboration with the regional medical officer, enforce
reporting requirements established by the system and make
recommendations to the commissioner, the Director of the Office of
Health Planning, and the chief medical officer for needed changes in
reporting requirements.
(16) Establish and implement a regional capital management plan
pursuant to the capital management plan established by the
commissioner for the system.
(17) Implement standards and formats established by the
commissioner for the development and submission of operating and
capital budget requests and make recommendations to the commissioner
and the Director of the Office of Health Planning for needed changes.
(18) Support regional providers in developing operating and
capital budget requests.
(19) Receive, evaluate, and prioritize provider operating and
capital budget requests pursuant to standards and criteria
established by the commissioner.
(20) Prepare a three-year regional operating and capital budget
request that meets the health care needs of the region pursuant to
this division, for submission to the commissioner.
(21) Establish a comprehensive three-year regional planning budget
using funds allocated to the region by the commissioner.
140114. The regional medical officers shall do all of the following:
(a) Administer all aspects of the regional office of health care
quality.
(b) Serve as a member of the regional planning board.
(c) In collaboration with the commissioner, the chief medical
officer, the regional medical officer, regional planning boards, the
patient advocate of the Office of Patient Advocacy, regional
providers, and patients, oversee the establishment of integrated
service networks, including those that provide services through
medical technologies such as telemedicine, that include physicians in
fee-for-service, solo and group practice, essential community, and
ancillary care providers and facilities that pool and align resources
and form interdisciplinary teams that share responsibility and
accountability for patient care and provide a continuum of
coordinated high quality primary to tertiary care to all residents of
the region.
(d) Ensure the evaluation and measurement of the quality of care
delivered in the region, including assessment of the performance of
individual providers, pursuant to standards and methods established
by the chief medical officer to ensure a single standard of high
quality care is delivered to all state residents.
(e) In collaboration with the chief medical officer and regional
providers, evaluate standards of care in use at the time the system
becomes operative.
(f) Ensure a smooth transition toward use of standards based on
clinical efficacy that guide clinical decision making. Identify areas
of medical practice where standards have not been established and
collaborated with the chief medical officer and health care
providers, to establish priorities in developing needed standards.
(g) Support the development and distribution of user-friendly
software for use by providers in order to support the delivery of
high quality care.
(h) Provide feedback to, and support and supervision of, health
care providers to ensure the delivery of high quality care pursuant
to standards established by the system.
(i) Collaborate with the regional Partnerships for Health to
develop patient education to assist consumers in evaluating and
appropriately utilizing health care providers and facilities.
(j) Collaborate with regional public health officers to establish
regional health policies that support the public health.
(k) Establish a regional program to monitor and decrease medical
errors and their causes pursuant to standards and methods established
by the chief medical officer.
(l) Support the development and implementation of innovative means
to provide high quality care and assist providers in securing funds
for innovative demonstration projects that seek to improve care
quality.
(m) Establish means to assess the impact of the system's policies
intended to assure the delivery of high quality care.
(n) Collaborate with the chief medical officer, the Director of
the Office of Health Planning, the regional planning director, and
health care providers in the development and maintenance of regional
health care databases.
(o) Ensure the enforcement of, and recommend needed changes in,
the system's reporting requirements.
(p) Support providers in developing regional budget requests.
(q) Annually report to the commissioner, the public, the regional
planning board, and the chief medical officer on the status of
regional health care programs, needed improvements, and plans to
implement and evaluate delivery of care improvements.
140115.
(a) Each region shall have a regional planning board
consisting of 13 members who shall be appointed by the regional
planning director. Members shall serve eight-year terms that coincide
with the term of the regional planning director and may be
reappointed for a second term.
(b) Regional planning board members shall have resided for a
minimum of two years in the region in which they serve prior to
appointment to the board.
(c) Regional planning board members shall reside in the region
they serve while on the board.
(d) The board shall consist of the following members:
(1) The regional planning director, the regional medical officer,
the regional director of the Partnerships for Health, and a public
health officer from one of the counties in the region.
(2) When there is more than one county in a region, the public
health officer board position shall rotate among the public health
county officers on a timetable to be established by each regional
planning board.
(3) A representative from the Office of Patient Advocacy.
(4) One expert in health care financing.
(5) One expert in health care planning.
(6) Two members who are direct care providers in the region, one
of whom shall be a registered nurse.
(7) One member who represents ancillary health care workers in the
region.
(8) One member representing hospitals in the region.
(9) One member representing essential community providers in the
region.
(10) One member representing the public.
(e) The regional planning director shall serve as chair of the
board.
(f) The purpose of the regional planning boards is to advise and
make recommendations to the regional planning director on all aspects
of regional health policy.
(g) Meetings of the board shall be open to the public pursuant to
the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section
11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the
Government Code).
140116. The following conflict-of-interest prohibitions shall
apply to all appointees of the commissioner or transition advisory
group, including, but not limited to, the patient advocate, the
Director of the Healthcare Fund, the purchasing director, the
Director of the Office of Health Planning, the Director of the
Payments Board, the chief medical officer, the Director of
Partnerships for Health, regional planning directors, and the
Inspector General:
(a) The appointee shall not have been employed in any capacity by
a for-profit insurance, pharmaceutical, or medical equipment company
that sells products to the system for a period of two years prior to
appointment.
(b) For two years after completing service in the system, the
appointee may not receive payments of any kind from, or be employed
in any capacity or act as a paid consultant to, a for-profit
insurance, pharmaceutical, or medical equipment company that sells
products to the system.
(c) The appointee shall avoid political activity that may create
the appearance of political bias or impropriety. Prohibited
activities shall include, but not be limited to, leadership of, or
employment by, a political party or a political organization; public
endorsement of a political candidate; contribution of more than five
hundred dollars ($500) to any one candidate in a calendar year or a
contribution in excess of an aggregate of one thousand dollars
($1,000) in a calendar year for all political parties or
organizations; and attempting to avoid compliance with this
prohibition by making contributions through a spouse or other family
member.
(d) The appointee shall not participate in making or in any way
attempt to use his or her official position to influence a
governmental decision in which he or she or a family member, business
partner, or colleague has a financial interest.
140200.
(a) In order to support the agency effectively in the
administration of this division, there is hereby established in the
State Treasury the Healthcare Fund. The fund shall be administered by
a director appointed by the commissioner.
(b) All moneys collected, received, and transferred pursuant to
this division shall be transmitted to the State Treasury to be
deposited to the credit of the Healthcare Fund for the purpose of
financing the California Healthcare System.
(c) Moneys deposited in the Healthcare Fund shall be used
exclusively to support this division, subject to appropriation by the
Legislature.
(d) All claims for health care services rendered pursuant to the
system shall be made to the Healthcare Fund through an electronic
claims and payment system. The commissioner shall investigate the
costs, benefits, and means of supporting health care providers in
obtaining electronic systems for claims and payments transactions;
however, alternative provisions shall be made for health care
providers without electronic systems.
(e) All payments made for health care services shall be disbursed
from the Healthcare Fund through an electronic claims and payments
system; however, alternative provisions shall be made for health care
providers without electronic systems.
(f) The director of the fund shall serve on the Healthcare Policy
Board.
140201.
(a) The Director of the Healthcare Fund shall establish
the following accounts within the Healthcare Fund:
(1) A system account to provide for all annual state expenditures
for health care.
(2) A reserve account.
(b) Premiums collected each year shall be roughly sufficient to
cover that year's projected costs.
(c) The system shall at all times hold an actuarially sound
reserve that is consistent with appropriate risk-based capital
standards to assure financial solvency of the system.
(d) During the transition, the commissioner shall work with the
Department of Insurance, the Department of Managed Health Care, and
other experts to determine an appropriate level of reserves for the
system for the first year and for future years of its operation.
(e) Moneys currently held in reserve by state health programs,
city and county contributions as determined by the commissioner
pursuant to subdivision (c) of Section 140240, and federal moneys for
health care held in reserve in federal trust accounts shall be
transferred to the reserve account when the state assumes financial
responsibility for health care under this division that is currently
provided by those programs.
(f) The commissioner may implement arrangements to self-insure the
system against unforeseen expenditures or revenue shortfalls not
covered by reserves and may borrow funds to cover temporary revenue
shortfalls not covered by system reserves, including the issuance of
bonds for this purpose, whichever is the more cost effective.
(g) Funds held in the reserve account and other Healthcare Fund
accounts may be prudently invested to increase their value according
to the Department of Managed Health Care's standards for financial
solvency.
140203.
(a) The Director of the Healthcare Fund shall immediately
notify the commissioner when regional or statewide revenue and
expenditure trends indicate that expenditures may exceed revenues.
(b) If the commissioner determines that statewide revenue trends
indicate the need for statewide cost control measures, the
commissioner shall convene the Healthcare Policy Board to discuss the
need for cost control measures and shall immediately report to the
Legislature and the public regarding the possible need for cost
control measures.
(c) Cost control measures include any or all of the following:
(1) Changes in the system or health facility administration that
improve efficiency.
(2) Changes in the delivery of health care services that improve
efficiency and care quality.
(3) Postponement of introduction of new benefits or benefit
improvements.
(4) Seeking statutory authority for a temporary decrease in
benefits.
(5) Postponement of planned capital expenditures.
(6) Adjustments of health care provider payments to correct for
deficiencies in care quality and failure to meet compensation
contract performance goals, pursuant to subdivisions (a) to (f),
inclusive, of Section 140106, paragraph (4) of subdivision (a) of
Section 140204, subdivision (a) of Section 140213, and subdivisions
(c) and (d) of Section 140606.
(7) Adjustments to the compensation of managerial employees and
upper level managers under contract with the system to correct for
deficiencies in management and failure to meet contract performance
goals.
(8) Limitations on the reimbursement budgets of the system's
providers and upper level managers whose compensation is determined
by the Payments Board.
(9) Limitations on aggregate reimbursements to manufacturers of
pharmaceutical and durable and nondurable medical equipment.
(10) Deferred funding of the reserve account.
(11) Imposition of copayments or deductible payments. Any
copayment or deductible payments imposed under this section shall be
subject to all of the following requirements:
(A) No copayment or deductible may be established when prohibited
by federal law.
(B) All copayments and deductibles shall meet federal guidelines
for copayments and deductible payments that may lawfully be imposed
on persons with low income.
(C) The commissioner shall establish standards and procedures for
waiving copayments or deductible payments and a waiver card that
shall be issued to a patient or to a family to indicate the waiver.
Procedures for copayment waiver may include a determination by a
patient's primary care provider that imposition of a copayment would
be a financial hardship. Copayment and deductible waivers shall be
reviewed annually by the regional planning director.
(D) Waivers shall not affect the reimbursement of health care
providers.
(E) Any copayments or deductible payments established pursuant to
this section shall be transmitted to the Treasurer to be deposited to
the credit of the Healthcare Fund.
(12) Imposition of an eligibility waiting period and other means
if the commissioner determines that large numbers of people are
immigrating to the state for the purpose of obtaining health care
through the system.
(d) Nothing in this division shall be construed to diminish the
benefits that an individual has under a collective bargaining
agreement or statute.
(e) Nothing in this division shall preclude employees from
receiving benefits available to them under a collective bargaining
agreement or other employee-employer agreement or a statute that are
superior to benefits under this division.
(f) Cost control measures implemented by the commissioner and the
Healthcare Policy Board shall remain in place in the state until the
commissioner and the Healthcare Policy Board determine that the cause
of a revenue shortfall has been corrected.
(g) If the Healthcare Policy Board determines that cost control
measures described in subdivision (c) will not be sufficient to meet
a revenue shortfall, the commissioner shall report to the Legislature
and to the public on the causes of the shortfall and the reasons for
the failure of cost controls and shall recommend measures to correct
the shortfall, including an increase in premium payments to the
system.
140204.
(a) If the commissioner or a regional planning director
determines that regional revenue and expenditure trends indicate a
need for regional cost control measures, the regional planning
director shall convene the regional planning board to discuss the
possible need for cost control measures and to make a recommendation
about appropriate measures to control costs. These may include any of
the following:
(1) Changes in the administration of the system or in health
facility administration that improve efficiency.
(2) Changes in the delivery of health care services and health
system management that improve efficiency or care quality.
(3) Postponement of planned regional capital expenditures.
(4) Adjustment of payments to health care providers to reflect
deficiencies in care quality and failure to meet compensation
contract performance goals and payments to upper level managers to
reflect deficiencies in management and failure to meet compensation
contract performance goals.
(5) Adjustment of payments to health care providers and upper
level managers above a specified amount of aggregate billing.
(6) Adjustment of payments to pharmaceutical and medical equipment
manufacturers and others selling goods and services to the system
above a specified amount of aggregate billing.
(b) If a regional planning board is convened to implement cost
control measures, the commissioner shall participate in the regional
planning board meeting.
(c) The regional planning director, in consultation with the
commissioner, shall determine if cost control measures are warranted
and those measures that shall be implemented.
(d) Imposition of copayments or deductibles, postponement of new
benefits or benefit improvements, deferred funding of the reserve
account, establishment of eligibility waiting periods, and increases
in premium payments under the system may occur on a statewide basis
only and with the concurrence of the commissioner and the Healthcare
Policy Board.
(e) If a regional planning director and regional planning board
are considering imposition of cost control measures, the regional
planning director shall immediately report to the residents of the
region regarding the possible need for cost control measures.
(f) Cost control measures shall remain in place in a region until
the regional planning director and the commissioner determine that
the cause of a revenue shortfall has been corrected.
140205.
(a) If, on June 30 of any year, the Budget Act for the
fiscal year beginning on July 1 has not been enacted, all moneys in
the reserve account of the Healthcare Fund shall be used to implement
this division until funds are available through the Budget Act.
(b) Notwithstanding any other provision of law and without regard
to fiscal year, if the annual Budget Act is not enacted by June 30 of
any fiscal year preceding the fiscal year to which the budget would
apply and if the commissioner determines that funds in the reserve
account are depleted, the following shall occur:
(1) The Controller shall annually transfer from the General Fund,
in the form of one or more loans, an amount to the Healthcare Fund
for the purpose of making payments to health care providers and to
persons and businesses under contract with the system or with health
care providers to provide services, medical equipment, and
pharmaceuticals to the system.
(2) Upon enactment of the Budget Act in any fiscal year to which
paragraph (1) applies, the Controller shall transfer all expenditures
and unexpected funds loaned to the Healthcare Fund to the
appropriate Budget Act item.
(3) The amount of any loan made pursuant to paragraph (1) for
which moneys were expended from the Healthcare Fund shall be repaid
by debiting the appropriate Budget Act item in accordance with
procedures prescribed by the Department of Finance.
140206.
(a) The commissioner annually shall prepare a budget for
the system that includes all expenditures, specifies a limit on total
annual state expenditures, and establishes allocations for each
health care region that shall cover a three-year period and that
shall be disbursed on a quarterly basis.
(b) The commissioner shall limit the growth of spending on a
statewide and on a regional basis, by reference to average growth in
state domestic product across multiple years; population growth,
actuarial demographics and other demographic indicators; differences
in regional costs of living; advances in technology and their
anticipated adoption into the benefit plan; improvements in
efficiency of administration and care delivery; improvements in the
quality of care; and projected future state domestic product growth
rates.
(c) The commissioner shall adjust the system's budget so that
aggregate spending in the state on health care shall not exceed
spending under this division by more than 5 percent.
(d) The commissioner shall project the system's revenues and
expenditures for 3, 6, 9, and 12 years pursuant to parameters
prescribed in subdivision (f).
(e) The budget for the system shall include all of the following:
(1) Transition budget.
(2) Providers and managers budget.
(3) Capitated operating budgets.
(4) Noncapitated operating budgets.
(5) Capital investment budget.
(6) Purchasing budget, including prescription drugs and durable
and nondurable medical equipment pursuant to Section 140220.
(7) Research and innovation budget pursuant to Section 140221.
(8) Workforce training and development budget pursuant to Section
140222.
(9) Reserve account pursuant to Section 140223.
(10) System administration budget pursuant to Section 140224.
(11) Regional budgets.
(f) In establishing budgets, the commissioner shall make
adjustments based on all of the following:
(1) Costs of transition to the new system.
(2) Projections regarding the health care services anticipated to
be used by California residents.
(3) Differences in cost of living between the regions, including
the overhead costs of maintaining medical practices.
(4) Health risk of enrollees.
(5) Scope of services provided.
(6) Innovative programs that improve care quality, administrative
efficiency, and workplace safety.
(7) Unrecovered cost of providing care to persons who are not
enrollees of the system. The commissioner shall seek to recover the
costs of care provided to persons who are not enrollees of the
system.
(8) Costs of workforce training and development.
(9) Costs of correcting health outcome disparities and the unmet
needs of previously uninsured and underinsured enrollees.
(10) Relative usage of different health care providers.
(11) Needed improvements in access to care.
(12) Projected savings in administrative costs.
(13) Projected savings due to provision of primary and preventive
care to the population, including savings from decreases in
preventable emergency room visits and hospitalizations.
(14) Projected savings from improvements in care quality.
(15) Projected savings from decreases in medical errors.
(16) Projected savings from systemwide management of capital
expenditures.
(17) Cost of incentives and bonuses to support the delivery of
high quality care, including incentives and bonuses needed to recruit
and retain an adequate supply of needed providers and managers and
to attract health care providers to medically underserved areas.
(18) Costs of treating complex illnesses, including disease
management programs.
(19) Cost of implementing standards of care, care coordination,
electronic medical records, and other electronic initiatives.
(20) Costs of new technology.
(21) Technology research and development costs and costs related
to the system's use of new technologies.
(g) Moneys in the reserve account shall not be considered as
available revenues for the purposes of preparing the system's budget,
except when the annual Budget Act has not been enacted by June 30 of
any fiscal year.
140207. The commissioner shall annually establish the total funds
to be allocated for provider and manager compensation pursuant to
this section. In establishing the provider and manager budgets, the
commissioner shall allot sufficient funds to assure that California
can attract and retain those providers and managers needed to meet
the health care needs of the population. In establishing provider and
manager budgets, the commissioner shall allocate funds for both
salaries, incentives, bonuses, and benefits to be provided to
officers and upper level managers of the system who are exempt from
state civil service statutes.
140208.
(a) The commissioner shall establish the Payments Board
and shall appoint a director and members of the board.
(b) The commissioner shall retain the authority to review,
approve, reject, and modify all payment contracts and compensation
plans established pursuant to this section.
(c) The Payments Board shall be composed of experts in health care
finance and insurance systems, a designated representative of the
commissioner, a designated representative of the Healthcare Fund, and
a representative of the regional planning directors. The position of
regional representative shall rotate among the directors of the
regional planning boards every two years.
(d) The board shall establish and supervise a uniform payments
system for health care providers and managers and shall maintain a
compensation plan for all of the following health care providers and
managers pursuant to the provider and manager budget established by
the commissioner:
(1) Upper level managers employed by, or under contract with,
private health care facilities, including, but not limited to,
hospitals, integrated health care delivery systems, group and solo
medical practices, and essential community facilities.
(2) Managers and officers of the system who are exempt from
statutes governing civil service employment.
(3) Health care providers including, but not limited to,
physicians, osteopathic physicians, dentists, podiatrists, nurse
practitioners, physician assistants, chiropractors, acupuncturists,
psychologists, social workers, marriage, family and child counselors,
and other professional health care providers who are required by law
to be licensed to practice in California and who provide services
pursuant to the system.
(4) Compensation for employees of the system that was determined
through employer-union negotiations before implementation of this
division shall be determined by negotiations between the system and
the unions after implementation of this division.
(5) Health care providers licensed and accredited to provide
services in California may choose to be compensated for their
services either by the system or by a person to whom they provide
services.
(6) Health care providers electing to be compensated by the system
shall enter into a contract with the system pursuant to provisions
of this section.
(7) Health care providers electing to be compensated by persons to
whom they provide services, instead of by the system, may establish
charges for their services.
(8) Health care providers who accept any payment from the system
under this division shall not bill a patient for any covered service,
except as authorized by the commissioner.
(e) Health care providers licensed or accredited to provide
services in California, who choose to be compensated by the system
instead of by patients to whom they provide services, may choose how
they wish to be compensated under this division, as fee-for-service
providers or as providers employed by, or under contract with, health
care systems that provide comprehensive, coordinated services.
(f) Notwithstanding provisions of the Business and Professions
Code, nurse practitioners, physician assistants, and others who under
California law must be supervised by a physician and surgeon,
an osteopathic physician, a
dentist, or a podiatrist, may choose fee-for-service compensation
while under lawfully required supervision. However, nothing in this
section shall interfere with the right of a supervising health care
provider to enter into a contractual arrangement that provides for
salaried compensation for employees who must be supervised under the
law by a physician and surgeon, an osteopathic physician, a dentist,
or a podiatrist.
(g) The compensation plan shall include all of the following:
(1) Actuarially sound payments that include a just and fair return
for health care providers in the fee-for-service sector and for
health care providers working in health systems where comprehensive
and coordinated services are provided, including the actuarial basis
for the payment.
(2) Payment schedules that shall be in effect for three years.
(3) Bonus and incentive payments, including, but not limited to,
all the following:
(A) Bonus payments for health care providers and upper level
managers who, in providing services and managing facilities,
practices, and integrated health systems pursuant to this division,
meet performance standards and outcome goals established by the
system.
(B) Incentive payments for health care providers and upper level
managers who provide services to the system in areas identified by
the Office of Health Planning as medically underserved.
(C) Incentive payments required to achieve the ratio of generalist
to specialist health care providers needed in order to meet the
standards of care and health needs of the population.
(D) Incentive payments required to recruit and retain nurse
practitioners and physician assistants in order to provide primary
and preventive care to the population.
(E) No bonus or incentive payment may be made in excess of the
total allocation for health care provider and manager incentive and
bonus reimbursement established by the commissioner in the system's
budget.
(F) No incentive may adversely affect the care a patient receives
or the care a health care provider recommends.
(h) Health care providers shall be paid for all services provided
pursuant to this division, including care provided to persons who are
subsequently determined to be ineligible for the system.
(i) Licensed health care providers who deliver services not
covered under the system may establish rates and charge patients for
those services.
(j) Reimbursement to health care providers and compensation to
managers may not exceed the amount allocated by the commissioner to
provider and manager annual budgets.
140209.
(a) Fee-for-service health care providers shall choose
representatives of their specialties to negotiate reimbursement rates
with the Payments Board on their behalf.
(b) The Payments Board shall establish a uniform system of
payments for all services provided pursuant to this division.
(c) Payment schedules shall be available to health care providers
in printed and in electronic documents.
(d) Payment schedules shall be in effect for three years, at which
time payment schedules may be renegotiated. Payment adjustments may
be made at the discretion of the Payments Board to meet the goals of
the system.
(e) In establishing a uniform system of payments, the Payments
Board shall collaborate with regional planning directors and health
care providers and shall take into consideration regional differences
in the cost of living and the need to recruit and retain skilled
health care providers in the region.
(f) Fee-for-service health care providers shall submit claims
electronically to the Healthcare Fund and shall be paid within 30
business days for claims filed in compliance with procedures
established by the Healthcare Fund.
140210.
(a) Compensation for health care providers and upper
level managers employed by, or under contract with, integrated health
care delivery systems, group medical practices, and essential
community providers that provide comprehensive, coordinated services
shall be determined according to the following guidelines:
(b) Health care providers and upper level managers employed by, or
under contract with, systems that provide comprehensive, coordinated
health care services shall be represented by their respective
employers or contractors for the purposes of negotiating
reimbursement with the Payments Board.
(c) In negotiating reimbursement with systems providing
comprehensive, coordinated services, the Payments Board shall take
into consideration the need for comprehensive systems to have
flexibility in establishing health care provider and upper level
manager reimbursement.
(d) Payment schedules shall be in effect for three years. However,
payment adjustments may be made at the discretion of the Payments
Board to meet the goals of the system.
(e) The Payments Board shall take into consideration regional
differences in the cost of living and the need to recruit and retain
skilled health care providers and upper level managers to the
regions.
(f) The Payments Board shall establish a timetable for
reimbursement for fee-for-service health care provider's
negotiations. If an agreement on reimbursement is not reached
according to the timetable established by the Payments Board, the
Payments Board shall establish reimbursement rates, which shall be
binding.
(g) Reimbursement negotiations shall be conducted consistent with
the state action doctrine of the antitrust laws.
140211.
(a) The Payments Board shall annually report to the
commissioner on the status of health care provider and upper level
manager reimbursement, including satisfaction with reimbursement
levels and the sufficiency of funds allocated by the commissioner for
provider and upper level manager reimbursement. The Payments Board
shall recommend needed adjustments in the allocation for health care
provider payments.
(b) The Office of Health Care Quality shall annually report to the
commissioner on the impact of the bonus payments in improving
quality of care, health outcomes, and management effectiveness. The
Payments Board shall recommend needed adjustments in bonus
allocations.
(c) The Office of Health Planning shall annually report to the
commissioner on the impact of the incentive payments in recruiting
health care providers and upper level managers to underserved areas,
in establishing the needed ratio of generalist to specialist health
care providers and in attracting and retaining nurse practitioners
and physician assistants to the state and shall recommend needed
adjustments.
140212.
(a) The commissioner shall establish an allocation for
each region to fund regional operating and capital budgets for a
period of three years. Allocations shall be disbursed to the regions
on a quarterly basis.
(b) Integrated health care delivery systems, essential community
providers, and group medical practices that provide comprehensive,
coordinated services may choose to be reimbursed on the basis of a
capitated system operating budget or a noncapitated system operating
budget that covers all costs of providing health care services.
(c) Health care providers choosing to function on the basis of a
capitated or a noncapitated system operating budget shall submit
three-year operating budget requests to the regional planning
director, pursuant to standards and guidelines established by the
commissioner.
(1) Health care providers may include in their operating budget
requests reimbursement for ancillary health care or social services
that were previously funded by money now received and disbursed by
the Healthcare Fund.
(2) No payment may be made from a capitated or noncapitated budget
for a capital expense except as provided in Section 140216.
(d) Regional planning directors shall negotiate operating budgets
with regional health care entities, which shall cover a period of
three years.
(e) Operating and capitated budgets shall include health care
workforce labor costs other than those described in paragraphs (1),
(2), and (3) of subdivision (d) of Section 140208. If unions
represent employees working in systems functioning under capitated or
noncapitated budgets, unions shall represent those employees in
negotiations with the regional planning director and the Payments
Board for the purpose of establishing their reimbursement.
140213.
(a) Health systems and medical practices functioning
under capitated and noncapitated operating budgets shall immediately
report any projected operating deficit to the regional planning
director. The regional planning director shall determine whether
projected deficits reflect appropriate increases in expenditures, in
which case the director shall make an adjustment to the operating
budget. If the director determines that deficits are not justifiable,
no adjustment shall be made.
(b) If a regional planning director determines that adjustments to
operating budgets will cause a regional revenue shortfall and that
cost control measures may be required, the regional planning director
shall report the possible revenue shortfall to the commissioner and
take actions required pursuant to Section 140203.
140215.
(a) Margins generated by a facility operating under a
system operating budget may be retained and used to meet the health
care needs of the population.
(b) No margin may be retained if that margin was generated through
inappropriate limitations on access to health care or compromises in
the quality of care or in any way that adversely affected or is
likely to adversely affect the health of the persons receiving
services from a facility, integrated health care delivery system,
group medical practice, or essential community provider functioning
under a system operating budget.
(1) The chief medical officer shall evaluate the source of margin
generation and report violations of this section to the commissioner.
(2) The commissioner shall establish and enforce penalties for
violations of this section.
(3) Penalty payments collected pursuant to violations of this
section shall be remitted to the Healthcare Fund for use in the
California Healthcare System.
(c) Facilities operating under system operating budgets of the
California Healthcare System may raise and expend funds from sources
other than the system including, but not limited to, private or
foundation donors for purposes related to the goals of this division
and in accordance with provisions of this division.
140216.
(a) During the transition, the commissioner shall develop
a capital management plan that shall include conflict-of-interest
standards and that shall govern all capital investments and
acquisitions undertaken in the system. The plan shall include a
framework, standards, and guidelines for all of the following:
(1) Standards whereby the Office of Health Planning shall oversee,
assist in the implementation of, and ensure that the provisions of
the capital management plan are enforced.
(2) Assessment and prioritization of short- and long-term capital
needs of the system on statewide and regional bases.
(3) Assessment of capital health care assets and capital health
care asset shortages on a regional and statewide basis at the time
this division is first implemented.
(4) Development by the commissioner of a multiyear system capital
development plan that supports the system's goals, priorities, and
performance standards and meets the health care needs of the
population.
(5) Development, as part of the system's capital budget, of
regional capital allocations that shall cover a period of three
years.
(6) Evaluation of, and support for, noninvestment means to meet
health care needs, including, but not limited to, improvements in
administrative efficiency, care quality, and innovative service
delivery, use, adaptation or refurbishment of existing land and
property, and identification of publicly owned land or property that
may be available to the system and that may meet a capital need.
(7) Development and maintenance of capital inventories on a
regional basis, including the condition, utilization capacity,
maintenance plan and costs, deferred maintenance of existing capital
inventory, and excess capital capacity.
(8) A process whereby those intending to make capital investments
or acquisitions shall prepare a business case for making the
investment or acquisition, including the full life-cycle costs of the
project or acquisition, an environmental impact report that meets
existing state standards, and a demonstration of how the investment
or acquisition meets the health care needs of the population it is
intended to serve. Acquisitions include, but are not limited to, the
acquisition of land, operational property, or administrative office
space.
(9) Standards and a process whereby the regional planning
directors shall evaluate, accept, reject, or modify a business plan
for a capital investment or acquisition. Decisions of a regional
planning director may be appealed through a dispute resolution
process established by the commissioner.
(10) Standards for binding project contracts between the system
and the party developing a capital project or making a capital
acquisition that shall govern all terms and conditions of capital
investments and acquisitions, including terms and conditions for
grants, loans, lines of credit, and lease-purchase arrangements by
the system.
(11) A process and standards whereby the Director of the
Healthcare Fund shall negotiate terms and conditions of the liens,
grants, lines of credit, and lease-purchase arrangements for capital
investments and acquisitions by the system. Terms and conditions
negotiated by the Director of the Healthcare Fund shall be included
in project contracts.
(12) A plan for the commissioner and for the regional planning
directors to issue requests for proposals and to oversee a process of
competitive bidding for the development of capital projects that
meet the needs of the system and to fund, partially fund, or
participate in seeking funding for, those capital projects.
(13) Responses to requests for proposals and competitive bids
shall include a description of how a project meets the service needs
of the region and addresses the environmental impact report and shall
include the full life cycle costs of a capital asset.
(14) Requests for proposals shall address how intellectual
property will be handled and shall include conflict-of-interest
guidelines that meet standards established by the commissioner as
part of the capital management plan.
(15) A process and standards for periodic revisions in the capital
management plan, including annual meetings in each region to discuss
the plan and make recommendations for improvements in the plan.
(16) Standards for determining when a violation of these
provisions shall be referred to the Attorney General for
investigation and possible prosecution of the violation.
(b) No registered lobbyist shall participate in, or in any way
attempt to influence, the request for proposals or competitive bid
process.
(c) Development of performance standards and a process to monitor
and measure performance of those making capital health care
investments and acquisitions, including those making capital
investments pursuant to a state competitive bidding process.
(d) A process for earned autonomy from state capital investment
oversight for those who demonstrate the ability to manage capital
investment and capital assets effectively in accordance with the
system's standards, and standards for loss of earned autonomy when
capital management is ineffective.
(e) Terms and conditions of capital project oversight by the
system shall be based on the performance history of the project
developer. Health care providers may earn autonomy from oversight if
they demonstrate effective capital planning and project management,
pursuant to the goals and guidelines established by the commissioner.
Health care providers who do not demonstrate that proficiency shall
remain subject to oversight by the regional planning director or
shall lose autonomy from oversight.
(f) In general, no capital investment may be made from an
operating budget. However, guidelines shall be established for the
types and levels of small capital investments that may be undertaken
from an operating budget without the approval of the regional
planning director.
(g) Any capital investments required for compliance with federal,
state, or local regulatory requirements or quality assurance
standards shall be exempt from paragraph (2) of subdivision (c) of
Section 140212.
140217.
(a) Regional planning directors shall develop a regional