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	<ns0:Description>
		<ns0:Id>20250AB__111397AMD</ns0:Id>
		<ns0:VersionNum>97</ns0:VersionNum>
		<ns0:History>
			<ns0:Action>
				<ns0:ActionText>INTRODUCED</ns0:ActionText>
				<ns0:ActionDate>2025-02-20</ns0:ActionDate>
			</ns0:Action>
			<ns0:Action>
				<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
				<ns0:ActionDate>2025-04-10</ns0:ActionDate>
			</ns0:Action>
			<ns0:Action>
				<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
				<ns0:ActionDate>2025-05-05</ns0:ActionDate>
			</ns0:Action>
		</ns0:History>
		<ns0:LegislativeInfo>
			<ns0:SessionYear>2025</ns0:SessionYear>
			<ns0:SessionNum>0</ns0:SessionNum>
			<ns0:MeasureType>AB</ns0:MeasureType>
			<ns0:MeasureNum>1113</ns0:MeasureNum>
			<ns0:MeasureState>AMD</ns0:MeasureState>
		</ns0:LegislativeInfo>
		<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Mark González</ns0:AuthorText>
		<ns0:Authors>
			<ns0:Legislator>
				<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
				<ns0:House>ASSEMBLY</ns0:House>
				<ns0:Name>Mark González</ns0:Name>
			</ns0:Legislator>
		</ns0:Authors>
		<ns0:Title> An act to add Article 4.15 (commencing with Section 14138.35) to Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code, relating to public social services.</ns0:Title>
		<ns0:RelatingClause>public social services</ns0:RelatingClause>
		<ns0:GeneralSubject>
			<ns0:Subject>Federally qualified health centers: mission spend ratio.</ns0:Subject>
		</ns0:GeneralSubject>
		<ns0:DigestText>
			<html:p>Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services, including federally qualified health center (FQHC) services as described by federal law. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.</html:p>
			<html:p>This bill would require each FQHC to have an annual mission spend ratio, as defined, of no less than 90% and would provide a methodology for calculation of that ratio, as specified, until the State Department of Public Health (department) has adopted a methodology for this
			 purpose, with a goal of implementation of the latter methodology by January 1, 2027.</html:p>
			<html:p>By June 30, 2026, and annually thereafter by June 30, the bill would require each FQHC or its parent corporation to report to the department total revenues collected in a form to be determined by the department. The bill would require each report to include, among other things, one of certain Internal Revenue Service (IRS) forms.
			 The bill would require each FQHC to submit an annual registration fee in an amount to be determined by the department and adjusted as necessary to fund these provisions. The bill would require the department to calculate and prepare a report of each FQHC’s mission spend ratio no later than 90 days after the deadline for receipt of each FQHC’s submission, and to transmit the report to the State Department of Health Care Services. The bill would require the department to conduct an audit of the financial information reported by FQHCs every 3 years, as specified.</html:p>
			<html:p>This bill would
			 impose penalties
			 for failure of an FQHC to comply with the above-described reporting and mission spend ratio requirements, including an administrative fine of $5,000 for a first violation and $10,000 for each subsequent month that an FQHC fails to submit an annual report. The bill would require those penalties to be deposited into the Mission Spend Ratio Penalty Account, which would be subject to appropriation by the Legislature, within the Special Deposit Fund.</html:p>
			<html:p>If
			 an FQHC disputes a determination or assessment, the bill would require the FQHC to simultaneously submit a request for appeal to both the department and the State Department of Health Care Services within 30 days of the FQHC’s receipt of the determination or assessment, as specified. The bill would require the department to submit its responsive arguments and all supporting documents to the FQHC and the State Department of Health Care Services within 30 days of the department’s receipt of the FQHC’s request for appeal. The bill would require the State Department of Health Care Services to hear a timely appeal and issue a decision, as
			 specified.</html:p>
			<html:p>This bill would authorize an FQHC to apply to the department for a waiver, for a term of one year from the date of issuance, to provide a temporary pause of the above-described reporting and mission spend ratio requirements or for an alternative mission spend ratio requirement on the basis of unexpected or exceptional circumstances or the FQHC’s economic condition. The bill would prescribe various types of information to be reported by an FQHC to obtain a waiver. The bill would authorize an FQHC to apply to renew a waiver at any time no fewer than 180 days before the expiration of the existing waiver.</html:p>
			<html:p>This bill would
			 make its provisions inapplicable to an FQHC or FQHC look-alike that is owned or operated by a political subdivision of the state or by a tribe or tribal organization receiving certain federal funding, as specified, or to an FQHC or FQHC look-alike participating in a bona fide labor-management cooperation committee.</html:p>
			<html:p>The
			 bill would require the department to adopt all regulations necessary to implement these provisions and would authorize the department to implement, interpret, or make specific these provisions, in whole or in part, by means of information notices, all-county letters, or other similar instructions without taking regulatory action. The bill would make its provisions severable. The bill would define various terms for purposes of these provisions.</html:p>
		</ns0:DigestText>
		<ns0:DigestKey>
			<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
			<ns0:Appropriation>NO</ns0:Appropriation>
			<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
			<ns0:LocalProgram>NO</ns0:LocalProgram>
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			<ns0:ImmediateEffect>NO</ns0:ImmediateEffect>
			<ns0:ImmediateEffectFlags>
				<ns0:Urgency>NO</ns0:Urgency>
				<ns0:TaxLevy>NO</ns0:TaxLevy>
				<ns0:Election>NO</ns0:Election>
				<ns0:UsualCurrentExpenses>NO</ns0:UsualCurrentExpenses>
				<ns0:BudgetBill>NO</ns0:BudgetBill>
				<ns0:Prop25TrailerBill>NO</ns0:Prop25TrailerBill>
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	</ns0:Description>
	<ns0:Bill id="bill">
		<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
		<ns0:BillSection id="id_C87DCE86-DF18-4AD0-BE4A-64830B10AF2A">
			<ns0:Num>SECTION 1.</ns0:Num>
			<ns0:Content>
				<html:p>The Legislature finds and declares all of the following:</html:p>
				<html:p>
					(a)
					<html:span class="EnSpace"/>
					Federally qualified health centers (FQHCs) are fundamental to the California health care safety net, as their mission is to provide primary and preventive care to low-income and underserved populations.
				</html:p>
				<html:p>
					(b)
					<html:span class="EnSpace"/>
					It is the intent of the Legislature to ensure that an appropriate proportion of each FQHC’s revenue is spent on program services expenses directly related to the FQHC’s mission to provide essential primary and preventive care to low-income and underserved populations.
				</html:p>
				<html:p>
					(c)
					<html:span class="EnSpace"/>
					(1)
					<html:span class="EnSpace"/>
					The Legislature recognizes the critical intersection between workforce development and delivery of high-quality care, and further recognizes that an FQHC’s participation in a statewide, multiemployer bona fide labor-management cooperation committee (LMCC) reflects institutional commitment to seeking partnerships and leveraging funding opportunities to achieve these twin objectives.
				</html:p>
				<html:p>
					(2)
					<html:span class="EnSpace"/>
					Bona fide LMCCs are a specific form of labor-management partnership which in general have been shown to promote cost savings as well as improve staff retention and patient care. The intent of this legislation is to support these same goals for FQHCs that are not part of LMCCs by directing a greater share of spending towards FQHCs’ mission to provide quality care to vulnerable populations.
				</html:p>
				<html:p>
					(d)
					<html:span class="EnSpace"/>
					It is the intent of this legislation to create a reasonable minimum standard of mission-directed spending as a proportion of revenue (“mission spend ratio”) to ensure FQHC patient service delivery is prioritized over management and overhead spending, while still allowing an FQHC to maintain ongoing, sound financial footing. It is the intent of the Legislature to apply the mission spend ratio to all FQHCs except those participating in a bona fide LMCC or certain other FQHCs.
				</html:p>
			</ns0:Content>
		</ns0:BillSection>
		<ns0:BillSection id="id_CA40E5B8-04CE-4EB5-86C5-BB9B4D6C6F66">
			<ns0:Num>SEC. 2.</ns0:Num>
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				Article 4.15 (commencing with Section 14138.35) is added to Chapter 7 of Part 3 of Division 9 of the 
				<ns0:DocName>Welfare and Institutions Code</ns0:DocName>
				, to read:
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			<ns0:Fragment>
				<ns0:LawHeading id="id_9CDFD0F1-861D-4568-BB63-134282CD4040" type="ARTICLE">
					<ns0:Num>4.15.</ns0:Num>
					<ns0:LawHeadingVersion id="id_20E03215-7FD4-4EB9-9A74-0A01D93A5AF6">
						<ns0:LawHeadingText>Federally Qualified Health Center Mission Spend Ratio</ns0:LawHeadingText>
					</ns0:LawHeadingVersion>
					<ns0:LawSection id="id_08890931-C8AB-4AE1-9E5E-016EA059C771">
						<ns0:Num>14138.35.</ns0:Num>
						<ns0:LawSectionVersion id="id_F188DF85-C961-457E-9290-484946B44CF5">
							<ns0:Content>
								<html:p>For purposes of this article, the following definitions apply:</html:p>
								<html:p>
									(a)
									<html:span class="EnSpace"/>
									“Bona fide labor-management cooperation committee” or “bona fide LMCC” means a statewide, multiemployer joint labor-management committee that is established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) and meets the following criteria:
								</html:p>
								<html:p>
									(1)
									<html:span class="EnSpace"/>
									The bona fide LMCC is not involved in the governance of an FQHC but exists to promote worker training, workforce expansion, and support for workers during training.
								</html:p>
								<html:p>
									(2)
									<html:span class="EnSpace"/>
									The bona fide LMCC has the following
						  composition:
								</html:p>
								<html:p>
									(A)
									<html:span class="EnSpace"/>
									Fifty percent of the committee consists of representatives of organized labor unions that represent health center workers in the state.
								</html:p>
								<html:p>
									(B)
									<html:span class="EnSpace"/>
									Fifty percent of the committee consists of representatives of FQHCs located in the state.
								</html:p>
								<html:p>
									(3)
									<html:span class="EnSpace"/>
									The membership of the bona fide LMCC includes one or more labor organizations that are certified or recognized as the exclusive bargaining representative of applicable workers at FQHCs in the state.
								</html:p>
								<html:p>
									(b)
									<html:span class="EnSpace"/>
									“Department” means the State Department of Public
						  Health, unless otherwise specified.
								</html:p>
								<html:p>
									(c)
									<html:span class="EnSpace"/>
									“Federally qualified health center” or “FQHC” means any community or public federally qualified health center as that term is defined in Section 1396d of Title 42 of the United States Code, including FQHC look-alikes.
								</html:p>
								<html:p>
									(d)
									<html:span class="EnSpace"/>
									“FQHC look-alike” means an organization that does not receive an FQHC award, but is designated by the federal Health Resources and Services Administration as meeting FQHC program requirements, as set forth in Sections 1395x(aa)(4)(B) and 1396d(l)(2)(B) of Title 42 of the United States Code. For purposes of this article, an FQHC look-alike is considered an FQHC and all references to FQHCs apply with equal force to FQHC look-alikes.
								</html:p>
								<html:p>
									(e)
									<html:span class="EnSpace"/>
									(1)
									<html:span class="EnSpace"/>
									“Mission-directed expenses” means expenses associated with activities that further an FQHC’s patient services mission and for which the FQHC was created to conduct.
								</html:p>
								<html:p>
									(2)
									<html:span class="EnSpace"/>
									“Mission-directed expenses” shall include all of the following:
								</html:p>
								<html:p>
									(A)
									<html:span class="EnSpace"/>
									The total compensation for all staff employed by the FQHC,
						  including salaries, wages, and employee benefits, but excluding all compensation for executive and administrative officers and employees. Employee benefits shall include payroll benefits, paid time off, health insurance, life insurance, pension and retirement, and workers’ compensation insurance.
								</html:p>
								<html:p>
									(B)
									<html:span class="EnSpace"/>
									The cost of consumable supplies that are used to provide patient care.
								</html:p>
								<html:p>
									(C)
									<html:span class="EnSpace"/>
									Outside patient care services, which shall be expenses associated with patient care services purchased under contract from any entity, including a hospital, laboratory, or physician group.
								</html:p>
								<html:p>
									(D)
									<html:span class="EnSpace"/>
									Professional liability insurance.
								</html:p>
								<html:p>
									(E)
									<html:span class="EnSpace"/>
									Continuing education, which shall
						  be the total cost of providing continuing education classes for health care professionals.
								</html:p>
								<html:p>
									(F)
									<html:span class="EnSpace"/>
									Capital expenditures that directly relate to patient care services, including rent, mortgage interest, depreciation, property taxes, property insurance, utilities, and other capital expenditures determined by the department.
								</html:p>
								<html:p>
									(3)
									<html:span class="EnSpace"/>
									“Mission-directed expenses” shall not include any of the following:
								</html:p>
								<html:p>
									(A)
									<html:span class="EnSpace"/>
									Administrative costs, including compensation paid to management and executive officers and employees, all costs to management companies, administrative service companies, home office expenses for parent companies and holding companies, legal expenses, trade association fees and dues, insurance costs, licensing fees, and all
						  administrative costs and profits paid to contractors or related party entities for staffing services, ancillary services, support services, or other services.
								</html:p>
								<html:p>
									(B)
									<html:span class="EnSpace"/>
									Capital expenditures that relate to administrative, overall operations or management purposes, including rent, mortgage interest, depreciation, property taxes, property insurance, utilities, and other capital expenditures determined by the department.
								</html:p>
								<html:p>
									(C)
									<html:span class="EnSpace"/>
									Profits, including net income and any profit paid to related parties on leases and property, and any profits paid to management companies.
								</html:p>
								<html:p>
									(f)
									<html:span class="EnSpace"/>
									“Mission spend ratio” means the percent of an FQHC’s total revenue from all payer sources in a calendar year expended on mission-directed expenses.
								</html:p>
								<html:p>
									(g)
									<html:span class="EnSpace"/>
									“Related party” means an organization related to the FQHC or that is under common ownership or control, as those terms are defined in Section 413.17(b) of Title 42 of the Code of Federal Regulations. A related party may include a management organization, owners of real estate, entities that provide staffing, any parent companies, holding companies, sister organizations, and others.
								</html:p>
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						</ns0:LawSectionVersion>
					</ns0:LawSection>
					<ns0:LawSection id="id_A1F15B9C-1462-408E-9D2C-7A65F17D5725">
						<ns0:Num>14138.36.</ns0:Num>
						<ns0:LawSectionVersion id="id_CB373B5B-A0AB-49B8-8E91-EE09D6CC3E55">
							<ns0:Content>
								<html:p>
									(a)
									<html:span class="EnSpace"/>
									Each FQHC shall have an annual mission spend ratio of no less than 90 percent.
								</html:p>
								<html:p>
									(1)
									<html:span class="EnSpace"/>
									Until the department has adopted a methodology for this purpose pursuant to paragraph (3), an FQHC’s total revenue from all payer sources means the FQHC’s total revenue for the calendar year, calculated consistent with Line 12 of Part I of Internal Revenue Service IRS Form 990, as set out in the form and instructions applicable to the 2024 taxable year.
								</html:p>
								<html:p>
									(2)
									<html:span class="EnSpace"/>
									Until the department has adopted a methodology for this purpose pursuant to paragraph (3), for the calculation of the mission spend ratio of each FQHC in the
						  2026 calendar year, “mission-directed expenses” shall be the total program service expenses reported under Line 25 of Column B of Part IX of IRS Form 990, as set out in the form and instructions applicable to the 2024 taxable year.
								</html:p>
								<html:p>
									(3)
									<html:span class="EnSpace"/>
									For the calculation of the mission spend ratio of each FQHC in the 2027 calendar year and all subsequent years, the department shall adopt a methodology to determine the expenses associated with activities that further an FQHC’s patient services mission, consistent with this section. If the department has not adopted a methodology pursuant to this paragraph sufficient for implementation by January 1, 2027, then the methodology set forth in paragraph (2) shall continue to be used until the department has adopted a methodology pursuant to this paragraph.
								</html:p>
								<html:p>
									(b)
									<html:span class="EnSpace"/>
									By June 30, 2026, and annually thereafter by June 30, each FQHC or its parent corporation shall report total revenues collected from all revenue sources, along with the portion of revenues that are expended on all mission-directed expenses, to the department in a form to be determined by the department. Each report shall include, at a minimum, all of the following:
								</html:p>
								<html:p>
									(1)
									<html:span class="EnSpace"/>
									The FQHC’s or parent corporation’s filed IRS Form 990, 990-PF, 990-EZ, or 1120, from the most recent taxable year,
						  with all attachments and schedules as applicable, in the same form as filed with the IRS, along with a list identifying which FQHC’s activities are included in the information on the IRS form.
								</html:p>
								<html:p>
									(2)
									<html:span class="EnSpace"/>
									A copy of the annual report filed for each FQHC with the Department of Health Care Access and Information pursuant to Section 1216 of the Health and Safety Code.
								</html:p>
								<html:p>
									(3)
									<html:span class="EnSpace"/>
									A certification signed by a duly authorized official of the FQHC or its parent corporation that certifies that, to the best of the official’s knowledge and information, each statement and amount in the accompanying report is believed to be true and correct.
								</html:p>
								<html:p>
									(4)
									<html:span class="EnSpace"/>
									For any FQHC that is required to prepare an annual financial statement pursuant to Section 12586 of
						  the Government Code, certification from an independent certified public accountant that the report submitted has been audited in conformity with generally accepted auditing standards.
								</html:p>
								<html:p>
									(c)
									<html:span class="EnSpace"/>
									Each FQHC shall submit an annual registration fee in an amount to be determined by the department and adjusted as necessary to fund the activities set forth in this article.
								</html:p>
								<html:p>
									(d)
									<html:span class="EnSpace"/>
									(1)
									<html:span class="EnSpace"/>
									No later than 90 days after the deadline for receipt of each FQHC’s submission, the department shall calculate the mission spend ratio for each FQHC and prepare a report of the mission spend ratios of every FQHC. The department shall transmit
						  the report to the subunit of the State Department of Health Care Services responsible for conducting Change in Scope-of-Service Request (CSOSR) audits.
								</html:p>
								<html:p>
									(2)
									<html:span class="EnSpace"/>
									The department shall publish the report of the mission spend ratios of every FQHC on its internet website.
								</html:p>
								<html:p>
									(e)
									<html:span class="EnSpace"/>
									The department shall conduct an audit of the financial information reported by FQHCs pursuant to this section every three years, in a manner and form prescribed by the department, to ensure the accuracy of the information reported and compliance with the requirements of this section. These audits may also include any audits of contractors or related party entities.
								</html:p>
							</ns0:Content>
						</ns0:LawSectionVersion>
					</ns0:LawSection>
					<ns0:LawSection id="id_D5A832A7-D87A-44C3-B080-E26D2F21F68A">
						<ns0:Num>14138.37.</ns0:Num>
						<ns0:LawSectionVersion id="id_A088A072-2B70-4258-A3DD-6928B4B6D87C">
							<ns0:Content>
								<html:p>
									(a)
									<html:span class="EnSpace"/>
									There is hereby continued in the Special Deposit Fund, established pursuant to Section 16370 of the Government Code, the Mission Spend Ratio Penalty Account, which shall be subject to appropriation by the Legislature. The account shall contain all moneys deposited pursuant to subdivisions (b) and (c).
								</html:p>
								<html:p>
									(b)
									<html:span class="EnSpace"/>
									The department shall impose sanctions for the failure to comply with the reporting provisions set forth in Section 14138.36, in the form of an administrative fine of five thousand dollars ($5,000) for a first violation and ten thousand dollars ($10,000) for each subsequent month that an FQHC fails to submit the annual reports required by that section.
								</html:p>
								<html:p>
									(c)
									<html:span class="EnSpace"/>
									(1)
									<html:span class="EnSpace"/>
									If the department determines that an FQHC has not met the required mission spend ratio for any reporting year, the department shall assess an administrative penalty equal to the difference between the amount of the FQHC spent on mission-directed expenses and 90 percent of the FQHC’s total revenue that year.
								</html:p>
								<html:p>
									(2)
									<html:span class="EnSpace"/>
									Any penalties paid pursuant to this subdivision shall not be considered mission-directed expenses for the calculation of the FQHC’s mission spend ratio in the year the penalty was incurred.
								</html:p>
								<html:p>
									(3)
									<html:span class="EnSpace"/>
									If the FQHC does not dispute the determination or assessment, the penalties shall be paid in full to the department within 30 days of receipt of a notice of penalty and deposited into the
						  Mission Spend Ratio Penalty Account.
								</html:p>
								<html:p>
									(4)
									<html:span class="EnSpace"/>
									(A)
									<html:span class="EnSpace"/>
									If the FQHC disputes the determination or assessment made pursuant to this subdivision, the FQHC shall, within 30 days of the FQHC’s receipt of the determination or assessment, simultaneously submit a request for appeal to both the department and the State Department of Health Care Services. The request shall include a detailed statement describing the reason for appeal and include all supporting documents the FQHC will present at the hearing.
								</html:p>
								<html:p>
									(B)
									<html:span class="EnSpace"/>
									Within 30 days of the department’s receipt of the FQHC’s request for appeal, the department shall submit, to both the FQHC and the State Department of Health Care Services, its responsive arguments and all supporting documents that the department will present at the
						  hearing.
								</html:p>
								<html:p>
									(C)
									<html:span class="EnSpace"/>
									The State Department of Health Care Services shall hear a timely appeal and issue a decision as follows:
								</html:p>
								<html:p>
									(i)
									<html:span class="EnSpace"/>
									The hearing shall commence within 60 days from the date of receipt by the State Department of Health Care Services of the FQHC’s timely request for appeal.
								</html:p>
								<html:p>
									(ii)
									<html:span class="EnSpace"/>
									The State Department of Health Care Services shall issue a decision within 120 days from the date of receipt by the State Department of Health Care Services of the FQHC’s timely request for appeal.
								</html:p>
								<html:p>
									(iii)
									<html:span class="EnSpace"/>
									The decision of the State Department of Health Care Services’ hearing officer, when issued, shall be the final decision of the State Department of Public Health.
								</html:p>
								<html:p>
									(D)
									<html:span class="EnSpace"/>
									The appeals process set forth in this paragraph shall be exempt from Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500), of Part 1 of Division 3 of Title 2 of the Government Code. The provisions of Sections 100171 and 131071 of the Health and Safety Code do not apply to appeals under this paragraph.
								</html:p>
								<html:p>
									(d)
									<html:span class="EnSpace"/>
									(1)
									<html:span class="EnSpace"/>
									An FQHC may apply to the department for a waiver providing a temporary pause of the requirements of Section 14138.36 or for an alternative mission spend ratio requirement to that set forth in subdivision (a) of Section 14138.36, on the basis of unexpected or exceptional circumstances or the FQHC’s economic condition. The issuance and terms of the waiver pursuant to this subdivision shall be solely and
						  exclusively within the authority of the department. A waiver issued pursuant to this subdivision shall be for a term of one year from the date of issuance.
								</html:p>
								<html:p>
									(2)
									<html:span class="EnSpace"/>
									To obtain a waiver based on unexpected or exceptional circumstances, an FQHC shall detail the following circumstances experienced by the FQHC:
								</html:p>
								<html:p>
									(A)
									<html:span class="EnSpace"/>
									When the FQHC first learned of the unexpected or exceptional circumstances.
								</html:p>
								<html:p>
									(B)
									<html:span class="EnSpace"/>
									Why the FQHC could not have anticipated those circumstances arising.
								</html:p>
								<html:p>
									(C)
									<html:span class="EnSpace"/>
									Actions that the FQHC took to address those circumstances.
								</html:p>
								<html:p>
									(D)
									<html:span class="EnSpace"/>
									Expenses incurred as a result of addressing those circumstances.
								</html:p>
								<html:p>
									(E)
									<html:span class="EnSpace"/>
									When the FQHC expects those circumstances to be resolved.
								</html:p>
								<html:p>
									(F)
									<html:span class="EnSpace"/>
									Preventive steps that the FQHC is taking to ensure that those circumstances do not unexpectedly arise in the future.
								</html:p>
								<html:p>
									(3)
									<html:span class="EnSpace"/>
									To obtain a waiver based on economic condition, an FQHC shall demonstrate that compliance with Section 14138.36 would raise doubts about the FQHC’s ability to continue as a going concern under generally accepted accounting principles. The evidence shall include documentation of the FQHC’s financial condition, the financial condition of any parent or affiliated entity, and
						  evidence of the actual or potential direct financial impact of compliance with Section 14138.36.
								</html:p>
								<html:p>
									(4)
									<html:span class="EnSpace"/>
									Consideration of an FQHC’s ability to continue as a going concern shall include the following factors regarding the FQHC or any affiliated entity:
								</html:p>
								<html:p>
									(A)
									<html:span class="EnSpace"/>
									Actual or likely closure of the FQHC or any affiliated entity.
								</html:p>
								<html:p>
									(B)
									<html:span class="EnSpace"/>
									Actual or likely closure of patient services or programs.
								</html:p>
								<html:p>
									(C)
									<html:span class="EnSpace"/>
									Actual or likely loss of jobs.
								</html:p>
								<html:p>
									(D)
									<html:span class="EnSpace"/>
									Whether the FQHC is small, rural, frontier, or serves a rural catchment area.
								</html:p>
								<html:p>
									(E)
									<html:span class="EnSpace"/>
									Whether closure of the FQHC would significantly impact access
						  to services in the region or service area.
								</html:p>
								<html:p>
									(F)
									<html:span class="EnSpace"/>
									Whether the FQHC is in financial distress that results or is likely to result in the closure of the FQHC or any affiliated entity, closure of patient services or programs, or loss of jobs. Factors to consider in determining financial distress include, but are not limited to, the FQHC’s prior and projected performance on financial metrics, including the amount of cash on hand, and whether the FQHC has, or is projected to experience, negative operating margins.
								</html:p>
								<html:p>
									(5)
									<html:span class="EnSpace"/>
									Requests for a waiver pursuant to this subdivision shall be submitted in writing to the department.
								</html:p>
								<html:p>
									(6)
									<html:span class="EnSpace"/>
									The department shall notify the FQHC of the decision on the waiver request in writing.
								</html:p>
								<html:p>
									(7)
									<html:span class="EnSpace"/>
									An FQHC may apply to renew a waiver issued pursuant to this subdivision at any time no fewer than 180 days before the expiration of the existing waiver.
								</html:p>
							</ns0:Content>
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					</ns0:LawSection>
					<ns0:LawSection id="id_134E3B25-9464-4DC9-B0B5-B4DB1E2B16A0">
						<ns0:Num>14138.38.</ns0:Num>
						<ns0:LawSectionVersion id="id_515B094D-DD28-4CBC-B7DF-19F96DFDBBB9">
							<ns0:Content>
								<html:p>This article shall not apply to any of the following:</html:p>
								<html:p>
									(a)
									<html:span class="EnSpace"/>
									Any FQHC or FQHC look-alike that is owned or operated by a county, a city and county, a health care district organized pursuant to Division 23 (commencing with Section 32000) of the Health and Safety Code, the University of California, a special health authority described in Part 4 (commencing with Section 101525) of Division 101 of the Health and Safety Code, or any other political subdivision of the state.
								</html:p>
								<html:p>
									(b)
									<html:span class="EnSpace"/>
									Any FQHC or FQHC look-alike that is owned or operated by a tribe or tribal organization receiving funding under the federal Indian Self-Determination and Education Assistance Act (25 U.S.C. Sec. 5301 et seq.).
								</html:p>
								<html:p>
									(c)
									<html:span class="EnSpace"/>
									Any FQHC or FQHC look-alike participating in a bona fide LMCC.
								</html:p>
							</ns0:Content>
						</ns0:LawSectionVersion>
					</ns0:LawSection>
					<ns0:LawSection id="id_2909EA63-DE60-43FE-A512-1C179ADC3AE5">
						<ns0:Num>14138.39.</ns0:Num>
						<ns0:LawSectionVersion id="id_3F65C1E6-96CE-41DA-8317-E9708DAE083A">
							<ns0:Content>
								<html:p>The department shall adopt all regulations necessary to implement this article. Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this article, in whole or in part, by means of information notices, all-county letters, or other similar instructions without taking regulatory action.</html:p>
							</ns0:Content>
						</ns0:LawSectionVersion>
					</ns0:LawSection>
				</ns0:LawHeading>
			</ns0:Fragment>
		</ns0:BillSection>
		<ns0:BillSection id="id_522DAA33-8623-41F4-A102-A9AE71DF3999">
			<ns0:Num>SEC. 3.</ns0:Num>
			<ns0:Content>
				<html:p>The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.</html:p>
			</ns0:Content>
		</ns0:BillSection>
	</ns0:Bill>
</ns0:MeasureDoc>