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HomeMy WebLinkAboutCorrespondence- #6DocuSign Envelope ID: F6C450FD-9543-4698-88A0-4C8C51123985 0 CalOptima February 7, 2023 Mayor and City Council City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 Dear Mayor and Council Members: Health CalOptima Health A Public Agency 505 City Parkway West Orange, CA 92868 9 714-246-8400 ® TTY:711 (j7 caloptima.org I write to you today to share CalOptima Health's insights about the role of Community Health Centers (CHCs) in Santa Ana and the broader community. CalOptima Health is the county -organized health system providing health care benefits to the nearly 950,000 Medi-Cal beneficiaries living in Orange County — including 53% of Santa Ana residents. As the sole managed care plan serving low-income individuals and families in the community, CalOptima Health relies on a robust network of safety net providers, including CHCs, to serve the needs of our most vulnerable populations. CHCs play a critically important role in providing direct primary care services to low-income individuals who otherwise struggle to have access to quality health care. CHCs, like Share Our Selves, specifically operate as Federally Qualified Health Centers (FQHCs) in areas designated by the federal government as having inadequate primary care services for low-income individuals who live at or below 200% of the Federal Poverty Level. In consideration of federal funding, FQHCs must commit to serve all persons regardless of insurance status or ability to pay and are subject to strict oversight by the U.S. Department of Health and Human Service (HHS) Health Resources and Services Administration (HRSA) concerning the scope and quality of services provided to the communities they serve. FQHCs also serve the greater health care community by offering an alternative to emergency rooms that otherwise frequently become the provider of last resort. Communities like Santa Ana that are fortunate with CHCs will find that they are a critical and reliable partner in improving community health care access and the lives of those they serve. Any proposed ordinance that impedes CHCs' ability to effectively operate or expand services in the City of Santa Ana to meet the needs of the community will negatively impact the health and well-being of its residents. Sincerely, EOocuSigned by: 000ccet Michael Hunn Chief Executive Officer El Sol Science & Arts Acad An Excellent Public School February 6, 2023 Dear Mayor and City Councilmembers Our friends at Share Our Selves have asked us to reach out to you to share our insights concerning the role of Community Health Centers. El Sol Science and Arts Academy (El Sol) has been a proud partner with Share Our Selves (SOS) for more than 15 years. In that time, they have served our community with quality and compassionate care. Our partnership has allowed SOS to demonstrate theirvalue to Santa Ana. In our early partnership, they were the singular source for serving our families and neighbors who had no other access to care. In the time since then, they have grown in scope and capacity here in Santa Ana. As El Sol is a passionate community provider of education, we are proud to partner with SOS. Community Health Centers play a critically important role in providing primary care services to low-income individuals and families who otherwise struggle to have access to quality healthcare. Community Health Centers like Share Our Selves operate as Federally Qualified Health Centers in areas designated by the federal government as having inadequate primary care services for low-income individuals and families who live at or below 200% of the Federal Poverty Limit. In consideration for federal funding, Federally Qualified Health Centers must commit to serve all persons regardless of insurance status or ability to pay. Federally Qualified Health Centers like Share Our Selves are subject to strict oversight by the U.S. Department of Health Research and Services Administration (HRSA) concerning, among other things, the scope and quality of services provided to the community they serve. As primary care providers for low-income and the uninsured, Federally Qualified Health Centers also serve the greater healthcare community by offering an alternative to Emergency Rooms that otherwise frequently become the provider of last resort for this community. If you are fortunate enough to have Community Health Centers in your community, you will find they can become a critical and reliable partner in improving access to healthcare in your community and in improving the lives of those they serve. Sincerely, aecu3lpnld nr CMbv,tVj_ Vq� OWS$ 135MCNCA707... Monique Daviss Executive Director 328 W. Halesworth St. Santa Ana, CA 92701 1 (714) 543-0023 1 www.elsolacademy.org February 6, 2023 Via Hand Delivery Hon. Valerie Amezcua, Mayor Hon. Members of City Council Ms. Normal Orozco, City Clerk City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 Re: Proposed Ordinance 2022-03 Dear Mayor, Members of the Council, and Ms. Clerk, Share Our Selves I currently serve as the chairperson of the board of directors of Share Our Selves ("SOS"). On behalf of SOS, and medical providers impacted by this matter, I would respectfully request that the City Council not proceed today to provide final approval of Ordinance 2022-03 (the "Ordinance"). For the reasons stated below, we at SOS believe that the Ordinance is flawed and needs to be sent back to staff for further review and revision to eliminate its unfair and discriminatory treatment of federally funded, non-profit community health centers, such as SOS and the predominantly Hispanic and Latino individuals it serves in Santa Ana. In this regard, I would kindly ask that the public hearing on the Ordinance be reopened so that I and others supporting SOS be allowed a meaningful opportunity to present our concerns regarding the Ordinance to the Council. As explained below, SOS does not believe that the public notice for the Ordinance was adequate because, among other things, the notice did not alert either non-profit or for -profit medical offices in the City's Professional district that they might be considered to be "government -subsidized" entities that would be subject to the new CUP requirement in the Ordinance if they accepted any federal funds for treating patients on Medicare, for example. We believe that, if that message had been communicated to the public at large, there would have been a lot more people speaking in opposition to the Ordinance on January 17, 2023. As it was, not a single person from the public spoke either in favor of or in opposition to the Ordinance on January 17. That underscores the fact the notice was deficient and helps to explain why representatives of SOS were not in attendance at the hearing on the 17th. Although we believe that the Ordinance should be reworked to eliminate the deficiencies listed below, it should, at a minimum, be clarified to provide that it will not apply to any planning application that has been submitted before the Ordinance takes effect, such as the Major Remodel Application (the "Application") that SOS's working partner, Turner Healthcare Facilities Acquisition LLC ("Turner"), initially submitted to the City on December 22, 2022, and then resubmitted on February 6, 2023, relating to the proposed remodeling of the commercial office building located at 2670 North Main Street in Santa Ana (the "Property") to provide SOS with a new, expanded outpatient clinic (the "Project"). Unless the Ordinance is clarified so that Turner's Application is grandfathered in, and the new CUP requirement for government -subsidized, non-profit medical offices will not apply to that Application, the benefits of the Project will be lost because the seller of the Property is not willing to provide additional extensions of time to close escrow on the purchase of the Property for the time that it will take to obtain a CUP for the Project. To lose the Project —which will bring $34 million in construction jobs and resources into the City and will generate at least 120 permanent jobs at the new clinic —would be a tragic outcome for SOS, the City, and its residents. Over the past year, from March 2022 to the present, Turner and SOS have spent hundreds of hours and hundreds of thousands of dollars in preparing plans and meeting with City staff regarding the Project. Now, however, the very life of the Project hangs in the balance and SOS implores the Council to save the Project by either sending the Ordinance back to staff to be revised or clarifying that the Ordinance, in its present form, will not apply to Turner's Application relating to the Project. Facts Regarding SOS And Its Status As A Regulated Agent of the Federal Government. SOS is a non-profit corporation and community health center that was founded in 1978 for the express purpose of implementing the Directives of the Catholic Bishops of the United States in offering a broad spectrum of services and resources to help those in need. For the past 53 years, has delivered high -quality, accessible, and affordable health care services to individuals and families throughout Orange County. In 2012, SOS was designated as a Federally Qualified Health Center ("FQHC") and it currently provides health services to children, adults, and seniors as well as comprehensive care at its four medical locations in Costa Mesa, Santa Ana, Mission Viejo, and Newport Beach. For the last 13 years, SOS has been serving the Santa Ana community at its El Sol Wellness Center located at 1014 North Broadway. Last year in Orange County, SOS provided care to over 14,000 unique patients in connection with approximately 43,000 medical and dental visits. Share Our Selves 2 1 P a g e Of the patients served by SOS, over 79% are of racial and/or ethnic minority backgrounds. 67% percent identify as Hispanic or Latino, 97% percent of SOS' patients are at or below 200% of the Federal Poverty Guideline, while 53% are at or below 100% of the Federal Poverty Guideline. Additionally, 57% of patients are covered by Medi-Cal and/or Medicare, and 24% of the patient population is uninsured. FQHCs are regulated by the Health Resources and Services Administration ("HRSA) of the United States Government. FQHCs receive an annual grant from HRSA for each approved site at which services are provided. In addition, FQHCs receive a higher reimbursement rate for seeing Medicaid (MediCal) patients than do hospitals, non-FQHCs, or practitioners. In exchange for the HRSA grant and higher reimbursement rate, FQHCs must provide cradle to grave primary care services and must accept all patients regardless of insurance status or ability to pay. FQHC's are also required to establish "sliding scale" fees for uninsured patients based on an assessment of the patient's income relative to federally adjusted poverty line which takes into consideration the size of the individual's household among other factors. FQHCs are required to charge at least a "nominal fee" regardless of how low an individual's income may be. The Public Health Service Act provides that eligible community health centers and their employees are employees of the federal Public Health Service ("PHS") for certain purposes. The Secretary of Health and Human Services deems a community health center to be a PHS employee after the center has qualified for certain federal assistance. Once a community health center is deemed a PHS employee, it enjoys immunity from those acts that relate to its employment, and any actions against it are treated as actions against the United States. Furthermore, for an FQHC receiving funds under 42 U.S.C. § 254b, any officer, governing board member, or employee of such an entity ... shall be deemed to be an employee of the Public Health Service for purposes such as immunity from liability for medical malpractice, etc. There is, therefore, a direct agency relationship between FQHCs, such as SOS, and the federal government. An Ordinance being considered for adoption by the Council would interfere and conflict with the accomplishment and execution of the full purposes and objectives of Congress, particularly with respect to providing health care to underserved populations. This fact alone presents serious issues concerning the Ordinance. Facts Regarding SOS's Proposed Expansion Project. Share Our Selves 3 1 P a g e In the fall of 2021, SOS identified significant unmet need for its services in Santa Ana, where it currently operates the El Sol Wellness Center on Broadway. Given the unmet demand, SOS decided to expand its outpatient clinic capacity by replacing its existing facility with a larger one. In February 2022, Turner and SOS signed a Term Sheet outlining the business terms for a long-term "triple net" lease of the Property to SOS as the tenant to operate a healthcare facility. In March 2022, Turner entered into a purchase and sale agreement to acquire the Property and to lease it to SOS upon approval of remodeling plans by the City. The intended lease between Turner and SOS would include a purchase option which would provide SOS with the right to purchase Turner's interest in the Property. The Property is improved with an 18% occupied three-story, 44,066 square foot commercial office building with 139 surface -parking spaces. The proposed Project involves interior tenant improvements to accommodate medical office uses, including primary care, dental, vision, and pharmacy services. The Property is located in Zone P: Professional, which, according to the January 17, 2023 Staff Report for the Ordinance allows for -profit medical offices "by right." The Unintended , Yet Serious, Consequences Of The Ordinance. The City has not given due consideration to the implications and potential consequences of the Ordinance. First, on its face, the Ordinance purports to subject medical offices operated by "government entities," i.e., by the United States Government or the State of California, to the City's zoning regulations, but the use of land owned by the U.S. or any state, such California, is never subject to the land use regulations of a city or county. This protection also extends to the agents of state and federal governments that are directly implementing the goals, objectives, and programs of such governments. Secondly, the Ordinance purports to require a CUP for any medical offices that are operated by any entities that the Ordinance refers to by the overly -broad and vague term "government -subsidized." As such, any medical office that accepts Medicare, Medicaid, Medi-Cal, or government -subsidized insurance would appear to qualify as a "government -subsidized" entity under the current language of the Ordinance. The same would be true of any office that accepted any PPP loans, any Small Business Association loans, any government subsidized malpractice insurance, or any other kind of grants or loans from the state or federal governments. Unless they were willing to apply for a CUP, the Ordinance would essentially prevent and discourage the owners of any for -profit medical offices in the Professional Share Our Selves 4 1 P a g e district from applying for or accepting these sorts of grants or subsidized loans, or from accepting payment from patients eligible for Medicare, Medicaid, Medi-Cal, or state subsidized insurance. Since it is hard to imagine that there are any medical offices in the P district that do not accept at least one of these forms of government subsidies, the Ordinance as currently drafted would have an immediate and devastating impact on the ability of medical offices in Santa Ana to serve the City's residents, particularly senior citizens. This would appear to be one of the many "unintended consequences" of approving the Ordinance and it clearly requires the Ordinance to be sent back to staff for further review and revision. Indeed, in the spreadsheet on page 3 of the January 17, 2023 Staff Report for the Ordinance, it appears that staff intended to distinguish between for -profit and non-profit medical offices and did not anticipate that the CUP requirement would apply to for -profit medical offices simply because they might, for example, serve patients covered by Medicare. This ambiguity caused by the vague language of the Ordinance is fatal to its enforcement, and the Ordinance needs to be sent back for further analysis and resolution. Moreover, because the Ordinance as presently drafted could potentially sweep in all medical offices and discourage them from receiving federal subsidies in order to avoid the CUP requirement, the Ordinance would impermissibly frustrate the purpose of the various state and federal government programs that provide all these forms of financial assistance. This Ordinance will likely have even more severe consequences that the City has not considered. Notably, the City receives millions of dollars of government grants and subsidies. The Staff Report and City Council discussions to date have not considered whether or not explicit discrimination against government medical programs might jeopardize the funding that the City receives itself. SOS submits that, when state and federal agencies learn that the City is directly interfering with the implementation of their health and welfare programs, they may withhold and/or cancel any more funds provided to the City. Additional Deficiencies Invalidating the Ordinance. In addition to the infirmities discussed above, the Ordinance is subject to the following deficiencies that render the Ordinance invalid: 1. Without any rational basis, the Ordinance unlawfully discriminates between for - profit and non-profit medical offices, allowing the former to operate "by right," but requiring the latter to apply for a discretionary CUP which could be denied following a Share Our Selves 5 1 P a g e public hearing. As such, the Ordinance violates the equal protection clauses of both the U.S. and California Constitutions to the extent that it discriminates between similarly - situated medical offices (for -profit and non-profit) for the illegitimate purpose of regulating how, when, and where non-profit FQHC's, like SOS, can serve poor and homeless minority clients. 2. The Ordinance's unequal treatment of for -profit and non-profit medical offices clearly shows that the ordinance improperly targets the client base served by non-profit entities like SOS. A neutral law found to have a disproportionately adverse effect upon a minority classification will be deemed unconstitutional if that impact can be traced to a discriminatory purpose, i.e., an intent to discriminate against a particular individual or class of individuals. Discrimination that involves a suspect class requires the City to show a compelling governmental interest to justify such action and the Ordinance points to no such interest. 3. City staff has publicly reported to the Council that the reason for requiring a non- profit medical office to obtain a CUP is so that the City can "ensure that the location and operation of such facilities are compatible with the scale, character, and nature of surrounding properties and neighborhoods." Obviously, the City does not feel that for - profit medical offices raise the same kinds of concerns and thus such businesses do not need to apply for a CUP. The clear implication, therefore, is that non-profit medical offices tend to attract a certain type of "clientele" that the City views as not being "compatible" with "character" of surrounding neighborhoods. That implication has racial and ethnic overtones, considering that the clients that would potentially be served by SOS at the new location in Santa Ana would be mainly persons identifying as Hispanic/Latino, African -American, or other ethnic minorities. Those overtones, in turn, would constitute invidious discrimination in violation of the U.S. and California Constitutions. 4. As a community health center, SOS is one of the intended beneficiaries of a multi -million, multi -year grant from the U.S. Department of Health and Human Services, Office of Minority Health for "Advancing Health Literacy to Enhance Equitable Community Responses to COVID-19." The City also receives funds from the federal government relating to various federal programs, including, but not limited to, the Community Development Block Grant Program, and the Home Investment Partnerships Program. The express terms of these federal grants, as well as other federal laws, including 42 USC §2000d ("Title VI") and the Civil Rights Remedies Equalization Act Share Our Selves 6 1 P a g e prohibit the City, as a recipient of federal funding, from engaging in discriminatory conduct. The Ordinance is discriminatory on its face in that it subjects FQHCs, like SOS, to unlawful disparate treatment based on the fact that it primarily serves racial and ethnic minority patients. In that regard, the Ordinance is also discriminatory in that it will have a disparate impact on such racial and ethnic minority populations served by SOS. 5. A local police power ordinance is invalid if it is arbitrary, discriminatory, unreasonable, oppressive, not substantially related to the public health, safety or welfare or only marginally serves legitimate purposes while infringing on personal interests protected under due process standards. Federal and state law provides that cities and counties may not, under the guise of the police power, impose restrictions that are unnecessary and unreasonable upon the use of private property or the pursuit of useful activities. Given that the operation and control of FQHCs are legitimate activities in which the federal and state have a considerable interest, the City's unilateral efforts to restrict those activities pursuant to the Ordinance is an improper exercise of its police power and amounts to bad faith. 6. The Ordinance impermissibly discriminates on the basis of disability and violates the Americans with Disability Act in at least three ways: (a) by distinguishing between medical offices specializing in treatment of addiction and all other forms of medical treatment, and imposing special burdens on medical treatment for addiction not applicable to other forms of medical treatment, (b) by preventing disabled individuals who, due to their disability, are reliant on government or charitable assistance from accessing health care on the same terms and in the same medical offices as other patients, and (c) by effectively prohibiting medical offices that have not obtained CUPs from assisting disabled patients who, due to their disability, are reliant on government subsidized forms of payment. 7. The Ordinance impermissibly discriminates on the basis of age, because individuals over 65 qualify for Medicare, and the Ordinance imposes special burdens on facilities that will accept Medicare payments, and prevents medical offices that have not obtained a CUP from serving patients paying through Medicare (i.e. virtually everyone over 65). Share Our Selves 7 1 P a g e 8. The Ordinance impermissibly discriminates on the basis of source of payment, and is subject to state and federal preemption, because there are numerous state and federal statutes and regulations forbidding payment discrimination in health care contexts, establishing a clear public policy against source of payment discrimination This gives rise to unlawful discrimination under the U.S. and California Constitutions, as well as state and federal statutes. 9. The Ordinance is internally inconsistent and violates CEQA. Specifically, the Ordinance relies on Sections 15060(c)(2) and 15060(c)(3) of the State CEQA Guidelines because it will not result in a direct or reasonably foreseeable indirect physical change in the environment, as there is no possibility it will have a significant effect on the environment and it is not a "project", as defined in Section 15378 of the CEQA Guidelines. However, contrary to these conclusions, the Staff Report for the ordinance indicates that the changes are intended to "create a user friendly environment," and recognizes that the changes duplicate those made in the City's 12/20/2022 Urgency Ordinance. The Staff Report for that ordinance explained that the changes were required to "address current and immediate threats to the public health, safety, or welfare," and that the absence of a conditional use permit requirement for government and philanthropic medical offices "hinder the City's ability to [... ] implement a regulatory land use and development framework to promote the health, safety, and the general welfare of the residents of Santa Ana." The Staff Report then explicitly acknowledges the fact that this portion of the ordinance will have an impact on the environment: "The proposed ordinance establishes a decision -making process for the City to identify, evaluate, regulate, address, and reduce the potential impact to the built environment stemming from these land uses." These admissions by the City belie the notion that the Ordinance will not result in any foreseeable direct or indirect physical changes in the environment and preclude the use of the CEQA exemptions relied upon by the City. 10. The Ordinance is a violation of due process and equal protection and freedom of association under the U.S. and California Constitutions in that it impermissibly discriminates (a) against FQHCs and their patients on the basis of homelessness, income, source of income, and reliance on government or charitable assistance and (b) against entities providing medical services on the basis of non-profit status, philanthropic purpose, and receipt of government subsidies. Share Our Selves 8 1 P a g e 11. The public notice for the first reading of the Ordinance was defective in that it constituted a denial of due process and violated applicable provisions of the Government Code because, among other things, the notice did not reference the Planning Commission's recommendation regarding the Ordinance, did not indicate the staff was recommending additional changes not included in that recommendation, did not provide any hint or suggestion that non-profit medical offices were going to be treated differently than for -profit medical offices or that for -profit offices might be subject to the Ordinance if they accepted any federal subsidies or reimbursements, and, most importantly, the notice did not indicate that applications that had been duly submitted before the Ordinance took effect were not going to be grandfathered in which is the normal custom and practice with new zoning ordinances. Conclusion. In light of the above -listed problems underlying the Ordinance, SOS respectfully requests that Ordinance either be sent back to staff to cure its deficiencies or that it at least be clarified so that it will not apply to Turner's Application. Thank you. Ernest W. ("Will") Klatte Chair, SOS Board of Directors Share Our Selves 9 1 P a g e