BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 442 (Ducheny) Hearing Date: 5/11/2009 Amended: 5/6/2009 Consultant: Katie Johnson Policy Vote: Health 11-0 _________________________________________________________________ ____ BILL SUMMARY: SB 442 would require the California Department of Public Health (CDPH) to issue a single, consolidated license to a clinic corporation, or an entity that operates multiple clinics under a single governing board with a universal administrative and operative structure. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2009-10 2010-11 2011-12 Fund Regulations $69 $117 $0 Special* Fee Development $55 $96 $96 Special* Data system modification $62 $108 $0 Special* Additional licensure $2,063 $2,739 $2,739 Special* survey staff Initial clinic licensing and unknown, but likely to provide sufficient Special* annual renewal funds to cover ongoing program costs fee revenue *State Department of Public Health Licensing and Certification Program Fund _________________________________________________________________ ____ STAFF COMMENTS: This bill meets the criteria for referral to the Suspense File. Existing law provides for the licensing and regulation of health clinics by the CDPH. Existing law provides for a fee to be paid for an initial and renewal license, as specified. Existing law permits a primary care clinic that has held a valid, unrevoked, and unsuspended license for at least the preceding five years to apply to establish another primary care clinic at an additional site, which is referred to as an affiliate clinic. Existing law provides that the CDPH approve an affiliate clinic without the necessity of first conducting an initial onsite survey if specified conditions are met. This bill would provide for a single, consolidated license for corporation clinics. This bill would require that clinics included in the consolidated license meet applicable requirements for licensure, as specified. This bill would require that for a clinic corporation to receive a consolidated license, it must have held a valid, unrevoked, and unsuspended license for at least the preceding five years. This bill would require that a clinic corporation meet specified requirements pertaining to the clinics that would be Page 2 SB 442 (Ducheny) included in its consolidated license, including that the corporate officers are the same for each clinic, the corporation's nonprofit board of directors owns and operates the clinics, and that there are medical directors operating under a single set of policies and procedures for all the clinics included in the license. It is estimated that the CDPH would need $69,000 in FY 2009-2010 and $117,000 in FY 2010-2011 to promulgate regulations to implement this new licensing category. This bill would require the CDPH to annually set the fee for a clinic corporation, defined in this bill as a nonprofit organization that owns one or more primary care clinics and/or one or mobile health care units that operate as primary care clinics. It is estimated that the CDPH would require an additional Fee Development Analyst at $55,000 in FY 2009-2010 and $96,000 ongoing to set the fee annually. Additionally, the CDPH would need an additional information technology staff person to modify the department's data systems to include this new licensure category at $62,000 in FY 2009-2010 and $108,000 in FY 2010-2011. This bill would require that the CDPH issue a consolidated license within 30 days of the receipt of a completed application or within seven days of the date the central application unit approves the application, whichever is sooner. Existing law allows the department 100 days to review and approve new clinic applications. Preliminary analysis indicates that the CDPH would need more survey staff to accommodate approximately 80 annual initial surveys in this new, shorter timeframe at an estimated cost of $2,063,000 in FY 2009-2010 and $2,739,000 ongoing. This bill would require the CDPH, commencing February 1, 2010, and every February thereafter, to publish the estimated fee for a single consolidated license. This bill would require that the estimated fee for primary care clinics and for each primary care clinic included in a consolidated license be included in the report and list of estimated fees that the CDPH reports to the Legislature and posts on its Internet Web site each February 1. Since the licensing fees would not be published until February 1, 2010, and it would be unlikely that the regulations process would be completed, the effective date of this bill, January 1, 2010, when the CDPH would be required to issue consolidated licenses, could be premature. Staff recommends that the bill be amended to require the CDPH to commence issuing a single, consolidated license no later than January 1, 2011. This bill would provide that a clinic corporation with a consolidated license may, at any time during the license period, add or remove a clinic. This bill would require the department to develop a single-page application form for the addition or removal of a clinic, as specified. For every clinic added, this bill would require that the clinic corporation pay a license fee equivalent to the fee for one primary care clinic included in a consolidated license. The proposed licensing fee for FY 2009-2010 for a community clinic is $600. Staff recommends that the bill be amended to require the CDPH to set the clinic corporation licensing and renewal fees and the fee per clinic included in a consolidated license at an amount sufficient to cover the annual costs of the program related to this licensure category. Page 3 SB 442 (Ducheny) This bill would require the CDPH to notify a clinic corporation of all deficiencies in its compliance with the provisions relating to its licensure and regulation that are discovered or confirmed by inspection and to work with the clinic on a plan of correction. If the issue remains unresolved at the conclusion of the plan of correction timeline, this bill would require the CDPH to assess a civil penalty at no more than $50 per day of noncompliance and would permit the department to take action against the licensee. This bill would prohibit the department from revoking or suspending a single, consolidated license unless all clinics on a license were found to be deficient. This bill would provide that, in the case of a deficient clinic, a clinic corporation could voluntarily remove that clinic from its consolidated license.