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.