BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           442 (Ducheny)
          
          Hearing Date:  1/21/2010        Amended: 1/12/2010
          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, an entity that operates multiple clinics  
          under a single governing board with a universal administrative  
          and operative structure.
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)

           Major Provisions        2010-11      2011-12       2012-13     Fund
                                                                  
          CDPH administration    up to $800 up to $1,300          up to  
          $1,200                 Special*

          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: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
          
          Existing law provides for the licensing and regulation of health  
          clinics, including community and free clinics, by CDPH. Existing  
          law provides for a fee to be paid for an initial and annual  
          renewal license, as specified. Estimated fees are published  
          every February 1 by CDPH.

          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 license an  










          affiliate clinic without the necessity of first conducting an  
          initial onsite survey if specified conditions are met and within  
          30 days of receipt of a completed application or within seven  
          days of approving it. 

          This bill would require CDPH's centralized application unit to  
          issue a single consolidated license to a clinic corporation upon  
          submission of a complete application, as specified. This bill  
          would require that for a clinic corporation to receive a single  
          consolidated license, it must have been a known entity to the  
          department, have been in existence for not less than five years,  
          and have operated at least one or more clinics or mobile health  
          units that hold a valid, unrevoked, and unsuspended license for  
          at least the preceding five years. Any clinics or mobile health  
          units placed on the single consolidated license at the time of  
          application that are not already individually licensed would be  
          deemed by the centralized application unit to meet the  
          requirements for an individually licensed clinic by virtue of  
          being included on the single consolidated license.
          Page 2
          SB 442 (Ducheny)

          This bill would require that a clinic corporation meet specified  
          requirements pertaining to the clinics that would be included in  
          its consolidated license, including that the corporate officers  
          are the same for each clinic, the corporation's non-profit 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. 

          This bill would require that the centralized application unit  
          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. If the centralized application unit determines that an  
          applicant is ineligible for a single consolidated license, this  
          bill would require that it would identify the reasons in  
          writing.

          This bill would provide that conducting an initial onsite survey  
          would not be necessary prior to licensure and that clinics  
          included on the single consolidated license would not be subject  
          to provisional licensure requirements. This bill would require  
          the centralized application unit to develop a one-page form to  
          add, relocate, or delete a clinic or mobile health unit on a  
          single consolidated license. It would do so within 30 days of  










          receipt of the form. This bill would also specify that a  
          licensed clinic corporation could add or relocate a clinic or  
          mobile health care unit to its single consolidated license  
          without the CDPH first conducting an initial onsite survey. 

          This bill would require the CDPH to notify a clinic and its  
          clinic corporation of any 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 provide that,  
          in the case of a deficient clinic, a clinic corporation could  
          voluntarily remove that clinic from its consolidated license.

          This bill would provide that any clinic or mobile health care  
          unit that is included in a single consolidated license is deemed  
          to be licensed for the purposes of enrollment as a provider in  
          the Medi-Cal, Medi-Cal Presumptive Eligibility, Child Health and  
          Disability Prevention, Perinatal Services, and the Family  
          Planning, Access, Care, and Treatment programs. Such a clinic or  
          mobile health care unit may instead choose to separately enroll  
          as a provider in these programs.

          This bill would provide that a clinic or mobile health care unit  
          included on a single consolidated license would be deemed to be  
          licensed as a primary care clinic for the purpose of obtaining a  
          pharmacy license and a clinical laboratory license or  
          registration.

          This bill would permit CDPH to take regulatory action against  
          any clinic or mobile health care unit that is included on a  
          single consolidated license and that any action taken by the  
          department or the California State Board of Pharmacy would be  
          against the individual clinic or mobile health care unit, not  
          against the clinic corporation.


          Page 3
          SB 442 (Ducheny)

          This bill would require the CDPH, commencing February 1, 2010,  
          and every February thereafter, to publish the estimated fee for  
          a single consolidated license. The licensing fees would be based  










          on CDPH workload and would offset program costs.

          CDPH currently uses a system of 14 regional offices and a  
          contract with Los Angeles County and a database that tracks  
          licensees to oversee all of the health facilities, including  
          clinics that it licenses and certifies. The department would  
          likely need to modify the way in which it oversees clinics since  
          clinics and mobile health care units on a single consolidated  
          license would no longer be tracked by an individual license  
          number. Depending on the workload at a given regional office, an  
          additional program technician could be needed to oversee a  
          single consolidated license and to facilitate communication  
          amongst the regional office that oversees the single  
          consolidated license and the other regional offices that will  
          directly oversee each of the clinics on the license. If each of  
          the offices and LA County needed to hire an extra full-time  
          staff member, costs could be up to $600,000 in FY 2010-2011 and  
          $1,000,000 in FY 2011-2012 and ongoing.

          This bill would state that regulations would not be necessary to  
          implement these provisions. However, it is likely that the CDPH  
          would need to promulgate regulations to implement these  
          provisions where the language is not explicit in its directions  
          to the department, clinics, mobile health care units, and clinic  
          corporations. If CDPH promulgates regulations, it would need  
          approximately $75,000 in FY 2010-2011 and $125,000 in FY  
          2011-2012.

          This bill would require the CDPH to annually set the fee for a  
          single consolidated license. It is estimated that the CDPH would  
          require an additional Fee Development Analyst at $60,000 in FY  
          2009-2010 and $100,000 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 and create a system that  
          would accommodate the new way of tracking clinics at $60,000 in  
          FY 2010-2011 and $110,000 in FY 2011-2012.

          In total, depending on department workload, costs for  
          regulations, ongoing district office administration, and  
          database management and clinic tracking would be up to  
          approximately $800,000 in FY 2010-2011 and $1,300,000 FY  
          2011-2012, and $1,200,000 ongoing. All costs would be offset by  
          initial and annual single consolidated license fees.

          The proposed amendment would require CDPH to commence publishing  










          an estimated fee for a single consolidated license no later than  
          February 1, 2011, instead of the current deadline February 1,  
          2010.