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.