BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 442| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 442 Author: Ducheny (D), et al Amended: 1/26/10 Vote: 21 SENATE HEALTH COMMITTEE : 11-0, 4/22/09 AYES: Alquist, Strickland, Aanestad, Cedillo, Cox, DeSaulnier, Leno, Maldonado, Negrete McLeod, Pavley, Wolk SENATE APPROPRIATIONS COMMITTEE : 9-0, 1/21/10 AYES: Kehoe, Cox, Corbett, Denham, Leno, Liu, Price, Walters, Yee SUBJECT : Clinic corporation: licensing SOURCE : California Family Health Council California Primary Care Association Planned Parenthood Affiliates of California DIGEST : This bill requires the Department of Public Health 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. ANALYSIS : Existing law: 1. Provides for the licensing and regulation of health CONTINUED SB 442 Page 2 clinics, including community and free clinics, by the Department of Public Health (DPH). 2. Provides for a fee to be paid for an initial and annual renewal license, as specified. Estimated fees are published every February 1 by DPH. 3. 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. 4. Provides that the DPH 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: 1. Requires DPH's centralized application unit to issue a single consolidated license to a clinic corporation upon submission of a complete application, as specified. 2. Requires 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. 3. Requires 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 SB 442 Page 3 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. 4. Requires 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 requires that it would identify the reasons in writing. 5. Provides 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. 6. Requires 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 will do so within 30 days of receipt of the form. 7. Specifies that a licensed clinic corporation could add or relocate a clinic or mobile health care unit to its single consolidated license without the DPH first conducting an initial onsite survey. 8. Requires the DPH 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 requires the DPH to assess a civil penalty at no more than $50 per day of noncompliance and permits the DPH to take action against the licensee. 9. Provides that, in the case of a deficient clinic, a clinic corporation could voluntarily remove that clinic from its consolidated license. 10.Provides that any clinic or mobile health care unit that SB 442 Page 4 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. 11.Provides that a clinic or mobile health care unit included on a single consolidated license will 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. 12.Permits DPH 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 DPH or the Board of Pharmacy would be against the individual clinic or mobile health care unit, not against the clinic corporation. 13.Requires the DPH, commencing February 1, 2011, and every February thereafter, to publish the estimated fee for a single consolidated license. The licensing fees will be based on DPH workload and will offset program costs. Comments According to the Senate Appropriations Committee analysis: "CDPH [California Department of Public Health] 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 SB 442 Page 5 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." FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: Yes According to the Senate Appropriations Committee: Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund SB 442 Page 6 DPH administration up to $800 up to $1,300up to $1,200 Special* Initial clinic licensing/ unknown, but likely to provide sufficient Special* annual renewal fee revenue funds to cover ongoing program costs * DPH Licensing and Certification Program Fund SUPPORT : (Verified 1/25/10) California Family Health Council (co-source) California Primary Care Association (co-source) Planned Parenthood Affiliates of California (co-source) Alliance Medical Center Alliance for Rural Community Health Alta Med Health Services Anderson Valley Health Center Central Valley Health Network Chinatown Service Center Clinicas del Camino Real, Incorporated Clinica de Salud del Valle de Salinas Clinica Sierra Vista Community Clinic Association of Los Angeles County East Community Health Center, Inc. Eisner Pediatric and Family Medical Center Family HealthCare Network Family Health Centers of San Diego Imperial Beach Health Center LifeLong Medical Care Long Valley Health Center MayView Community Health Center Mendocino Coast Clinics, Inc. Mendocino Community Health Clinics, Inc. Neighborhood Healthcare North Coast Clinics Network North County Health Services Northeast Valley Health Corporation Open Door Community Health Centers Petaluma Health Center Planned Parenthood Mar Monte Planned Parenthood of San Diego and Riverside Counties Planned Parenthood of Santa Barbara, Ventura and San Luis SB 442 Page 7 Obispo Planned Parenthood: Shasta-Diablo Potter Valley Community Health Center Redwood Coast Medical Services Saban Free Clinic Salud Para La Gente Shasta Community Health Center Shasta Consortium of Community Health Centers Shingletown Medical Center Six Rivers Planned Parenthood Southern Trinity Health Services UMMA Community Clinic Venice Family Clinic West County Health Centers, Inc. ARGUMENTS IN SUPPORT : The California Primary Care Association (CPCA) states that this bill eliminates unnecessary administrative barriers to increasing access to care by allowing primary care clinics to operate multiple sites under one consolidated license. CPCA states that moving to a consolidated licensure will streamline the licensing process, reduce duplication, and promote administrative efficiency, and thereby maximize the ability of safety net providers to meet the growing health care needs of individuals and families in their communities. Planned Parenthood Affiliates of California (PPAC) states that each time a clinic corporation applies for a new clinic, numerous documents must be submitted to DPH, many of which are duplications of paperwork already filed with the department. PPAC states that significant time and money is expended on these cumbersome licensing activities that take away from the critical services clinic staff should be providing. PPAC states that this bill streamlines and modernizes the current overly burdensome processes and eliminate duplication. CTW:mw 1/26/10 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** SB 442 Page 8