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