BILL ANALYSIS SB 442 Page 1 Date of Hearing: June 29, 2010 ASSEMBLY COMMITTEE ON HEALTH William W. Monning, Chair SB 442 (Ducheny) - As Amended: June 22, 2010 SENATE VOTE : 35-0 SUBJECT : Clinic corporation: licensing. SUMMARY : Amends the administrative requirements for a clinic corporation to apply for licensure for an affiliate primary care clinic or a mobile health care unit operated as a primary care clinic (collectively affiliate clinics). Specifically, this bill : 1)Makes findings and declarations regarding the current system for licensing affiliate clinics and the need to streamline administrative processes through paperwork reduction and elimination of duplication in the application process. 2)Clarifies that a clinic corporation can apply to establish affiliate clinics on behalf of a primary care clinic, as specified. Defines "clinic corporation" as a nonprofit organization that operates one or more affiliate clinics. Makes other definitions, as specified. 3)Adds to the conditions already in existing law under which the Department of Public Health (DPH) is required to approve a license for an affiliate clinic without first conducting an initial onsite survey, that the clinic corporation and affiliate clinic have the same medical director or directors and medical policies, procedures, protocols, and standards. 4)Requires the affiliate clinic licensure application to consist solely of a single-page form and supporting documents relating to: the contact information of the clinic corporation and affiliate clinic's administrative officers; the affiliate clinic location and hours of operation; evidence of compliance with minimum safety standards related to the affiliate clinic's physical plant; and, other pertinent information, as specified. 5)Permits the affiliate clinic application to be signed by an officer of the clinic corporation's board of directors or the SB 442 Page 2 clinic corporation's chief executive officer or executive director. 6)Requires the clinic corporation, in order to reduce paperwork, eliminate errors, and streamline communications between DPH and a clinic corporation that operates one or more affiliate clinics, on behalf of all of the licensed clinics it operates, to act as the administrative headquarters for purposes of receiving from and submitting to DPH communications, as specified. 7)Requires DPH to maintain a corporate file containing information about each clinic corporation operating one or more affiliate clinics, and for the file to include specified information. 8)Prohibits a clinic corporation from being required to resubmit information, materials, or documents, as specified, as part of an affiliate clinic application. 9)Requires a clinic corporation to submit to DPH, on behalf of all licensed affiliate clinics operated by the clinic corporation, a single report of change that is applicable to all affiliate clinics operated by the clinic corporation, including a change in a principal officer or general manager of the governing body, the medical director, and the clinic administrator, as required by law. 10)Requires a clinic corporation to submit to DPH, on behalf of all licensed affiliate clinics operated by the clinic corporation, a single payment for all affiliate clinic licensure. 11)Makes other technical and clarifying changes. EXISTING LAW : 1)Defines a primary clinic as an outpatient health facility, operated by a nonprofit corporation, which provides direct medical, surgical, dental, optometric, or podiatric advice, services, or treatment to patients who remain less than 24 hours. Requires that primary care clinics be licensed by DPH and approved for operation by DPH prior to obtaining a Medi-Cal provider number or providing services. SB 442 Page 3 2)Requires DPH to issue a provisional license, upon approval of a primary clinic's initial licensure application, which is good for six months from the date of issuance. DPH is then required to conduct an on-site survey of the clinic within 30 days prior to the expiration of the provisional license and, if the clinic meets all licensure requirements, issue a regular license. 3)Permits a primary care clinic that has held a valid and unsuspended license for at least the preceding five years, with no history of repeated or uncorrected violations of law or regulation that pose immediate jeopardy to a patient and has no pending suspensions or revocation actions, to apply to establish an affiliate primary care clinic (affiliate clinic) at an additional site. 4)Requires DPH to issue a regular license to an affiliate clinic within 30 days without the necessity of first conducting an on-site survey, if: a) The parent primary care clinic has submitted a completed application for licensure for the affiliate clinic; b) The parent and affiliate clinics' corporate officers are the same and the clinics are owned and operated by the same nonprofit organization; c) The parent affiliate clinic's operational policies and procedures and staff training are substantially the same; and, d) The parent clinic has submitted evidence to DPH establishing compliance with the minimum construction standards of adequacy and safety of the affiliate's physical plant as prescribed by the Office of Statewide Health Planning and Development (OSHPD). 5)Authorizes DPH to conduct a licensing inspection at any time after receipt of the affiliate clinic licensing application; 6)Defines a mobile health care unit, commonly referred to as a "mobile clinic," as a commercial coach that is licensed by DPH as an independent freestanding clinic, or approved by DPH as an adjunct of a licensed parent health facility or clinic, and that provides medical, diagnostic, and treatment services in order to ensure the availability of quality health care services for patients in remote or underserved areas, and patients who need specialized types of medical care. SB 442 Page 4 7)Authorizes DPH to issue a special permit to a clinic approved to provide one or more specified special services, such as birthing services, for which the state has established separate standards. 8)Authorizes DPH to take various types of enforcement actions against a primary care clinic that has violated state law or regulation, including imposing fines, sanctions, civil or criminal penalties, and suspension or revocation of the clinic's license. FISCAL EFFECT : This version of the bill has not yet been analyzed by a fiscal committee. COMMENTS : 1)PURPOSE OF THIS BILL . According to the author, primary care clinics are at the core of the state's health care safety net and primary care delivery systems. The author states that, among the top concerns for clinics in their day-to-day administration and long-term planning are difficulties associated with state licensing and certification. The author asserts that the current system for licensing and certification of clinics is outdated and inefficient, which causes providers and the state to waste scarce financial and human resources. The author states that most clinic organizations operate multiple clinic sites, ranging in numbers from two to 25, under the governance of a single board of directors and medical directorship, using common business practices, policies, and procedures, as well as medical oversight. The author states that despite this, under current law, each clinic site must be separately licensed, which requires clinics to often submit the same information on separate licensing applications, even when the information is identical or unchanged. The author states that this process is not only administratively burdensome and duplicative, it does not account for the role of the governing clinic organization. The author states that delays in the processing of licensing applications often inhibit clinics from providing and/or billing for much-needed services in their communities. The author states that, to avoid the state licensing process, many clinics are opting to open "intermittent clinics," which SB 442 Page 5 operate at or less than 20 hours per week, and do not require state licensure. 2)AFFILIATE CLINIC LICENSURE . Under current law, primary care clinics that wish to establish additional clinic sites, referred to as "affiliate clinics" are granted an expedited licensure process. Affiliate clinics are eligible for licensure based upon their parent clinic's compliance history. In order to apply to establish an affiliate clinic, a parent clinic is required to have held a valid, unrevoked, and unsuspended license for the preceding five years. In addition, the parent clinic must have no demonstrable history of repeated or uncorrected violations that pose immediate jeopardy to patients, as well as no pending action to suspend or revoke the parent clinic's license. The parent clinic is required to submit a completed application and an application fee, establish that the parent clinic and the affiliate clinic have the same corporate officers and are owned and operated by the same organization with the same board of directors, and provide evidence of compliance with minimum safety standards related to the affiliate clinic's physical plant. If the parent clinic meets these requirements, DPH is required to issue a license to the affiliate clinic within 30 days. Affiliate clinics are not required to be surveyed to qualify for licensure. However, affiliate clinics must still pay license fees. 3)STREAMLINED AFFILIATE CLINIC APPLICATION . According to the author and sponsors of this bill, the parent primary care clinic, referred to in this bill as the clinic corporation, is currently required in its application for affiliate clinic licensure to submit approximately 210 pages of duplicative information, with original signatures of each corporate officer, board member, and clinic manager for every new clinic application. The author and sponsor cite the following documents as duplicative and propose in this bill to have their required submission eliminated in order to streamline the application process: clinic corporation's organizational chart; copy of the non-profit corporation filing statement from the California Secretary of State; Articles of Incorporation; corporation bylaws; copy of the Internal Revenue Service letter of determination acknowledging tax-exempt nonprofit corporation status; list of all clinics operated by the clinic corporation, including name, address, SB 442 Page 6 and contact information; administrative organization; and, an applicant individual information form which must be completed and signed by each board member, the corporation's President/CEO, the officers of the corporation, and the clinic manager which often results in a minimum of six pages per individual. The author and sponsor maintain that the supporting documents that will remain required under the provisions of this bill include, but are not limited to: certificate of occupancy from local authority; grant deed, bill of sale, or sublease or rental agreement of the clinic location; proof that the clinic meets Title 24 building standard requirements; transfer agreement between the affiliate clinic and a local hospital; fire safety inspection request; and, services to be provided at the clinic. 4)SUPPORT . According to Planned Parenthood Affiliates of California (PPAC), one of the cosponsors of this bill, under current law, each time a clinic corporation applies for a new affiliate clinic license; numerous documents must be submitted to DPH. PPAC maintains that this bill simply streamlines the current overly-burdensome process and eliminates the duplicate submissions of information currently required. PPAC argues that this bill modernizes the current affiliate clinic licensure process so that primary care clinics can more efficiently open their doors and meet the growing needs of individuals and families in their communities. 5)OPPOSITION . DPH writes in opposition to this bill that DPH is willing to work to reduce the paperwork associated with affiliate clinic licensure; however that DPH must maintain the authority to collect all information necessary to ensure public safety. DPH maintains that this bill proposes significant system changes and, while not difficult, the changes will impose a fiscal impact on the department. 6)PREVIOUS LEGISLATION . a) AB 2010 (DeSaulnier), Chapter 90, Statutes of 2008, exempts affiliate clinics from provisional licensure requirements. b) SB 1213 (Ducheny), Chapter 360, Statutes of 2008, requires mobile clinics to notify DPH at least 24 hours SB 442 Page 7 prior to providing services at a new site, and waives any notice requirement in the event the mobile clinic is responding to federal, state, or local public health emergencies. c) SB 937 (Ducheny), Chapter 602, Statutes of 2003, revises provisions relating to the licensure and operation of clinics, and authorizes a primary care clinic that has been licensed and in good standing for five years to file an application to establish an affiliate clinic at an additional site. d) AB 2404 (Reyes), Chapter 111, Statutes of 2002, prohibits the Department of Health Services (DHS), now DPH, from requiring the licensure of each site where a mobile clinic provides services, and instead requires a mobile clinic to report to DHS at least 15 days prior to its first visit to a new site, and to report to local authorities to obtain necessary approvals. e) AB 951 (Florez), Chapter 525, Statutes of 2001, requires DHS to establish a centralized licensing application unit to review applications, and train clinic surveyors in order to process license applications in a more timely, uniform, and cost-effective manner. f) AB 2259 (Woodruff), Chapter 1020, Statutes of 1993, provides for the licensure of mobile clinics to ensure the availability of quality health care services for patients in remote or underserved areas, and imposes various licensure requirements and safety standards on mobile clinics. g) SB 1140 (Royce), Chapter 1456, Statutes of 1987, requires provisional licensure for clinics, and other types of health facilities. 7)AUTHOR AMENDMENTS . The author will be proposing clarifying, technical amendments in an attempt to satisfy concerns raised by DPH. REGISTERED SUPPORT / OPPOSITION : Support California Family Health Council, Inc. (cosponsor) SB 442 Page 8 California Primary Care Association (cosponsor) Planned Parenthood Affiliates of California (cosponsor) Central Valley Health Network Community Clinic Association of Los Angeles County Family Health Centers of San Diego Family HealthCare Network Mountain Health & Community Services, Inc. Planned Parenthood of San Diego & Riverside Counties Planned Parenthood of Santa Barbara, Ventura and San Luis Obispo Counties Opposition California Department of Public Health Analysis Prepared by : Tanya Robinson-Taylor / HEALTH / (916) 319-2097