BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 442
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          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  








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            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.









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          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.








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          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  








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            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,  








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            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  








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               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)








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          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