BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: SB 442
S
AUTHOR: Ducheny
B
AMENDED: August 12, 2010
HEARING DATE: August 19, 2010
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CONSULTANT:
4
Chan-Sawin/cjt
2
PURSUANT TO S.R. 29.10
SUBJECT
Clinic corporation: licensing
SUMMARY
Streamlines 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 known as affiliate
clinics).
CHANGES TO EXISTING LAW
Existing law:
Defines a primary care 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 the
California Department of Public Health (DPH) and approved
for operation by DPH prior to obtaining a Medi-Cal provider
number or providing services.
Requires DPH to issue a provisional license, upon approval
Continued---
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of a primary care 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.
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 clinic at an additional
site.
Requires DPH to issue a regular license to an affiliate
clinic within 30 days, without first conducting an on-site
survey, if:
1. The parent primary care clinic has submitted a
completed application for licensure for the affiliate
clinic;
2. The parent and affiliate clinics' corporate
officers are the same, and the clinics are owned and
operated by the same nonprofit organization;
3. The parent and affiliate clinic's operational
policies and procedures, and staff training are
substantially the same; and,
4. 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.
Authorizes DPH to conduct a licensing inspection at any
time after receipt of the affiliate clinic licensing
application;
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
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of medical care.
Authorizes DPH to issue a special permit to a clinic
approved to provide one or more specified specialized
services, such as birthing services, for which the state
has established separate standards.
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.
This bill:
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.
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, and makes
other definitions, as specified.
Adds, to the conditions already established in existing law
under which 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.
Requires the affiliate clinic licensure application to
consist solely of a simple form and supporting documents
containing: the names, addresses and 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.
Requires the affiliate clinic application to be signed by
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an officer of the clinic corporation's board of directors,
or the clinic corporation's chief executive officer or
executive director.
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.
Requires DPH to maintain a complete corporate file
containing information about each clinic corporation
operating one or more affiliate clinics, and for the file
to include specified information.
Prohibits a clinic corporation from being required to
resubmit information, materials, or documents, as
specified, as part of an affiliate clinic application,
unless the information, materials, or documents are
necessary to complete the corporate file.
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.
Permits a clinic corporation to submit to DPH, on behalf of
all licensed affiliate clinics operated by the clinic
corporation that are within the same license renewal month,
a single payment for all affiliate clinic licensure renewal
fees.
Makes other technical and clarifying changes.
FISCAL IMPACT
According to the Assembly Appropriations Committee
analysis, minor absorbable workload to DPH to continue
oversight of licensing and certification of health clinics.
STAFF ANALYSIS OF SENATE BILL SB 442 (Ducheny) Page
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BACKGROUND AND DISCUSSION
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 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 2 to 25,
under the governance of a single board of directors and
medical director, using common business practices,
policies, procedures, and medical oversight. 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
believes that this process is not only administratively
burdensome and duplicative, it does not account for the
role of the governing clinic organization, and that the
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
operate at or less than 20 hours per week, and do not
require state licensure.
According to the author and sponsors, the parent primary
care clinic or 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, including: 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, and contact information;
administrative organization; and, an applicant's individual
information form which must be completed and signed by each
STAFF ANALYSIS OF SENATE BILL SB 442 (Ducheny) Page
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board member, the corporation's President/CEO, the officers
of the corporation, and the clinic manager, often resulting
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 a 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.
Primary care clinic licensure in California
According to DPH, there are currently 972 primary care
clinics currently licensed in California. In order to
obtain a license, a primary care clinic must submit an
application and fee to DPH, and pass an initial licensure
survey conducted by DPH. Upon receipt of a completed
application for a clinic license, DPH has up to 100 days to
either grant or deny the license.
Existing law requires DPH to issue a provisional license,
good for six months from the date of issuance, to a clinic
that has not been previously licensed. DPH is required to
inspect the clinic within 30 days prior to the termination
of the provisional license, and, if the clinic meets all
licensure requirements, issue a regular license. Clinics
that do not meet the requirements for licensure, but make
progress toward meeting the requirements, may have their
provisional license renewed by DPH for another six months.
Already established primary care clinics that wish to
establish additional clinic sites, referred to as
"affiliate clinics," are granted an expedited licensure
process to open additional "affiliate clinics." 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
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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 exempt from provisional licensure
requirements, and are not required to be surveyed to
qualify for licensure. However, affiliate clinics must
still pay license fees.
Arguments in support
According to Planned Parenthood Affiliates of California
(PPAC), one of the co-sponsors 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 states that many of these documents
are duplicates of papers already on file with DPH from the
clinic corporation, and this bill simply streamlines the
current overlyburdensome process and eliminates the
duplicate submissions of information currently required.
PPAC further 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.
Prior legislation
AB 2010 (DeSaulnier), Chapter 90, Statutes of 2008, exempts
affiliate clinics from provisional licensure requirements.
SB 1213 (Ducheny), Chapter 360, Statutes of 2008, requires
mobile clinics to notify DPH at least 24 hours 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.
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
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licensed and in good standing for five years to file an
application to establish an affiliate clinic at an
additional site.
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
provided 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
AB 951 (Florez), Chapter 525, Statutes of 2001, requires
DHS (now DPH), 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.
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 imposed various
licensure requirements and safety standards on mobile
clinics.
SB 1140 (Royce), Chapter 1456, Statutes of 1987, requires
provisional licensure for clinics, and other types of
health facilities.
COMMENTS
1. Bill reflects recent amendments
When the bill was heard in Senate Health Committee on April
22, 2009, it proposed a new single, consolidated license
structure and process for clinic corporations and their
affiliated clinics. The amendments taken in the Assembly,
as reflected in the current version, instead proposed to
streamline the existing affiliate clinic licensing process,
to decrease the administrative burdens faced by clinics and
clinic corporations when establishing a new affiliate
clinic site.
PRIOR ACTIONS
Senate Health: n/a (prior version)
Senate Appropriations:n/a (prior version)
STAFF ANALYSIS OF SENATE BILL SB 442 (Ducheny) Page
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Senate Floor: n/a (prior version)
Assembly Health: 19-0
Assembly Appropriations: 17-0
Assembly Floor: 74-0
POSITIONS
Support: California Family Health Council, Inc.
(cosponsor)
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 Advocacy Project, Los Angeles
County
Planned Parenthood Mar Monte
Planned Parenthood of Orange and San Bernardino
Counties
Planned Parenthood of San Diego & Riverside Counties
Planned Parenthood of Santa Barbara, Ventura and San
Luis Obispo Counties
Oppose: None received
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