BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 534
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          SENATE THIRD READING
          SB 534 (Ed Hernandez)
          As Amended July 3, 2013
          Majority vote

           SENATE VOTE  :34-0  
           
           HEALTH              19-0        AGING               6-0         
           
           ----------------------------------------------------------------- 
          |Ayes:|Pan, Logue, Ammiano,      |Ayes:|Yamada, Wagner, Brown,    |
          |     |Atkins, Bonilla, Bonta,   |     |Daly, Gray, Levine        |
          |     |Chesbro, Gomez, Roger     |     |                          |
          |     |Hernández, Lowenthal,     |     |                          |
          |     |Maienschein, Mansoor,     |     |                          |
          |     |Mitchell, Nazarian,       |     |                          |
          |     |Nestande,                 |     |                          |
          |     |V. Manuel Pérez, Wagner,  |     |                          |
          |     |Wieckowski, Wilk          |     |                          |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           APPROPRIATIONS      17-0                                        
           
           -------------------------------- 
          |Ayes:|Gatto, Harkey, Bigelow,   |
          |     |Bocanegra, Bradford, Ian  |
          |     |Calderon, Campos,         |
          |     |Donnelly, Eggman, Gomez,  |
          |     |Hall, Holden, Linder,     |
          |     |Pan, Quirk, Wagner, Weber |
          |     |                          |
          |     |                          |
           -------------------------------- 
           SUMMARY  :  Requires, until the California Departments of Public  
          Health (DPH) and Developmental Services (DDS) adopt regulations  
          for licensure for Intermediate Care Facilities for the  
          Developmentally Disabled - Nursing (ICF/DD-N), these facilities  
          comply with applicable federal certification standards.   
          Requires chronic dialysis clinics, surgical clinics, and  
          rehabilitation clinics to comply with federal certification  
          standards until DPH has adopted regulations for those  
          facilities.  Specifically,  this bill  :  

          1)Requires, until DPH adopts regulations relating to the  








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            provision of services by a chronic dialysis clinic, a surgical  
            clinic, or rehabilitation clinic, the following facilities  
            licensed or seeking licensure to comply with the following  
            federal certification standards in effect immediately  
            preceding January 1, 2013:

             a)   Requires a chronic dialysis clinic to comply with  
               applicable federal certification standards for an end stage  
               renal disease clinic;

             b)   Requires a surgical clinic to comply with applicable  
               federal certification standards for an ambulatory surgical  
               clinic (ASC); and,

             c)   Requires a rehabilitation clinic to comply with  
               applicable federal certification standards for a  
               comprehensive outpatient rehabilitation facility.

          2)Requires until the DPH and DDS adopt regulations pursuant to  
            existing law, relating to services by ICF/DD-N, licensed  
            facilities to comply with applicable federal certification  
            standards in effect immediately preceding January 1, 2013.

          3)Deletes a requirement that regulations developed by DPH and  
            DDS pertaining to ICF/DD-N and ICF/DD-continuous nursing  
            include licensing fee schedules appropriate to facilities  
            which will encourage their development.

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee, one-time costs for analysis of standards, development  
          of recommendations, report to the Legislature, and a public  
          hearing in the range of $200,000 (Licensing and Certification  
          Fund).  

          Currently, the California Department of Public Health (CDPH) has  
          the authority to cite facilities under federal law.  If the  
          authority to cite facilities under state law is used instead,  
          revenue may accrue to the State Facilities Citation Penalty  
          Account instead of the federal Facilities Citation Penalty  
          Account.  These are both special fund accounts that are used for  
          purposes of the CDPH Licensing and Certification program and  
          related activities.  The state account is available for funding  
          of long-term care ombudsman programs and for quality improvement  
          activities, while the federal account is used for temporary  








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          management costs of facilities whose certification or licensure  
          is revoked.

           COMMENTS  :  According to the author, this bill would require four  
          health facility categories currently regulated by DPH to comply  
          with facility-specific federal certification requirements to  
          meet state licensing requirements until DPH adopts state  
          regulations.  These facilities are already required to meet  
          federal requirements in order to receive Medicare and Medicaid  
          funding; this bill simply gives authority to state regulators to  
          enforce these standards until such time that DPH adopts  
          regulations specific to these facilities.

          According to DPH, as of April 2, 2013, there are 173 designated  
          health care facilities that have been issued a state license.   
          This includes 98 chronic dialysis clinics, 57 ICF/DD-N's, 16  
          surgical clinics, and two rehabilitation clinics.  Among these  
          four facility types, 166 facilities (96%) had an active license  
          while the rest, seven (4%) did not.  To date, DPH has not  
          adopted state regulations for these facilities, but relies on  
          the federal certification standards to determine licensure.  DPH  
          is currently in the process of drafting regulations for the  
          ICF/DD facilities, however, the Assembly Health Committee staff  
          is not aware of any regulations in process for the surgical  
          clinics, chronic dialysis clinics, and rehabilitation clinics.

          The federal regulatory standards for chronic dialysis clinics  
          (referred to as End Stage Renal Centers in federal regulations),  
          surgical clinics (referred to as ASC in federal regulations),  
          and rehabilitation clinics, among other things, set forth the  
          various standards required at each facility in order to qualify  
          for Medicare and Medicaid participation by the Centers for  
          Medicare and Medicaid Services (CMS).  Depending on the facility  
          in question, the regulations set requirements for the facilities  
          management and governing body, what services may be offered and  
          safety and cleanliness standards.  Standards also include, but  
          are not limited to, requirements covering patient rights, the  
          administration of anesthesia, if applicable, medical records,  
          privacy, and infection control.  The federal regulatory  
          standards for ASCs also include as part of their requirements  
          for coverage with CMS that the ASC must comply with state  
          licensure requirements.   
           
          DPH is the sponsor of this bill, and states that this bill will  








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          enable it to adopt existing federal regulatory standards as the  
          state licensing standards for chronic dialysis clinics,  
          rehabilitation clinics, surgical clinics, and ICF/DD-Ns.  DPH  
          states that it functions as the regulatory agency for  
          approximately 30 different types of health care facilities and  
          clinics.  DPH states that it does not have state licensing  
          standards in place for chronic dialysis clinics, rehabilitation  
          clinics, surgical clinics, and ICF/DD-Ns.  Federal standards for  
          these facilities exist, but DPH lacks the statutory authority to  
          enforce the standards.  In the absence of such authority, DPH  
          states that it may only recommend action by CMS to stop Medicare  
          and Medicaid program funding if the health care facility is out  
          of compliance.  


          Analysis Prepared by  :    Lara Flynn / HEALTH / (916) 319-2097 


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