California Legislature—2015–16 Regular Session

Assembly BillNo. 1130


Introduced by Assembly Member Gray

(Principal coauthor: Assembly Member Gonzalez)

February 27, 2015


An act to amend Section 1206 of the Health and Safety Code, relating to clinics.

LEGISLATIVE COUNSEL’S DIGEST

AB 1130, as introduced, Gray. Clinics: licensing: hours of operation.

Under existing law, the State Department of Public Health licenses and regulates clinics, as defined. Under existing law, specified types of clinics are exempted from these licensing provisions, including a clinic operated by a licensed primary care community or free clinic, that is operated on separate premises from the licensed clinic, and that is open for limited services of no more than 20 hours a week.

This bill would increase the number of hours that a clinic may be open under this licensure exemption provision to 30 hours a week.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P1    1

SECTION 1.  

Section 1206 of the Health and Safety Code is
2amended to read:

3

1206.  

This chapter does not apply to the following:

4(a) Except with respect to the option provided with regard to
5surgical clinics in paragraph (1) of subdivision (b) of Section 1204
6and, further, with respect to specialty clinics specified in paragraph
P2    1(2) of subdivision (b) of Section 1204, any place or establishment
2owned or leased and operated as a clinic or office by one or more
3licensed health care practitioners and used as an office for the
4practice of their profession, within the scope of their license,
5regardless of the name used publicly to identify the place or
6establishment.

7(b) Any clinic directly conducted, maintained, or operated by
8the United States or by any of its departments, officers, or agencies,
9and any primary care clinic specified in subdivision (a) of Section
101204 that is directly conducted, maintained, or operated by this
11state or by any of its political subdivisions or districts, or by any
12city. Nothing in this subdivision precludes the state department
13from adopting regulations that utilize clinic licensing standards as
14eligibility criteria for participation in programs funded wholly or
15partially under Title XVIII or XIX of the federal Social Security
16Act.

17(c) Any clinic conducted, maintained, or operated by a federally
18recognized Indian tribe or tribal organization, as defined in Section
19450 or 1601 of Title 25 of the United States Code, that is located
20on land recognized as tribal land by the federal government.

21(d) Clinics conducted, operated, or maintained as outpatient
22departments of hospitals.

23(e) Any facility licensed as a health facility under Chapter 2
24(commencing with Section 1250).

25(f) Any freestanding clinical or pathological laboratory licensed
26under Chapter 3 (commencing with Section 1200) of Division 2
27of the Business and Professions Code.

28(g) A clinic operated by, or affiliated with, any institution of
29learning that teaches a recognized healing art and is approved by
30the state board or commission vested with responsibility for
31regulation of the practice of that healing art.

32(h) A clinic that is operated by a primary care community or
33free clinic and that is operated on separate premises from the
34licensed clinic and is only open for limited services of no more
35thanbegin delete 20end deletebegin insert 30end insert hours a week. An intermittent clinic as described in
36this subdivision shall, however, meet all other requirements of
37law, including administrative regulations and requirements,
38pertaining to fire and life safety.

39(i) The offices of physicians in group practice who provide a
40preponderance of their services to members of a comprehensive
P3    1group practice prepayment health care service plan subject to
2Chapter 2.2 (commencing with Section 1340).

3(j) Student health centers operated by public institutions of
4higher education.

5(k) Nonprofit speech and hearing centers, as defined in Section
61201.5. Any nonprofit speech and hearing clinic desiring an
7exemption under this subdivision shall make application therefor
8to the director, who shall grant the exemption to any facility
9meeting the criteria of Section 1201.5. Notwithstanding the
10licensure exemption contained in this subdivision, a nonprofit
11speech and hearing center shall be deemed to be an organized
12outpatient clinic for purposes of qualifying for reimbursement as
13a rehabilitation center under the Medi-Cal Act (Chapter 7
14(commencing with Section 14000) of Part 3 of Division 9 of the
15Welfare and Institutions Code).

16(l) A clinic operated by a nonprofit corporation exempt from
17federal income taxation under paragraph (3) of subsection (c) of
18Section 501 of the Internal Revenue Code of 1954, as amended,
19or a statutory successor thereof, that conducts medical research
20and health education and provides health care to its patients through
21a group of 40 or more physicians and surgeons, who are
22independent contractors representing not less than 10
23board-certified specialties, and not less than two-thirds of whom
24practice on a full-time basis at the clinic.

25(m) Any clinic, limited to in vivo diagnostic services by
26magnetic resonance imaging functions or radiological services
27under the direct and immediate supervision of a physician and
28surgeon who is licensed to practice in California. This shall not
29be construed to permit cardiac catheterization or any treatment
30modality in these clinics.

31(n) A clinic operated by an employer or jointly by two or more
32employers for their employees only, or by a group of employees,
33or jointly by employees and employers, without profit to the
34operators thereof or to any other person, for the prevention and
35treatment of accidental injuries to, and the care of the health of,
36the employees comprising the group.

37(o) A community mental health center, as defined in Section
38begin delete 5601.5end deletebegin insert 5667end insert of the Welfare and Institutions Code.

39(p) (1) A clinic operated by a nonprofit corporation exempt
40from federal income taxation under paragraph (3) of subsection
P4    1(c) of Section 501 of the Internal Revenue Code of 1954, as
2amended, or a statutory successor thereof, as an entity organized
3and operated exclusively for scientific and charitable purposes and
4that satisfied all of the following requirements on or before January
51, 2005:

6(A) Commenced conducting medical research on or before
7January 1, 1982, and continues to conduct medical research.

8(B) Conducted research in, among other areas, prostatic cancer,
9cardiovascular disease, electronic neural prosthetic devices,
10biological effects and medical uses of lasers, and human magnetic
11resonance imaging and spectroscopy.

12(C) Sponsored publication of at least 200 medical research
13articles in peer-reviewed publications.

14(D) Received grants and contracts from the National Institutes
15of Health.

16(E) Held and licensed patents on medical technology.

17(F) Received charitable contributions and bequests totaling at
18least five million dollars ($5,000,000).

19(G) Provides health care services to patients only:

20(i) In conjunction with research being conducted on procedures
21or applications not approved or only partially approved for payment
22(I) under the Medicare program pursuant to Section 1359y(a)(1)(A)
23of Title 42 of the United States Code, or (II) by a health care service
24plan registered under Chapter 2.2 (commencing with Section 1340),
25or a disability insurer regulated under Chapter 1 (commencing
26with Section 10110) of Part 2 of Division 2 of the Insurance Code;
27provided that services may be provided by the clinic for an
28additional period of up to three years following the approvals, but
29only to the extent necessary to maintain clinical expertise in the
30procedure or application for purposes of actively providing training
31in the procedure or application for physicians and surgeons
32unrelated to the clinic.

33(ii) Through physicians and surgeons who, in the aggregate,
34devote no more than 30 percent of their professional time for the
35entity operating the clinic, on an annual basis, to direct patient care
36activities for which charges for professional services are paid.

37(H) Makes available to the public the general results of its
38research activities on at least an annual basis, subject to good faith
39protection of proprietary rights in its intellectual property.

P5    1(I) Is a freestanding clinic, whose operations under this
2subdivision are not conducted in conjunction with any affiliated
3or associated health clinic or facility defined under this division,
4except a clinic exempt from licensure under subdivision (m). For
5purposes of this subparagraph, a freestanding clinic is defined as
6“affiliated” only if it directly, or indirectly through one or more
7intermediaries, controls, or is controlled by, or is under common
8control with, a clinic or health facility defined under this division,
9except a clinic exempt from licensure under subdivision (m). For
10purposes of this subparagraph, a freestanding clinic is defined as
11“associated” only if more than 20 percent of the directors or trustees
12of the clinic are also the directors or trustees of any individual
13clinic or health facility defined under this division, except a clinic
14exempt from licensure under subdivision (m). Any activity by a
15clinic under this subdivision in connection with an affiliated or
16associated entity shall fully comply with the requirements of this
17subdivision. This subparagraph shall not apply to agreements
18between a clinic and any entity for purposes of coordinating
19medical research.

20(2) By January 1, 2007, and every five years thereafter, the
21Legislature shall receive a report from each clinic meeting the
22criteria of this subdivision and any other interested party
23concerning the operation of the clinic’s activities. The report shall
24include, but not be limited to, an evaluation of how the clinic
25impacted competition in the relevant health care market, and a
26detailed description of the clinic’s research results and the level
27of acceptance by the payer community of the procedures performed
28at the clinic. The report shall also include a description of
29procedures performed both in clinics governed by this subdivision
30and those performed in other settings. The cost of preparing the
31reports shall be borne by the clinics that are required to submit
32them to the Legislature pursuant to this paragraph.



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