California Legislature—2015–16 Regular Session

Assembly Bill No. 1774

Introduced by Assembly Member Bonilla

February 3, 2016

An act to amend Sections 654.1, 655.5, 1206, 1206.6, 1220, 1244, 1246.5, 1271.1, 1272, 1300, 1301, and 1320 of, and to repeal Sections 1223, 1227, 1241.1, 1265, 1265.1, 1266, 1267, 1268, 1272.4, 1272.6, 1281, 1300.1, 1310, 1324, and 1325 of, the Business and Professions Code, to amend Section 9272 of the Food and Agricultural Code, to amend Sections 1206 and 1600.3 of the Health and Safety Code, and to amend Section 14043.27 of the Welfare and Institutions Code, relating to clinical laboratories.

LEGISLATIVE COUNSEL’S DIGEST

AB 1774, as introduced, Bonilla. Clinical laboratories: licensure.

Existing federal law, the Clinical Laboratory Improvement Amendments of 1988 (CLIA) requires the federal Centers for Medicare and Medicaid Services to certify and regulate clinical laboratories that perform testing on humans. Complaints against individual laboratories are directed to the state.

Existing law provides for the licensure, registration, and regulation of clinical laboratories and various clinical laboratory personnel by the State Department of Public Health. Under existing law the department inspects clinical laboratories and assesses a fee for licensure of those facilities.

This bill would repeal the laws requiring a clinical laboratory to be licensed and inspected by the department, including the licensing fee. The bill would also make conforming changes.

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

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

SECTION 1.  

Section 654.1 of the Business and Professions
Code is amended to read:

654.1.  

begin insert (a) end insert begin insert   end insert begin delete Persons end delete begin insert A person end insert licensed under Chapter 4
(commencing with Section 1600) of this division or licensed under
Chapter 5 (commencing with Section 2000) of this division or
licensed under any initiative act referred to in this division relating
to osteopaths may not refer patients, clients, or customers to begin delete any end delete
begin insert a end insert clinical laboratory begin delete licensed under Section 1265 end delete in which the
licensee has begin delete any end delete begin insert a end insert membership, proprietary interest, or coownership
in any form, or has begin delete any end delete begin insert a end insert profit-sharing arrangement, unless the
licensee at the time of making begin delete such end delete begin insert the end insert referral discloses in writing
begin delete such end delete begin insert the end insert interest to the patient, client, or customer. The written
disclosure shall indicate that the patient may choose any clinical
laboratory for purposes of having begin delete any end delete laboratory work or
assignment performed.

begin delete

This

end delete

begin insert (b) end insert begin insert   end insert begin insert This end insert begin delete section end delete begin insert does end insert shall not apply to persons who are members
of a medical group begin delete which end delete begin insert that end insert contracts to provide medical care
to members of a group practice prepayment plan registered under
the Knox-Keene Health Care Service Act of begin delete 1975, Chapter end delete begin insert 1975
(Chapter end insert 2.2 (commencing with Section 1340) of Division 2 of
the Health and Safety begin delete Code. end delete begin insert Code). end insert

begin delete

This

end delete

begin insert (c) end insert begin insert   end insert begin insert This end insert begin delete section end delete begin insert does end insert shall not apply to begin delete any end delete begin insert a end insert referral to a clinical
laboratory begin delete which end delete begin insert that end insert is owned and operated by a health facility
licensed pursuant to Chapter 2 (commencing with Section 1250)
of Division 2 of the Health and Safety Code.

begin delete

This

end delete

begin insert (d) end insert begin insert   end insert begin insert This end insert section does not prohibit the acceptance of evaluation
specimens for proficiency testing or referral of specimens or begin delete such end delete
begin insert the end insert assignment from one clinical laboratory to another clinical
laboratory, either licensed or exempt under this chapter, providing
the report indicates clearly the laboratory performing the test.

begin delete

“Proprietary

end delete

begin insert (e) end insert begin insert   end insert begin insert “Proprietary end insert interest” does not include ownership of a
building where space is leased to a clinical laboratory at the
prevailing rate under a straight lease arrangement.

begin delete

A

end delete

begin insert (f) end insert begin insert   end insert begin insert A end insert violation of this section is a public offense and is
punishable upon a first conviction by imprisonment in a county
jail for not more than one year, or by imprisonment pursuant to
subdivision (h) of Section 1170 of the Penal Code, or by a fine not
exceeding ten thousand dollars ($10,000), or by both that
imprisonment and fine. A second or subsequent conviction shall
be punishable by imprisonment pursuant to subdivision (h) of
Section 1170 of the Penal Code.

SEC. 2.  

Section 655.5 of the Business and Professions Code
is amended to read:

655.5.  

(a) It is unlawful for begin delete any end delete begin insert a end insert person licensed under this
division or under begin delete any end delete begin insert an end insert initiative act referred to in this division,
or begin delete any end delete begin insert a end insert clinical laboratory, or begin delete any end delete begin insert a end insert health facility when billing
for a clinical laboratory of the facility, to charge, bill, or otherwise
solicit payment from begin delete any end delete begin insert a end insert patient, client, or customer for begin delete any end delete begin insert a end insert
clinical laboratory service not actually rendered by the person or
clinical laboratory or under his, her or its direct supervision unless
the patient, client, or customer is apprised at the first time of the
charge, billing, or solicitation of the name, address, and charges
of the clinical laboratory performing the service. The first begin delete such end delete
written charge, bill, or other solicitation of payment shall separately
set forth the name, address, and charges of the clinical laboratory
concerned and shall clearly show whether or not the charge is
included in the total of the account, bill, or charge. This subdivision
begin delete shall be end delete begin insert is end insert satisfied if the required disclosures are made to the
third-party payer of the patient, client, or customer. If the patient
is responsible for submitting the bill for the charges to the
third-party payer, the bill provided to the patient for that purpose
shall include the disclosures required by this section. This
subdivision begin delete shall end delete begin insert does end insert not apply to a clinical laboratory of a health
facility or a health facility when billing for a clinical laboratory of
the facility nor to a person licensed under this division or under
any initiative act referred to in this division if the standardized
billing form used by the facility or person requires a summary
entry for all clinical laboratory charges. For purposes of this
subdivision, “health facility” has the same meaning as defined in
Section 1250 of the Health and Safety Code.

(b)  begin delete Commencing July 1, 1994, a end delete begin insert A end insert clinical laboratory shall
provide to each of its referring providers, upon request, a schedule
of fees for services provided to patients of the referring provider.
The schedule shall be provided within two working days after the
clinical laboratory receives the request. For the purposes of this
subdivision, a “referring provider” means begin delete any end delete begin insert a end insert provider who has
referred a patient to the clinical laboratory in the preceding
six-month period. begin delete Commencing July 1, 1994, a end delete begin insert A end insert clinical laboratory
that provides a list of laboratory services to a referring provider
or to a potential referring provider shall include a schedule of fees
for the laboratory services listed.

(c) It is also unlawful for begin delete any end delete begin insert a end insert person licensed under this
division or under any initiative act referred to in this division to
charge additional charges for begin delete any end delete begin insert a end insert clinical laboratory service that
is not actually rendered by the licensee to the patient and itemized
in the charge, bill, or other solicitation of payment. This section
shall not be construed to prohibit any of the following:

(1)  begin delete Any end delete begin insert An end insert itemized charge for begin delete any end delete begin insert a end insert service actually rendered
to the patient by the licensee.

(2)  begin delete Any end delete begin insert A end insert summary charge for services actually rendered to a
patient by a health facility, as defined in Section 1250 of the Health
and Safety Code, or by a person licensed under this division or
under any initiative act referred to in this division if the
standardized billing form used by the facility or person requires a
summary entry for all clinical laboratory charges.

(d) As used in this section, the term begin delete “any end delete begin insert “a end insert person licensed
under this division” includes a begin delete person licensed under paragraph
(1) of subdivision (a) of Section 1265, end delete begin insert registered laboratory, as
defined in Section 1206, end insert all wholly owned subsidiaries of the
person, a parent company that wholly owns the person, and any
subsidiaries wholly owned by the same parent that wholly owns
the person. “Wholly owned” means ownership directly or through
one or more subsidiaries. This section shall not apply to billings
by a begin delete person licensed under paragraph (1) of subdivision (a) of
Section 1265 end delete begin insert registered laboratory end insert when the begin delete person licensed under
paragraph (1) of subdivision (a) of Section 1265 end delete begin insert registered
laboratory end insert bills for services performed by begin delete any end delete begin insert a end insert laboratory owned
or operated by the begin delete person licensed under paragraph (1) of
subdivision (a) of Section 1265. end delete begin insert registered laboratory. end insert

(e) This section begin delete shall end delete begin insert does end insert not apply to begin delete any end delete begin insert a end insert person or clinical
laboratory who or which contracts directly with a health care
service plan licensed pursuant to Section 1349 of the Health and
Safety Code, if the services are to be provided to members of the
plan on a prepaid basis and without additional charge or liability
on account thereof.

(f) A violation of this section is a public offense and is
punishable upon a first conviction by imprisonment in a county
jail for not more than one year, or by imprisonment pursuant to
subdivision (h) of Section 1170 of the Penal Code, or by a fine not
exceeding ten thousand dollars ($10,000), or by both that
imprisonment and fine. A second or subsequent conviction is
punishable by imprisonment pursuant to subdivision (h) of Section
1170 of the Penal Code.

(g) (1) Notwithstanding subdivision (f), a violation of this
section by a physician and surgeon for a first offense shall be
subject to the exclusive remedy of reprimand by the Medical Board
of California if the transaction that is the subject of the violation
involves a charge for a clinical laboratory service that is less than
the charge would have been if the clinical laboratory providing
the service billed a patient, client, or customer directly for the
clinical laboratory service, and if that clinical laboratory charge is
less than the charge listed in the clinical laboratory’s schedule of
fees pursuant to subdivision (b).

(2)  begin delete Nothing in this end delete begin insert This end insert subdivision begin delete shall be construed to end delete begin insert does
not end insert permit a physician and surgeon to charge more than he or she
was charged for the laboratory service by the clinical laboratory
providing the service unless the additional charge is for service
actually rendered by the physician and surgeon to the patient.

SEC. 3.  

Section 1206 of the Business and Professions Code is
amended to read:

1206.  

(a) For the purposes of this chapter the following
definitions are applicable:

(1) “Analyte” means the substance or constituent being begin delete measured end delete
begin insert measured, end insert including, but not limited to, glucose, sodium, or
theophyline, or any substance or property whose presence or
absence, concentration, activity, intensity, or other characteristics
are to be determined.

(2) “Biological specimen” means any material that is derived
from the human body.

(3) “Blood electrolyte analysis” means the measurement of
electrolytes in a blood specimen by means of ion selective
electrodes on instruments specifically designed and manufactured
for blood gas and acid-base analysis.

(4) “Blood gas analysis” means a clinical laboratory test or
examination that deals with the uptake, transport, and begin delete metabolism end delete
begin insert metabolization end insert of oxygen and carbon dioxide in the human body.

(5) “Clinical laboratory test or examination” means the
detection, identification, measurement, evaluation, correlation,
monitoring, and reporting of any particular analyte, entity, or
substance within a biological specimen for the purpose of obtaining
scientific data begin delete which end delete begin insert that end insert may be used as an aid to ascertain the
presence, progress, and source of a disease or physiological
condition in a human being, or used as an aid in the prevention,
prognosis, monitoring, or treatment of a physiological or
pathological condition in a human being, or for the performance
of nondiagnostic tests for assessing the health of an individual.

(6) “Clinical laboratory science” means any of the sciences or
scientific disciplines used to perform a clinical laboratory test or
examination.

(7) “Clinical laboratory practice” means the application of
clinical laboratory sciences or the use of any means that applies
the clinical laboratory sciences within or outside of a licensed or
registered clinical laboratory. Clinical laboratory practice includes
consultation, advisory, and other activities inherent to the
profession.

(8) “Clinical laboratory” means begin delete any end delete begin insert a end insert place used, or begin delete any end delete begin insert an end insert
establishment or institution organized or operated, for the
performance of clinical laboratory tests or examinations or the
practical application of the clinical laboratory sciences. That
application may include any means that applies the clinical
laboratory sciences.

(9) “Direct and constant supervision” means personal
observation and critical evaluation of the activity of unlicensed
laboratory personnel by a physician and surgeon, or by a person
licensed under this chapter other than a trainee, during the entire
time that the unlicensed laboratory personnel are engaged in the
duties specified in Section 1269.

(10) “Direct and responsible supervision” means both of the
following:

(A) Personal observation and critical evaluation of the activity
of a trainee by a physician and surgeon, or by a person licensed
under this chapter other than a trainee, during the entire time that
the trainee is performing clinical laboratory tests or examinations.

(B) Personal review by the physician and surgeon or the licensed
person of all results of clinical laboratory testing or examination
performed by the trainee for accuracy, reliability, and validity
before the results are reported from the laboratory.

(11) “Licensed laboratory” means a clinical laboratory licensed
begin delete pursuant to paragraph (1) of subdivision (a) of Section 1265. end delete
begin insert pursuant to the federal Clinical Laboratory Improvement
Amendments of 1988 (CLIA). end insert

(12) “Location” means either a street and city address, or a site
or place within a street and city address, where any of the clinical
laboratory sciences or scientific disciplines are practiced or applied,
or where begin delete any end delete clinical laboratory tests or examinations are
performed.

(13) “Physician office laboratory” means a clinical laboratory
that is begin delete licensed or registered under Section 1265, and that is end delete either:
(A) begin delete a clinical laboratory that is end delete owned and operated by a partnership
or professional corporation that performs clinical laboratory tests
or examinations only for patients of five or fewer physicians and
surgeons or podiatrists who are shareholders, partners, or
employees of the partnership or professional corporation that owns
and operates the clinical laboratory; or (B) begin delete a clinical laboratory
that is end delete owned and operated by an individual licensed physician
and surgeon or a podiatrist, and that performs clinical laboratory
tests or examinations only for patients of the physician and surgeon
or podiatrist who owns and operates the clinical laboratory.

(14) “Point-of-care laboratory testing device” means a portable
laboratory testing instrument to which the following applies:

(A) It is used within the proximity of the patient for whom the
test or examination is being conducted.

(B) It is used in accordance with the patient test management
system, the quality control program, and the comprehensive quality
assurance program established and maintained by the laboratory
pursuant to paragraph (2) of subdivision (d) of Section 1220.

(C) It meets the following criteria:

(i) Performs clinical laboratory tests or examinations classified
as waived or of moderate complexity under the federal Clinical
Laboratory Improvement Amendments of 1988 (CLIA) (42 U.S.C.
Sec. 263a).

(ii) Performs clinical laboratory tests or examinations on
biological specimens that require no preparation after collection.

(iii) Provides clinical laboratory tests or examination results
without calculation or discretionary intervention by the testing
personnel.

(iv) Performs clinical laboratory tests or examinations without
the necessity for testing personnel to perform calibration or
maintenance, except resetting pursuant to the manufacturer’s
instructions or basic cleaning.

(15) “Public health laboratory” means a laboratory that is
operated by a city or county in conformity with Article 5
(commencing with Section 101150) of Chapter 2 of Part 3 of
Division 101 of the Health and Safety Code and the regulations
adopted thereunder.

(16) “Registered laboratory” means a clinical laboratory
begin delete registered pursuant to paragraph (2) of subdivision (a) of Section
1265. end delete begin insert that performs clinical laboratory tests or examinations
subject to a certificate of waiver or a certificate of
provider-performed microscopy under CLIA. end insert

(17) “Specialty” means histocompatibility, microbiology,
diagnostic immunology, chemistry, hematology,
immunohematology, pathology, genetics, or other specialty
specified by regulation adopted by the department.

(18) “Subspecialty” for purposes of microbiology, means
bacteriology, mycobacteriology, mycology, parasitology, virology,
molecular biology, and serology for diagnosis of infectious
diseases, or other subspecialty specified by regulation adopted by
the department; for purposes of diagnostic immunology, means
syphilis serology, general immunology, or other subspecialty
specified by regulation adopted by the department; for purposes
of chemistry, means routine chemistry, clinical microscopy,
endocrinology, toxicology, or other subspecialty specified by
regulation adopted by the department; for purposes of
immunohematology, means ABO/Rh Type and Group, antibody
detection for transfusion, antibody detection nontransfusion,
antibody identification, compatibility, or other subspecialty
specified by regulation adopted by the department; for pathology,
means tissue pathology, oral pathology, diagnostic cytology, or
other subspecialty specified by regulation adopted by the
department; for purposes of genetics, means molecular biology
related to the diagnosis of human genetic abnormalities,
cytogenetics, or other subspecialty specified by regulation adopted
by the department.

(b)  begin delete Nothing in this end delete begin insert This end insert chapter begin delete shall end delete begin insert does not end insert restrict, limit, or
prevent begin delete any end delete begin insert a end insert person licensed to provide health care services under
the laws of this state, including, but not limited to, licensed
physicians and surgeons and registered nurses, from practicing the
profession or occupation for which he or she is licensed.

(c)  begin delete Nothing in this end delete begin insert This end insert chapter begin delete shall end delete begin insert does not end insert authorize begin delete any end delete begin insert a end insert
person to perform or order health care services, or utilize the results
of the clinical laboratory test or examination, unless the person is
otherwise authorized to provide that care or utilize the results. The
inclusion of a person in Section 1206.5 for purposes of performing
a clinical laboratory test or examination shall not be interpreted to
authorize a person, who is not otherwise authorized, to perform
venipuncture, arterial puncture, or skin puncture.

SEC. 4.  

Section 1206.6 of the Business and Professions Code
is amended to read:

1206.6.  

Subdivision (a) of Section 1206.5 begin delete shall end delete begin insert does end insert not apply
to a pharmacist at a community pharmacy who, upon customer
request, performs only blood glucose, hemoglobin A1c, or
cholesterol tests that are classified as waived under CLIA and are
approved by the federal Food and Drug Administration for sale to
the public without a prescription in the form of an over-the-counter
test kit, provided that all of the following requirements are satisfied:

(a) The pharmacy obtains a valid CLIA certificate of waiver
and complies with all other requirements for the performance of
waived clinical laboratory tests under applicable federal
regulations. For purposes of CLIA, the person identified as
responsible for directing and supervising testing oversight and
decisionmaking shall be the pharmacist-in-charge, as defined in
Section 4036.5.

(b) The pharmacy begin delete obtains a registration from the department
pursuant to Section 1265 and end delete complies with this chapter.

(c) The tests are performed only by a pharmacist, as defined in
Section 4036, in the course of performing routine patient
assessment procedures in compliance with Section 4052.4.

SEC. 5.  

Section 1220 of the Business and Professions Code is
amended to read:

1220.  

(a) (1) Each clinical laboratory shall maintain records,
equipment, and facilities that are adequate and appropriate for the
services rendered.

(2) (A) Except for tests or examinations classified as waived
under CLIA, each clinical laboratory shall enroll, and demonstrate
successful participation, as defined under CLIA, for each specialty
and subspecialty in which it performs clinical laboratory tests or
examinations, in a proficiency testing program approved by the
department or by begin delete HCFA, end delete begin insert CMS, end insert to the same extent as required by
CLIA in Subpart H (commencing with Section 493.801) of Title
42 of the Code of Federal Regulations. This requirement begin delete shall end delete begin insert does end insert
not begin delete be interpreted to end delete prohibit a clinical laboratory from performing
clinical laboratory tests or examinations in a specialty or
subspecialty for which there is no department or begin delete HCFA end delete begin insert CMS end insert
approved proficiency testing program.

(B) Each clinical laboratory shall authorize its proficiency test
results to be reported to the department in an electronic format that
is compatible with the department’s proficiency testing data
monitoring system and shall authorize the release of proficiency
tests results to the public to the same extent required by CLIA.

(b) Each clinical laboratory shall be conducted, maintained, and
operated without injury to the public health.

begin delete

(c) (1) The department shall conduct inspections of licensed
clinical laboratories no less than once every two years. The
department shall maintain a record of those inspections and shall
ensure that every licensed clinical laboratory in California is
inspected at least that often.

(2) Registered clinical laboratories shall not be routinely
inspected by the department.

end delete begin delete

(3)

end delete

begin insert (c) end insert  The department shall conduct an investigation of complaints
received concerning begin delete any end delete begin insert a end insert clinical begin delete laboratory, which end delete begin insert laboratory
that end insert may include an inspection of the laboratory.

begin delete

(4) Each licensed or registered clinical laboratory shall be
subject to inspections by HCFA or HCFA agents, as defined by
CLIA, as a condition of licensure or registration.

end delete

(d) (1) Each clinical laboratory shall perform all clinical
laboratory tests or examinations classified as waived under CLIA
in conformity with the manufacturer’s instructions.

(2) Except for those clinical laboratories performing only tests
or examinations classified as waived under CLIA, each clinical
laboratory shall establish and maintain all of the following:

(A) A patient test management system that meets the standards
of CLIA in Subpart J (commencing with Section 493.1100) of
Title 42 of the Code of Federal Regulations.

(B) A quality control program that meets the requirements of
CLIA in Subpart K (commencing with Section 493.1200) of Title
42 of the Code of Federal Regulations as in effect on January 1,
2015, and that may include the clinical laboratory’s use of begin delete the
following alternative quality control testing procedures recognized end delete
begin insert an Individualized Quality Control Plan, as incorporated into
Appendix C of the State Operations Manual adopted end insert by the federal
Centers for Medicare and Medicaid Services begin delete (CMS): end delete begin insert (CMS). end insert

begin delete

(i) Until December 31, 2015, equivalent quality control
procedures.

end delete begin delete

(ii) Commencing January 1, 2016, an Individualized Quality
Control Plan, as incorporated in Appendix C of the State
Operations Manual adopted by CMS.

end delete

(C) A comprehensive quality assurance program that meets the
standards of CLIA in Subpart P (commencing with Section
493.1701) of Title 42 of the Code of Federal Regulations.

SEC. 6.  

Section 1223 of the Business and Professions Code is
repealed.

begin delete

1223.  

(a) The Legislature finds and declares that it is the public
policy of the state to ensure that California’s laboratory standards,
including its laboratory personnel standards, be sustained in order
to provide accurate, reliable, and necessary test results. The
Legislature further finds that inspections are the most effective
means of furthering this policy. It is not the intent of the Legislature
to reduce in any way the resources available to the department for
inspections, but rather to provide the department with the greatest
flexibility to concentrate its resources where they can be most
effective. It is the intent of the Legislature to provide for an
inspection process that includes state-based inspection components
and that determines compliance with federal and state requirements
for clinical laboratories.

(b) The department shall employ, or contract for, inspectors,
special agents, and investigators, and provide any clerical and
technical assistance as necessary to administer this chapter and
may incur other expenses as necessary.

(c) Laboratories accredited by a private, nonprofit organization
shall be deemed by the department to meet state licensure or
registration requirements, and shall be issued a certificate of that
deemed status by the department, provided that both of the
following conditions are met:

(1) The private, nonprofit organization meets all of the following
requirements:

(A) Is approved by the federal Center for Medicare and Medicaid
Services as an accreditation body under CLIA and provides the
department with the following information:

(i) A detailed comparison of the individual accreditation or
approval requirements, with the comparable condition-level
requirements.

(ii) A detailed description of its inspection process, including
all of the following:

(I) Frequency of inspections.

(II) Copies of inspection forms.

(III) Instructions and guidelines.

(IV) A description of the review and decisionmaking process
of inspections.

(V) A statement concerning whether inspections are announced
or unannounced.

(VI) A description of the steps taken to monitor the correction
of deficiencies.

(iii) A description of the process for monitoring proficiency
testing performance, including action to be taken in response to
unsuccessful participation.

(iv) A list of all of its current California licensed or registered
laboratories and the expiration date of their accreditation, licensure,
or registration, as applicable.

(B) Is approved by the department as having accreditation
standards that are equal to, or more stringent than, state
requirements for licensure and registration.

(C) Conducts inspections of clinical laboratories in a manner
that will determine compliance with federal standards and
California laws to the extent that California laws provide greater
protection to residents, or are more stringent than federal standards,
as determined by the department. Notwithstanding any other
provision of law, the department may, without taking regulatory
action pursuant to Chapter 3.5 (commencing with Section 11340)
of Part 1 of Division 3 of Title 2 of the Government Code,
implement or interpret this section by means of an All Clinical
Laboratories Letter (ACLL). The department shall post the ACLL
on its Internet Web site so that any person may observe which
California laws are more stringent than federal standards, and
which accreditation bodies have been approved to conduct
inspections. Public comment on the ACLL shall be accepted by
the department for 30 days after posting and shall become final
45 days after the posting. Comments received shall be considered
by the department. Nothing in this subdivision is intended to
change existing statutory or regulatory requirements governing
the operation of clinical laboratories or their personnel.

(D) Is approved by the department as meeting the requirements
of this paragraph. The department shall begin accepting
applications for approval, in a form and manner prescribed by the
department, by January 1, 2011. The department shall make a
determination on an application submitted pursuant to this
subparagraph within 180 days of receiving the application.

(2) The laboratory meets all of the following requirements:

(A) Meets the accreditation standards of the private, nonprofit
organization.

(B) Agrees to permit the private, nonprofit organization to
provide any records or other information to the department, its
agents, or contractors, as the department may require.

(C) Pays the applicable fees required under Section 1300.

(D) Authorizes its proficiency testing organization to furnish
to the department and the private, nonprofit organization the results
of the laboratory’s participation in an approved proficiency testing
program, as defined in 42 C.F.R. 493.2, for the purpose of
monitoring the laboratory’s proficiency testing, along with
explanatory information needed to interpret the proficiency testing
results, upon request of the department.

(E) Authorizes the private, nonprofit organization to release to
the department a notification of every violation of condition-level
requirements, including the actions taken by the organization as a
result of the violation, within 30 days of the initiation of the action.

(F) Authorizes the private, nonprofit organization to give notice
to the department of any withdrawal of the laboratory’s
accreditation.

(d) If the private, nonprofit organization described in subdivision
(c) has withdrawn or revoked its accreditation of a laboratory, the
laboratory shall retain its certificate of deemed status issued
pursuant to subdivision (c) for 45 days after the laboratory receives
notice of the withdrawal or revocation of the accreditation, or the
effective date of any action taken by the department, whichever
is earlier.

(e) A certificate of deemed status issued pursuant to subdivision
(c) shall be renewed annually provided that the conditions for
issuance specified in subdivision (c) are still met. Except as
authorized under subdivision (f), the department shall not conduct
routine inspections of a laboratory issued a certificate of deemed
status pursuant to subdivision (c). Each application for a certificate
of deemed status issued under subdivision (c) and each request for
renewal of that certificate shall be accompanied by the fees set
forth in Section 1300. The total of those certificate application and
renewal fees collected by the department shall be sufficient to
cover the cost of issuing the certificate. If the department
determines that those certificate fees do not fully support the costs
of these activities, it shall report that determination to the
Legislature.

(f) Nothing in this section shall be construed to prohibit the
exercise of the department’s authority to conduct complaint
investigations, sample validation inspections, or require submission
of proficiency testing results to the department to ensure
compliance of any clinical laboratory with state standards.

end delete

SEC. 7.  

Section 1227 of the Business and Professions Code is
repealed.

begin delete

1227.  

Every person or clinical laboratory licensed or registered
under this chapter shall report to the department, within 30 days
thereof, any change of name or address.

end delete

SEC. 8.  

Section 1241.1 of the Business and Professions Code
is repealed.

begin delete

1241.1.  

(a) A primary care clinic, licensed pursuant to
subdivision (a) of Section 1204 of the Health and Safety Code,
that is operating within a network of primary care clinics, may be
issued a license to operate a clinical laboratory pursuant to Section
1265, which authorizes the conduct of clinical laboratory tests and
examinations from its network of primary care clinics, if all of the
following conditions are met:

(1) The central laboratory’s sole purpose is performing moderate
or high complexity clinical laboratory tests and examinations, or
both, for the patients of the clinics in the network.

(2) Prior to performing any tests or examinations, the central
laboratory obtains a certificate under the federal Clinical
Laboratory Improvement Amendments of 1988 (42 U.S.C. 263a)
(CLIA) and a state laboratory license for the appropriate complexity
level of clinical laboratory testing pursuant to Section 1265.

(b) For purposes of this section, “network of primary care
clinics” means two or more primary care clinics operated by the
same nonprofit corporation with the same board of directors and
the same corporate officers, and operating under the same
procedures and protocols.

end delete

SEC. 9.  

Section 1244 of the Business and Professions Code is
amended to read:

1244.  

begin delete (a) end delete begin delete   end delete begin delete Nothing in this end delete begin insert This end insert chapter begin delete shall end delete begin insert does not end insert restrict,
limit, or prevent a program of nondiagnostic general health
assessment provided that:

(1) The program begin delete meets the requirements of Section 1265 and end delete
complies with the requirements of CLIA for waived testing.

(2) The purpose of the program is to screen asymptomatic
individuals for chronic health disorders and to refer individuals to
licensed sources of care as indicated.

(3) The program does not test for human immunodeficiency
virus or any reportable disease or condition identified in Section
120130 of the Health and Safety Code or the regulations adopted
under that section.

(4) The program utilizes only those devices that comply with
all of the following:

(A) Meet all applicable state and federal performance standards
pursuant to Section 111245 of the Health and Safety Code.

(B) Are not adulterated as specified in Article 2 (commencing
with Section 111250) of Chapter 6 of Part 5 of Division 104 of
the Health and Safety Code.

(C) Are not misbranded as specified in Article 3 (commencing
with Section 111330) of Chapter 6 of Part 5 of Division 104 of
the Health and Safety Code.

(D) Are not new devices unless they meet the requirements of
Section 111550 of the Health and Safety Code.

(E) Are approved as waived tests and are used according to the
manufacturer’s instructions.

(5) Blood collection is performed by skin puncture only.

(6) Testing of a urine specimen is performed by the dipstick
method only.

(7) Testing is performed on site and reported directly to the
person requesting the test.

(8) The program maintains a supervisory committee consisting
of, at a minimum, a licensed physician and surgeon and a clinical
laboratory scientist licensed pursuant to this code.

(9) The supervisory committee for the program adopts written
protocols that shall be followed in the program and that shall
contain all of the following:

(A) Provision of written information to individuals to be
assessed that shall include, but not be limited to, the following:

(i) The potential risks and benefits of assessment procedures to
be performed in the program.

(ii) The limitations, including the nondiagnostic nature, of
assessment examinations of biological specimens performed in
the program.

(iii) Information regarding the risk factors or markers targeted
by the program.

(iv) The need for followup with licensed sources of care for
confirmation, diagnosis, and treatment as appropriate.

(B) Proper use of each device utilized in the program including
the operation of analyzers, maintenance of equipment and supplies,
and performance of quality control procedures including the
determination of both accuracy and reproducibility of
measurements in accordance with instructions provided by the
manufacturer of the assessment device used.

(C) Proper procedures to be employed when collecting blood,
if blood specimens are to be obtained.

(D) Proper procedures to be employed in handling and disposing
of all biological specimens to be obtained and material
contaminated by those biological specimens. These procedures
shall comply with all county and city ordinances for medical waste
management and blood-borne pathogen control that apply to the
location where the program operates.

(E) Proper procedures to be employed in response to fainting,
excessive bleeding, or other medical emergencies.

(F) Documentation that the testing personnel are following the
instructions of the instrument’s manufacturer, are trained in the
performance of the test, and are competent to perform the testing
without supervision.

(G) Reporting of assessment results to the individual being
assessed.

(H) Referral and followup to licensed sources of care as
indicated.

begin delete

The

end delete

begin insert (10) end insert begin insert   end insert begin insert (a) end insert begin insert   end insert begin insert The end insert written protocols adopted by the supervisory
committee shall be maintained for at least one year following
completion of the assessment begin delete program end delete begin insert program, end insert during which
period they shall be subject to review by department personnel
and the local health officer or his or her designee, including the
public health laboratory director.

(b) If skin puncture to obtain a blood specimen is to be
performed in a program of nondiagnostic general health
assessment, the individual performing the skin puncture shall be
authorized to perform skin puncture under this chapter.

(c) A program of nondiagnostic general health assessment that
fails to meet the requirements set forth in subdivisions (a) and (b)
shall not operate.

(d) For purposes of this section, “skin puncture” means the
collection of a blood specimen by the finger prick method only
and does not include venipuncture, arterial puncture, or any other
procedure for obtaining a blood specimen.

(e)  begin delete Nothing in this end delete begin insert This end insert chapter begin delete shall be interpreted as
prohibiting end delete begin insert does not prohibit end insert a licensed clinical laboratory from
operating a program of nondiagnostic general health assessment
provided that the clinical laboratory complies with the requirements
of this section.

(f) A program for a health fair providing diagnostic or screening
tests is not a nondiagnostic general health assessment program if
all of the requirements of this chapter are met, and the laboratory
performing the testing is licensed begin delete or registered under subdivision
(a) of Section 1265. end delete begin insert by federal law or is operating with a waiver
for the applicable procedures. end insert For a test that is not authorized for
self-ordering pursuant to Section 1246.5 and that is not for a
nondiagnostic general health assessment pursuant to this section,
the begin delete licensed or registered end delete clinical laboratory participating in the
health fair shall assure that the test is ordered begin delete on-site end delete begin insert onsite end insert only
by a person licensed under this division who is authorized under
his or her scope of practice to order the test or by a person
authorized by that licensee. The results of a test performed at a
health fair shall be provided to the test subject along with an
explanation of the results.

SEC. 10.  

Section 1246.5 of the Business and Professions Code
is amended to read:

1246.5.  

begin insert (a) end insert begin insert   end insert Notwithstanding any other begin delete provision of end delete law, begin delete any end delete
begin insert a end insert person may request, and begin delete any end delete begin insert a end insert licensed clinical laboratory or
public health laboratory may perform, the laboratory tests specified
in this section. A registered clinical laboratory may perform the
laboratory tests specified in this section if the test is subject to a
certificate of waiver under begin delete CLIA and the laboratory has registered
with the department under paragraph (2) of subdivision (a) of
Section 1265. end delete begin insert CLIA. end insert A program for nondiagnostic general health
assessment that includes a laboratory test specified in this section
shall comply with the provisions of Section 1244. The results from
any test may be provided directly to the person requesting the test
if the test is on or for his or her own body. These test results shall
be provided in a manner that presents clear information and that
identifies results indicating the need for referral to a physician and
surgeon.

begin delete

The

end delete

begin insert (b) end insert begin insert   end insert begin insert The end insert tests that may be conducted pursuant to this section are:
pregnancy, glucose level, cholesterol, occult blood, and any other
test for which there is a test for a particular analyte approved by
the federal Food and Drug Administration for sale to the public
without a prescription in the form of an over-the-counter test kit.
A test approved only as an over-the-counter collection device may
not be conducted pursuant to this section.

SEC. 11.  

Section 1265 of the Business and Professions Code
is repealed.

begin delete

1265.  

(a) (1) A clinical laboratory performing clinical
laboratory tests or examinations classified as of moderate or of
high complexity under CLIA shall obtain a clinical laboratory
license pursuant to this chapter. The department shall issue a
clinical laboratory license to any person who has applied for the
license on forms provided by the department and who is found to
be in compliance with this chapter and the regulations pertaining
thereto. No clinical laboratory license shall be issued by the
department unless the clinical laboratory and its personnel meet
the CLIA requirements for laboratories performing tests or
examinations classified as of moderate or high complexity, or both.

(2) A clinical laboratory performing clinical laboratory tests or
examinations subject to a certificate of waiver or a certificate of
provider-performed microscopy under CLIA, shall register with
the department. The department shall issue a clinical laboratory
registration to any person who has applied for the registration on
forms provided by the department and is found to be in compliance
with this chapter, the regulations pertaining thereto, and the CLIA
requirements for either a certificate of waiver or a certificate of
provider-performed microscopy.

(b) An application for a clinical laboratory license or registration
shall include the name or names of the owner or the owners, the
name or names of the laboratory director or directors, the name
and location of the laboratory, a list of the clinical laboratory tests
or examinations performed by the laboratory by name and total
number of test procedures and examinations performed annually
(excluding tests the laboratory may run for quality control, quality
assurance, or proficiency testing purposes). The application shall
also include a list of the tests and the test kits, methodologies, and
laboratory equipment used, and the qualifications (educational
background, training, and experience) of the personnel directing
and supervising the laboratory and performing the laboratory
examinations and test procedures, and any other relevant
information as may be required by the department. If the laboratory
is performing tests subject to a provider-performed microscopy
certificate, the name of the provider or providers performing those
tests shall be included on the application. Application shall be
made by the owners of the laboratory and the laboratory directors
prior to its opening. A license or registration to conduct a clinical
laboratory if the owners are not the laboratory directors shall be
issued jointly to the owners and the laboratory directors and the
license or registration shall include any information as may be
required by the department. The owners and laboratory directors
shall be severally and jointly responsible to the department for the
maintenance and conduct thereof or for any violations of this
chapter and regulations pertaining thereto.

(c) The department shall not issue a license or registration until
it is satisfied that the clinical laboratory will be operated within
the spirit and intent of this chapter, that the owners and laboratory
directors are each of good moral character, and that the granting
of the license will not be in conflict with the interests of public
health.

(d) A separate license or registration shall be obtained for each
laboratory location, with the following exceptions:

(1) Laboratories that are not at a fixed location, that is,
laboratories that move from one testing site to another, such as
mobile units providing laboratory testing, health screening fairs,
or other temporary testing locations, may apply for and obtain one
license or registration for the designated primary site or home base,
using the address of that primary site.

(2) Not-for-profit, or federal, state, or local government
laboratories that engage in limited (not more than a combination
of 15 moderately complex or waived tests, as defined under CLIA,
per license) public health testing may apply for and obtain a single
license or registration.

(3) Laboratories within a hospital that are located at contiguous
buildings on the same campus and under common direction, may
file a single application or multiple applications for a license or
registration of laboratory locations within the same campus or
street address.

(4) Locations within a single street and city address that are
under common ownership may apply for and obtain a single license
or registration or multiple licenses or registrations, at the discretion
of the owner or owners.

(e) (1) A license or registration shall be valid for one year unless
revoked or suspended. A clinical laboratory license or registration
shall be automatically revoked 30 days from a major change of
laboratory directorship or ownership. The clinical laboratory shall
be required to submit a completed application for a new clinical
laboratory license or registration within those 30 days or cease
engaging in clinical laboratory practice.

(2) If a clinical laboratory intends to continue to engage in
clinical laboratory practice during the 30 days after a major change
in directorship occurs and before the laboratory license or
registration is automatically revoked, the laboratory owner may
appoint an interim director who meets the requirements of this
chapter and CLIA. The interim director shall be appointed within
five business days of the major change of the directorship. Written
notice shall be provided to the department of the appointment of
the laboratory director pursuant to this paragraph within five
business days of the appointment.

(f) If the department does not within 60 days after the date of
receipt of the application issue a license or registration, it shall
state the grounds and reasons for its refusal in writing, serving a
copy upon the applicant by certified mail addressed to the applicant
at his or her last known address.

(g) The department shall be notified in writing by the laboratory
owners or delegated representatives of the owners and the
laboratory directors of any change in ownership, directorship,
name, or location, including the addition or deletion of laboratory
owners or laboratory directors within 30 days. However, notice of
change in ownership shall be the responsibility of both the current
and new owners. Laboratory owners and directors to whom the
current license or registration is issued shall remain jointly and
severally responsible to the department for the operation,
maintenance, and conduct of the clinical laboratory and for any
violations of this chapter or the regulations adopted thereunder,
including any failure to provide the notifications required by this
subdivision, until proper notice is received by the department. In
addition, failure of the laboratory owners and directors to notify
the department within 30 days of any change in laboratory
directors, including any additions or deletions, shall result in the
automatic revocation of the clinical laboratory’s license or
registration.

(h) The withdrawal of an application for a license or registration
or for a renewal of a license, or registration, issuable under this
chapter, shall not, after the application has been filed with the
department, deprive the department of its authority to institute or
continue a proceeding against the applicant for denial of the license,
registration, or renewal upon any ground provided by law or to
enter an order denying the license, registration, or renewal upon
any such ground, unless the department consents in writing to the
withdrawal.

(i) The suspension, expiration, or forfeiture by operation of law
of a license or registration issued under this chapter, or its
suspension, forfeiture, or cancellation by order of the department
or by order of a court of law, or its surrender without the written
consent of the department, shall not deprive the department of its
authority to institute or continue an action against a license or
registration issued under this chapter or against the laboratory
owner or laboratory director upon any ground provided by law or
to enter an order suspending or revoking the license or registration
issued under this chapter.

(j) (1) Whenever a clinical laboratory ceases operations, the
laboratory owners, or delegated representatives of the owners, and
the laboratory directors shall notify the department of this fact, in
writing, within 30 calendar days from the date a clinical laboratory
ceases operation. For purposes of this subdivision, a laboratory
ceases operations when it suspends the performance of all clinical
laboratory tests or examinations for 30 calendar days at the location
for which the clinical laboratory is licensed or registered.

(2) (A) Notwithstanding any other provision of law, owners
and laboratory directors of all clinical laboratories, including those
laboratories that cease operations, shall preserve medical records
and laboratory records, as defined in this section, for three years
from the date of testing, examination, or purchase, unless a longer
retention period is required pursuant to any other provision of law,
and shall maintain an ability to provide those records when
requested by the department or any duly authorized representative
of the department.

(B) For purposes of this subdivision, “medical records” means
the test requisition or test authorization, or the patient’s chart or
medical record, if used as the test requisition, the final and
preliminary test or examination result, and the name of the person
contacted if the laboratory test or examination result indicated an
imminent life-threatening result or was of panic value.

(C) For purposes of this subdivision, “laboratory records” means
records showing compliance with CLIA and this chapter during a
laboratory’s operation that are actual or true copies, either
photocopies or electronically reproducible copies, of records for
patient test management, quality control, quality assurance, and
all invoices documenting the purchase or lease of laboratory
equipment and test kits, reagents, or media.

(D) Information contained in medical records and laboratory
records shall be confidential, and shall be disclosed only to
authorized persons in accordance with federal, state, and local
laws.

(3) The department or any person injured as a result of a
laboratory’s abandonment or failure to retain records pursuant to
this section may bring an action in a court of proper jurisdiction
for any reasonable amount of damages suffered as a result thereof.

(k) For purposes of this section, in the case of a pharmacy that
applies for a registration pursuant to Section 1206.6, “laboratory
director” means the pharmacist-in-charge identified pursuant to
subdivision (a) of Section 1206.6.

end delete

SEC. 12.  

Section 1265.1 of the Business and Professions Code
is repealed.

begin delete

1265.1.  

(a) A primary care clinic that submits an application
to the State Department of Public Health for clinic licensure
pursuant to subdivision (a) of Section 1204 of the Health and Safety
Code may submit prior to that submission, or concurrent therewith,
an application for licensure or registration of a clinical laboratory
to be operated by the clinic.

(b) An application for licensure of a clinical laboratory submitted
pursuant to this section shall be subject to all applicable laboratory
licensing laws and regulations, including, but not limited to, any
statutory or regulatory timelines and processes for review of a
clinical laboratory application.

end delete

SEC. 13.  

Section 1266 of the Business and Professions Code
is repealed.

begin delete

1266.  

The clinical laboratory license and the license or current
renewal permit of each person performing tests shall be
conspicuously posted in the clinical laboratory.

end delete

SEC. 14.  

Section 1267 of the Business and Professions Code
is repealed.

begin delete

1267.  

Any denial, suspension, or revocation of a license under
this chapter shall be conducted in compliance with Section 100171
of the Health and Safety Code.

end delete

SEC. 15.  

Section 1268 of the Business and Professions Code
is repealed.

begin delete

1268.  

Upon filing application therefor, containing such
information as the department may require, and the payment of
the license fee, the department shall issue to any person duly
licensed under this chapter a duplicate license for one previously
issued or, where there has been a change of name, another license
in lieu of one previously issued.

end delete

SEC. 16.  

Section 1271.1 of the Business and Professions Code
is amended to read:

1271.1.  

(a)  begin delete Clinical laboratories which are licensed pursuant
to this chapter and provide end delete begin insert A clinical laboratory that provides end insert
cytology services shall, if the begin delete licensee end delete begin insert laboratory end insert ceases operation,
preserve records, reports, cytology slides, and cell blocks as
prescribed in subdivision (g) of Section 1271 and Section 1274.

(b)  begin delete Any end delete begin insert A end insert person injured as a result of the begin delete licensee’s end delete
begin insert laboratory’s end insert abandonment of records may bring an action in begin delete any end delete
begin insert a end insert court of competent jurisdiction for the amount of begin delete any end delete damages
suffered as a result. begin delete In the event the licensee end delete begin insert If the laboratory end insert was
a corporation or partnership begin delete which end delete begin insert that end insert has been dissolved, the
person injured may bring an action against that corporation’s or
partnership’s principal officers of record at the time of the
dissolution.

(c) For purposes of this section, the following definitions shall
apply:

(1) “Abandonment of records” means violating subdivision (a)
and thereby leaving patients and physicians and surgeons without
access to information to which they are entitled pursuant to this
chapter.

(2) “Principal officers” means:

(A) In the case of a partnership other than a limited partnership,
any partner.

(B) In the case of a limited partnership, any general partner, as
defined in begin delete subdivision (i) of end delete Section begin delete 15611 end delete begin insert 15904.02 end insert of the
Corporations Code.

(C) In the case of a corporation, the chairperson of the board,
the chief executive officer, and the president of the corporation.

SEC. 17.  

Section 1272 of the Business and Professions Code
is amended to read:

1272.  

A clinical laboratory shall participate in a begin delete state-approved end delete
begin insert CLIA-approved end insert proficiency testing program and demonstrate
satisfactory performance in all of the laboratory specialities that
include tests performed in the laboratory. Proficiency shall be
tested in the following specialties: microbiology, serology, clinical
chemistry, hematology, cytology, and immunohematology.

SEC. 18.  

Section 1272.4 of the Business and Professions Code
is repealed.

begin delete

1272.4.  

The department shall establish standards for the
evaluation of cytologic slides, for reporting the adequacy of
cytologic slides, for a cytotechnologist competency program, and
for a proficiency testing program for clinical laboratories providing
cytology services.

end delete

SEC. 19.  

Section 1272.6 of the Business and Professions Code
is repealed.

begin delete

1272.6.  

The department shall, on or before January 1, 1992,
develop or adopt a proficiency testing program for laboratories
providing cytology services which may be administered by the
department or by a proficiency testing service or program approved
by the department. The proficiency program established pursuant
to this section shall include announced and unannounced onsite
proficiency testing, with that testing to take place, to the extent
practicable, under normal working conditions.

end delete

SEC. 20.  

Section 1281 of the Business and Professions Code
is repealed.

begin delete

1281.  

It is unlawful for any person to own, operate, maintain,
direct, or engage in the business of operating a clinical laboratory,
as defined in this chapter, unless he or she possesses a valid clinical
laboratory license issued by the department. In the event a health
facility does not perform clinical laboratory services, but provides
laboratory services to its patients under an agreement with another
person or entity that holds and is operating under a valid clinical
laboratory license, the health facility shall not be required to obtain
a clinical laboratory license.

end delete

SEC. 21.  

Section 1300 of the Business and Professions Code
is amended to read:

1300.  

The amount of begin delete application, registration, end delete begin insert application end insert and
license fees under this chapter shall be as follows:

(a) The application fee for a histocompatibility laboratory
director’s, clinical laboratory bioanalyst’s, clinical chemist’s,
clinical microbiologist’s, clinical laboratory toxicologist’s, clinical
cytogeneticist’s, or clinical genetic molecular biologist’s license
is sixty-three dollars begin delete ($63) commencing on July 1, 1983. end delete begin insert ($63). end insert

(b) The annual renewal fee for a histocompatibility laboratory
director’s, clinical laboratory bioanalyst’s, clinical chemist’s,
clinical microbiologist’s, clinical laboratory toxicologist’s, clinical
cytogeneticist’s, or clinical genetic molecular biologist’s license
is sixty-three dollars begin delete ($63) commencing on July 1, 1983. end delete begin insert ($63). end insert

(c) The application fee for a clinical laboratory scientist’s or
limited clinical laboratory scientist’s license is thirty-eight dollars
begin delete ($38) commencing on July 1, 1983. end delete begin insert ($38). end insert

(d) The application and annual renewal fee for a
cytotechnologist’s license is fifty dollars begin delete ($50) commencing on
January 1, 1991. end delete begin insert ($50). end insert

(e) The annual renewal fee for a clinical laboratory scientist’s
or limited clinical laboratory scientist’s license is twenty-five
dollars begin delete ($25) commencing on July 1, 1983. end delete begin insert ($25). end insert

begin delete

(f) A clinical laboratory applying for a license to perform tests
or examinations classified as of moderate or of high complexity
under CLIA and a clinical laboratory applying for certification
under subdivision (c) of Section 1223 shall pay an application fee
for that license or certification based on the number of tests it
performs or expects to perform in a year, as follows:

(1) Less than 2,001 tests: two hundred seventy dollars ($270).

(2) Between 2,001 and 10,000, inclusive, tests: eight hundred
twenty dollars ($820).

(3) Between 10,001 and 25,000, inclusive, tests: one thousand
three hundred fifteen dollars ($1,315).

(4) Between 25,001 and 50,000, inclusive, tests: one thousand
five hundred eighty dollars ($1,580).

(5) Between 50,001 and 75,000, inclusive, tests: one thousand
nine hundred sixty dollars ($1,960).

(6) Between 75,001 and 100,000, inclusive, tests: two thousand
three hundred forty dollars ($2,340).

(7) Between 100,001 and 500,000, inclusive, tests: two thousand
seven hundred forty dollars ($2,740).

(8) Between 500,001 and 1,000,000, inclusive, tests: four
thousand nine hundred ten dollars ($4,910).

(9) More than 1,000,000 tests: five thousand two hundred sixty
dollars ($5,260) plus three hundred fifty dollars ($350) for every
500,000 tests over 1,000,000, up to a maximum of 15,000,000
tests.

(g) A clinical laboratory performing tests or examinations
classified as of moderate or of high complexity under CLIA and
a clinical laboratory with a certificate issued under subdivision (c)
of Section 1223 shall pay an annual renewal fee based on the
number of tests it performed in the preceding calendar year, as
follows:

(1) Less than 2,001 tests: one hundred seventy dollars ($170).

(2) Between 2,001 and 10,000, inclusive, tests: seven hundred
twenty dollars ($720).

(3) Between 10,001 and 25,000, inclusive, tests: one thousand
one hundred fifteen dollars ($1,115).

(4) Between 25,001 and 50,000, inclusive, tests: one thousand
three hundred eighty dollars ($1,380).

(5) Between 50,001 and 75,000, inclusive, tests: one thousand
seven hundred sixty dollars ($1,760).

(6) Between 75,001 and 100,000, inclusive, tests: two thousand
forty dollars ($2,040).

(7) Between 100,001 and 500,000, inclusive, tests: two thousand
four hundred forty dollars ($2,440).

(8) Between 500,001 and 1,000,000, inclusive, tests: four
thousand six hundred ten dollars ($4,610).

(9) More than 1,000,000 tests per year: four thousand nine
hundred sixty dollars ($4,960) plus three hundred fifty dollars
($350) for every 500,000 tests over 1,000,000, up to a maximum
of 15,000,000 tests.

end delete begin delete

(h)

end delete

begin insert (f) end insert  The application fee for a trainee’s license is thirteen dollars
begin delete ($13) commencing on July 1, 1983. end delete begin insert ($13). end insert

begin delete

(i)

end delete

begin insert (g) end insert  The annual renewal fee for a trainee’s license is eight dollars
begin delete ($8) commencing on July 1, 1983. end delete begin insert ($8). end insert

begin delete

(j)

end delete

begin insert (h) end insert  The application fee for a duplicate license is five dollars
begin delete ($5) commencing on July 1, 1983. end delete begin insert ($5). end insert

begin delete

(k)

end delete

begin insert (i) end insert  The personnel licensing delinquency fee is equal to the annual
renewal fee.

begin delete

(l)

end delete

begin insert (j) end insert  The director may establish a fee for examinations required
under this chapter. The fee shall not exceed the total cost to the
department in conducting the examination.

begin delete

(m) A clinical laboratory subject to registration under paragraph
(2) of subdivision (a) of Section 1265 and performing only those
clinical laboratory tests or examinations considered waived under
CLIA shall pay an annual fee of one hundred dollars ($100). A
clinical laboratory subject to registration under paragraph (2) of
subdivision (a) of Section 1265 and performing only
provider-performed microscopy, as defined under CLIA, shall pay
an annual fee of one hundred fifty dollars ($150). A clinical
laboratory performing both waived and provider-performed
microscopy shall pay an annual registration fee of one hundred
fifty dollars ($150).

(n) The costs of the department in conducting a complaint
investigation, imposing sanctions, or conducting a hearing under
this chapter shall be paid by the clinical laboratory. The fee shall
be no greater than the fee the laboratory would pay under CLIA
for the same type of activities and shall not be payable if the
clinical laboratory would not be required to pay those fees under
CLIA.

end delete begin delete

(o)

end delete

begin insert (k) end insert  The state, a district, city, county, city and county, or other
political subdivision, or begin delete any end delete begin insert a end insert public officer or body shall be
subject to the payment of fees established pursuant to this chapter
or regulations adopted thereunder.

begin delete

(p) In addition to the payment of registration or licensure fees,
a clinical laboratory located outside the State of California shall
reimburse the department for travel and per diem to perform any
necessary onsite inspections at the clinical laboratory in order to
ensure compliance with this chapter.

end delete begin delete

(q)

end delete

begin insert (l) end insert  The department shall establish an application fee and a
renewal fee for a medical laboratory technician license, the total
fees collected not to exceed the costs of the department for the
implementation and operation of the program licensing and
regulating medical laboratory technicians pursuant to Section
1260.3.

begin delete

(r) The costs of the department to conduct any reinspections to
ensure compliance of a laboratory applying for initial licensure
shall be paid by the laboratory. This additional cost for each visit
shall be equal to the initial application fee and shall be paid by the
laboratory prior to issuance of a license. The department shall not
charge a reinspection fee if the reinspection is due to error or
omission on the part of the department.

(s) A fee of twenty-five dollars ($25) shall be assessed for
approval of each additional location authorized by paragraph (2)
of subdivision (d) of Section 1265.

(t) On or before July 1, 2013, the department shall report to the
Legislature during the annual legislative budget hearing process
the extent to which the state oversight program meets or exceeds
federal oversight standards and the extent to which the federal
Department of Health and Human Services is accepting exemption
applications and the potential cost to the state for an exemption.

end delete

SEC. 22.  

Section 1300.1 of the Business and Professions Code
is repealed.

begin delete

1300.1.  

The application and renewal fees for clinical laboratory
licenses specified in Section 1300 shall be adjusted annually in
the manner specified in Section 100450 of the Health and Safety
Code. The adjustments shall be rounded off to the nearest whole
dollar amount.

end delete

SEC. 23.  

Section 1301 of the Business and Professions Code
is amended to read:

1301.  

begin delete

(a) The annual renewal fee for a clinical laboratory
license or registration set under this chapter shall be paid during
the 30-day period before the expiration date of the license or
registration. If the license or registration is not renewed before the
expiration date, the licensee or registrant, as a condition precedent
to renewal, shall pay a delinquency fee equal to 25 percent of the
annual renewal fee for up to 60 days after the expiration date, in
addition to the annual renewal fee in effect on the last preceding
regular renewal date. Failure to pay the annual renewal fee in
advance during the time the license or registration remains in force
shall, ipso facto, work a forfeiture of the license or registration
after a period of 60 days from the expiration date of the license or
registration.

end delete

begin delete (b) end delete begin delete   end delete begin delete (1) end delete begin delete   end delete begin insert (a) end insert begin insert   end insert The department shall give written notice to all
persons licensed pursuant to Section 1260, 1260.1, 1261, 1261.5,
1262, 1264, or 1270 begin insert at least end insert 30 days in advance of the regular
renewal date that a renewal fee has not been paid. In addition, the
department shall give written notice to licensed clinical laboratory
bioanalysts or doctoral degree specialists and clinical laboratory
scientists or limited clinical laboratory scientists by registered or
certified mail 90 days in advance of the expiration of the fifth year
that a renewal fee has not been paid begin delete and end delete begin insert and, end insert if not paid before
the expiration of the fifth year of begin delete delinquency end delete begin insert delinquency, end insert the
licensee may be subject to reexamination.

begin delete

(2)

end delete

begin insert (b) end insert  If the renewal fee is not paid for five or more years, the
department may require an examination before reinstating the
license, except that begin delete no end delete begin insert an end insert examination shall begin insert not end insert be required as a
condition for reinstatement if the original license was issued
without an examination. begin delete No end delete begin insert An end insert examination shall begin insert not end insert be required
for reinstatement if the license was forfeited solely by reason of
nonpayment of the renewal fee if the nonpayment was for less than
five years.

begin delete

(3)

end delete

begin insert (c) end insert  If the license is not renewed within 60 days after its
expiration, the licensee, as a condition precedent to renewal, shall
pay the delinquency fee identified in subdivision begin delete (k) end delete begin insert (i) end insert of Section
1300, in addition to the renewal fee in effect on the last preceding
regular renewal date. Payment of the delinquency fee begin delete will not be end delete
begin insert is not end insert necessary begin delete if end delete begin insert if, end insert within 60 days of the license expiration begin delete date end delete
begin insert date, end insert the licensee files begin delete with the department end delete an application for
inactive status.

SEC. 24.  

Section 1310 of the Business and Professions Code
is repealed.

begin delete

1310.  

If the department determines that a laboratory that has
been issued a license or registration under this chapter, except for
a laboratory only performing tests or examinations classified as
waived under CLIA, no longer substantially meets the requirements
of this chapter or the regulations adopted thereunder, the
department, in lieu of, or in addition to, revocation or suspension
of the license or registration under Section 1320 or 1323, may
impose any of the following:

(a) Directed plans of correction, as defined under CLIA.

(b) Civil money penalties in an amount ranging from fifty dollars
($50) to three thousand dollars ($3,000) per day of noncompliance,
or per violation, for a condition-level deficiency that does not pose
immediate jeopardy, to an amount ranging from three thousand
fifty dollars ($3,050) to ten thousand dollars ($10,000) per day of
noncompliance, or per violation, for a condition-level deficiency
that poses immediate jeopardy, but only after notice and an
opportunity to respond in accordance with Section 100171 of the
Health and Safety Code, and consideration of facts enumerated in
CLIA in Section 493.1834 of Title 42 of the Code of Federal
Regulations.

(c) Civil money penalties in an amount ranging from fifty dollars
($50) to three thousand dollars ($3,000) per day of noncompliance,
or per violation, for a violation of subdivision (t) of Section 1320,
for failure to comply with disease reporting requirements, but only
after notice and an opportunity to respond in accordance with
Section 100171 of the Health and Safety Code.

(d) Onsite monitoring, as defined under CLIA, and payment for
the costs of onsite monitoring.

(e) Any combination of the actions described in subdivisions
(a), (b), (c), and (d).

end delete

SEC. 25.  

Section 1320 of the Business and Professions Code
is amended to read:

1320.  

The department may deny, suspend, or revoke begin delete any end delete begin insert a end insert
license begin delete or registration end delete issued begin delete under end delete begin insert pursuant to end insert this chapter for
any of the following reasons:

(a) Conduct involving moral turpitude or dishonest reporting
of tests.

(b) Violation by the begin delete applicant, licensee, or registrant end delete begin insert applicant
or licensee end insert of this chapter or begin delete any end delete begin insert a end insert rule or regulation adopted
pursuant thereto.

(c) Aiding, abetting, or permitting the violation of this chapter,
the rules or regulations adopted begin delete under end delete begin insert pursuant to end insert this begin delete chapter end delete
begin insert chapter, end insert or the Medical Practice begin delete Act, Chapter end delete begin insert Act (Chapter end insert 5
(commencing with Section 2000) of Division begin delete 2. end delete begin insert 2). end insert

(d) Permitting a licensed trainee to perform tests or procure
specimens unless under begin delete the end delete direct and responsible begin delete supervision of
a person duly licensed under this chapter or physician and surgeon
other than another licensed trainee. end delete begin insert supervision. end insert

(e) Violation of any provision of this code governing the practice
of medicine and surgery.

(f) Proof that an begin delete applicant, licensee, or registrant end delete begin insert applicant or
licensee end insert has made false statements in any material regard on the
application for a begin delete license, registration, end delete begin insert license end insert or renewal issued
begin delete under end delete begin insert pursuant to end insert this chapter.

(g) Conduct inimical to the public health, morals, welfare, or
safety of the people of the State of California in the begin delete maintenance
or operation of the premises or end delete begin insert provision of end insert services for which a
license begin delete or registration end delete is issued begin delete under end delete begin insert pursuant to end insert this chapter.

(h) Proof that the applicant or licensee has used begin delete any degree, or
certificate, end delete begin insert a degree or certificate end insert as a means of qualifying for
licensure that has been purchased or procured by barter or by any
unlawful means or obtained from begin delete any end delete begin insert an end insert institution begin delete that end delete begin insert that, end insert at
the time the degree, certificate, or title was begin delete obtained end delete begin insert obtained, end insert was
not recognized or accredited by the department of education of the
state where the institution is or was located to give training in the
field of study in which the degree, certificate, or title is claimed.

(i) Violation of any of the prenatal laws or regulations pertaining
thereto in Chapter 2 (commencing with Section 120675) of Part
3 of Division 105 of the Health and Safety Code and Article 1
(commencing with Section 1125) of Group 4 of Subchapter 1 of
Chapter 2 of Part 1 of Title 17 of the California Code of
Regulations.

(j) Knowingly accepting an assignment for clinical laboratory
tests or specimens begin delete from end delete begin insert from, end insert and the rendering of a report thereon
begin delete to end delete begin insert to, end insert persons not authorized by law to submit those specimens or
assignments.

(k) Rendering a report on clinical laboratory work actually
performed in another clinical laboratory without designating clearly
the name and address of the laboratory in which the test was
performed.

(l) Conviction of a felony or begin delete of any end delete misdemeanor involving
moral turpitude under the laws of any state or of the United States
arising out of or in connection with the practice of clinical
laboratory technology. The record of conviction or a certified copy
thereof shall be conclusive evidence of that conviction.

(m) Unprofessional conduct.

(n) The use of drugs or alcoholic beverages to the extent or in
a manner as to be dangerous to a person licensed under this chapter,
or any other person to the extent that begin delete that end delete use impairs the ability
of the licensee to begin delete conduct end delete begin insert conduct, end insert with safety to the begin delete public end delete begin insert public, end insert
the practice of clinical laboratory technology.

(o) Misrepresentation in obtaining a begin delete license or registration. end delete
begin insert license. end insert

(p) Performance begin delete of, or representation of the laboratory as entitled
to perform, end delete begin insert of end insert a clinical laboratory test or examination or other
procedure that is not within the specialties or subspecialties, or
category of laboratory procedures authorized by the begin delete license or
registration. end delete begin insert license. end insert

begin delete

(q) Refusal of a reasonable request of HCFA, a HCFA agent,
the department, or any employee, agent, or contractor of the
department, for permission to inspect, pursuant to this chapter, the
laboratory and its operations and pertinent records during the hours
the laboratory is in operation.

end delete begin delete

(r) Failure to comply with reasonable requests of the department
for any information, work, or materials that the department
concludes is necessary to determine the laboratory’s continued
eligibility for its license or registration, or its continued compliance
with this chapter or the regulations adopted under this chapter.

end delete begin delete

(s) Failure to comply with a sanction imposed under Section
1310.

end delete begin delete

(t) Failure to comply with the disease reporting requirements
adopted pursuant to Section 120130 of the Health and Safety Code.
However, when a laboratory is not able to obtain complete
information for a patient within the reporting timeframes, it shall
document that it made a good faith effort to do so and it shall
submit the report with the available information within the required
reporting timeframes and, in that case, the laboratory shall not be
subject to sanctions for failure to submit complete patient
information.

end delete

SEC. 26.  

Section 1324 of the Business and Professions Code
is repealed.

begin delete

1324.  

Except for a person or entity whose license was revoked
automatically under Section 1265, no person or entity who has
owned or operated a clinical laboratory that had its license or
registration revoked may, within two years of the revocation of
the license or registration, own or operate a laboratory for which
a license or registration has been issued under this chapter.

end delete

SEC. 27.  

Section 1325 of the Business and Professions Code
is repealed.

begin delete

1325.  

Notwithstanding Sections 1267 and 1322, the license or
registration of a clinical laboratory that has been excluded from
participation under the Medicare program (Title XVIII of the Social
Security Act (42 U.S.C. Sec. 1395 et seq.)), under the Medicaid
Program (Title XIX of the Social Security Act (42 U.S.C. Sec.
1396 et seq.)), or that had its certificate revoked under CLIA, shall
be automatically suspended by the department for the period the
laboratory is so excluded or has its certificate revoked.

end delete

SEC. 28.  

Section 9272 of the Food and Agricultural Code is
amended to read:

9272.  

The provisions of this chapter shall not apply (1) to
facilities primarily engaged in the collection, preparation, testing,
processing, storage, or distribution of human blood or blood
products, provided begin delete such end delete begin insert the end insert facility is licensed pursuant to begin delete Section
1601 or 1602 end delete begin insert Chapter 4 (commencing with Section 1600) of
Division 2 end insert of the Health and Safety Code and any begin delete biologic end delete begin insert biologic, end insert
as defined in Section begin delete 9203 end delete begin insert 9203, end insert produced by begin delete such end delete begin insert the end insert facility is
sold or distributed only to an establishment licensed by this chapter
or (2) to clinical laboratories begin delete licensed pursuant to Chapter 3
(commencing with Section 1200) of Division 2 of the Business
and Professions Code end delete whose only biologics are autogenous
bacterins prepared at the request of licensed veterinarians.

SEC. 29.  

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

1206.  

This chapter does not apply to the following:

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

(b)  begin delete Any end delete begin insert A end insert clinic directly conducted, maintained, or operated by
the United States or by any of its departments, officers, or agencies,
and any primary care clinic specified in subdivision (a) of Section
1204 that is directly conducted, maintained, or operated by this
state or by any of its political subdivisions or districts, or by any
city. Nothing in this subdivision precludes the begin delete state end delete department
from adopting regulations that utilize clinic licensing standards as
eligibility criteria for participation in programs funded wholly or
partially under Title XVIII or XIX of the federal Social Security
Act.

(c) (1)  begin delete Any end delete begin insert A end insert clinic conducted, maintained, or operated by a
federally recognized Indian tribe or tribal organization, as defined
in Section 450 or 1603 of Title 25 of the United States Code, that
is located on land recognized as tribal land by the federal
government.

(2)  begin delete Any end delete begin insert A end insert clinic conducted, maintained, or operated by a
federally recognized Indian tribe or tribal organization, as defined
in Section 450 or 1603 of Title 25 of the United States Code, under
a contract with the United States pursuant to the Indian
Self-Determination and Education Assistance Act (Public Law
93-638), regardless of the location of the clinic, except that if the
clinic chooses to apply to the State Department of Public Health
for a state facility license, then the State Department of Public
Health will retain authority to regulate that clinic as a primary care
clinic as defined by subdivision (a) of Section 1204.

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

(e)  begin delete Any end delete begin insert A end insert facility licensed as a health facility under Chapter 2
(commencing with Section 1250).

(f)  begin delete Any end delete begin insert A end insert freestanding clinical or pathological begin delete laboratory
licensed under Chapter 3 (commencing with Section 1200) of
Division 2 of the Business and Professions Code. end delete begin insert laboratory. end insert

(g) A clinic operated by, or affiliated with, begin delete any end delete begin insert an end insert institution
of learning that teaches a recognized healing art and is approved
by the state board or commission vested with responsibility for
regulation of the practice of that healing art.

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

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

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

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

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

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

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

(o) A community mental health center, as defined in Section
5667 of the Welfare and Institutions Code.

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

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

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

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

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

(E) Held and licensed patents on medical technology.

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

(G) Provides health care services to patients only:

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

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

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

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

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

SEC. 30.  

Section 1600.3 of the Health and Safety Code is
amended to read:

1600.3.  

“Blood bank depository” means begin delete any end delete begin insert a end insert place other than
a blood bank where human whole blood and human whole blood
derivatives specified by regulation are stored and held for
transfusion. begin delete Such blood end delete begin insert Blood end insert bank depositories shall be clinical
laboratories, licensed in accordance with the provisions of begin delete Chapter
3 (commencing with Section 1200), Division 2 of the Business
and Professions Code, end delete begin insert federal law, end insert or begin delete such end delete other places where
services essentially equivalent are maintained, as determined by
the department.

SEC. 31.  

Section 14043.27 of the Welfare and Institutions
Code is amended to read:

14043.27.  

(a) If an applicant or provider is granted provisional
provider status or preferred provisional provider status pursuant
to Section 14043.26 and, if at any time during the provisional
provider status period or preferred provisional provider status
period, the department conducts any announced or unannounced
visits or any additional inspections or reviews pursuant to this
chapter or Chapter 8 (commencing with Section 14200), or the
regulations adopted thereunder, or pursuant to Section 100185.5
of the Health and Safety Code, and discovers or otherwise
determines the existence of any ground to deactivate the provider’s
number and business addresses or suspend the provider from the
Medi-Cal program pursuant to this chapter or Chapter 8
(commencing with Section 14200), or the regulations adopted
thereunder, or pursuant to Section 100185.5 of the Health and
Safety Code, or if any of the circumstances listed in subdivision
(c) occur, the department shall terminate the provisional provider
status or preferred provisional provider status of the provider,
regardless of whether the period of time for which the provisional
provider status or preferred provisional provider status was granted
under Section 14043.26 has elapsed.

(b) Termination of provisional provider status or preferred
provisional provider status shall include deactivation of the
provider’s number, including all business addresses used by the
provider to obtain reimbursement from the Medi-Cal program and
removal of the provider from enrollment in the Medi-Cal program,
except where the termination is based upon a ground related solely
to a specific location for which provisional provider status was
granted. Termination of provisional provider status based upon
grounds related solely to a specific location may include failure
to have an established place of business, failure to possess the
business or zoning permits or other approvals necessary to operate
a business, or failure to possess the appropriate licenses, permits,
or certificates necessary for the provider of service category or
subcategory identified by the provider in its application package.
Where the grounds relate solely to a specific location, the
termination of provisional provider status shall include only
deactivation of the specific locations that the grounds apply to and
shall include removal of the provider from enrollment in the
Medi-Cal program only if, after deactivation of the specific
locations, the provider does not have any business address that is
not deactivated.

(c) The following circumstances are grounds for termination of
provisional provider status or preferred provisional provider status:

(1) The provider, persons with an ownership or control interest
in the provider, or persons who are directors, officers, or managing
employees of the provider have been convicted of any felony, or
convicted of any misdemeanor involving fraud or abuse in any
government program, related to neglect or abuse of a patient in
connection with the delivery of a health care item or service, or in
connection with the interference with, or obstruction of, any
investigation into health care related fraud or abuse, or have been
found liable for fraud or abuse in any civil proceeding, or have
entered into a settlement in lieu of conviction for fraud or abuse
in any government program within 10 years of the date of the
application package.

(2) There is a material discrepancy in the information provided
to the department, or with the requirements to be enrolled, that is
discovered after provisional provider status or preferred provisional
provider status has been granted and that cannot be corrected
because the discrepancy occurred in the past.

(3) The provider has provided material information that was
false or misleading at the time it was provided.

(4) The provider failed to have an established place of business
at the business address for which the application package was
submitted at the time of any onsite inspection, announced or
unannounced visit, or any additional inspection or review
conducted pursuant to this article or a statute or regulation
governing the Medi-Cal program, unless the practice of the
provider’s profession or delivery of services, goods, supplies, or
merchandise is such that services, goods, supplies, or merchandise
are rendered or delivered at locations other than the business
address and this practice or delivery of services, goods, supplies,
or merchandise has been disclosed in the application package
approved by the department when the provisional provider status
or preferred provisional provider status was granted.

(5) The provider meets the definition of a clinic under Section
1200 of the Health and Safety Code, but is not licensed as a clinic
pursuant to Chapter 1 (commencing with Section 1200) of Division
2 of the Health and Safety Code and fails to meet the requirements
to qualify for at least one exemption pursuant to Section 1206 or
1206.1 of the Health and Safety Code.

(6) The provider performs clinical laboratory tests or
examinations, but it or its personnel do not meet CLIA, and the
regulations adopted begin delete thereunder, and the state clinical laboratory
law, end delete begin insert thereunder, end insert do not possess valid CLIA begin delete certificates and clinical
laboratory registrations or licenses pursuant to Chapter 3
(commencing with Section 1200) of Division 2 of the Business
and Professions Code, end delete begin insert certificates, end insert or are not exempt begin delete from licensure
as a clinical laboratory under end delete begin insert pursuant to end insert Section 1241 of the
Business and Professions Code.

(7) The provider fails to possess either of the following:

(A) The appropriate licenses, permits, certificates, or other
approvals needed to practice the profession or occupation, or
provide the services, goods, supplies, or merchandise the provider
identified in the application package approved by the department
when the provisional provider status or preferred provisional
provider status was granted and for the location for which the
application was submitted.

(B) The business or zoning permits or other approvals necessary
to operate a business at the location identified in its application
package approved by the department when the provisional provider
status or preferred provisional provider status was granted.

(8) The provider, or if the provider is a clinic, group, partnership,
corporation, or other association, any officer, director, or
shareholder with a 10 percent or greater interest in that
organization, commits two or more violations of the federal or
state statutes or regulations governing the Medi-Cal program, and
the violations demonstrate a pattern or practice of fraud, abuse, or
provision of unnecessary or substandard medical services.

(9) The provider commits any violation of a federal or state
statute or regulation governing the Medi-Cal program or of a statute
or regulation governing the provider’s profession or occupation
and the violation represents a threat of immediate jeopardy or
significant harm to any Medi-Cal beneficiary or to the public
welfare.

(10) The provider submits claims for payment that subject a
provider to suspension under Section 14043.61.

(11) The provider submits claims for payment for services,
goods, supplies, or merchandise rendered at a location other than
the business address or addresses listed on the application for
enrollment, unless the practice of the provider’s profession or
delivery of services, goods, supplies, or merchandise is such that
services, goods, supplies, or merchandise are rendered or delivered
at locations other than the business address and this practice or
delivery of services, goods, supplies, or merchandise has been
disclosed in the application package approved by the department
when the provisional provider status was granted.

(12) The provider has not paid its fine, or has a debt due and
owing, including overpayments and penalty assessments, to any
federal, state, or local government entity that relates to Medicare,
medicaid, Medi-Cal, or any other federal or state health care
program, and has not made satisfactory arrangements to fulfill the
obligation or otherwise been excused by legal process from
fulfilling the obligation.

(d) If, during a provisional provider status period or a preferred
provisional provider status period, the department conducts any
announced or unannounced visits or any additional inspections or
reviews pursuant to this chapter or Chapter 8 (commencing with
Section 14200), or the regulations adopted thereunder, and
commences an investigation for fraud or abuse, or discovers or
otherwise determines that the provider is under investigation for
fraud or abuse by any other state, local, or federal government law
enforcement agency, the provider shall be subject to termination
of provisional provider status or preferred provisional provider
status, regardless of whether the period of time for which the
provisional provider status or preferred provisional provider status
was granted under Section 14043.26 has elapsed.

(e) A provider whose provisional provider status or preferred
provisional provider status has been terminated pursuant to this
section may appeal the termination in accordance with Section
14043.65.

(f) Any department-recovered fine or debt due and owing,
including overpayments, that are subsequently determined to have
been erroneously collected shall be promptly refunded to the
provider, together with interest paid in accordance with subdivision
(e) of Section 14171 and Section 14172.5.