BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2747|
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THIRD READING
Bill No: AB 2747
Author: Hadley (R)
Amended: 8/1/16 in Senate
Vote: 21
SENATE HEALTH COMMITTEE: 8-0, 6/29/16
AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen,
Pan, Roth
NO VOTE RECORDED: Wolk
SENATE APPROPRIATIONS COMMITTEE: Senate rule 28.8
ASSEMBLY FLOOR: 79-0, 5/5/16 (Consent) - See last page for
vote
SUBJECT: Chronic dialysis clinics
SOURCE: Author
DIGEST: This bill requires the Department of Public Health
(DPH) to process a license application for a chronic dialysis
clinic, and conduct a licensure survey, within 90 days of
receiving an application, and to also conduct an unannounced
certification survey for the Centers for Medicare and Medicaid
Services (CMS) within 60 days after DPH receives approval from
CMS to conduct the CMS certification survey.
ANALYSIS:
Existing law:
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1)Licenses and regulates various clinics by DPH, including
primary care clinics as well as specialty clinics which
include: surgical clinics, chronic dialysis clinics, and
rehabilitation clinics.
2)Requires DPH to adopt reasonable rules and regulations as may
be necessary to enable DPH to carry out the purposes of
provisions of law governing the various types of clinics
licensed by DPH.
3)Requires chronic dialysis clinics to comply with federal
certification standards for an end stage renal disease clinic,
as specified, until DPH adopts regulations relating to the
provision of services by a chronic dialysis clinic.
4)Requires DPH, no later than 90 calendar days have receipt of a
home health agency application, to make every effort to
complete the application paperwork and conduct a licensure
survey, and to also make every effort to conduct an
unannounced certification survey for CMS within 90 days of
receipt of a letter from the agency notifying DPH of the
agency's readiness for the CMS certification survey.
This bill:
1)Requires DPH, within 90 calendar days after it receives an
initial and complete CDC application, to complete the
application paperwork and conduct a licensure survey, if
necessary, to inspect the clinic and evaluate the clinic's
compliance with state licensure requirements. Requires DPH to
forward its recommendation, if necessary, and all other
information, to CMS within the same 90 calendar days.
2)Requires DPH, for a chronic dialysis clinic (CDC) applicant
seeking to receive reimbursement under the Medicare or
Medi-Cal programs, to conduct an unannounced CMS certification
survey, if necessary, within 60 days after DPH receives
approval from CMS to conduct the certification survey.
3)Requires DPH, no later than 30 calendar days after the CMS
certification survey, to forward the results of its licensure
and certification surveys and all other information necessary
for certification to CMS.
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4)Makes various legislative findings and declarations, including
the following:
a) New dialysis facilities in California are being required
to wait nine months or longer to be licensed by DPH and to
receive CMS certification surveys after they are otherwise
ready to serve patients;
b) The prevalence of dialysis in California is increasing
faster than the national average;
c) A dialysis center must be staffed prior to requesting a
survey, which means that the center is bearing the cost of
staff for nine months or more before it can serve patients;
d) It would require less than one full-time equivalent
staff member to eliminate the current backlog of
approximately 20 new dialysis centers; and,
e) It is the intent of the Legislature in enacting this
bill to require expeditious licensure and Medicare
certification surveys for new dialysis clinics in
California.
Comments
1)Author's statement. According to the author, there is a
dialysis center in his district which has been fully
operational since January of 2015, and has still not been
inspected. The author states that it is unconscionable that
patients are denied medically necessary facilities due to
inspection backlogs. This bill will remedy this problem by
giving dialysis centers a reasonable wait time for
certification.
2)Chronic dialysis clinics and the timeline for licensure and
certification. A CDC provides care for the treatment of
patients with end-stage renal disease (ESRD), including renal
dialysis services. ESRD, also known as end-stage kidney
disease or kidney failure, is when the kidneys, which remove
waste and excess water from the body, are no longer able to
work at a level needed for day-to-day life. The most common
causes of ESRD in the United States are diabetes and high
blood pressure. Dialysis does some of the job of the kidneys
when they stop working, including removing extra salt, water,
and waste products so they do not build up in the body. A
typical patient with ESRD will need to go to a CDC three times
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a week for dialysis treatment, with each treatment taking
about four hours. According to data from the United States
Renal Data System, there is wide variation in the prevalence
of ESRD throughout the United States, with the lowest rates in
New England, and the highest rates in the Ohio and Mississippi
River valleys, the Southeast, Texas and California.
According to DPH, there are currently 534 licensed CDCs in
California, and 13 CDC applicants awaiting their initial
licensure survey. The length of time these 13 applications
have been pending range from 51 days to more than 400 days.
There are also 30 CDCs that have been licensed, but are
awaiting the CMS certification survey. According to DPH, it
cannot proceed with the CMS certification survey until it has
received approval from CMS, and the average length of time to
receive approval to schedule a CMS survey is 307 days from
when CMS is notified that a CDC is ready for the certification
survey. Once DPH receives the approval from CMS, the CDC is
informed that there will be an unannounced survey within one
to two months. A CDC may apply for a priority exemption
request from CMS to shorten this wait, but DPH states that
these are rarely granted, except in areas where the CDC can
demonstrate a shortage of providers.
3)History of concern with DPH's Licensing and Certification
Program. DPH's Licensing and Certification Program (L&C)
licenses and regulates numerous categories of health
facilities and agencies, including hospitals, skilled nursing
facilities, and clinics. In addition, CMS contracts with L&C
to evaluate facilities to certify that they meet federal
requirements to become Medicare and Medi-Cal providers. L&C
performs these functions directly, through various field
offices, in most of the state, but contracts with Los Angeles
County for the licensing and CMS certification function of
health facilities located in Los Angeles County. There have
been long-standing concerns about the L&C program, especially
with regard to complaint investigation backlogs in long-term
care facilities, and it has been the subject of multiple
legislative oversight hearings, including by the Senate Budget
and Fiscal Review Subcommittee No. 3, as well as an audit by
the California State Auditor in 2014. A lack of an adequate
number of health facility evaluator nurses to perform
licensing and certification surveys and to work on complaint
investigations was identified as part of these oversight
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hearings, and the 2015-2016 Budget included an increase in
expenditure authority to add 237 positions to address the
licensing and certification workload. The contract with Los
Angeles County was also increased to provide additional
resources for L&C activities in Los Angeles County. Budget
trailer bill language was adopted that focused on shortening
the timeline to investigate complaints in long-term care
facilities. While L&C has hired many new health facility
evaluator nurses, there are still a number of vacant
positions, and they are working to improve efforts to fill
these positions.
4)CMS survey policies. According to DPH, this bill's
requirement that it conduct a CMS certification survey within
90 days of notification by the CDC is in conflict with the
requirement that CMS approve a CDC for a survey prior to DPH
performing the unannounced certification survey. DPH reports
that it currently takes an average of 307 days for CMS to
issue this approval, and even then, because it must be
unannounced, the survey cannot take place immediately. CMS
directs states to prioritize federal survey functions in four
priority "tiers." Tier 1 consists of statutory mandates, such
as surveys of existing nursing homes and home health agencies.
Most initial surveys for providers seeking to participate in
Medicare or Medicaid for the first time are prioritized in
Tier 4, compared to complaint investigations and
recertification of existing providers. Because of the unique
reliance of dialysis patients on Medicare, CMS does grant end
stage renal disease facilities, or CDCs in California, a
higher priority than most other provider types by placing them
in Tier 3. Further, CMS has a priority exception request
procedure which allows providers to apply for an exception to
their tier assignment if lack of CMS certification would
"cause significant access-to-care problems for beneficiaries
served by the provider."
Related/Prior Legislation
SB 534 (Hernandez of 2015), among other provisions, required
CDC's to comply with applicable federal certification standards
for end stage renal disease clinics until DPH adopts regulations
relating to the provision of services by a CDC. SB 534 was held
on the Senate Appropriations suspense file.
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AB 993 (Aghazarian, Chapter 620, Statutes of 2007), among other
provisions, required DPH, no later than 90 calendar days after
receipt of a home health agency application, to make every
effort to complete the application paperwork and conduct a
licensure survey, and to also make every effort to conduct an
unannounced certification survey for CMS within 90 days of
receipt of a letter from the agency notifying DPH of the
agency's readiness for the CMS certification survey.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified 8/10/16)
California Dialysis Council
DaVita
Fresenius Medical Care
Kaiser Permanente
Renal Support Network
U.S. Renal Care
One Individual
OPPOSITION: (Verified8/10/16)
Department of Public Health
ARGUMENTS IN SUPPORT: This bill is supported by Fresenius
Medical Care (FMC), which states that according to the most
recent United States Renal Data Systems annual report, the
number of Californians with ESRD has grown more than 36% in the
past decade. FMC states that it operates more than 140 CDCs in
California, but currently has 5 facilities that have been
waiting since before August 2015 for their licensure and
certification surveys. The California Dialysis Council states in
support that this bill is an important step in ensuring that
California has enough dialysis clinics for the increasing
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California population. Kaiser Permanente states in support that
expedited DPH completion of application paperwork, licensure and
certification surveys, and coordination with CMS would
facilitate timely CMS certification of newly built dialysis
centers, which would in turn positively affect its ability to
place dialysis patients promptly and appropriately. DaVita and
U.S. Renal Care both state that recently constructed dialysis
clinics are waiting nine months or more for state licensure and
CMS certification surveys. Meanwhile, patients are driving long
distances to receive dialysis treatment while more convenient
new clinics sit idle, fully equipped and fully staffed, waiting
for DPH to conduct licensure and certification surveys.
ARGUMENTS IN OPPOSITION: This bill is opposed by DPH, which
states that mandatory timelines for processing initial licenses
and for completing the certification survey for health
facilities removes needed flexibility for DPH to prioritize
critical workload in a way that best protects patient safety.
DPH states that creating mandatory timeframes would elevate the
priority of initial licensing for CDC's at the expense of other
functions, such as complaint investigations and relicensing of
currently operating facilities.
ASSEMBLY FLOOR: 79-0, 5/5/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier,
Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger
Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey,
Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes,
McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,
O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Beth Gaines
Prepared by:Vince Marchand / HEALTH / (916) 651-4111
8/10/16 16:03:44
**** END ****
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