Amended in Assembly July 7, 2015

Amended in Assembly June 23, 2015

Amended in Senate April 22, 2015

Amended in Senate March 26, 2015

Senate Bill No. 323

Introduced by Senator Hernandez

(Principal coauthor: Assembly Member Eggman)

(Coauthor: Assembly Member Mark Stone)

February 23, 2015

An act to amend Sections 650.01 and 805 of, to amend and renumber Section 2837 of, and to add Section 2837 to, the Business and Professions Code, relating to healing arts.

LEGISLATIVE COUNSEL’S DIGEST

SB 323, as amended, Hernandez. Nurse practitioners: scope of practice.

The Nursing Practice Act provides for the licensure and regulation of nurse practitioners by the Board of Registered Nursing. The act authorizes the implementation of standardized procedures that authorize a nurse practitioner to perform certain acts, including ordering durable medical equipment in accordance with standardized procedures, certifying disability for purposes of unemployment insurance after physical examination and collaboration with a physician and surgeon, and, for an individual receiving home health services or personal care services, approving, signing, modifying, or adding to a plan of treatment or plan of care after consultation with a physician and surgeon. A violation of those provisions is a crime.

This bill would authorize a nurse practitioner who holds a national certification from a national certifying body recognized by the board to practice without the supervision of a physician and surgeon, if the nurse practitioner meets existing requirements for nurse practitioners and practices in one of certain specified settings. The bill would begin insert prohibit entities described in those specified settings from interfering with, controlling, or otherwise directing the professional judgment of such a nurse practitioner, as specified, and would end insert authorize such a nurse practitioner, in addition to any other practice authorized in statute or regulation, to perform specified acts, including the acts described above, without reference to standardized procedures or the specific need for the supervision of a physician and surgeon. The bill, instead, would require a nurse practitioner to refer a patient to a physician and surgeon or other licensed health care provider if a situation or condition of the patient is beyond the scope of the nurse practitioner’s education and training. The bill would require a nurse practitioner practicing under these provisions to maintain professional liability insurance appropriate for the practice setting. By imposing new requirements on nurse practitioners, the violation of which would be a crime, this bill would impose a state-mandated local program.

Existing law prohibits a licensee, as defined, from referring a person for laboratory, diagnostic, nuclear medicine, radiation oncology, physical therapy, physical rehabilitation, psychometric testing, home infusion therapy, or diagnostic imaging goods or services if the licensee or his or her immediate family has a financial interest with the person or entity that receives the referral, and makes a violation of that prohibition punishable as a misdemeanor. Under existing law, the Medical Board of California is required to review the facts and circumstances of any conviction for violating the prohibition, and to take appropriate disciplinary action if the licensee has committed unprofessional conduct.

This bill would include a nurse practitioner, as specified, under the definition of a licensee, which would expand the scope of an existing crime and therefore impose a state-mandated local program. The bill would also require the Board of Registered Nursing to review the facts and circumstances of any conviction of a nurse practitioner, as specified, for violating that prohibition, and would require the board to take appropriate disciplinary action if the nurse practitioner has committed unprofessional conduct.

Existing law provides for the professional review of specified healing arts licentiates through a peer review process. Existing law defines the term “licentiate” for those purposes to include, among others, a physician and surgeon.

This bill would include a nurse practitioner, as specified, under the definition of licentiate, and would require the Board of Registered Nursing to disclose reports, as specified.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

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

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

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) Nurse practitioners are a longstanding, vital, safe, effective,
and important part of the state’s health care delivery system. They
are especially important given California’s shortage of physicians,
with just 16 of 58 counties having the federally recommended ratio
of physicians to residents.

(b) Nurse practitioners will play an especially important part in
the implementation of the federal Patient Protection and Affordable
Care Act (Public Law 111-148), which will bring an estimated
five million more Californians into the health care delivery system,
because they will provide for greater access to primary care
services in all areas of the state. This is particularly true for patients
in medically underserved urban and rural communities.

(c) Due to the excellent safety and efficacy record that nurse
practitioners have earned, the Institute of Medicine of the National
Academies has recommended full practice authority for nurse
practitioners. Currently, 20 states allow nurse practitioners to
practice to the full extent of their training and education.

(d) Furthermore, nurse practitioners will assist in addressing
the primary care provider shortage by removing delays in the
provision of care that are created when dated regulations require
a physician’s signature or protocol before a patient can initiate
treatment or obtain diagnostic tests that are ordered by a nurse
practitioner.

SEC. 2.  

Section 650.01 of the Business and Professions Code
is amended to read:

650.01.  

(a) Notwithstanding Section 650, or any other
provision of law, it is unlawful for a licensee to refer a person for
laboratory, diagnostic nuclear medicine, radiation oncology,
physical therapy, physical rehabilitation, psychometric testing,
home infusion therapy, or diagnostic imaging goods or services if
the licensee or his or her immediate family has a financial interest
with the person or in the entity that receives the referral.

(b) For purposes of this section and Section 650.02, the
following shall apply:

(1) “Diagnostic imaging” includes, but is not limited to, all
X-ray, computed axial tomography, magnetic resonance imaging
nuclear medicine, positron emission tomography, mammography,
and ultrasound goods and services.

(2) A “financial interest” includes, but is not limited to, any
type of ownership interest, debt, loan, lease, compensation,
remuneration, discount, rebate, refund, dividend, distribution,
subsidy, or other form of direct or indirect payment, whether in
money or otherwise, between a licensee and a person or entity to
whom the licensee refers a person for a good or service specified
in subdivision (a). A financial interest also exists if there is an
indirect financial relationship between a licensee and the referral
recipient including, but not limited to, an arrangement whereby a
licensee has an ownership interest in an entity that leases property
to the referral recipient. Any financial interest transferred by a
licensee to any person or entity or otherwise established in any
person or entity for the purpose of avoiding the prohibition of this
section shall be deemed a financial interest of the licensee. For
purposes of this paragraph, “direct or indirect payment” shall not
include a royalty or consulting fee received by a physician and
surgeon who has completed a recognized residency training
program in orthopedics from a manufacturer or distributor as a
result of his or her research and development of medical devices
and techniques for that manufacturer or distributor. For purposes
of this paragraph, “consulting fees” means those fees paid by the
manufacturer or distributor to a physician and surgeon who has
completed a recognized residency training program in orthopedics
only for his or her ongoing services in making refinements to his
or her medical devices or techniques marketed or distributed by
the manufacturer or distributor, if the manufacturer or distributor
does not own or control the facility to which the physician is
referring the patient. A “financial interest” shall not include the
receipt of capitation payments or other fixed amounts that are
prepaid in exchange for a promise of a licensee to provide specified
health care services to specified beneficiaries. A “financial interest”
shall not include the receipt of remuneration by a medical director
of a hospice, as defined in Section 1746 of the Health and Safety
Code, for specified services if the arrangement is set out in writing,
and specifies all services to be provided by the medical director,
the term of the arrangement is for at least one year, and the
compensation to be paid over the term of the arrangement is set
in advance, does not exceed fair market value, and is not
determined in a manner that takes into account the volume or value
of any referrals or other business generated between parties.

(3) For the purposes of this section, “immediate family” includes
the spouse and children of the licensee, the parents of the licensee,
and the spouses of the children of the licensee.

(4) “Licensee” means a physician as defined in Section 3209.3
of the Labor Code, and a nurse practitioner practicing pursuant to
Section 2837.

(5) “Licensee’s office” means either of the following:

(A) An office of a licensee in solo practice.

(B) An office in which services or goods are personally provided
by the licensee or by employees in that office, or personally by
independent contractors in that office, in accordance with other
provisions of law. Employees and independent contractors shall
be licensed or certified when licensure or certification is required
by law.

(6) “Office of a group practice” means an office or offices in
which two or more licensees are legally organized as a partnership,
professional corporation, or not-for-profit corporation, licensed
pursuant to subdivision (a) of Section 1204 of the Health and Safety
Code, for which all of the following apply:

(A) Each licensee who is a member of the group provides
substantially the full range of services that the licensee routinely
provides, including medical care, consultation, diagnosis, or
treatment through the joint use of shared office space, facilities,
equipment, and personnel.

(B) Substantially all of the services of the licensees who are
members of the group are provided through the group and are
billed in the name of the group and amounts so received are treated
as receipts of the group, except in the case of a multispecialty
clinic, as defined in subdivision (l) of Section 1206 of the Health
and Safety Code, physician services are billed in the name of the
multispecialty clinic and amounts so received are treated as receipts
of the multispecialty clinic.

(C) The overhead expenses of, and the income from, the practice
are distributed in accordance with methods previously determined
by members of the group.

(c) It is unlawful for a licensee to enter into an arrangement or
scheme, such as a cross-referral arrangement, that the licensee
knows, or should know, has a principal purpose of ensuring
referrals by the licensee to a particular entity that, if the licensee
directly made referrals to that entity, would be in violation of this
section.

(d) No claim for payment shall be presented by an entity to any
individual, third party payer, or other entity for a good or service
furnished pursuant to a referral prohibited under this section.

(e) No insurer, self-insurer, or other payer shall pay a charge or
lien for any good or service resulting from a referral in violation
of this section.

(f) A licensee who refers a person to, or seeks consultation from,
an organization in which the licensee has a financial interest, other
than as prohibited by subdivision (a), shall disclose the financial
interest to the patient, or the parent or legal guardian of the patient,
in writing, at the time of the referral or request for consultation.

(1) If a referral, billing, or other solicitation is between one or
more licensees who contract with a multispecialty clinic pursuant
to subdivision (l) of Section 1206 of the Health and Safety Code
or who conduct their practice as members of the same professional
corporation or partnership, and the services are rendered on the
same physical premises, or under the same professional corporation
or partnership name, the requirements of this subdivision may be
met by posting a conspicuous disclosure statement at the
registration area or by providing a patient with a written disclosure
statement.

(2) If a licensee is under contract with the Department of
Corrections or the California Youth Authority, and the patient is
an inmate or parolee of either respective department, the
requirements of this subdivision shall be satisfied by disclosing
financial interests to either the Department of Corrections or the
California Youth Authority.

(g) A violation of subdivision (a) shall be a misdemeanor. In
the case of a licensee who is a physician, the Medical Board of
California shall review the facts and circumstances of any
conviction pursuant to subdivision (a) and take appropriate
disciplinary action if the licensee has committed unprofessional
conduct. In the case of a licensee who is a nurse practitioner
functioning pursuant to Section 2837, the Board of Registered
Nursing shall review the facts and circumstances of any conviction
pursuant to subdivision (a) and take appropriate disciplinary action
if the licensee has committed unprofessional conduct. Violations
of this section may also be subject to civil penalties of up to five
thousand dollars ($5,000) for each offense, which may be enforced
by the Insurance Commissioner, Attorney General, or a district
attorney. A violation of subdivision (c), (d), or (e) is a public
offense and is punishable upon conviction by a fine not exceeding
fifteen thousand dollars ($15,000) for each violation and
appropriate disciplinary action, including revocation of professional
licensure, by the Medical Board of California, the Board of
Registered Nursing, or other appropriate governmental agency.

(h) This section shall not apply to referrals for services that are
described in and covered by Sections 139.3 and 139.31 of the
Labor Code.

(i) This section shall become operative on January 1, 1995.

SEC. 3.  

Section 805 of the Business and Professions Code is
amended to read:

805.  

(a) As used in this section, the following terms have the
following definitions:

(1) (A) “Peer review” means both of the following:

(i) A process in which a peer review body reviews the basic
qualifications, staff privileges, employment, medical outcomes,
or professional conduct of licentiates to make recommendations
for quality improvement and education, if necessary, in order to
do either or both of the following:

(I) Determine whether a licentiate may practice or continue to
practice in a health care facility, clinic, or other setting providing
medical services, and, if so, to determine the parameters of that
practice.

(II) Assess and improve the quality of care rendered in a health
care facility, clinic, or other setting providing medical services.

(ii) Any other activities of a peer review body as specified in
subparagraph (B).

(B) “Peer review body” includes:

(i) A medical or professional staff of any health care facility or
clinic licensed under Division 2 (commencing with Section 1200)
of the Health and Safety Code or of a facility certified to participate
in the federal Medicare program as an ambulatory surgical center.

(ii) A health care service plan licensed under Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and
Safety Code or a disability insurer that contracts with licentiates
to provide services at alternative rates of payment pursuant to
Section 10133 of the Insurance Code.

(iii) Any medical, psychological, marriage and family therapy,
social work, professional clinical counselor, dental, or podiatric
professional society having as members at least 25 percent of the
eligible licentiates in the area in which it functions (which must
include at least one county), which is not organized for profit and
which has been determined to be exempt from taxes pursuant to
Section 23701 of the Revenue and Taxation Code.

(iv) A committee organized by any entity consisting of or
employing more than 25 licentiates of the same class that functions
for the purpose of reviewing the quality of professional care
provided by members or employees of that entity.

(2) “Licentiate” means a physician and surgeon, doctor of
podiatric medicine, clinical psychologist, marriage and family
therapist, clinical social worker, professional clinical counselor,
dentist, physician assistant, or nurse practitioner practicing pursuant
to Section 2837. “Licentiate” also includes a person authorized to
practice medicine pursuant to Section 2113 or 2168.

(3) “Agency” means the relevant state licensing agency having
regulatory jurisdiction over the licentiates listed in paragraph (2).

(4) “Staff privileges” means any arrangement under which a
licentiate is allowed to practice in or provide care for patients in
a health facility. Those arrangements shall include, but are not
limited to, full staff privileges, active staff privileges, limited staff
privileges, auxiliary staff privileges, provisional staff privileges,
temporary staff privileges, courtesy staff privileges, locum tenens
arrangements, and contractual arrangements to provide professional
services, including, but not limited to, arrangements to provide
outpatient services.

(5) “Denial or termination of staff privileges, membership, or
employment” includes failure or refusal to renew a contract or to
renew, extend, or reestablish any staff privileges, if the action is
based on medical disciplinary cause or reason.

(6) “Medical disciplinary cause or reason” means that aspect
of a licentiate’s competence or professional conduct that is
reasonably likely to be detrimental to patient safety or to the
delivery of patient care.

(7) “805 report” means the written report required under
subdivision (b).

(b) The chief of staff of a medical or professional staff or other
chief executive officer, medical director, or administrator of any
peer review body and the chief executive officer or administrator
of any licensed health care facility or clinic shall file an 805 report
with the relevant agency within 15 days after the effective date on
which any of the following occur as a result of an action of a peer
review body:

(1) A licentiate’s application for staff privileges or membership
is denied or rejected for a medical disciplinary cause or reason.

(2) A licentiate’s membership, staff privileges, or employment
is terminated or revoked for a medical disciplinary cause or reason.

(3) Restrictions are imposed, or voluntarily accepted, on staff
privileges, membership, or employment for a cumulative total of
30 days or more for any 12-month period, for a medical disciplinary
cause or reason.

(c) If a licentiate takes any action listed in paragraph (1), (2),
or (3) after receiving notice of a pending investigation initiated
for a medical disciplinary cause or reason or after receiving notice
that his or her application for membership or staff privileges is
denied or will be denied for a medical disciplinary cause or reason,
the chief of staff of a medical or professional staff or other chief
executive officer, medical director, or administrator of any peer
review body and the chief executive officer or administrator of
any licensed health care facility or clinic where the licentiate is
employed or has staff privileges or membership or where the
licentiate applied for staff privileges or membership, or sought the
renewal thereof, shall file an 805 report with the relevant agency
within 15 days after the licentiate takes the action.

(1) Resigns or takes a leave of absence from membership, staff
privileges, or employment.

(2) Withdraws or abandons his or her application for staff
privileges or membership.

(3) Withdraws or abandons his or her request for renewal of
staff privileges or membership.

(d) For purposes of filing an 805 report, the signature of at least
one of the individuals indicated in subdivision (b) or (c) on the
completed form shall constitute compliance with the requirement
to file the report.

(e) An 805 report shall also be filed within 15 days following
the imposition of summary suspension of staff privileges,
membership, or employment, if the summary suspension remains
in effect for a period in excess of 14 days.

(f) A copy of the 805 report, and a notice advising the licentiate
of his or her right to submit additional statements or other
information, electronically or otherwise, pursuant to Section 800,
shall be sent by the peer review body to the licentiate named in
the report. The notice shall also advise the licentiate that
information submitted electronically will be publicly disclosed to
those who request the information.

The information to be reported in an 805 report shall include the
name and license number of the licentiate involved, a description
of the facts and circumstances of the medical disciplinary cause
or reason, and any other relevant information deemed appropriate
by the reporter.

A supplemental report shall also be made within 30 days
following the date the licentiate is deemed to have satisfied any
terms, conditions, or sanctions imposed as disciplinary action by
the reporting peer review body. In performing its dissemination
functions required by Section 805.5, the agency shall include a
copy of a supplemental report, if any, whenever it furnishes a copy
of the original 805 report.

If another peer review body is required to file an 805 report, a
health care service plan is not required to file a separate report
with respect to action attributable to the same medical disciplinary
cause or reason. If the Medical Board of California, the Board of
Registered Nursing, or a licensing agency of another state revokes
or suspends, without a stay, the license of a physician and surgeon,
a peer review body is not required to file an 805 report when it
takes an action as a result of the revocation or suspension.

(g) The reporting required by this section shall not act as a
waiver of confidentiality of medical records and committee reports.
The information reported or disclosed shall be kept confidential
except as provided in subdivision (c) of Section 800 and Sections
803.1 and 2027, provided that a copy of the report containing the
information required by this section may be disclosed as required
by Section 805.5 with respect to reports received on or after
January 1, 1976.

(h) The Medical Board of California, the Osteopathic Medical
Board of California, the Board of Registered Nursing, and the
Dental Board of California shall disclose reports as required by
Section 805.5.

(i) An 805 report shall be maintained electronically by an agency
for dissemination purposes for a period of three years after receipt.

(j) No person shall incur any civil or criminal liability as the
result of making any report required by this section.

(k) A willful failure to file an 805 report by any person who is
designated or otherwise required by law to file an 805 report is
punishable by a fine not to exceed one hundred thousand dollars
($100,000) per violation. The fine may be imposed in any civil or
administrative action or proceeding brought by or on behalf of any
agency having regulatory jurisdiction over the person regarding
whom the report was or should have been filed. If the person who
is designated or otherwise required to file an 805 report is a
licensed physician and surgeon, the action or proceeding shall be
brought by the Medical Board of California. The fine shall be paid
to that agency but not expended until appropriated by the
Legislature. A violation of this subdivision may constitute
unprofessional conduct by the licentiate. A person who is alleged
to have violated this subdivision may assert any defense available
at law. As used in this subdivision, “willful” means a voluntary
and intentional violation of a known legal duty.

(l) Except as otherwise provided in subdivision (k), any failure
by the administrator of any peer review body, the chief executive
officer or administrator of any health care facility, or any person
who is designated or otherwise required by law to file an 805
report, shall be punishable by a fine that under no circumstances
shall exceed fifty thousand dollars ($50,000) per violation. The
fine may be imposed in any civil or administrative action or
proceeding brought by or on behalf of any agency having
regulatory jurisdiction over the person regarding whom the report
was or should have been filed. If the person who is designated or
otherwise required to file an 805 report is a licensed physician and
surgeon, the action or proceeding shall be brought by the Medical
Board of California. The fine shall be paid to that agency but not
expended until appropriated by the Legislature. The amount of the
fine imposed, not exceeding fifty thousand dollars ($50,000) per
violation, shall be proportional to the severity of the failure to
report and shall differ based upon written findings, including
whether the failure to file caused harm to a patient or created a
risk to patient safety; whether the administrator of any peer review
body, the chief executive officer or administrator of any health
care facility, or any person who is designated or otherwise required
by law to file an 805 report exercised due diligence despite the
failure to file or whether they knew or should have known that an
805 report would not be filed; and whether there has been a prior
failure to file an 805 report. The amount of the fine imposed may
also differ based on whether a health care facility is a small or
rural hospital as defined in Section 124840 of the Health and Safety
Code.

(m) A health care service plan licensed under Chapter 2.2
(commencing with Section 1340) of Division 2 of the Health and
Safety Code or a disability insurer that negotiates and enters into
a contract with licentiates to provide services at alternative rates
of payment pursuant to Section 10133 of the Insurance Code, when
determining participation with the plan or insurer, shall evaluate,
on a case-by-case basis, licentiates who are the subject of an 805
report, and not automatically exclude or deselect these licentiates.

SEC. 4.  

Section 2837 of the Business and Professions Code is
amended and renumbered to read:

2837.5.  

Nothing in this article shall be construed to limit the
current scope of practice of a registered nurse authorized pursuant
to this chapter.

SEC. 5.  

Section 2837 is added to the Business and Professions
Code, to read:

2837.  

(a) Notwithstanding any other law, a nurse practitioner
who holds a national certification from a national certifying body
recognized by the board may practice under this section without
supervision of a physician and surgeon, if the nurse practitioner
meets all the requirements of this article and practices in one of
the following:

(1) A clinic as described in Chapter 1 (commencing with Section
1200) of Division 2 of the Health and Safety Code.

(2) A facility as described in Chapter 2 (commencing with
Section 1250) of Division 2 of the Health and Safety Code.

(3) A facility as described in Chapter 2.5 (commencing with
Section 1440) of Division 2 of the Health and Safety Code.

(4) An accountable care organization, as defined in Section
3022 of the federal Patient Protection and Affordable Care Act
(Public Law 111-148).

(5) A group practice, including a professional medical
corporation, begin insert as defined in Section 2406, end insert another form of
corporation controlled by physicians and surgeons, a medical
partnership, a medical foundation exempt from licensure, or another
lawfully organized group of physicians that delivers, furnishes, or
otherwise arranges for or provides health care services.

(6) A medical group, independent practice association, or any
similar association.

begin insert

(b) An entity described in subdivision (a) shall not interfere
with, control, or otherwise direct the professional judgment of a
nurse practitioner functioning pursuant to this section in a manner
prohibited by Section 2400 or any other law.

end insert begin delete

(b)

end delete

begin insert (c) end insert  Notwithstanding any other law, in addition to any other
practice authorized in statute or regulation, a nurse practitioner
who meets the qualifications of subdivision (a) may do any of the
following without physician and surgeon supervision:

(1) Order durable medical equipment. Notwithstanding that
authority, this paragraph shall not operate to limit the ability of a
third-party payer to require prior approval.

(2) After performance of a physical examination by the nurse
practitioner and collaboration, if necessary, with a physician and
surgeon, certify disability pursuant to Section 2708 of the
Unemployment Insurance Code.

(3) For individuals receiving home health services or personal
care services, after consultation, if necessary, with the treating
physician and surgeon, approve, sign, modify, or add to a plan of
treatment or plan of care.

(4) Assess patients, synthesize and analyze data, and apply
principles of health care.

(5) Manage the physical and psychosocial health status of
patients.

(6) Analyze multiple sources of data, identify a differential
diagnosis, and select, implement, and evaluate appropriate
treatment.

(7) Establish a diagnosis by client history, physical examination,
and other criteria, consistent with this section, for a plan of care.

(8) Order, furnish, prescribe, or procure drugs or devices.

(9) Delegate tasks to a medical assistant pursuant to Sections
1206.5, 2069, 2070, and 2071, and Article 2 of Chapter 3 of
Division 13 of Title 16 of the California Code of Regulations.

(10) Order hospice care, as appropriate.

(11) Order diagnostic procedures and utilize the findings or
results in treating the patient.

(12) Perform additional acts that require education and training
and that are recognized by the nursing profession as appropriate
to be performed by a nurse practitioner.

begin delete

(c)

end delete

begin insert ( end insert begin insert d) end insert  A nurse practitioner shall refer a patient to a physician and
surgeon or other licensed health care provider if a situation or
condition of the patient is beyond the scope of the education and
training of the nurse practitioner.

begin delete

(d)

end delete

begin insert ( end insert begin insert e) end insert  A nurse practitioner practicing under this section shall
maintain professional liability insurance appropriate for the practice
setting.

SEC. 6.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.