Amended in Senate April 14, 2015

Senate Bill No. 396

Introduced by Senator Hill

February 25, 2015

An act to amend Sections 805 and 805.5 of, and to add Section 2216.5 to, the Business and Professions Code, begin insert to amend Section 12529.7 of the Government Code, end insert and to amend Sections 1204, 1248.15, 1248.3, and 1248.35 of the Health and Safety Code, relating to health begin delete and care facilities. end delete begin insert care. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 396, as amended, Hill. Health begin delete and care facilities: end delete begin insert care: end insert outpatient settings and surgical begin delete clinics. end delete begin insert clinics: facilities: licensure and enforcement. end insert

Existing law provides for the licensure and regulation of clinics by the State Department of Public Health. A violation of those provisions is a misdemeanor. Existing law provides that certain types of specialty clinics, including surgical clinics, as defined, are eligible for licensure. begin insert Existing law excludes from the definition of surgical clinic any place or establishment owned or leased and operated as a clinic or office by one or more physicians or dentists in individual or group practice. Existing law requires a surgical clinic that is licensed or seeking licensure to comply with federal certification standards for an ambulatory surgical clinic until the department adopts regulations relating to the provision of services by a surgical clinic. end insert

This bill would begin delete clarify end delete begin insert provide end insert that a surgical clinic begin insert that has met the federal certification standards and requirements for an ambulatory surgical clinic end insert is eligible for licensure by the department regardless of physician begin insert , podiatrist, end insert or dentist ownership. begin insert The bill would provide that a surgical clinic is deemed to have met the licensure requirements under the chapter upon presenting documentation, within a 3-year period, that the surgical clinic has met the federal certification requirements for an ambulatory surgical clinic. end insert

The Medical Practice Act provides for the licensure and regulation of physicians and surgeons by the Medical Board of California. Existing law provides that it is unprofessional conduct for a physician and surgeon to perform procedures in any outpatient setting except in compliance with specified provisions. Existing law prohibits an association, corporation, firm, partnership, or person from operating, managing, conducting, or maintaining an outpatient setting in the state unless the setting is one of the specified settings, which includes, among others, begin insert an ambulatory surgical clinic that is certified to participate in the Medicare program, end insert a surgical clinic licensed by the State Department of Public begin delete Health end delete begin insert Health, end insert or an outpatient setting accredited by an accreditation agency approved by the Division of Licensing of the Medical Board of California.

Existing law provides that an outpatient setting that is accredited shall be inspected by the accreditation agency and may be inspected by the Medical Board of California. Existing law requires that the inspections be conducted no less often than once every 3 years by the accreditation agency and as often as necessary by the Medical Board of California to ensure quality of care provided. Existing law requires that certificates for accreditation issued to outpatient settings by an accreditation agency shall be valid for not more than 3 years.

This bill would require that all subsequent inspections after the initial inspection for accreditation be unannounced. This bill would require an outpatient setting accredited by the division begin insert and a facility certified to participate in the federal Medicare program as an ambulatory surgical center end insert to pay certain fees and to comply with certain data submission requirements. The bill would also instead require that an initial certificate of accreditation by an accreditation agency be valid for not more than 2 years and that a renewal certificate be valid for not more than 3 years.

Existing law requires members of the medical staff and other practitioners who are granted clinical privileges in an outpatient setting to be professionally qualified and appropriately credentialed for the performance of privileges granted and requires the outpatient setting to grant privileges in accordance with recommendations from qualified health professionals, and credentialing standards established by the outpatient setting.

This bill would additionally require that each begin delete physician and surgeon end delete begin insert licensee end insert who performs procedures in an outpatient setting that requires the outpatient setting to be accredited be peer reviewed begin insert , at least every 2 years, end insert by begin delete California licensed physicians end delete begin insert licensees end insert who are qualified by education begin insert and end insert experience to perform the same types of begin insert , or similar end insert procedures. begin insert The bill would require the findings of the peer review to be reported to the accrediting body who shall determine if the licensee continues to be professionally qualified and appropriately credentialed for the performance of privileges granted. end insert By expanding the scope of a crime, this bill would impose a state-mandated local program.

Existing law requires specified entities, including any health care service plan or medical care foundation, to request a report from the Medical Board of California, the Board of Psychology, the Osteopathic Medical Board of California, or the Dental Board of California, prior to granting or renewing staff privileges, to determine if a certain report has been made indicating that the applying physician and surgeon, psychologist, podiatrist, or dentist has been denied staff privileges, been removed from a medical staff, or had his or her staff privileges restricted.

This bill would also require an outpatient setting and a facility certified to participate in the federal Medicare program as an ambulatory surgical center to request that report. By expanding the scope of a crime, this bill would impose a state-mandated local program.

begin insert

Existing law establishes a vertical enforcement and prosecution model for cases before the Medical Board of California, and requires the board to report to the Governor and the Legislature on that model by March 1, 2015.

end insert begin insert

This bill would extend the date that report is due to March 1, 2016.

end insert

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.  

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 begin delete facility or end delete
begin insert facility, of a end insert clinic licensed under Division 2 (commencing with
Section 1200) of the Health and Safety Code, of a facility certified
to participate in the federal Medicare program as an ambulatory
surgical center, or of an outpatient setting accredited pursuant to
Section 1248.1 of the Health and Safety Code.

(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, or physician assistant. “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 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, 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. 2.  

Section 805.5 of the Business and Professions Code
is amended to read:

805.5.  

(a) Prior to granting or renewing staff privileges for
any physician and surgeon, psychologist, podiatrist, or dentist, any
health facility licensed pursuant to Division 2 (commencing with
Section 1200) of the Health and Safety Code, any health care
service plan or medical care foundation, the medical staff of the
institution, a facility certified to participate in the federal Medicare
program as an ambulatory surgical center, or an outpatient setting
accredited pursuant to Section 1248.1 of the Health and Safety
Code shall request a report from the Medical Board of California,
the Board of Psychology, the Osteopathic Medical Board of
California, or the Dental Board of California to determine if any
report has been made pursuant to Section 805 indicating that the
applying physician and surgeon, psychologist, podiatrist, or dentist
has been denied staff privileges, been removed from a medical
staff, or had his or her staff privileges restricted as provided in
Section 805. The request shall include the name and California
license number of the physician and surgeon, psychologist,
podiatrist, or dentist. Furnishing of a copy of the 805 report shall
not cause the 805 report to be a public record.

(b) Upon a request made by, or on behalf of, an institution
described in subdivision (a) or its medical staff the board shall
furnish a copy of any report made pursuant to Section 805 as well
as any additional exculpatory or explanatory information submitted
electronically to the board by the licensee pursuant to subdivision
(f) of that section. However, the board shall not send a copy of a
report (1) if the denial, removal, or restriction was imposed solely
because of the failure to complete medical records, (2) if the board
has found the information reported is without merit, (3) if a court
finds, in a final judgment, that the peer review, as defined in
Section 805, resulting in the report was conducted in bad faith and
the licensee who is the subject of the report notifies the board of
that finding, or (4) if a period of three years has elapsed since the
report was submitted. This three-year period shall be tolled during
any period the licentiate has obtained a judicial order precluding
disclosure of the report, unless the board is finally and permanently
precluded by judicial order from disclosing the report. If a request
is received by the board while the board is subject to a judicial
order limiting or precluding disclosure, the board shall provide a
disclosure to any qualified requesting party as soon as practicable
after the judicial order is no longer in force.

If the board fails to advise the institution within 30 working days
following its request for a report required by this section, the
institution may grant or renew staff privileges for the physician
and surgeon, psychologist, podiatrist, or dentist.

(c) Any institution described in subdivision (a) or its medical
staff that violates subdivision (a) is guilty of a misdemeanor and
shall be punished by a fine of not less than two hundred dollars
($200) nor more than one thousand two hundred dollars ($1,200).

SEC. 3.  

Section 2216.5 is added to the Business and Professions
Code, to read:

2216.5.  

An outpatient setting accredited pursuant to Section
1248.1 of the Health and Safety Code begin delete is end delete begin insert and a facility certified to
participate in the federal Medicare program as an ambulatory
surgical center are end insert subject to the requirements of Section begin delete 1216, end delete
begin insert 1216 of, end insert subdivision (f) of Section begin delete 127280, end delete begin insert 127280 of, Section
127285 of, end insert and Section 128737 begin delete of end delete begin insert of, end insert the Health and Safety Code.
begin insert Any fees collected pursuant to subdivision (f) of Section 127280
of the Health and Safety Code shall not exceed the reasonable
costs incurred by the Office of Statewide Health Planning and
Development in regulating the outpatient setting and the facility. end insert

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 12529.7 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

12529.7.  

By March 1, begin delete 2015, end delete begin insert 2016, end insert the Medical Board of
California, in consultation with the Department of Justice and the
Department of Consumer Affairs, shall report and make
recommendations to the Governor and the Legislature on the
vertical enforcement and prosecution model created under Section
12529.6.

begin delete SEC. 4. end delete
begin insert SEC. 5. end insert   

Section 1204 of the Health and Safety Code is amended
to read:

1204.  

Clinics eligible for licensure pursuant to this chapter are
primary care clinics and specialty clinics.

(a)  (1)  Only the following defined classes of primary care
clinics shall be eligible for licensure:

(A)  A “community clinic” means a clinic operated by a
tax-exempt nonprofit corporation that is supported and maintained
in whole or in part by donations, bequests, gifts, grants, government
funds or contributions, that may be in the form of money, goods,
or services. In a community clinic, any charges to the patient shall
be based on the patient’s ability to pay, utilizing a sliding fee scale.
No corporation other than 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, shall operate a community clinic;
provided, that the licensee of any community clinic so licensed on
the effective date of this section shall not be required to obtain
tax-exempt status under either federal or state law in order to be
eligible for, or as a condition of, renewal of its license. No natural
person or persons shall operate a community clinic.

(B)  A “free clinic” means a clinic operated by a tax-exempt,
nonprofit corporation supported in whole or in part by voluntary
donations, bequests, gifts, grants, government funds or
contributions, that may be in the form of money, goods, or services.
In a free clinic there shall be no charges directly to the patient for
services rendered or for drugs, medicines, appliances, or
apparatuses furnished. No corporation other than 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, shall operate
a free clinic; provided, that the licensee of any free clinic so
licensed on the effective date of this section shall not be required
to obtain tax-exempt status under either federal or state law in
order to be eligible for, or as a condition of, renewal of its license.
No natural person or persons shall operate a free clinic.

(2)  Nothing in this subdivision shall prohibit a community
clinic or a free clinic from providing services to patients whose
services are reimbursed by third-party payers, or from entering
into managed care contracts for services provided to private or
public health plan subscribers, as long as the clinic meets the
requirements identified in subparagraphs (A) and (B). For purposes
of this subdivision, any payments made to a community clinic by
a third-party payer, including, but not limited to, a health care
service plan, shall not constitute a charge to the patient. This
paragraph is a clarification of existing law.

(b)  The following types of specialty clinics shall be eligible for
licensure as specialty clinics pursuant to this chapter:

(1)  (A) A “surgical clinic” means a clinic that is not part of a
hospital and that provides ambulatory surgical care for patients
who remain less than 24 hours. A surgical clinic does not include
any place or establishment owned or leased and operated as a clinic
or office by one or more physicians begin insert , podiatrists, end insert or dentists in
individual or group practice, regardless of the name used publicly
to identify the place or establishment.

(B) A physician begin insert , podiatrist, end insert or dentist may, at his or her option,
apply for licensure. A surgical clinic shall be eligible for licensure
by the department regardless of physician begin insert , podiatrist, end insert or dentist
ownership. begin insert A surgical clinic that has met the federal certification
standards and requirements for an ambulatory surgical clinic, as
specified in Part 416 of Title 42 of the Code of Federal
Regulations, shall be eligible for licensure by the department
pursuant to this chapter. end insert

begin insert

(C) Until the department adopts regulations relating to the
provision of services by a surgical clinic pursuant to Section 1225,
a surgical clinic is deemed to have met the licensure requirements
under this chapter upon presenting documentation, within a
three-year period, that the surgical clinic has met the federal
certification standards for an ambulatory surgical clinic.

end insert

(2)  A “chronic dialysis clinic” means a clinic that provides less
than 24-hour care for the treatment of patients with end-stage renal
disease, including renal dialysis services.

(3)  A “rehabilitation clinic” means a clinic that, in addition to
providing medical services directly, also provides physical
rehabilitation services for patients who remain less than 24 hours.
Rehabilitation clinics shall provide at least two of the following
rehabilitation services: physical therapy, occupational therapy,
social, speech pathology, and audiology services. A rehabilitation
clinic does not include the offices of a private physician in
individual or group practice.

(4)  An “alternative birth center” means a clinic that is not part
of a hospital and that provides comprehensive perinatal services
and delivery care to pregnant women who remain less than 24
hours at the facility.

begin delete SEC. 5. end delete
begin insert SEC. 6. end insert   

Section 1248.15 of the Health and Safety Code is
amended to read:

1248.15.  

(a) The board shall adopt standards for accreditation
and, in approving accreditation agencies to perform accreditation
of outpatient settings, shall ensure that the certification program
shall, at a minimum, include standards for the following aspects
of the settings’ operations:

(1) Outpatient setting allied health staff shall be licensed or
certified to the extent required by state or federal law.

(2) (A) Outpatient settings shall have a system for facility safety
and emergency training requirements.

(B) There shall be onsite equipment, medication, and trained
personnel to facilitate handling of services sought or provided and
to facilitate handling of any medical emergency that may arise in
connection with services sought or provided.

(C) In order for procedures to be performed in an outpatient
setting as defined in Section 1248, the outpatient setting shall do
one of the following:

(i) Have a written transfer agreement with a local accredited or
licensed acute care hospital, approved by the facility’s medical
staff.

(ii) Permit surgery only by a licensee who has admitting
privileges at a local accredited or licensed acute care hospital, with
the exception that licensees who may be precluded from having
admitting privileges by their professional classification or other
administrative limitations, shall have a written transfer agreement
with licensees who have admitting privileges at local accredited
or licensed acute care hospitals.

(iii) Submit for approval by an accrediting agency a detailed
procedural plan for handling medical emergencies that shall be
reviewed at the time of accreditation. No reasonable plan shall be
disapproved by the accrediting agency.

(D) The outpatient setting shall submit for approval by an
accreditation agency at the time of accreditation a detailed plan,
standardized procedures, and protocols to be followed in the event
of serious complications or side effects from surgery that would
place a patient at high risk for injury or harm or to govern
emergency and urgent care situations. The plan shall include, at a
minimum, that if a patient is being transferred to a local accredited
or licensed acute care hospital, the outpatient setting shall do all
of the following:

(i) Notify the individual designated by the patient to be notified
in case of an emergency.

(ii) Ensure that the mode of transfer is consistent with the
patient’s medical condition.

(iii) Ensure that all relevant clinical information is documented
and accompanies the patient at the time of transfer.

(iv) Continue to provide appropriate care to the patient until the
transfer is effectuated.

(E) All physicians and surgeons transferring patients from an
outpatient setting shall agree to cooperate with the medical staff
peer review process on the transferred case, the results of which
shall be referred back to the outpatient setting, if deemed
appropriate by the medical staff peer review committee. If the
medical staff of the acute care facility determines that inappropriate
care was delivered at the outpatient setting, the acute care facility’s
peer review outcome shall be reported, as appropriate, to the
accrediting body or in accordance with existing law.

(3) The outpatient setting shall permit surgery by a dentist acting
within his or her scope of practice under Chapter 4 (commencing
with Section 1600) of Division 2 of the Business and Professions
Code or physician and surgeon, osteopathic physician and surgeon,
or podiatrist acting within his or her scope of practice under
Chapter 5 (commencing with Section 2000) of Division 2 of the
Business and Professions Code or the Osteopathic Initiative Act.
The outpatient setting may, in its discretion, permit anesthesia
service by a certified registered nurse anesthetist acting within his
or her scope of practice under Article 7 (commencing with Section
2825) of Chapter 6 of Division 2 of the Business and Professions
Code.

(4) Outpatient settings shall have a system for maintaining
clinical records.

(5) Outpatient settings shall have a system for patient care and
monitoring procedures.

(6) (A)  Outpatient settings shall have a system for quality
assessment and improvement.

(B) (i) Members of the medical staff and other practitioners
who are granted clinical privileges shall be professionally qualified
and appropriately credentialed for the performance of privileges
granted. The outpatient setting shall grant privileges in accordance
with recommendations from qualified health professionals, and
credentialing standards established by the outpatient setting.

(ii) Each begin delete physician and surgeon end delete begin insert licensee end insert who performs
procedures in an outpatient setting that requires the outpatient
setting to be accredited shall be begin insert , at least every two years, end insert peer
reviewed, as described in begin insert subparagraph (A) of paragraph (1) of
subdivision (a) of end insert Section 805 of the Business and Professions
Code, including when the outpatient setting has only begin delete one physician
and surgeon. end delete begin insert one licensee. end insert The peer review shall be performed by
begin delete California licensed physicians end delete begin insert licensees end insert who are qualified by
education begin insert and end insert experience to perform the same types of begin insert , or similar end insert
procedures. begin insert The findings of the peer review shall be reported to
the accrediting body who shall determine if the licensee continues
to meet the requirements described in clause (i). end insert

(C) Clinical privileges shall be periodically reappraised by the
outpatient setting. The scope of procedures performed in the
outpatient setting shall be periodically reviewed and amended as
appropriate.

(7) Outpatient settings regulated by this chapter that have
multiple service locations shall have all of the sites inspected.

(8) Outpatient settings shall post the certificate of accreditation
in a location readily visible to patients and staff.

(9) Outpatient settings shall post the name and telephone number
of the accrediting agency with instructions on the submission of
complaints in a location readily visible to patients and staff.

(10) Outpatient settings shall have a written discharge criteria.

(b) Outpatient settings shall have a minimum of two staff
persons on the premises, one of whom shall either be a licensed
physician and surgeon or a licensed health care professional with
current certification in advanced cardiac life support (ACLS), as
long as a patient is present who has not been discharged from
supervised care. Transfer to an unlicensed setting of a patient who
does not meet the discharge criteria adopted pursuant to paragraph
(10) of subdivision (a) shall constitute unprofessional conduct.

(c) An accreditation agency may include additional standards
in its determination to accredit outpatient settings if these are
approved by the board to protect the public health and safety.

(d) No accreditation standard adopted or approved by the board,
and no standard included in any certification program of any
accreditation agency approved by the board, shall serve to limit
the ability of any allied health care practitioner to provide services
within his or her full scope of practice. Notwithstanding this or
any other provision of law, each outpatient setting may limit the
privileges, or determine the privileges, within the appropriate scope
of practice, that will be afforded to physicians and allied health
care practitioners who practice at the facility, in accordance with
credentialing standards established by the outpatient setting in
compliance with this chapter. Privileges may not be arbitrarily
restricted based on category of licensure.

(e) The board shall adopt standards that it deems necessary for
outpatient settings that offer in vitro fertilization.

(f) The board may adopt regulations it deems necessary to
specify procedures that should be performed in an accredited
outpatient setting for facilities or clinics that are outside the
definition of outpatient setting as specified in Section 1248.

(g) As part of the accreditation process, the accrediting agency
shall conduct a reasonable investigation of the prior history of the
outpatient setting, including all licensed physicians and surgeons
who have an ownership interest therein, to determine whether there
have been any adverse accreditation decisions rendered against
them. For the purposes of this section, “conducting a reasonable
investigation” means querying the Medical Board of California
and the Osteopathic Medical Board of California to ascertain if
either the outpatient setting has, or, if its owners are licensed
physicians and surgeons, if those physicians and surgeons have,
been subject to an adverse accreditation decision.

begin delete SEC. 6. end delete
begin insert SEC. 7. end insert   

Section 1248.3 of the Health and Safety Code is
amended to read:

1248.3.  

(a)  An initial certificate of accreditation issued to an
outpatient setting by an accreditation agency shall be valid for not
more than two years, and a renewal certificate shall be valid for
not more than three years.

(b)  The outpatient setting shall notify the accreditation agency
within 30 days of any significant change in ownership, including,
but not limited to, a merger, change in majority interest,
consolidation, name change, change in scope of services, additional
services, or change in locations.

(c)  Except for disclosures to the division or to the Division of
Medical Quality under this chapter, an accreditation agency shall
not disclose information obtained in the performance of
accreditation activities under this chapter that individually identifies
patients, individual medical practitioners, or outpatient settings.
Neither the proceedings nor the records of an accreditation agency
or the proceedings and records of an outpatient setting related to
performance of quality assurance or accreditation activities under
this chapter shall be subject to discovery, nor shall the records or
proceedings be admissible in a court of law. The prohibition
relating to discovery and admissibility of records and proceedings
does not apply to any outpatient setting requesting accreditation
in the event that denial or revocation of that outpatient setting’s
accreditation is being contested. Nothing in this section shall
prohibit the accreditation agency from making discretionary
disclosures of information to an outpatient setting pertaining to
the accreditation of that outpatient setting.

begin delete SEC. 7. end delete
begin insert SEC. 8. end insert   

Section 1248.35 of the Health and Safety Code is
amended to read:

1248.35.  

(a) Every outpatient setting that is accredited shall
be inspected by the accreditation agency and may also be inspected
by the Medical Board of California. The Medical Board of
California shall ensure that accreditation agencies inspect outpatient
settings.

(b) Unless otherwise specified, the following requirements apply
to inspections described in subdivision (a).

(1) The frequency of inspection shall depend upon the type and
complexity of the outpatient setting to be inspected.

(2) Inspections shall be conducted no less often than once every
three years by the accreditation agency and as often as necessary
by the Medical Board of California to ensure the quality of care
provided. After the initial inspection for accreditation, all
subsequent inspections shall be unannounced.

(3) The Medical Board of California or the accreditation agency
may enter and inspect any outpatient setting that is accredited by
an accreditation agency at any reasonable time to ensure
compliance with, or investigate an alleged violation of, any
standard of the accreditation agency or any provision of this
chapter.

(c) If an accreditation agency determines, as a result of its
inspection, that an outpatient setting is not in compliance with the
standards under which it was approved, the accreditation agency
may do any of the following:

(1) Require correction of any identified deficiencies within a
set timeframe. Failure to comply shall result in the accrediting
agency issuing a reprimand or suspending or revoking the
outpatient setting’s accreditation.

(2) Issue a reprimand.

(3) Place the outpatient setting on probation, during which time
the setting shall successfully institute and complete a plan of
correction, approved by the board or the accreditation agency, to
correct the deficiencies.

(4) Suspend or revoke the outpatient setting’s certification of
accreditation.

(d) (1) Except as is otherwise provided in this subdivision,
before suspending or revoking a certificate of accreditation under
this chapter, the accreditation agency shall provide the outpatient
setting with notice of any deficiencies and the outpatient setting
shall agree with the accreditation agency on a plan of correction
that shall give the outpatient setting reasonable time to supply
information demonstrating compliance with the standards of the
accreditation agency in compliance with this chapter, as well as
the opportunity for a hearing on the matter upon the request of the
outpatient setting. During the allotted time to correct the
deficiencies, the plan of correction, which includes the deficiencies,
shall be conspicuously posted by the outpatient setting in a location
accessible to public view. Within 10 days after the adoption of the
plan of correction, the accrediting agency shall send a list of
deficiencies and the corrective action to be taken to the board and
to the California State Board of Pharmacy if an outpatient setting
is licensed pursuant to Article 14 (commencing with Section 4190)
of Chapter 9 of Division 2 of the Business and Professions Code.
The accreditation agency may immediately suspend the certificate
of accreditation before providing notice and an opportunity to be
heard, but only when failure to take the action may result in
imminent danger to the health of an individual. In such cases, the
accreditation agency shall provide subsequent notice and an
opportunity to be heard.

(2) If an outpatient setting does not comply with a corrective
action within a timeframe specified by the accrediting agency, the
accrediting agency shall issue a reprimand, and may either place
the outpatient setting on probation or suspend or revoke the
accreditation of the outpatient setting, and shall notify the board
of its action. This section shall not be deemed to prohibit an
outpatient setting that is unable to correct the deficiencies, as
specified in the plan of correction, for reasons beyond its control,
from voluntarily surrendering its accreditation prior to initiation
of any suspension or revocation proceeding.

(e) The accreditation agency shall, within 24 hours, report to
the board if the outpatient setting has been issued a reprimand or
if the outpatient setting’s certification of accreditation has been
suspended or revoked or if the outpatient setting has been placed
on probation. If an outpatient setting has been issued a license by
the California State Board of Pharmacy pursuant to Article 14
(commencing with Section 4190) of Chapter 9 of Division 2 of
the Business and Professions Code, the accreditation agency shall
also send this report to the California State Board of Pharmacy
within 24 hours.

(f) The accreditation agency, upon receipt of a complaint from
the board that an outpatient setting poses an immediate risk to
public safety, shall inspect the outpatient setting and report its
findings of inspection to the board within five business days. If an
accreditation agency receives any other complaint from the board,
it shall investigate the outpatient setting and report its findings of
investigation to the board within 30 days.

(g) Reports on the results of any inspection shall be kept on file
with the board and the accreditation agency along with the plan
of correction and the comments of the outpatient setting. The
inspection report may include a recommendation for reinspection.
All final inspection reports, which include the lists of deficiencies,
plans of correction or requirements for improvements and
correction, and corrective action completed, shall be public records
open to public inspection.

(h) If one accrediting agency denies accreditation, or revokes
or suspends the accreditation of an outpatient setting, this action
shall apply to all other accrediting agencies. An outpatient setting
that is denied accreditation is permitted to reapply for accreditation
with the same accrediting agency. The outpatient setting also may
apply for accreditation from another accrediting agency, but only
if it discloses the full accreditation report of the accrediting agency
that denied accreditation. Any outpatient setting that has been
denied accreditation shall disclose the accreditation report to any
other accrediting agency to which it submits an application. The
new accrediting agency shall ensure that all deficiencies have been
corrected and conduct a new onsite inspection consistent with the
standards specified in this chapter.

(i) If an outpatient setting’s certification of accreditation has
been suspended or revoked, or if the accreditation has been denied,
the accreditation agency shall do all of the following:

(1) Notify the board of the action.

(2) Send a notification letter to the outpatient setting of the
action. The notification letter shall state that the setting is no longer
allowed to perform procedures that require outpatient setting
accreditation.

(3) Require the outpatient setting to remove its accreditation
certification and to post the notification letter in a conspicuous
location, accessible to public view.

(j) The board may take any appropriate action it deems necessary
pursuant to Section 1248.7 if an outpatient setting’s certification
of accreditation has been suspended or revoked, or if accreditation
has been denied.

begin delete SEC. 8. end delete
begin insert SEC. 9. end insert   

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.