BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 396
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|AUTHOR: |Hill |
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|VERSION: |April 22, 2015 |
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|HEARING DATE: |April 29, 2015 | | |
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|CONSULTANT: |Vince Marchand |
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SUBJECT : Health care: outpatient settings and surgical clinics:
facilities: licensure and enforcement.
SUMMARY : Requires a surgical clinic to be eligible for licensure by the
California Department of Public Health regardless of physician
ownership, deems a surgical clinic to have met licensure
requirements if they are federally certified, requires
inspections of accredited outpatient surgical settings to be
unannounced, and requires both accredited and federally
certified surgical settings to be subject to the same reporting
requirements to the Office of Statewide Health Planning and
Development as licensed surgical clinics.
Existing law:
1.Licenses and regulates various clinics by the California
Department of Public Health (CDPH), including primary care
clinics as well as specialty clinics which include surgical
clinics.
2.Defines a "surgical clinic," for purposes of provisions of law
defining what types of clinics are eligible for licensure by
CDPH, as a clinic that is not part of a hospital and that
provides ambulatory surgical care for patients who remain less
than 24 hours. However, it exempts from this definition 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, but specifies that physicians or
dentists, may, at their option, apply for licensure.
3.Requires any licensed health facility, health care service
plan or medical care foundation, or the medical staff of the
institution, prior to granting or renewing staff privileges
for any physician, psychologist, podiatrist, or dentist, to
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request a report from the respective professional licensing
board to see if any report has been made pursuant to existing
provisions of law indicating that the licensee has been denied
staff privileges, removed from a medical staff, or had his or
her staff privileges restricted.
4.Requires, until CDPH adopts regulations relating to the
provision of services by certain clinics, including surgical
clinics, those clinics to comply with the federal
certification standards in effect immediately preceding
January 1, 2013. In the case of surgical clinics, these
clinics are required to comply with applicable federal
certification standards for an ambulatory surgical clinic, as
specified. Requires CDPH, by July 1, 2017, to submit a report
to the appropriate legislative committees that describes the
extent to which the federal certification standards are or are
not sufficient as a basis for state licensing standards, and
requires this report to make recommendations for any
California-specific standards that may be necessary. Sunsets
these provisions of law on January 1, 2018.
5.Requires licensed clinics to annually file with OSHPD certain
reports, including utilization and financial data, as well as
an Ambulatory Surgery Data Record report for each patient
encounter during which at least one ambulatory surgery
procedure is performed. Establishes a fee that clinics are
required to pay that is tied to the number of reports a clinic
files, as specified.
6.Defines "outpatient setting" as any facility clinic or other
setting that is not part of a general acute care hospital
where anesthesia is used in doses that, when administered,
have the probability of placing a patient at risk for loss of
life-preserving protective reflexes. Specifies that an
outpatient setting can only be operated if it is one of the
following:
a. An ambulatory surgical center that is
CMS-certified;
b. A tribal clinic, as specified;
c. A clinic operated directly by the United
States or any of its departments;
d. A clinic licensed by CDPH;
e. A health facility licensed as a general acute
care hospital;
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f. A dental office using anesthesia pursuant to
specified provisions of law; or,
g. An outpatient setting that has been accredited
by an accreditation agency that is approved to issue
certificates of accreditation to outpatient settings
by the Medical Board of California (MBC).
7.Requires MBC to adopt standards for accreditation and, in
approving accrediting agencies to perform accreditation of
outpatient settings, to ensure that the certification program,
at a minimum, includes specified standards, including having
written transfer agreements with a hospital, permitting
surgery only by physicians who have admitting privileges at a
local hospital, and having a system for quality assessment and
improvement.
8.Requires accrediting agencies to inspect outpatient settings,
and permits MBC to also conduct inspections. Requires
certificates of accreditation to be valid for no more than
three years.
This bill:
1.Clarifies a provision of law that permits a physician or
dentist, at their option, to apply for licensure from CDPH as
a surgical clinic by specifically requiring a surgical clinic
to be eligible for licensure by CDPH regardless of physician,
podiatrist, or dentist ownership.
2.Deems a surgical clinic to have met licensure requirements,
until CDPH adopts regulations relating to the provision of
services by a surgical clinic, upon presenting documentation,
within a three-year period, that the surgical clinic has met
the federal certification standards for an ambulatory surgical
clinic established by the Centers for Medicare and Medicaid
Services (CMS-certified).
3.Adds a CMS-certified facility, or an accredited outpatient
setting, as specified, to provisions of law requiring licensed
health facilities to check with professional licensing boards
prior to granting staff privileges to a physician or other
licensed health care professional to see if a report has been
made indicating that the licensee has had staff privileges
revoked or restricted elsewhere.
4.Requires all inspections after the initial inspection for
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accreditation to be unannounced inspections, which existing
law requires to be at least every three years by the
accreditation agency and as often as necessary by MBC.
5.Requires an accredited outpatient setting, as defined, and a
CMS-certified facility, to be subject to the provisions of law
that require reporting of data to the Office of Statewide
Health Planning and Development (OSHPD), including the
Ambulatory Surgery Data Record report for each patient
encounter during which at least one ambulatory surgery
procedure is performed, as well as certain utilization and
financial data.
6.Requires an accredited outpatient setting and a CMS-certified
facility to pay a fee to OSHPD based on the number of
ambulatory surgery data records submitted to OSHPD, but
prohibits this fee from exceeding the reasonable costs
incurred by OSHPD in regulating the outpatient setting and
facility.
7.Requires each licensee who performs procedures in an
accredited outpatient setting to be peer reviewed at least
every two years. Requires this peer review to be a process in
which the basic qualifications, staff privileges, employment,
medical outcomes, or professional conduct of a licensee is
reviewed to make recommendations for quality improvement and
education, if necessary, including when the outpatient setting
has only one licensee.
8.Requires the peer review for accredited outpatient settings to
be performed by licensees who are qualified by education and
experience to perform the same or similar types of procedures.
9.Requires the findings of the peer review of accredited
outpatient settings to be reported to the accrediting body,
which is required to determine if the licensee continues to
meet the requirements necessary to be granted clinical
privileges.
10.Delays a requirement, from March 1, 2015 to March 1, 2016,
for MBC to make a report, along with recommendations, to the
Governor and Legislature on the vertical enforcement and
prosecution model, as defined.
FISCAL
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EFFECT : This bill has not been analyzed by a fiscal committee.
COMMENTS :
1.Author's statement. According to the author, the primary
focus of this bill is to allow ambulatory surgical clinics
(ASCs), which are Medicare certified and are currently
required to seek accreditation as an "outpatient setting,"
that meet both the accreditation requirements of an
accrediting agency and those of MBC as well as those of CDPH,
to have the option of becoming licensed by the CDPH, which has
primary responsibility and oversight of those ASCs which are
Medicare certified. This will allow one agency (CDPH) to have
primary jurisdiction and responsibility for those ASCs
operating within California and to ensure they meet all
standards and requirements of both CDPH and the federal
regulations for ASCs. This measure will also clear up any
confusion as to where a patient may file a complaint regarding
an ASC that may be accredited and at the same time Medicare
certified. Currently, a complaint may have to be filed both
with MBC and CDPH so that appropriate action may be taken
against the ASC. This measure will also require that current
outpatient settings are also subject to peer review and that
any peer review findings be reported to their appropriate
accrediting agency.
2.Background on ambulatory surgery centers and Capen v. Shewry.
Under existing law, surgical clinics in California are
regulated in one or more of three ways: (1) licensed as a
surgical clinic by CDPH; (2) CMS-certified to accept payment
from Medicare and Medicaid; or, (3) accredited by an agency
approved by MBC. MBC currently has approved five accrediting
agencies. Prior to 2007, most of the settings that were
certified as ambulatory surgical centers by CMS to take
Medicare and Medicaid payments were also licensed as surgical
clinics by CDPH, as CDPH generally utilized the same standards
for licensing as CMS uses for certification, and it was often
in the clinic's interest to be licensed for purposes of being
included in health insurance networks. If the surgical setting
did not plan on performing procedures for which it would seek
payment from Medicare or Medi-Cal or other third-party payors,
an outpatient surgical setting would often choose to just
become accredited by an MBC-approved accrediting agency.
However, in 2007, the Third District Court of Appeal issued
its decision in the lawsuit Capen v. Shewry (Capen). In Capen,
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the issue before the court was whether a surgical clinic that
is wholly owned and operated by a physician, but where
physicians who are not owners will practice, is required to
obtain a license from CDPH. Up to this point, CDPH had
interpreted existing law as requiring licensure when physician
who were not owners were practicing surgery at the location.
Existing law exempts from the definition of a surgical clinic
"any place or establishment owned or leased and operated as a
clinic or office by one or more physicians?in individual or
group practice." CDPH was asserting that if physicians who are
not part of the ownership group were allowed to practice, the
clinic would not fall under this exemption. However, the court
found that the statute in question was ambiguous, and
concluded that physician-owned clinics are not subject to
licensing by CDPH. Even though the statute specifically gave a
physician-owned clinic the option , at the clinics choice, of
seeking licensure, CDPH interpreted the court's decision in
Capen to strip CDPH of the authority to license or regulate a
surgical clinic that had any degree of physician ownership,
and that it could not issue or renew a license for any
surgical clinic that is even partly physician owned.
Because of the nature of surgical clinics, there is often at
least some partial physician ownership, even with surgical
facilities that are associated with large medical systems. As
a result of the Capen decision and CDPH's interpretation that
it could no longer renew a license where there was partial
physician ownership, the number of surgical clinics went from
about 500 in 2007 to only 35 surgical clinics licensed in
California today. Additionally, because only licensed clinics
are currently required to report ambulatory surgery data to
OSHPD, the amount of ambulatory surgical data has gone way
down: according to the California HealthCare Foundation,
1,167,583 outpatient surgeries were reported to OSHPD in 2007,
while only 120,155 were reported in 2010 - this despite the
fact that more and more surgeries are happening in outpatient
settings.
To help fill in some of the regulatory void created by the
Capen decision and a concern that there was insufficient
oversight of outpatient surgery settings, the Legislature
passed SB 100 (Price), Chapter 645, Statutes of 2011. SB 100
made a number of changes regarding the approval, oversight,
and inspection of outpatient settings that were accredited by
MBC-approved accrediting agencies, and gave accrediting
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agencies the ability to issue outpatient settings a plan of
corrective action for any deficiencies found during
inspections.
3.Double referral. This bill was heard in the Senate Business,
Professions and Economic Development Committee on April 20,
2015, and passed with a 9-0 vote.
4.Prior legislation. SB 534 (Hernandez), Chapter 722, Statutes
of 2013, requires chronic dialysis clinics, surgical clinics,
rehabilitation clinics, and intermediate care
facilities/developmentally disabled-nursing to meet federal
certification standards until CDPH adopts licensing
regulations for these facilities, and sunsets these provisions
on January 1, 2018.
SB 100 (Price,) of 2011, required MBC to make a number of
changes regarding the approval, oversight and inspection of
outpatient settings and accreditation agencies and in
developing a plan of corrective action for any deficiencies
found by the accreditation agencies or the MBC during
inspections.
SB 1150 (Negrete McLeod), of 2010, would have required MBC to
adopt regulations regarding the appropriate level of physician
availability needed within clinics or other settings using
laser or intense pulse light devices, required MBC to post a
factsheet on cosmetic surgery, required MBC to adopt standards
for out patient settings that offer in vitro fertilization,
and made changes to MBC oversight of accreditation agencies.
SB 1150 was held on the Assembly Appropriations Committee
suspense file.
SB 674 (Negrete McLeod), of 2009, would have required
specified healing arts licensees to include professional
designations behind their names in advertisements; required
MBC to adopt regulations regarding the appropriate level of
physician availability needed within clinics or other settings
using laser or intense pulse light devices for elective
cosmetic procedures; permitted MBC to adopt standards that it
deems necessary for outpatient settings that offer in vitro
fertilization; and revised accreditation requirements and
procedures. SB 674 was vetoed by the Governor, who stated:
"While some provisions may provide marginal improvements to
consumer protection, I cannot support this bill when it fails
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to address the need for stronger licensing and oversight of
outpatient surgical centers. The continued reliance by the
medical community on external accreditation agencies without
enforcement capability is an insufficient solution for
protecting patients. As outpatient surgeries continue to
increase in number and complexity, surgical centers cannot
continue to perform procedures in an unregulated and
unenforced environment."
AB 832 (Jones), of 2009, would have required CDPH to convene a
workgroup to consider and develop recommendations for state
oversight and monitoring of ambulatory surgical centers, to
ensure public health and safety. AB 832 was held on the
Assembly Appropriations Committee suspense file.
AB 543 (Plescia), of 2007, would have established licensing
requirements for surgical clinics and would have required,
effective January 1, 2008, that all surgical clinics meet
specified operating and staffing standards. AB 543 was vetoed
by the Governor, who stated: "While I support the intent of
this legislation, I am unable to sign it as it lacks critical
patient safety protections. This bill doesn't establish
appropriate time limits for performing surgery under general
anesthesia. Further it inappropriately restricts
administrative flexibility and creates state fiscal pressure
during ongoing budget challenges. I am directing the
Department of Public Health to pursue legislation that
establishes licensure standards for these facilities that are
consistent with federal requirements and protect the health
and safety of patients."
5.Support. This bill is supported by MBC, which states that
existing law requires licensed surgical clinics to report
aggregate utilization and patient encounter data to OSHPD.
However, when these physician-owned ambulatory surgical
centers were required to be accredited instead of licensed,
there was no requirement to report data to OSHPD. MBC states
that this resulted in a serious deficiency of data for
accredited outpatient settings. In addition, MBC states that
existing law allows a physician who owns his or her own
outpatient setting to choose not to have peer review of his or
her practice, and that MBC believes that for consumer
protection, physician working in these settings should be
subjected to peer review evaluations, which can be utilized as
a tool by the accrediting agencies when determining compliance
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with existing law. Finally, MBC states that inspections
currently performed by accrediting agencies are announced,
unless they are deemed status surveys. Requiring subsequent
inspections to be unannounced will help to ensure that
facilities do not have time to prepare for an inspection and
will more closely align with inspections for other types of
ambulatory surgery settings. The California Ambulatory Surgery
Association states in support that even though existing law
provides adequate oversight for ambulatory surgery settings
utilizing certain levels of anesthesia, a September 2007 court
ruling (Capen v. Shewry) has prohibited CDPH from issuing
state licenses to physician-owned surgery centers, which make
up the vast majority of ambulatory surgery settings in
California. Furthermore, CASA states that without adding an
accredited outpatient setting and CMS-certified ambulatory
surgical center to the list of eligible facilities that can
obtain reports from the MBC, surgery centers are unable to
ensure that physicians and others providing care in those
facilities have not been denied staff privileges, been removed
from a medical staff, or have had his or her staff privileges
restricted. This bill is also supported by the California
Hospital Association (CHA), which states that many of their
hospitals and systems operate or have other business
relationships with outpatient centers in which surgery is
performed. CHA supports the requirement in this bill for the
organization to determine if a certain report has been made
indicating the applying physician, psychologist, podiatrist or
dentist has been denied staff privileges or had his or her
staff privileges restricted. CHA also supports the goal of the
bill to establish a peer review process in these settings.
6.Opposition. The California Society of Plastic Surgeons (CSPS)
opposes this bill, stating that it does not believe the
changes would result in any improvement of the accreditation
process or enhance patient safety. Rather, CSPS states that
this bill only increases costs for accredited facilities,
which will increase costs to the overall healthcare system.
According to CSPS, this bill creates additional onerous data
reporting with no obvious need or plan for use of the data.
CSPS also argues the use of unannounced inspections would put
patient safety at risk, as staff and physician attention would
be diverted from patient care by the inspectors and their
requirements for evaluating manual, logs, and patient records.
7.Oppose unless amended. The California Medical Association
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(CMA) states that it is concerned that some of the proposed
changes would create significant logistical challenges for
certain outpatient surgery settings without a commensurate
increase in consumer protection. According to CMA, some of the
proposed changes, including unannounced visits by an
accreditation agency, some of the peer review changes, and
mandatory reporting, could create unnecessary hardship on
certain facilities. CMA states that we should not seek to
unduly burden facilities with regulations that have an
uncertain impact on improving patient care.
8.Technical amendments.
a. This bill requires an accredited outpatient setting
and a CMS-certified facility to pay a fee to OSHPD based
on the number of ambulatory surgery data records
submitted to OSHPD, but prohibits this fee from exceeding
the reasonable costs incurred by OSHPD in regulating the
outpatient setting and facility. However, for these
purposes, OSHPD is not "regulating" these settings, but
just collecting data and making some of it publicly
available. To avoid confusion, the word "regulating"
should be deleted, and instead the costs should not
exceed the reasonable costs incurred by OSHPD related to
the reports filed by these settings.
b. This bill deems a surgical clinic to have met
licensure requirements upon presenting documentation,
within a three-year period , that the surgical clinic has
met federal certification standards. The intent of this
provision is to ensure the federal certification is
within three years, but the way this is phrased it could
be interpreted to mean that the clinic has three years
within which to provide documentation of federal
certification. This should be clarified.
SUPPORT AND OPPOSITION :
Support: California Ambulatory Surgery Association
California Hospital Association
Medical Board of California
Oppose: California Medical Association (unless amended)
California Society of Plastic Surgeons
-- END --
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