BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 396 (Hill) - Health care: outpatient settings and surgical
clinics: facilities: licensure and enforcement
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|Version: May 5, 2015 |Policy Vote: B., P. & E.D. 9 - |
| | 0, HEALTH 9 - 0 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: May 18, 2015 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 396 would make a surgical clinic eligible for
licensure by the Department of Public Health, regardless of
physician ownership.
Fiscal
Impact:
Likely one-time costs of about $125,000 over two years for the
adoption of regulations by the Department of Public Health
(Licensing and Certification Fund).
Projected initial licensing costs of about $800,000 to review
SB 396 (Hill) Page 1 of
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license application information and conduct initial site
inspections of surgical clinics (Licensing and Certification
Fund). This cost estimate assumes that the number of licensed
surgical clinics under the bill will increase to approximately
500, the number that were previously licensed by the
Department. These costs would be incurred once the Department
completed the required regulations. After the initial increase
in licensing activity due to the new ability for surgical
clinics to be licensed, the ongoing costs should be
substantially reduced.
Unknown costs for data collection and analysis by the Office
of Statewide Health Planning and Development. Any costs
incurred by the Office under the bill would be reimbursed by
fees paid by licensed surgical clinics.
Background: Under current law, the Department of Public Health licenses a
variety of health care facilities, including surgical clinics.
Under existing law, the definition of surgical clinic excludes
surgical clinics owned or leased by a physician or dentist.
However, current law also allows a physician or dentist (who
owns or leases a clinic) to apply for licensure by the
Department. In addition to licensure by the Department of Public
Health, surgical clinics may also be certified by the Centers
for Medicare and Medicaid Services (allowing them to bill
Medicare or Medi-Cal for services) and/or surgical clinics may
be accredited by an accrediting agency approved by the Medical
Board of California.
Current law also requires the Medical Board of California to
adopt standards for accreditation and to approve independent
agencies to accredit outpatient settings (including surgical
clinics).
Prior to 2007, most surgical clinics that were certified by the
Centers for Medicare and Medicaid Services were also licensed by
the Department of Public Health (since the regulatory standards
were effectively the same).
A court case in 2007 found that certain physician-owned clinics
are not subject to licensure by the Department of Public Health.
The Department has interpreted this court decision as
SB 396 (Hill) Page 2 of
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prohibiting it from licensing any physician owned clinics, even
if the physician owner requests licensure. Since 2007, the
number of licensed surgical clinics has declined from over 500
to 35.
Proposed Law:
SB 396 would make a surgical clinic eligible for licensure by
the Department of Public Health, regardless of physician
ownership.
Specific provisions of the bill would:
Clarify current law to allow a physician or dentist, at their
option, to apply for licensure as a surgical clinic,
regardless of ownership;
Until the Department of Public Health adopts implementing
regulations, deem a surgical clinic to have met licensure
requirements by demonstrating that the surgical clinic meets
federal certification standards for Centers for Medicare and
Medicaid Services;
Require all inspections (after the initial inspection) by an
independent certifying entity (that has been approved by the
Medical Board) to be unannounced;
Require an accredited outpatient setting and a Centers for
Medicare and Medicaid Services certified facility to be
subject to patient encounter and financial data reporting
requirements;
Require an accredited outpatient setting and a Centers for
Medicare and Medicaid Services certified facility to pay a fee
to the Office of Statewide Health Planning and Development to
cover the costs of collecting and analyzing reported data;
Require each licensee who performs procedures in an accredited
outpatient facility to be peer reviewed at least every two
years;
Delays the deadline of a report from the Medical Board to the
Legislature on its vertical enforcement model, for one year to
March 2016.
Related
Legislation: SB 534 (Hernandez, Statutes of 2013) requires
chronic dialysis clinics, surgical clinics, rehabilitation
clinics, and certain intermediate care facilities to meet
SB 396 (Hill) Page 3 of
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federal certification standards until the Department of Public
Health adopts licensing regulations for those facilities.
Staff
Comments: The Department of Public Health has indicated that
the bill as drafted may not allow them to license physician
owned clinics, even upon request of the physician. This analysis
assumes that future amendments to the bill to clarify the
Department's authority will allow for such licensure. The cost
estimates above assume that the Department will be able to
implement the bill, as intended by the author.
The only costs that may be incurred by a local agency relate to
crimes and infractions. Under the California Constitution, such
costs are not reimbursable by the state.
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