BILL ANALYSIS Ó
SB 396
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Date of Hearing: July 7, 2015
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Susan Bonilla, Chair
SB 396(Hill) - As Amended June 29, 2015
SENATE VOTE: 40-0
SUBJECT: Health care: outpatient settings and surgical clinics:
facilities: licensure and enforcement.
SUMMARY: Requires a Medicare-certified clinic and an accredited
outpatient setting, as specified, to request a report from the
appropriate healthcare regulatory board regarding the filing of
a peer review report; requires licensees who perform procedures
in outpatient settings to be subject to peer review every two
years and the accrediting body to review the findings of those
reports; and, further specifies that inspections of accredited
outpatient surgical centers may be unannounced with a 60-day
warning to the surgical center of the pending inspection.
EXISTING LAW:
1)Defines an "outpatient setting" to mean any facility, clinic,
unlicensed clinic, center, office, or other setting that is
not part of a general acute care facility, as specified, and
where anesthesia or peripheral nerve blocks, or both, is used
when in compliance with the community standard of practice, in
doses that, when administered have the probability of placing
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a patient at risk for loss of the patient's life-preserving
protective reflexes; and, specifies that "outpatient setting"
also means facilities that include in vitro fertilization.
(Health and Safety Code (HSC) Section 1248(b).
2)Defines an "accreditation agency" to mean a public or private
organization that is approved to issue certificates of
accreditation to outpatient settings by the Medical Board of
California (MBC), as specified. (HSC Section 1248(c))
3)Requires the MBC to adopt standards for accreditation and, in
approving accreditation agencies to perform accreditation of
outpatient settings, must ensure that the certification
program meet specified standards and requirements. (HSC
Section 1248.15)
4)Specifies that any outpatient setting may apply to an
accreditation agency for a certificate of accreditation, and
accreditation must be issued by the accreditation agency
solely on the basis of compliance with its standards approved
by the MBC. (HSC Section 1248.2(a))
5)Requires the MBC to obtain and maintain a list of accredited
outpatient settings from the information provided by the
accreditation agencies and the MBC to notify the public, by
placing the information on its Internet website, whether an
outpatient setting is accredited or the setting's
accreditation has been revoked, suspended, or placed on
probation, or the setting has received a reprimand by the
accrediting agency. (HSC Section 1248.2(b))
6)Specifies that if an outpatient setting does not meet the
standards approved by the MBC, accreditation must be denied by
the accreditation agency, which must provide the outpatient
setting notification of the reasons for the denial, and that
an outpatient setting may reapply for accreditation at any
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time after receiving notification of the denial. (HSC Section
1248.25)
7)Provides that certificates of accreditation issued to
outpatient settings are valid for three years. (HSC Section
1248.3)
8)Requires the MBC to inspect every outpatient setting which is
accredited and ensure that accreditation agencies inspect
outpatient settings. (HSC Section 1248.35(a))
9)Provides the following requirements for MBC inspections of
outpatient settings: (HSC Section 1248.35(b)(1),(2))
a) The frequency of inspections depends upon the type and
complexity of the outpatient setting to be inspected; and,
b) Inspections must be conducted no less often than once
every three years by the accreditation agency and as often
as necessary to ensure the quality of care provided.
10)Specifies that before an accrediting agency suspends or
revokes a certificate of accreditation, the accreditation
agency must provide the outpatient setting with notice of any
deficiencies, and the outpatient setting must agree with the
accreditation agency on a plan of correction that will give
the outpatient setting reasonable time to supply information
demonstrating compliance with the standards of the
accreditation agency, as specified. (HSC Section
1248.35(d)(1))
11)Provides that if an outpatient setting does not comply with a
corrective action within a timeframe specified by the
accrediting agency, the accrediting agency must issue a
reprimand, and may either place the outpatient setting on
probation or suspend or revoke the accreditation of the
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outpatient setting and notify the MBC of its action. (HSC
Section 1248.35(d)(2))
12)Specifies that if an outpatient setting's certification of
accreditation has been suspended or revoked, or if the
accreditation has been denied, the accreditation agency is
required to do the following: 1) notify the MBC of the action,
2) send a notification letter to the outpatient setting of the
action and provide specified information, and 3) require the
outpatient setting to remove its accreditation certification
and post the notification letter in a conspicuous location
that is accessible to the public. (HSC Section 1248.35(i))
13)Defines "peer review" to mean 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 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 and assess and improve the quality of care
rendered in a health care facility, clinic, or other setting
providing medical services. (Business and Professions Code
(BPC) Section 805(a)(1)(A))
14)Requires 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 to file an "805 report" with the relevant agency
within 15 days after the effective date on which any of the
following occurs as a result of an action of a peer review
body: (BPC Section 805(b))
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a) A licentiate's application for staff privileges or
membership is denied or rejected for a medical disciplinary
cause or reason;
b) A licentiate's membership, staff privileges, or
employment is terminated or revoked for a medical
disciplinary cause or reason; or,
c) 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.
15)Requires that prior to granting or renewing staff privileges
for any physician and surgeon, psychologist, podiatrist, or
dentist, any health facility licensed, as specified, or any
health care service plan or medical care foundation, or the
medical staff of the institution, request a report from the
MBC, the Board of Psychology, the Osteopathic Medical Board,
or the Dental Board of California to determine if any 805
report 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 specified. (BPC Section
805.5(a))
THIS BILL:
16)Adds an ambulatory surgery center or an accredited outpatient
setting, which are certified to participate in the Medicare
program, to the list of entities required to request a report
from the MBC, the Board of Psychology, the Osteopathic Medical
Board, or the Dental Board of California prior to granting or
renewing staff privileges for any licentiate, to determine if
any 805 report has been made indicating that the licensee has
had staff privileges revoked or restricted elsewhere, as
specified.
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17)Extends the date by one year, from March 1, 2015, to March 1,
2016 for the MBC to submit a report and make recommendations
to the Governor and the Legislature on vertical enforcement.
18)Requires each licensee, who performs procedures in an
outpatient setting that requires the outpatient setting to be
accredited to be peer reviewed at least every two years, and
that the peer review process must 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,
including an outpatient setting with only one licensee.
19)Requires peer review to be performed by licensees who are
qualified by education and experience to perform the same
types of, or similar, procedures, and the findings of the peer
review to be reported to the governing body who will determine
if the licensee continues to meet the requirements, as
specified.
20)Requires the process that resulted in the findings of the
peer review to be reviewed by the accrediting agency at the
next survey to determine if the outpatient setting meets
applicable accreditation standards, as specified.
21)Provides that after the initiation inspection for
accreditation, subsequent inspections may be unannounced, and
for unannounced routine inspections, accreditation agencies
must notify the outpatient setting that the inspection will
occur within 60 days.
22)Makes other minor and technical changes.
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FISCAL EFFECT: According to the Senate Appropriations Committee
analysis dated May 18, 2015, this bill will likely result in
one-time costs of about $125,000 over two years for the adoption
of regulations by the Department of Public Health (DPH) The
projected initial licensing costs may be approximately $800,000
to review license application information and conduct initial
site inspections of surgical clinics. 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 DPH 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. There are also unknown costs for data
collection and analysis by the Office of Statewide Health
Planning and Development (OSHPD). Any costs incurred by the
OSHPD under the bill would be reimbursed by fees paid by
licensed surgical clinics.
COMMENTS:
Purpose. This bill is sponsored by the author. According to
the author, "This bill would also allow an accredited outpatient
setting or "Medicare certified ambulatory surgical center" (i.e.
Ambulatory Surgery Center) to access reports from the [MBC] to
ensure patient protection when credentialing, granting or
renewing staff privileges for providers at that facility. This
measure will require that current outpatient settings are also
subject to peer review and that any peer review findings be
reported to their appropriate accrediting agency? [L]astly, this
bill would allow for unannounced inspections of an accredited
outpatient setting facility by Accreditation Agencies or the
[MBC]."
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Background. The recent June 29, 2015 amendments to this bill
significantly narrow the scope of the bill to require an
accredited outpatient setting or Medicare-certified ambulatory
surgery center to access peer review reports from the MBC when
credentialing, granting or renewing staff privileges in an
effort to enhance consumer protection. This bill also specifies
that peer review evaluations are to be conducted every two years
for physicians and surgeons working in accredited outpatient
settings in order for recommendations to be made regarding
quality improvement and education, if necessary, for each
licensee in the outpatient settings. Lastly, this bill
specifies that routine inspections of accredited outpatient
settings may be unannounced with a 60-day window after
notification that an unannounced inspection will occur. This
bill is intended to strengthen the current accreditation process
and ensure that peer review reports are considered as part of
the accreditation process, as well as the process for granting
staff privileges.
Peer Review. Peer review is a process where physicians evaluate
their colleagues' work to determine compliance with the standard
of care. Peer reviews are intended to detect incompetent or
unprofessional physicians early and terminate, suspend, or limit
their practice if necessary. According to the MBC, a "peer
review report" also referred to as an "805" report, is the
mechanism in which peer review bodies are required to report
certain information regarding licensees to the MBC. The 805
reports must be filed if specified actions occur, which include:
1) a peer review body denies or rejects a licensee's
applications for staff privileges or membership for a medical
disciplinary cause or reason; 2) a licensee's staff privileges,
membership, or employment are revoked for a medical disciplinary
cause or reason; 3) restrictions are imposed, or voluntarily
accepted, on staff privileges, membership, or employment for a
total of 30 days or more within any 12 month period for medical
disciplinary reasons; 4) if the resignation, leave of absence,
withdrawal or abandonment of application or for renewal of
privileges occurs after receiving notice of a pending
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investigation initiated for a medical disciplinary cause or
reason; and, 5) a summary suspension of staff privileges,
membership, or employment is imposed for a period in excess of
14 days. BPC Section 805 defines who the peer review body
consists of, including the licensed medical or professional
staff of any health facility, or clinic or an ambulatory surgery
center that is Medicare certified.
The peer review process helps to review the basic
qualifications, staff privileges, employment, medical outcome,
or professional conduct of a licensee to make recommendations
for quality improvement and education. In addition, the peer
review process aids in the determination of whether a licensee
may practice, or continue to practice in a healthcare facility,
clinic, or other settings providing medical services.
As detailed above, an 805 report is required to be filed with
the MBC (and other health related boards) within 15 days if a
licensee's application for staff privileges or membership is
rejected, on the effective date of an action to revoke or impose
restrictions on privileges, membership, or employment, or if the
licensee resigns, takes a leave of absence, withdraw or abandons
an application for privileges. The 805 reports are not publicly
available to consumers; however, copies may be requested by
certain health care facilities. Prior to granting or renewing
staff privileges for any physician and surgeon (and other health
care licensees as specified), it is also required that any
health care facility or the medical staff of the institution
request from the MBC (or other related health board) a report to
determine if any 805 report has been made indicating the
applying physician and surgeon (or other health care licensee,
as specified) has been denied staff privileges, been removed
from a medical staff, or had his or her staff privileges
restricted as provided in Section 805. A failure to file an 805
report could be punishable by a fine of up to $100,000 per
violation, and for negligent or unintentional reporting, a fine
up to $50,000 per violation.
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This bill will expand the list of entities which must request an
805 report to include a facility certified to participate in the
Medicare program as an ambulatory surgical setting or an
accredited outpatient setting, as specified, to determine if a
report has been made indicating that a licensee has had staff
privileges revoked or restricted elsewhere.
In addition, this bill will require physicians and surgeons
working in accredited outpatient settings to be subjected to the
peer review process every two years, and requires the findings
from those reports to be reported to the accreditation agency
who would use the information as a tool to for the governing
body of the facility to determine if the licensee who was
subject to the peer review report continues to meet professional
qualification standards and is professionally credentialed for
the privileges to practice for which he or she is granted. This
additional peer review requirement aims to help accrediting
agencies determine whether the outpatient setting meets
applicable accreditation standards.
Accredited healthcare facilities. Outpatient surgery care
centers are facilities which provide surgery services in
out-of-hospital settings. Under current law, physicians and
surgeons may not perform outpatient surgeries unless they are
performed in an accredited, licensed, or certified setting.
According to the MBC, if the surgical procedure requires
anesthesia to be administered in doses that have the probability
of placing a patient at risk for loss of the patient's
life-preserving protective reflexes, then the surgery must be
performed in an accredited, licensed, or certified setting.
However, if the surgery only requires local anesthesia or a
peripheral nerve block, or administers anti- anxiety medications
or pain killers in doses that do not place the patient at risk
for loss of life-preserving protective reflexes, then the
surgery does not have to be performed in an accredited,
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licensed, or certified setting.
Outpatient surgery may take place in the following settings: 1)
an outpatient setting that is accredited by an accreditation
agency approved by the MBC; 2) a surgical clinic licensed by the
California Department of Public Health; or, 3) an ambulatory
surgical center certified by the Center for Medicare and
Medicaid Services to participate in the Medicare program. In
addition to the outpatient settings above, there are specific
settings which are recognized in HSC 1248.1. The MBC only has
jurisdiction over those outpatient settings which are accredited
through MBC approved accreditation agencies. The MBC notes that
MBC approved accreditation agencies verify that each setting
meets specified standards before being awarded accreditation.
Each MBC approved accreditation agency is required to inspect
each setting at least once every three years. HSC Section
1248.15 specifies the requirements necessary for an outpatient
center to meet accreditation standards. As part of the
accreditation process, accreditation agencies are required to be
inspected once every three years, at a minimum. This bill will
require that after the initiation inspection for accreditation,
all subsequent inspections may be unannounced and for those that
are unannounced, the accrediting body must provide a 60-day
window after notification for when the inspection might occur.
If the results of the inspection conclude that the setting is
out of compliance with the standards, the accreditation agency
must issue a deficiency report and may require correction, issue
a reprimand, place the setting on probation, or suspend or
revoke the accreditation. The accreditation agency must issue a
report to the MBC within 24 hours if the setting has been issued
a reprimand, been placed on probation, or had its accreditation
suspended or revoked. This information is then posted on the
MBC's website where it is available to the public.
The MBC currently recognizes five accrediting agencies which
include: Accreditation Association for Ambulatory Health Care,
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Inc. (AAAHC), American Association for Accreditation of
Ambulatory Surgery Facilities, Inc. (AAAASF), The Joint
Commission, The Institute for Medical Quality (IMQ), and
American Osteopathic Association / Healthcare Facilities
Accreditation Program (HFAP).
Prior Related Legislation. SB 100 (Price), Chapter 645,
Statutes of 2011, required the MBC to adopt regulations on or
before January 1, 2013, on the appropriate level of physician
availability necessary within clinics using laser or intense
pulse light devices for elective cosmetic surgery. Made a
number of changes regarding the approval, oversight and
inspection of outpatient settings, as defined, by MBC and
accreditation agencies approved by the MBC, and in developing a
plan of corrective action for any deficiencies found by the
accreditation agencies or the MBC during inspections, or
otherwise. Revised the existing definition of "outpatient
settings" to include fertility clinics that offer in vitro
fertilization.
SB 1150 (Negrete McLeod) of 2010, would have required license
designations on health care provider advertising; required the
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 the MBC to
post a factsheet on cosmetic surgery; required the MBC to adopt
standards for settings that offer in vitro fertilization; and
made changes to the MBC's oversight of accreditation agencies.
STATUS: This bill was held in the Assembly Appropriations
Committee.
SB 674 (Negrete McLeod) of 2009, would have required a health
care practitioner, as specified, to include specific
professional designation following the health care
practitioner's name in advertisements; required the MBC to adopt
regulations on the appropriate level of physician availability
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necessary within clinics or other settings using laser or
intense pulse light devices for elective cosmetic surgery;
required certain healing arts licensees to include in
advertisements certain words or designations following their
names indicating the particular educational degree they hold or
healing art they practice, as specified; and, authorized the MBC
to issue an accreditation agency a citation, including an
administrative fine, in accordance with a specified system
established by the MBC if the agency is not meeting the criteria
set by the MBC. STATUS: This bill was vetoed by Governor
Schwarzenegger. The Governor's veto message stated, "While some
provisions may provide marginal improvements to consumer
protection, I cannot support this bill when it fails 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 2122 (Plescia) of 2008, would have established the California
Outpatient Surgery Patient Safety and Improvement Act, which
would have required surgical clinics to meet prescribed
licensing requirements and standards, including compliance with
Medicare Conditions of Participation. STATUS: This bill was
held in the Assembly Appropriations Committee.
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. STATUS: This bill
was vetoed by Governor Schwarzenegger. The Governor's veto
message 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
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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."
ARGUMENTS IN SUPPORT:
The Medical Board of California writes in support, "[This bill]
would require peer review evaluations every two years for
physicians and surgeons working in ambulatory surgery centers
and would allow the accredited outpatient setting facility
inspections performed by accreditation agencies to be
unannounced (after the initial inspection) and would require at
least a 60 day window to be given to facilities for unannounced
inspections?The [MBC] believes that for consumer protection,
physicians working in [ambulatory surgery centers] should be
subject to peer review evaluations, which would be given to the
governing body of the outpatient setting and be reviewed by the
accreditation agency at the next inspection of the outpatient
setting"
ARGUMENTS IN OPPOSITION:
None on file to reflect the current version of the bill.
REGISTERED SUPPORT:
Medical Board of California
REGISTERED OPPOSITION:
None on file to reflect the current version of the bill.
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Analysis Prepared by:Elissa Silva / B. & P. / (916)
319-3301