BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 396  


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          Date of Hearing:  July 15, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          SB 396  
          (Hill) - As Amended June 29, 2015


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          Urgency:  No  State Mandated Local Program:  YesReimbursable:   
          No


          SUMMARY:


          This bill implements improvements in oversight of outpatient  
          settings, or ambulatory surgery centers (ASCs), by the Medical  
          Board of California (MBC).  Specifically, this bill:








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          1)Allows an accredited outpatient setting or Medicare-certified  
            ASC to access peer review reports from the MBC to inform  
            decisions regarding issuance of staff privileges. 



          2)Requires accredited outpatient settings to be subject to a  
            peer review process (similar to a process required for  
            procedures performed in hospitals) at least every two years,  
            and requires these results to be reported to the governing  
            body and reviewed by the accrediting agency. 



          3)Requires accreditation inspections to be unannounced, within a  
            60-day notification window.
          


          FISCAL EFFECT:


          Minor and absorbable costs to the MBC (Contingent Fund of the  
          MBC).


          COMMENTS:


          1)Purpose.  This bill is intended to improve the oversight of  
            outpatient settings by making modest changes to existing  
            accreditation requirements. 










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          2)Background. Advances in technology, financial incentives, and  
            consumer demand have resulted in a large number of surgical  
            procedures being performed in ACSs, as opposed to in  
            traditional hospital settings.  ASCs are a highly profitable  
            business, with average reported margins in the range of  
            17-30%.  About 97% are investor-owned.  A 2007 court decision,  
             Capen v. Shewry (2007) 155 Cal.App.4th 378, removed the  
            requirement for ASCs to be licensed by the California  
            Department of Public Health (CDPH), and was interpreted to  
            mean that ASCs with physician owners come under the oversight  
            of the Medical Board of California, not CDPH.  Since this  
            change, there has been significant concern about ensuring  
            adequate oversight of these outpatient settings and adequate  
            enforcement mechanisms, as well as the ability to track data  
            related to ASCs.  At this time, surgical clinics that are not  
            physician-owned can be licensed by CDPH, but physician-owned  
            ASCs cannot. These ASCs, however, can be certified for  
            Medicare participation or accredited by MBC-approved agencies.



            A prior version of this bill solved this problem by  
            specifically granting CDPH authority to license surgical  
            centers owned by physicians, at physician option.  It also  
            required data reporting. However, the bill has been scaled  
            back significantly and in its current version, it implements  
            more modest improvements to oversight through the existing  
            accreditation system. 





          3)Related Legislation. Numerous attempts have been made since  
            2007 to improve oversight in the wake of the Capen decision.   
            Most were unsuccessful, and were either vetoed or did not pass  
            the Legislature. The April 20, 2015, Senate Business,  
            Professions, and Economic Development analysis discusses eight  








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            such efforts from 2006- 2011, and their outcomes.  



            SB 100 (Price), Chapter 645, Statutes of 2011, made a number  
            of changes to the approval, oversight, and inspection of  
            outpatient settings, added in vitro fertilization clinics to  
            the oversight regime, and required MBC to promulgate  
            regulations to address issues related to lasers in cosmetic  
            surgery.   


          


          Analysis Prepared by:Lisa Murawski / APPR. / (916)  
          319-2081