BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: SB 1195 Hearing Date: April 18,
2016
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|Author: |Hill |
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|Version: |April 6, 2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Nicole Billington, Bill Gage |
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Subject: Professions and vocations: board actions:
competitive impact
SUMMARY: Grants authority to the Director of the Department of Consumer
Affairs (DCA) to review a decision or other action, except as
specified, of a board within the DCA to determine whether it
unreasonably restrains trade and to approve, disapprove, or
modify the board decision or action, as specified; eliminates
the requirement that the executive officer of the Board of
Registered Nursing be a registered nurse; clarifies when a
judgment or settlement for treble damages antitrust award would
be granted for a member of a regulatory board; provides for an
additional standard for the Office of Administrative Law to
follow when reviewing regulatory actions of state boards. Also
makes various changes that are intended to improve the
effectiveness of the Veterinary Medical Board (Board) and
extends the Board's sunset dates.
Existing law:
1)Provides for the licensure and regulation of various
professions and vocations by the boards within the DCA, and
authorizes those boards to adopt regulations to enforce the
laws pertaining to the profession and vocation for which they
have jurisdiction.
2)Makes decisions of any board within the DCA pertaining to
setting standards, conducting examinations, passing
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candidates, and revoking licenses final, except as specified,
and provides that those decisions are not subject to review by
the Director of the DCA. (Business and Professions Code (BPC
§ 109 (a))
3)Provides that the Director may initiate an investigation of
any allegations of misconduct in the preparation,
administration, or scoring of any examination which is
administered by a board, or in the review and qualifications
which are part of the licensing process of any board. (BPC §
109 (b))
4)Provides that the Director may intervene in any matter of any
board where an investigation by the Division of Investigation
discloses probably cause to believe that the conduct or
activity of a board, or its members or employees constitutes a
violation of criminal law. (BPC § 109 (c))
5)Authorizes the Director to audit and review, upon his or her
own initiative, or upon the request of a consumer or licensee,
inquiries and complaints regarding licensees, dismissals of
disciplinary cases, the opening, conduct, or closure of
investigations, informal conferences, and discipline short of
formal accusation by the Medical Board of California, the
allied health professional boards, and the California Board of
Podiatric Medicine and the Director may make recommendations
for changes to the disciplinary system to the appropriate
board, the Legislature, or both.
(BPC § 116 (a))
6)Requires the Director to annually report to the chairpersons
of certain committees of the Legislature information regarding
findings from any audit, review, of monitoring and evaluation.
(BPC § 116 (b))
7)Authorizes the Director to contract for services of experts
and consultants where necessary. (BPC § 307)
8)Requires regulations, except those pertaining to examinations
and qualifications for licensure and fee changes proposed or
promulgated by a board within the DCA, to comply with certain
requirements before the regulation or fee change can take
effect, including that the Director is required to be notified
of the rule or regulation and given 30 days to disapprove the
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regulation. (BPC § 313.1)
9)Prohibits a rule or regulation that is disapproved by the
Director from having any force or effect, unless the
Director's disapproval is overridden by a unanimous vote of
the members of the board, as specified.
10)Provides, until January 1, 2018, for the licensure and
regulation of registered nurses by the Board of Registered
Nursing (BRN) which is within the DCA, and requires the BRN to
appoint an executive officer who is a nurse currently licensed
by the BRN.
11)Establishes the California Veterinary Medicine Practice Act
until January 1, 2017, and requires the Veterinary Medical
Board (VMB) within the Department of Consumer Affairs (DCA)
to, among other things, license and regulate veterinarians,
registered veterinary technicians (RVTs), RVT schools and
programs, and veterinary premises. (BPC § 4800 et seq.)
12)Requires a public entity to pay any judgment or any
compromise settlement of a claim or action against an employee
or former employee of the public entity if the employee or
former employee requests the public entity to defend him or
her against any claim or action against him or her for an
injury arising out of an act or omission occurring within the
scope of his or her employment as an employee of the public
entity, the request is made in writing not less than 10 days
before the day of the trial, and the employee or former
employee reasonably cooperates in good faith in the defense of
the claim or action. (Government Code § 825)
13)Specifies that the Administrative Procedure Act governs the
procedure for the adoption, amendment, or repeal of
regulations by state agencies and for review of those
regulatory actions by the Office of Administrative Law and
requires the review of the office to follow certain standards,
including, among others, necessity, as defined. (Government
Code § 11340 et seq.)
This bill:
1) Authorizes the Director, upon his or her own initiative, and
require the Director, upon the request of a consumer or
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licensee, to review a decision or other action, except as
specified, of a board within the DCA to determine whether it
unreasonably restrains trade and to approve, disapprove, or
modify the board decision or action, as specified.
2) Requires the Director to post on the DCA's website his or her
final written decision and the reasons for the decision
within 90 days from receipt of the request of a consumer or
licensee.
3) Commencing on March 1, 2017, would require the Director to
annually report to the chairs of specified committees of the
Legislature information regarding the Director's
disapprovals, modifications, or findings from any audit,
review or monitoring and evaluation.
4) Authorizes the Director to seek, designate, employ, or
contract for services of independent antitrust experts for
purposes of reviewing board actions for unreasonable
restraints of trade.
5) Requires the Director to review and approve any regulation
promulgated by a board within the DCA, as specified, and
would authorize the Director to modify any regulation as a
condition of approval, and to disapprove a regulation because
it would have an impermissible anticompetitive effect.
6) Prohibits any rule or regulation from having any force or
effect if the Director does not approve the regulation
because it has an impermissible anticompetitive effect.
7) Extends the sunset date for the VMB and Executive Officer of
the Board until January 1, 2021.
8) Authorizes a veterinarian and registered veterinarian
technician who is under the director supervision of a
veterinarian with a current and active license to compound a
drug for anesthesia, the prevention, cure, or relief of a
wound, fracture, bodily injury, or disease of an animal in a
premises currently and actively registered with the VMB, as
specified, and would authorize the California State Board of
Pharmacy and the VMB to ensure compliance with these
requirements.
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9) Requires veterinarians engaged in practice of veterinary
medicine employed by the University of California or by
Western University of Health Sciences while engage in the
performance of specific duties to be licensed as a
veterinarians in the state or hold a university license
issued by the VMB, and that the applicant for a university
license to meet certain requirements, including that the
applicant passes a specified exam.
10)Provides that a veterinary premise registration may be
canceled after five years of delinquency, unless the VMB
finds circumstances or conditions that would justify a new
premise registration to be issued.
11)Makes technical changes to BPC regarding the VMB.
12)Requires a public entity to pay a judgment or settlement for
treble damage antitrust awards against a member of a
regulatory board for an act or omission occurring within the
scope of her or her employment as a member of a regulatory
board.
13)Adds competitive impact, as defined, as an additional
standard for the Office of Administrative Law (Office) to
follow when reviewing regulatory actions of a state board on
which a controlling number of decisionmakers are active
market participants in the market that the board regulates,
and requires the Office to, among other things, consider
whether the anticompetitive effects of the proposed
regulation are clearly outweighed by the public policy
merits.
14)Authorizes the Office to designate, employ, or contract for
the services of independent antitrust or applicable economic
experts when reviewing proposed regulations for competitive
impact.
15)Requires state boards on which a controlling number of
decisionmakers are active market participants in the market
that the board regulates, when preparing the public notice,
to additionally include a statement that the agency has
evaluated the impact of the regulation on competition and
that the effect of the regulation is within a clearly
articulated and affirmatively expressed state law or policy.
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FISCAL EFFECT: Unknown. This bill is keyed "fiscal" by
Legislative Counsel.
COMMENTS:
1. Purpose. This bill is sponsored by the Author , and is one of
five "sunset bills" the Author is sponsoring this Session.
According to the Author, this bill is necessary to make
changes to the California Veterinary Medicine Practice Act
relating to the operation of the Veterinary Medical Board and
to both the authority of the Director of the DCA and the
Office of Administrative Law to assure compliance with a
recent U.S. Supreme Court Decision, North Carolina State
Board of Dental Examiners v. FTC. These changes arose from
issues raised in the Board's sunset review process, and
require legislative action.
2. Oversight Hearings and Sunset Review of Licensing Boards and
Programs. Beginning in 2015, the Senate Business,
Professions, and Economic Development Committee and the
Assembly Business and Professions Committee (Committees)
conducted joint oversight hearings to review 12 regulatory
entities: DCA, Acupuncture Board, Board of Behavioral
Sciences, California Massage Therapy Association, Court
Reporters Board, Board of Pharmacy, Physician Assistant
Board, Board of Podiatric Medicine, Bureau of Private
Postsecondary Education, Board of Psychology, Bureau of Real
Estate, Bureau of Real Estate Appraisers, and Veterinary
Medical Board. The Committees conducted three hearings in
March to review these entities. This bill and the
accompanying sunset bills are intended to implement
legislative changes as recommended by staff of the Committees
and which are reflected in the Background Papers prepared by
Committee staff for each agency and program reviewed this
year.
3. Potential Antitrust (Anticompetitive) Actions of Boards -
Compliance with North Carolina State Board of Dental
Examiners v. FTC.
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In 2010, the Federal Trade Commission (FTC) brought an
administrative complaint against the North Carolina State
Board of Dental Examiners (Board) for exclusion of
non-dentists from the practice of teeth whitening. The FTC
alleged that the Board's decision was an uncompetitive and
unfair method of competition under the Federal Trade
Commission Act. This opened the Board to lawsuits and
substantial damages from affected parties.
The Board was composed of 6 licensed, practicing dentists and
2 public members. The practice of teeth whitening was not
addressed in the statutes comprising the Dental Practice Act.
Instead of initiating a rulemaking effort to clarify the
appropriate practice of teeth whitening, the Board sent
cease-and-desist letters to non-dentists in the state
offering teeth whitening services. The Board argued that the
FTC's complaint was invalid because the Board was acting as
an agent of North Carolina, and according to state-action
immunity, one cannot sue the state acting in its sovereign
capacity for anticompetitive conduct. A federal appeals
court sided with the FTC, and the Board appealed to the
United States Supreme Court (Court).
In February 2015, the Court agreed with the FTC and
determined that the Board was not acting as a state agent and
could be sued for its actions. The Court ruled, "Because a
controlling number of the Board's decision-makers are active
participants in the occupation the Board regulates, the Board
can invoke state-action antitrust immunity only if it was
subject to active supervision by the State, and here that
requirement is not met."
The Court was not specific about what may constitute "active
participants" or "active supervision." However, the Court did
say that "active supervision" requires "that state officials
have and exercise power to review particular anticompetitive
acts of private parties and disapprove those that fail to
accord with state policy," and that "the supervisor must
review the substance of the anticompetitive decision, not
merely the procedures followed to produce it."
FTC Staff Guidance on Active Supervision of State Regulatory
Boards. In October 2015, the FTC released a staff guidance,
"Active Supervision of State Regulatory Boards Controlled by
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Market Participants," in order to better explain when active
supervision of a state regulatory board would be required in
order for a board to invoke the state action defense. The
guidance also aimed to highlight what factors are relevant
when determining if the active supervision requirement has
been satisfied. The FTC stated that active supervision
includes the ability of a state supervisor to review the
substance of the anticompetitive decision and have the power
to veto or modify a decision. The state supervisor may not
be an active market participant. In addition, the FTC states
that active supervision must precede the implementation of
the alleged anticompetitive restraint.
The FTC stated that the guidance addresses only the active
supervision requirement of the state action defense, and
antitrust analysis is fact-specific and context-dependent.
This means that although a state action defense might not be
applicable in a certain case, this does not mean that the
conduct of a regulatory board necessarily violates federal
antitrust laws.
Implications for the Boards under the DCA . On October 22,
2015, the Senate Committee on Business, Professions and
Economic Development and Assembly Business and Professions
Committee held a joint informational hearing to explore the
implications of the Court decision on the DCA's 26
professional regulatory boards and consider recommendations.
In response to the Court's decision, the Chair of this
Committee, State Senator Jerry Hill, requested an opinion
from the Office of Attorney General Kamala Harris (AG). The
AG released the following:
North Carolina Dental has brought both the composition of
licensing boards and the concept of active state
supervision into the public spotlight, but the standard it
imposes is flexible and context-specific. This leaves the
state with many variables to consider in deciding how to
responds.
Whatever the chosen response may be, the state can be
assured that North Carolina Dental's "active state
supervision" requirement is satisfied when a
non-market-participant state official has and exercises the
power to substantively review a board's action and
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determines whether the action effectuates the state's
regulatory policies.
The DCA boards are semiautonomous bodies whose members are
appointed by the Governor and the Legislature. It is
important to note that although a most of the non-healing
arts boards have the statutory authority for a public
majority allotment in their makeup, more than half of the
healing arts and non-healing arts boards are currently
comprised of a majority of members representing the
profession, based on vacancies and current appointments.
There are currently only one health board and four non-health
boards that are comprised of a public member majority with
their current makeup. While the boards operate largely
independently, they also fall within the DCA's jurisdiction.
The Legislature provides routine oversight and the Office of
Administrative Law reviews regulations stemming from
rulemaking undertaken by the boards.
Although the boards are tied to the state through various
structural and statutory oversights, it is presently unclear
whether current laws and practices are sufficient to ensure
that the boards are state actors and, thus, immune from legal
action. The recent decision against the Texas Medical Board
in the Teladoc case emphasizes the need for California to
prove that it provides active state supervision. In that
case, one of the nation's largest providers of telephone
medical services, Teladoc, sued the Texas Medical Board after
the Board issued a rule that requires physicians to either
meet with patients in person before treating them remotely,
or to treat them face-to-face via technology while other
providers are physically present with them when treating a
patient for the first time. Teladoc alleged that this rule
violates antitrust laws because it would restrict the
company's ability to compete, resulting in higher prices and
less access to doctors for Texans. The Board argued that it
should be immune from antitrust liability as a state agency
but a judge rejected that argument, writing that "for a board
to be considered actively supervised, the state supervisor
must have power to veto or modify the board's decisions, and
supervision of the Texas Medical Board does not meet that
requirement."
It appears necessary for the Legislature and the Department to
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devise a mechanism for independent state review of regulatory
board actions, including the ability of some type of state
supervisor to veto or modify decisions, as cited in the Texas
Teladoc case, in order for these boards and board members to
ensure that boards
can continue to effectively regulate California's professions
without fear of being sued.
During the sunset review hearing in March, in which several
DCA issue were discussed, the need to respond to the
implications surrounding this recent Court decision were
reviewed by the Committees and the DCA. The DCA at that time
was asked to address two questions and was asked to respond to
the Committees in
30 days:
(1) How does the DCA plan on addressing the "active state
supervision" requirement; and,
(2) What does the DCA believe are necessary next steps to
ensure robust protection of the public from potentially
problematic trust forming coalitions on regulatory boards..
It was also recommended by the Committees, that in light of
the FTC guidance on the active supervision of state regulatory
boards controlled by market participants, that the Committees
should remove the active license requirement for the Executive
Officer position for the BRN and that that there should
basically be no Executive Officer of any board who was a
licensee of the board they serve.
As indicated earlier, North Carolina State Board of Dental
Examiners v. FTC placed limitations on the immunity of
regulatory boards controlled by active market participants.
This is because individuals who are directly affected by their
own rulemaking may not be able to detect their biases,
purposefully or inadvertently placing their benefit over those
of the public. Or, as the Supreme Court stated, "Dual
allegiances are not always apparent to an actor." In the
North Carolina case, the focus was on board members, but the
argument against interested participants could also be made
for boards' administrative managers. The DCA executive
officers (EOs) wield a great deal of power, daily directing
and running the administrative machine with often only
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occasional guidance from an ever-changing board. EOs are
vested with substantial decision-making authority and have the
ability to shape policy direction of a particular board
through their recommendations, management, and relationships.
Presently, the Board of Registered Nursing (BRN) is the only
board within the DCA that requires its EO to be currently
licensed by the board he or she regulates; the Board of
Vocational Nursing and Psychiatric Technicians removed this
requirement last year in light of serious allegations of
mismanagement. According to the recent hiring bulletin for
the BRN's Executive Officer, the EO is responsible for
"?planning, organizing and directing the activities of the
Board in areas of administration, enforcement and licensure.
The EO serves as the liaison between the Board and
stakeholders. The EO enforces the overall policies established
by the Board relating to Board programs?." To place this
control with an interested stakeholder may be directly
contrary to the intent of a well-balanced regulatory system.
Response by the DCA . On April 11, 2016, the DCA responded to
the questions and recommendations of the Committees as
follows:
(1) How does the DCA plan on addressing the "active state
supervision" requirement?
According to the DCA, they have proactively provided training
and guidance to its constituent entities regarding the North
Carolina case, including the active state supervision
requirement. Based upon the case, the California Attorney
General's opinion, and the Federal Trade Commission's
published guidelines, the Department has provided guidance to
its entities regarding best practices, including:
Continuing to promote their primary mission of
consumer protection;
Identifying when the board may be making
market-sensitive decisions;
Conducting an analysis of the competitive aspects of
decisions;
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Utilizing the applicable state processes which
contain elements of state supervision;
Considering objective evidence; and,
Adequately documenting the discussions on a
particular decision.
The Department and the Attorney General's Office have also
collaborated to develop and present training regarding the
case for executive officers and board presidents.
Additionally, DCA indicates that information related to the
case has been incorporated in the Board Member Orientation
Training which is held each quarter. Presentations regarding
the case have taken place at numerous board meetings.
The Department addressed potential statutory changes and
identified two areas where it believes that the law should be
strengthened and clarified.
First, the existing regulatory review process must be made
stronger. Under current law, the Director reviews board
regulations and has the authority to disapprove them if they
are "injurious to the public health, safety or welfare."
However, current law does not specifically authorize the
Director to disapprove regulations for anticompetitive impacts
in the market without furthering a clearly articulated state
policy. In order to ensure appropriate state supervision, the
Department believes that the Director should have the specific
authority to disapprove regulations that will have
anticompetitive impacts in the market, if these are not
substantiated by state policy.
Second, the DCA stated that current potential liability of
board members needs to be addressed. Lawsuits regarding
antitrust violations, if successful, can lead to awards of
treble damages. The Department believes that these damages
are not punitive in nature, and wishes to clarify this
position in statue to ensure that if a board member is acting
pursuant to a state policy, they will be indemnified by the
state for an antitrust violation in the same way they are for
other types of lawsuits.
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(2) What does the DCA believe are necessary next steps to
ensure robust protection of the public from potentially
problematic trust forming coalitions on regulatory boards?
As noted above, the Department states that it will continue
to encourage the boards to utilize best practices and provide
training in this area, which should assist in mitigating the
potential for board actions which violate antitrust laws. As
discussed at the hearing, the Department believes that some
legislative change is warranted in the areas of the
Director's review of regulations, the classification of
treble damages arising in anti-trust litigation as damages
that can be indemnified by the state, and the employment of
Executive Officers that are licensees. The Department further
states that it will continue to evaluate the impact of the
North Carolina case and continue to work closely with the
Administration and committee staff to vet policies related to
potential antitrust liability based upon the board governance
model.
(3) In light of the FTC guidance on the Active Supervision of
State Regulatory Boards Controlled by Market Participants,
the Committees should remove the active license requirement
for the Executive Officer position for the Board of
Registered Nursing.
The Department agrees, in concept, with the Committees'
recommendation that the active license requirement for
executive officers should be removed. Having a nonmarket
participant serve as an executive officer is critical in
minimizing the impact an active market participant executive
officer may have on the operations. This would be an
additional step in addressing the concerns of the North
Carolina case.
This measure is intended to address the concerns raised by
the DCA and both its suggested changes and recommendations to
comply with the recent U.S. Supreme Court decision. It will
expand the authority of the Director to review and take
appropriate action regarding regulations or board decisions
which may have potential antitrust (anticompetitive)
implications, clarify potential liability for board members
involved in possible antitrust litigation, and eliminate the
requirement that the Executive Officer of the BRN be a
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registered nurse.
1. Background on VMB. The mission of the Veterinary Medical
Board (VMB) is to protect consumers and animals through
development and maintenance of professional standards,
licensing of veterinarians, registered veterinary
technicians, and premises, and diligent enforcement of the
California Veterinary Medicine Practice Act. The Board is
composed of eight members: four veterinarians, one RVT, and
three public members. The Board licenses 12,086 Veterinarians
and 6,424 RVTs. The licensee population has increased
steadily over the past five years. The Board also requires
registration of all premises where veterinary medicine,
veterinary dentistry, veterinary surgery, and the various
branches thereof, is being practiced. The Board currently
registers 3,636 veterinary premises.
The pet-owning public expects that the providers of their pet's
health care are well-trained and are competent to provide
these services. The Board assures the public that
veterinarians and RVTs possess the level of competence
required to perform these services by developing and
enforcing standards for examinations, licensing, and hospital
and school inspection. The Board also conducts regular
practice analyses to validate the licensing examinations for
both veterinarians and RVTs. Additional eligibility pathways
have also been approved for licensure of internationally
trained veterinary graduates and certification of RVTs to
allow qualified applicants from other states in the U.S. and
countries around the world to come to California and to
improve the provision of veterinary health care for consumers
and their animals. The Board's goals, as stated in its
Strategic Plan, include decreased enforcement cycle times,
enhanced quality and training of hospital inspectors,
inspecting existing hospitals within one year of
registration, and working with DCA to reduce the amount of
unlicensed activity occurring in the marketplace.
2. Review of the VMB - Issues Identified and Recommended
Changes. The Board was last reviewed by the Senate Committee
on Business, Professions and Economic Development and
Assembly Committee on Business, Professions and Consumer
Protection (now Assembly Business and Professions) in
2012-13. At that time, both committees identified 12 issues
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for discussion. The Board's sunset date was only extended for
two years because of serious concerns raised by the
Committees during its review. However, it was determined that
the Board would only have to submit a report to the
Committees that addressed only the most significant issues
for the Board to discuss. On December 1, 2015, the Board
submitted its required Supplemental Sunset Review Report to
the Committees.
The following are some of the major issues pertaining to the
Board along with background information concerning the
particular issue. Recommendations were made by Committee
staff regarding the particular issue areas that needed to be
addressed.
a) Issue : University Licensure.
Background : Exiting law, BPC Section 4830(a)(4) allows for
an exemption to licensure for veterinarians working at both
veterinary medical schools in California, UC Davis and
Western University.
States that have veterinary schools typically have
exemptions or some form of university licensure to
accommodate the schools' hiring needs. Veterinary schools
hire veterinarians from all over the world who sometimes
come into a state for a limited period of time, and who do
not practice outside the confines of the university.
However, problems can arise when the university veterinary
hospital is providing services to the general public and
the consumer does not have recourse through a licensing
board for standard of care issues.
The Board receives calls periodically from consumers whom
are unhappy with the services at a university teaching
hospital and request the Board to intervene. Since
veterinarians working at the universities are exempt from
licensure, the Board states that it has no authority to
pursue disciplinary action and must advise the consumer to
seek recourse through the university's complaint mediation
process. The exemption presents consumer protection issue,
and the Board believes that all veterinarians providing
treatment to the public's animals should be licensed and
regulated. Faculty recruited for clinical positions within
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the university typically specialize in certain species and
conditions, are experts in their field of study, and have
undergone intensive specialty testing that exceeds the
examinations required for entry-level licensure. In fact,
for employment in clinical faculty positions, the
university requires specialty training or other advanced
clinical training. Some faculty may have graduated from
foreign veterinary schools that are recognized but not
accredited by the American Veterinary Medical Association.
As reported by UC Davis and Western University, requiring
full licensure would negatively impact the universities'
ability to attract and recruit the best qualified
veterinarians.
During the past two years, the MDC has debated the issue of
requiring veterinarians working in a university setting to
obtain a University License and therefore, no longer be
exempt from Board oversight. As part of the MDC's research,
former legal counsel reviewed the pertinent statutes, BPC
section 4830 (a)(4), and concluded that the existing
exemption for veterinarians employed by the universities
would need to be amended to either to strike the language
in section 4830 (a)(4) and thus require a license for
university personnel or include language in 4830 (a)(4)
that would qualify when a "University License" must be
issued in order for a veterinarian employed by a university
to provide veterinary services to the public's animals.
The MDC voted to recommend to the Board that a separate
University License be issued to veterinarians who are
employed by and who engage in the practice of veterinary
medicine in the performance of their duties for the
university. Both UC Davis and Western University are
supportive of requiring a University License for
veterinarians practicing within the university setting as
it will provide consumer recourse through the Board and
allow the Board to assist the university in handling
enforcement matters involving university employees.
The Board voted to approve the request for a statutory
change at its October 2015 meeting and requests assistance
from the Legislature to amend Section BPC Section 4830 and
add new BPC 4848.1.
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The change would require an implementation date set out at
least 6 months from the effective date to enable university
personnel to comply with the proposed examination
requirements (California jurisprudence exam) and
educational course on regionally specific diseases and
conditions.
Recommendation and Proposed Statutory Change : The
Committees may wish to amend Business and Professions Code
to require the Board to separately license veterinarians
practicing within a university setting.
This bill requires the Board to provide a separate
licensure category for veterinarians practicing solely
within the university setting.
b) Issue : Delinquent Registration Status.
Background : Currently there is no provision for the
premises registration to cancel after five years, as would
be consistent with other license types regulated by the
Board. Instead hospital premises registrations are left in
a delinquent status indefinitely and remain on the Board's
records. The records are accessible on the Board's website
under the "License Verification" feature. It is confusing
for consumers who use the website to find registered
veterinary premises and retrieve data on hospitals that
have been in a delinquent status for more than five years.
Many of these hospitals are no longer operating veterinary
premises, yet there is not mechanism by which the Board may
cancel the premises registration. In addition, the
retention of electronic records for delinquent premises
registrations is a resource issue for the Board as there is
a "per record" cost for maintaining the data.
Recommendation and Proposed Statutory Change : The
Committees may wish to amend Business and Professions Code
to allow the Board to cancel the premises registration of
veterinary premises that have remained in delinquent status
for more than five years.
This bill allows for a premise registration to be canceled
after five years of delinquency.
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c) Issues : Drug Compounding.
Background : During hospital inspections, Board inspectors
routinely encounter bulk form drugs used for compounding
medications stored at veterinary hospitals. If the drugs
are not properly stored, labeled, or are expired, the
inspector will advise the Licensing Manager of the
compliance issue. However, there are no specific provisions
in the Practice Act to provide oversight of a veterinarian
compounding drugs for use in day-to-day veterinary
practices and for dispensing to clients. Instead, the Board
has looked to laws and regulations governing pharmacies
(BPC Sections 4051, 4052, and 4127 & Title 16 CCR Sections
1735-1735.8 and 1751 et. seq.) since veterinarians are
authorized prescribers under BPC Section 4170. Pharmacy
regulations not only include specific requirements for
pharmacies that compound and dispense medications, but also
define the "reasonable quantity" of a compounded medication
that may be furnished to a prescriber (in this case,
veterinarian) by the pharmacy to administer to the
prescriber's patients within their facility, or to dispense
to their patient/client. It should be noted that the Board
of Pharmacy is currently pursuing a regulatory amendment to
its Compounding Drug Preparation regulations that includes
amendments to the "reasonable quantity" definition of
compounded drugs that may be supplied to veterinarians for
the purposes of dispensing. In addition to pharmacy
provisions, federal law provides for Extralabel Drug Use in
Animals, CFR Title 21 Part 530.13, which authorizes
veterinarians to compound medications in following
situations:
There is no approved animal or human drug
available that is labeled for, and in a concentration
or form appropriate for, treating the condition
diagnosed.
The compounding is performed by a licensed
veterinarian within the scope of a professional
practice.
Adequate measures are followed to ensure the
safety and effectiveness of the compounded product.
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The quantity of compounding is commensurate
with the established need of the identified patient.
The Board has been actively engaged in discussions
regarding the regulation of veterinarians compounding drugs
since October 2014 when the US Government Accountability
Office contacted the Board to obtain information on
California's regulation of animal drug compounding. At that
time, the federal Food and Drug Administration (FDA) was
considering changes to its guidance on Compounding Animal
Drugs from Bulk Drug Substances. Ultimately, the FDA
released Draft Guidance #230 in May 2015, which was
intended to provide parameters for compounding animal
drugs.
At its October 20, 2014 meeting, the MDC reviewed the issue
of drug compounding by veterinarians for their animal
patients. The issue, as raised by Board legal counsel, was
that there is no explicit grant of authority in the
Practice Act authorizing licensed veterinarians to compound
drugs pursuant to federal law. Board counsel advised that
provisions for veterinarians to compound drugs for animal
patients would need to be added to the veterinary medicine
scope of practice. The MDC examined the lack of statutory
guidance for veterinarians and ultimately recommended that
the Board consider a legislative proposal to grant
veterinarians the authority to compound drugs for their
animal patients under the existing limitations of CFR Title
21 Part 530.13.
Recommendation and Proposed Statutory Change : The
Committees may wish to amend Business and Professions Code
to grant limited state authority for veterinarians to
compound drugs.
This bill establishes authority for drug compounding in the
practice of veterinary medicine.
Note : The exact language for this section is still under
revision and will likely be amended at a later date.
1. Prior Related Legislation. SB 1243 (Lieu, Chapter 395,
Statutes of 2014) Extended until January 1, 2017, the
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provisions establishing the Veterinary Medical Board and the
term of the executive officer of the Board.
SB 304 (Lieu, Chapter 515, Statutes of 2013) extended until
January 1, 2016, the provisions establishing the VMB,
subjects the VMB to a review by the appropriate policy
committees of the Legislature, and clarifies that the review
of the VMB shall be limited to those issues identified by the
appropriate policy committees.
2. Arguments in Support. The University of California - Davis
School of Veterinary Medicine supports the licensing
provisions for veterinarians practicing solely within a
university setting. They cite that the proposed change in
licensing requirements respects the need for consumer
protection in California and provides recourse for consumers
with complains while retaining sufficient flexibility for the
University to fulfill its mission by recruiting the very best
veterinary faculty.
The California Veterinary Medical Association has a "support,
if amended" position on SB 1195. While they support the
continued existence of a Veterinary Medical Board, CVMA is
concerned with components of the current language as it
relates to veterinary drug compounding. The proposed language
seeks to substitute the terms "pharmacist" and "pharmacies"
with "veterinarian" and "veterinary premises" in statute and
in reference to numerous compounding regulations. CVMA
believes the compounding for veterinarians is uniquely
different from the pharmacy profession and requires separate
regulations. They also raise concern that the language may
inadvertently cancel out previous statutory agreements
relative to veterinary labeling and drug packaging. However,
they indicated confidence that they will be able to achieve a
positive resolution at an upcoming meeting with stakeholders
including the Board, Board of Pharmacy, CVMA, and Committee
staff. As previously noted in this analysis, the drug
compounding language is still under revision pending the
outcome of that meeting.
SUPPORT AND OPPOSITION:
Support:
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University of California - Davis School of Veterinary Medicine
Support if Amended:
California Veterinary Medical Association
Opposition: None on file as of April 12, 2016.
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