BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1544|
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THIRD READING
Bill No: AB 1544
Author: Assembly Health Committee
Amended: 8/17/09 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 10-0, 7/15/09
AYES: Alquist, Strickland, Aanestad, Cedillo, Cox,
DeSaulnier, Leno, Negrete McLeod, Pavley, Wolk
NO VOTE RECORDED: Maldonado
SENATE APPROPRIATIONS COMMITTEE : 12-0, 8/17/09
AYES: Kehoe, Cox, Corbett, Denham, Hancock, Leno, Oropeza,
Price, Runner, Walters, Wolk, Yee
NO VOTE RECORDED: Wyland
ASSEMBLY FLOOR : 79-0, 6/1/09 - See last page for vote
SUBJECT : Health facilities: licensure
SOURCE : Author
DIGEST : This bill permits a hospital in good standing to
apply to the Department of Public Health (DPH) to offer an
outpatient service as a supplemental service without a
prior onsite survey by DPH. This bill also requires DPH to
approve the application and to issue or deny a new license
within 100 days of receiving a complete application.
ANALYSIS : Existing law provides for the licensing and
regulation of health facilities, including hospitals and
CONTINUED
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primary care clinics, by DPH. Existing law provides for a
fee to be paid by a hospital when applying for initial and
renewing licensure, as specified.
Existing regulations define a hospital outpatient service
as the rendering of non-emergency health care services to
patients who remain in the hospital less than 24 hours.
Existing law permits a primary care clinic that has held a
valid, unrevoked, and unsuspended license for at least the
preceding five years to apply to establish another primary
care clinic at an additional site, which is referred to as
an affiliate clinic. Existing law provides that DPH
approve an affiliate clinic without the necessity of first
conducting an initial onsite survey if specified conditions
are met.
This bill permits a hospital to apply to DPH to offer a new
or modify an existing outpatient service without a prior
onsite survey by DPH, provided it has met the following
requirements:
1. Has held for the five years immediately preceding the
submission of the completed application, a valid,
unrevoked or unsuspended license.
2. Does not have a history of repeated or uncorrected
violations that pose immediate jeopardy to a patient.
3. Does not have pending actions against it to suspend or
revoke the license or terminate Medicare or Medi-Cal
certification.
4. Owns and operates the outpatient service that is the
subject of the application.
This bill requires an applicant hospital to complete all
appropriate forms and documentation, pay any necessary
fees, and to describe the type of outpatient service and
its location and evidence showing that the outpatient
service has written policies and procedures governing its
operation. This bill also requires DPH to approve the
application and to issue or deny a new license within 100
days of receiving a complete application.
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This bill limits the outpatient service to providing
primary health care service to patients who remain in the
outpatient clinic for less than 24 hours and prohibits the
service from providing chronic dialysis treatment,
alternative birthing services, and outpatient surgeries
that are provided by a surgical clinic.
This bill provides that DPH may conduct a licensing
inspection or complaint investigation after the application
is approved.
DPH will need $70,000 in fiscal year 2009-10 and $120,000
in fiscal year 2010-11 to promulgate regulations related to
this bill. Ongoing costs will be absorbable since
hospitals may add supplemental services at any time under
existing law.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11
2011-12 Fund
DPH regulations $70 $120
$0Special*
* DPH Licensing and Certification Program Fund
SUPPORT : (Verified 8/19/09)
California Association of Rural Health Clinics
California Hospital Association
Catholic Healthcare West
Chino Valley Medical Center
Colusa Regional Medical Center
Desert Valley Hospital
Hospital Association of San Diego and Imperial Counties
Montclair Hospital Medical Center
Palomar Pomerado Health
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Private Essential Access Community Hospitals
San Antonio Community Hospital
San Dimas Community Hospital
Scripps Mercy Hospital
Shasta Regional Medical Center
Sierra Kings District Hospital
Victor Valley Community Hospital
OPPOSITION : (Verified 8/19/09)
Department of Public Health
ARGUMENTS IN SUPPORT : The California Hospital
Association (CHA) states that hospitals are frustrated at
the amount of time it takes for their clinics to be
approved by DPH. A hospital operated clinic in Reedley had
to wait seven months to be surveyed, during which time it
had to forego 2,800 patient visits. In Modesto, Fairfield,
Clear Lake, and Lodi similar delays have been encountered.
CHA states that hospitals are attempting to respond to the
health care needs of their communities by opening and
expending outpatient primary care clinics, as a means of
relieving overcrowded emergency departments and providing
access to health care services for uninsured and
underinsured patients. CHA argues that the expedited
approval process outlined in the bill will provide
hospitals that are seeking to provide these services parity
with non-hospital based primary care clinics, and will
reduce the amount of time that new and expanded clinics
must wait for surveys before they can commence operations.
ARGUMENTS IN OPPOSITION : DPH states that under this
bill, even if it chose to conduct an initial onsite survey
within 30 days after an application by a hospital to start
or expand a clinic, and found licensing deficiencies, it
would be required to approve the special permit, because
the bill provides no option to deny the application, which
could jeopardize patient safety. DPH also argues that the
bill will give preferential treatment to clinics that are
hospital-operated vis-?-vis other primary clinics (except
for affiliate clinics), which will be subject to the
100-day timeline in existing law for receipt of licenses.
DPH also expresses concern that it is inappropriate to
apply the same standards to outpatient settings of
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hospitals and affiliate clinics of primary care clinics.
While the operational standards for affiliate clinics are
the same as those of primary care clinics that seek to
establish them, the standards for primary care clinics are
fundamentally different from those of hospitals. Thus, the
fact that a hospital is in good standing on its hospital
license is not indicative of its ability to operate an
outpatient clinic. Finally, DPH states that it will need
to promulgate regulations in order to implement the bill.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Duvall, Emmerson, Eng, Evans, Feuer, Fletcher,
Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani,
Garrick, Gilmore, Hagman, Hall, Harkey, Hayashi,
Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Knight,
Krekorian, Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza,
Miller, Monning, Nava, Nestande, Niello, Nielsen, John A.
Perez, V. Manuel Perez, Portantino, Price, Ruskin, Salas,
Saldana, Silva, Skinner, Smyth, Solorio, Audra
Strickland, Swanson, Torlakson, Torres, Torrico, Tran,
Villines, Yamada, Bass
NO VOTE RECORDED: Block
RJG:mw 8/19/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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