BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: SJR 13
S
AUTHOR: Oropeza
J
AMENDED: As Introduced
R
HEARING DATE: July 8, 2009
CONSULTANT:
1
Hansel/cjt
3
SUBJECT
New dialysis clinic licensure and certification
SUMMARY
Urges the federal Centers for Medicare and Medicaid
Services (CMS) to adopt regulations, and the Congress and
President to enact legislation, to improve and speed up the
process for timely licensure and certification surveys of
new dialysis clinics to provide patients with access to
these services as soon as possible, and to eliminate
the chilling impact on new clinic construction in
California.
CHANGES TO EXISTING LAW
Existing federal law:
Establishes conditions for participation that health care
providers, including specialty clinics, must meet to
participate in the Medicare and Medicaid programs.
Existing state law:
Provides for the regulation and oversight by the Department
of Public Health of primary care clinics and specialty
clinics. Includes as a type of specialty clinic a "chronic
dialysis clinic," which is a clinic that provides less than
24-hour care for the treatment of patients with end-stage
Continued---
STAFF ANALYSIS OF SENATE BILL SJR 13 (Oropeza)Page 2
renal disease, including renal dialysis services.
This resolution:
Urges the federal Centers for Medicare and Medicaid
Services (CMS) to adopt regulations, and the Congress and
President to enact legislation, to improve and speed up the
process for timely licensure and certification surveys of
new dialysis clinics to provide patients with access to
these services as soon as possible, and to eliminate
the chilling impact on new clinic construction in
California.
Cites several factors demonstrating a need for more timely
licensure and certification of new dialysis clinics,
including:
The need to expand the number of dialysis clinics in
California to keep pace with the growing population of
dialysis patients, driven by the growth in hypertension
and diabetes, which are the two primary diagnoses leading
to chronic kidney disease (CKD) and kidney failure;
A new dialysis clinic must have a state licensure survey
and a separate CMS certification survey before the clinic
may be reimbursed for treating Medicare patients, and new
dialysis clinics must wait months, and more than a year
in some instances, for state surveyors to perform the
licensure and certification surveys;
The current state of the licensure and certification
process reduces the incentive for dialysis providers to
consider California locations for new dialysis clinics
and increases the potential for future access problems
for California patients;
In areas where all dialysis clinics are at maximum
capacity, some Medicaid and Medicare patients must be
kept in acute care hospitals, at much greater cost, while
they wait for availability at a dialysis clinic so that
they may transfer to a long-term care facility and obtain
outpatient dialysis care at the clinic;
CMS requires state surveyors in the Licensing and
Certification Division of the State Department of Public
Health (DPH) to perform surveys pursuant to a four tier
survey process, in which new dialysis clinic surveys are
STAFF ANALYSIS OF SENATE BILL SJR 13 (Oropeza)Page 3
placed in Tier III; and,
CMS requires the department to complete all functions
categorized as Tier I or Tier II prior to completing
functions in Tier III, but provides insufficient funding
for the completion of the Tier I and Tier II functions.
States that CMS should either separate new dialysis clinic
surveys from other functions in the four tier process, move
new dialysis clinic surveys into Tier I or Tier II, or
provide adequate funding to ensure the completion of Tier
I, II, and III functions on a timely basis.
Also states that the new CMS requirement for a
"justification letter" for new dialysis clinics further
slows the process and should be eliminated and CMS should
permit the department surveyors to better utilize their
resources by allowing state licensure surveys to be
completed simultaneously with CMS certification surveys.
FISCAL IMPACT
Unknown.
BACKGROUND AND DISCUSSION
The author states that the current process for licensing
and certifying dialysis clinics, so that they can receive
Medicare funding, is onerous and unnecessarily slow, and
the resulting delays adversely impact patient care. It is
well documented that the current system which requires
separate licensing and certification surveys, instead of
them being conducted at the same time, means that patients
must often wait up to a year for a new facility to open.
This delay has the dual effect of reducing the incentive
for dialysis providers to open new facilities and requires
patients to travel long distances for dialysis services,
and in some cases requires them to be treated at acute care
hospitals. The author argues that allowing the licensure
and certification surveys to be conducted simultaneously
will greatly speed up the process, and allow more dialysis
clinics to open in California.
Health facility licensing in California
STAFF ANALYSIS OF SENATE BILL SJR 13 (Oropeza)Page 4
Health care facilities in California are licensed,
regulated, inspected, and/or certified by a number of
public and private agencies at the state and federal
levels, including the California Department of Public
Health (DPH) Licensing and Certification Program (L&C) and
the U.S. Department of Health and Human Services' Centers
for Medicare and Medicaid Services (CMS). These agencies
have separate -- yet sometimes overlapping --
jurisdictions. L&C is responsible for ensuring health care
facilities comply with state laws and regulations. In
addition, L&C cooperates with CMS to ensure that facilities
accepting Medicare and Medi-Cal (California's version of
the federal Medicaid program) payments meet federal
requirements.
According to the DPH L&C Division, a facility that has
submitted a licensing application is first subject to a
licensing survey, which focuses on building standards,
policies and procedures, the credentialing of staff, and
equipment and supplies. A facility that wishes to receive
Medicare and Medicaid payments must submit a separate
application to CMS. Once that application is approved, L&C
conducts a federal certification survey. This survey is
designed to ensure that the facility can provide services
in accordance with federal regulations. The only way a
facility can demonstrate this is to begin admitting
patients/residents and providing services prior to billing
the federal programs.
According to DPH, it is unable to estimate the length of
time it takes to conduct the initial licensing and
certification surveys, but believes it has improved the
timeliness of the surveys. The timelines for the surveys
further varies among its field offices, depending on their
workload. DPH L&C does not receive federal funding for its
licensing survey work, which is funded through license
facility fees, but does receive federal funding for the
certification surveys. While CMS contends that the state
is receiving sufficient funding to conduct Tier 1 through 3
survey work, funding for Tier 4 facilities, including for
initial certification surveys, is generally acknowledged to
be inadequate. According to DPH, while additional federal
funding for surveyor positions would help reduce backlogs,
it would also need authorization through the budget for
additional surveyor positions in order to make use of the
new funds.
STAFF ANALYSIS OF SENATE BILL SJR 13 (Oropeza)Page 5
According to DPH, given the fact that a facility cannot
operate without first having a license and that the federal
certification survey evaluates how a facility is actually
delivering care to patients in accordance with federal
regulations, concurrent licensing and certification surveys
cannot currently be done simultaneously.
Conditions of participation in Medicare and Medicaid
CMS develops conditions of participation that health care
providing organizations must meet in order to participate
in the Medicare and Medicaid programs. These minimum health
and safety standards are the foundation for improving
quality and protecting the health and safety of
beneficiaries. CMS also selects accrediting organizations
whose standards providers are allowed to meet in lieu of
meeting conditions of participation, through a deeming
process. Initial and periodic surveys (inspections) to
certify providers, i.e. to determine whether the provider
complies with the conditions of participation, are done on
behalf of CMS by states.
Among the health care providers that CMS establishes
conditions of participation for are ambulatory surgical
centers, end-stage renal disease facilities (dialysis
facilities), federally qualified health centers, home
health agencies, hospitals, and nursing facilities.
CMS priorities for surveys of providers and suppliers in
Medicare
CMS currently establishes priorities for initial
certification surveys. Tier 1 consists of statutory
mandated surveys for hospitals, acute care facilities,
skilled nursing facilities, and home health agencies, as
well as surveys conducted in response to immediate jeopardy
complaints. Tier 2 consists of surveys in response to
other complaints. Tier 3 consists of end-stage renal
disease facilities and transplant centers. CMS accords
these facilities a higher priority for certification
surveys than other types of providers, due to the heavy
reliance of patients who need these services on Medicare,
and the fact that there are no deemed accreditation options
for these facilities. Tier 4 consists of initial
certifications of all other provider or supplier types that
have the option to achieve deemed Medicare status by
demonstrating compliance through an approved accrediting
STAFF ANALYSIS OF SENATE BILL SJR 13 (Oropeza)Page 6
organization, as well as any other types of providers not
otherwise covered by Tier 3.
Priority exception requests
Providers or suppliers may apply to the state survey agency
for CMS to consider an exception to the priority system for
an initial survey, if lack of Medicare certification would
cause significant access-to-care problems for beneficiaries
served by the provider or supplier. According to DPH, due
to the timing of the paperwork involved, this process does
not have a significant impact on when the initial the
certification survey is conducted. In addition, DPH states
that if CMS were to elevate initial ESRD certification
surveys into a higher category, it would have to "bump
down" initial surveys of other types of facilities.
Kidney dialysis
According to the National Kidney Foundation, dialysis is
needed when a patient develops end stage kidney failure and
the treatment is designed to perform the blood-cleaning
functions of a normal kidney. The most common treatment
option, called hemodialysis, is a treatment in which blood
is removed from the body, filtered through an artificial
kidney and then returned to the body. Hemodialysis is
typically done three times per week, in sessions lasting
anywhere from three to five hours, and often leaves the
patient feeling weak, tired or sick.
Related bills
SB 112 (Oropeza) revises the training requirements for
certified hemodialysis technicians. Prohibits an
individual from providing services as a hemodialysis
technician without being certified by DPH, as specified.
In Assembly Business and Professions Committee.
Prior legislation
SB 1474 (Alquist) of 2007 - 08, would have required the
department to promulgate regulations that would require the
implementation of procedures for the surveillance , and
reporting of, violations of patient rights and sanitary
standards at chronic dialysis clinics, as specified.
Referred to Senate Health Committee; hearing cancelled at
the request of the author.
STAFF ANALYSIS OF SENATE BILL SJR 13 (Oropeza)Page 7
Arguments in support
The California Dialysis Council, the sponsor of SJR 13,
states that given that the population of dialysis patients
in California continues to grow, driven by the surge in
diabetes and hypertension, and given the delays in opening
new facilities due to the separate licensing and
certification surveys that must be conducted, it is
essential that CMS and the Congress address this problem,
as requested by the resolution.
POSITIONS
Support: California Dialysis Council (sponsor)
Oppose: None received
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