BILL ANALYSIS
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|Hearing Date:April 27, 2009 |Bill No:SB |
| |744 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: SB 744Author:Strickland
As Amended:April 22, 2009 Fiscal: Yes
SUBJECT: Clinical laboratories: public health laboratories.
SUMMARY: This is an urgency measure that modifies the clinical
laboratory licensing fee structure, facilitates the use of private
accrediting organizations to inspect clinical laboratories, requires
public health laboratories to pay laboratory and personnel licensing
fees, and increases phlebotomy technician licensing fees.
NOTE : This measure was heard in the Senate Health Committee on
April 15, 2009, and was passed out of that Committee by a vote of
11 to 0.
Existing law:
1)Establishes in federal law, the Clinical Laboratory Improvement
Amendments of 1988 (CLIA), regulates laboratories when performing
testing on human specimens and includes laboratory standards for
proficiency testing, facility administration, personnel
qualifications, and quality control. Applies standards to all
settings, including commercial, hospital, or physician office
laboratories.
2)Establishes within the Department of Public Health (DPH) the
Laboratory Field Services (LFS) which provides for licensing and
registration services for clinical laboratories, as specified.
3)Requires a clinical laboratory that performs tests that are of
moderate or high complexity to be licensed by DPH. Requires a
clinical laboratory that performs tests that are of low
complexity, also referred to as "waived tests," or that perform
provider-performed microscopy (PPM), which is microscopic
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analysis of a specimen by a health care provider such as a
physician, to be registered, rather than licensed, by DPH.
Requires a laboratory that operates multiple locations, to obtain
a separate license or registration for each laboratory location.
4)Defines a clinical laboratory as any establishment or institution
operated for the performance of clinical laboratory tests or
examinations, or the practical application of clinical laboratory
sciences.
5)Allows the DPH to certify a clinical laboratory that is
accredited by a private, nonprofit organization as having met
state licensure or registration requirements, provided that the
accrediting organization is federally approved under CLIA, has
accreditation standards that are equal to, or more stringent
than, state licensure and registration requirements, and allows
DPH to randomly inspect its accredited clinical laboratories for
compliance with state law. Specifies certification requirements
for accredited laboratories, including allowing the accrediting
organization to provide any records or other information about
the laboratory required by DPH.
6)Requires clinical laboratories to pay fees, as specified, to DPH
for the purposes of initial and renewal licensure, registration,
or certification.
7)Establishes the Clinical Laboratory Improvement Fund (CLIF), into
which fees collected by DPH from clinical laboratories are
deposited and used for the purpose of licensing, registration,
certification, inspection, or other activities relating to the
regulation of clinical laboratories.
8)Requires the services of a public health laboratory to be
available to city or county local public health departments for
the purpose of examining suspected cases of infectious and
environmental diseases, and to assist in community disease
surveillance. Requires any city or county public health
laboratory, and specified personnel to be approved by DPH, and to
comply with all applicable CLIA requirements. Under existing
law, public health laboratories are exempt from licensure and
certification fees.
9)Requires an unlicensed person employed by a clinical laboratory
whose job is to withdraw blood from a patient to be certified as
a phlebotomy technician. Existing law requires an individual
seeking phlebotomy technician certification to pay a fee of $25
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to DPH upon initial application and annual renewal.
This bill:
1)Finds and declares that it is the public policy of the state to
ensure that California's laboratory standards, including
personnel standards, are sustained to provide accurate, reliable,
and necessary test results.
2)Requires private, nonprofit organizations that are allowed to
accredit clinical laboratories to conduct inspections of clinical
laboratories in a manner that determines compliance with federal
standards and state laws to the extent that California laws
provide greater protection to residents, or are more stringent
than federal standards, as determined by DPH. Allows DPH to
implement or interpret this by means of an All Clinical
Laboratories Letter , to be posted on the Internet Website, as
specified.
3)Requires a private, nonprofit organization that accredits
clinical laboratories to provide the following information to
DPH:
a) A detailed comparison of the individual accreditation or
approval requirements, with the comparable condition-level
requirements.
b) A detailed description of its inspection process, including
all of the following: Frequency of inspections; Copies of
inspection forms; Instructions and guidelines; a description
of the review and decision making process of inspections; a
statement concerning whether inspections are announced or
unannounced; and a description of the steps taken to monitor
the correction of deficiencies.
c) A description of the process for monitoring proficiency
testing performance, including action to be taken in response
to unsuccessful participation.
d) A list of all of its current California licensed or
registered laboratories and the expiration date of their
accreditation or licensure, as applicable.
e) Procedures for making proficiency testing information
available, including explanatory information required to
interpret proficiency testing results, on a reasonable basis,
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upon request of any person.
4)Revises the requirement a clinical laboratory that is accredited
by a private, nonprofit organization must meet to include the
following:
a) Pay all applicable fees, as specified.
b) Authorizes its proficiency testing organization to furnish
to the accrediting organization the results of the
laboratory's participation in an approved proficiency testing
program, as specified.
c) Authorizes the accrediting organization to do the
following:
i) Release to DPH the laboratory's proficiency test
results, as specified.
ii) Release to DPH a notification of every violation of
condition-level requirements, including the actions taken by
the accrediting organization as a result of the violation,
within 30 days of the initiation of the action.
iii) Give notice to the DPH of any withdrawal of the
laboratory's accreditation.
5)Requires that if the accrediting organization has withdrawn or
revoked its accreditation of a laboratory, a laboratory retains
its certificate of accreditation for 45 days after the laboratory
receives notice of the withdrawal or revocation of accreditation,
or the effective date of any action taken by DPH, whichever is
earlier.
6)States that provisions allowing an accrediting organization to
issue a certificate of deemed status to laboratories does not
prohibit DPH from retaining its authority to conduct complaint
investigations, sample validation inspections or requiring the
submission of proficiency testing results to DPH to ensure
compliance of any clinical laboratory standards.
7)Increases the fees for application for and renewal of a
certificate for a phlebotomy technician to no more than $100 for
a two-year fee (currently at $25).
8)Revises the fees for clinical laboratories personnel performing
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specific testing as follows:
a) For histocompatibility laboratory director's, clinical
laboratory bioanalyst's, clinical chemist's, clinical
microbiologist's, clinical laboratory toxicologist's, clinical
cytogeneticist's, or clinical molecular biologist's license is
$63 (currently at $38).
b) The annual renewal fee for a histocompatibility laboratory
director's, clinical laboratory bioanalyst's, clinical
chemist's, clinical microbiologist's, or clinical laboratory
toxicologist's license is $63 (currently at $38).
c) The application fee for a clinical laboratory scientist's
or limited clinical laboratory scientist's license is $38
(currently at $23).
d) The annual renewal fee for a clinical laboratory
scientist's or limited clinical laboratory scientist's license
is $25 (currently at $15).
9)Specifies that the application fees for clinical laboratories
applying for a license to perform tests or examinations
classified as of moderate or of high complexit y under CLIA and a
clinical laboratory applying for certification is as follows:
a) Less than 2,001 tests: $270
b) Between 2,001 and 10,000, inclusive, tests: $820
c) Between 10,001 and 25,000, inclusive, tests: $1,315.
d) Between 25,001 and 50,000, inclusive, tests: $1,580.
e) Between 50,001 and 75,000, inclusive, tests: $1,960.
f) Between 75,001 and 100,000, inclusive, tests: $2,340.
g) Between 100,001 and 500,000, inclusive, tests: $2,740.
h) Between 500,001 and 1,000,000, inclusive, tests: $4,910.
i) More than 1,000,000 tests: $5,260 and an additional $350
for every 500,000 tests over 1,000,000.
10) Indicates that the fees for a clinical laboratory performing
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tests or examinations classified as moderate or of high
complexity under CLIA, and a clinical laboratory with a
certificate, as specified, must pay an annual renewal fee based
on the number of tests performed or expected to performed as
follows:
a) Less than 2,001 tests: $170.
b) Between 2,001 and 10,000, inclusive, tests: $720.
c) Between 10,001 and 25,000, inclusive, tests: $1,115.
d) Between 25,001 and 50,000, inclusive, tests: $1,380.
e) Between 50,001 and 75,000, inclusive, tests: $1,760.
f) Between 75,001 and 100,000, inclusive, tests: $2,040.
g) Between 100,001 and 500,000, inclusive, tests: $2,440.
h) Between 500,001 and 1,000,000, inclusive, tests: $4,610.
i) More than 1,000,000 tests per year: $4,960 and an
additional $350 for every 500,000 tests over 1,000,000.
11)Revises the fees for the following:
a) Application fee for a trainee's license is $13 (currently
at $8).
b) Annual renewal fee for a trainee's license is $8 (currently
at $5).
c) Application fee for a duplicate license is $5 (currently at
$3).
12)Revises the annual application fee of a clinical laboratory
required to be registered performing clinical laboratory tests or
examinations subject to a certificate of waiver or a certificate
of provider-performed microscopy under CLIA from $50 to $100. A
clinical laboratory subject to registration and performing only
provider-performed microscopy must pay an annual registration fee
of $150 (currently at $75). A clinical laboratory performing
both waived and provider-performed microscopy must pay an annual
registration fee of $150 (currently at $75).
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13)Requires a laboratory to pay for costs incurred by DPH in
conducting re-inspections to ensure compliance of a laboratory
applying for initial licensure. Specifies that the additional
costs for each visit will be equal to the initial application fee
and will be paid by the laboratory prior to issuance of a
license.
14)Requires a $25 fee for approval of each additional location as
authorized for a not-for-profit, or federal, state, or local
government laboratories that engage in limited public health
testing.
15)Indicates that the total fees collected is not to exceed the
costs incurred by DPH for licensing, certification, inspection,
or other activities relating to regulation of clinical
laboratories.
16) States that if a clinical laboratory license or registration is
not renewed before the expiration data, the licensee or
registrant, as a condition preceding the renewal must pay a
delinquency fee equal to 25% of the annual renewal fee for up to
60 days after the expiration date, in addition to the annual
renewal fee in effect on the last preceding regular renewal date.
17)States that all interest earned on moneys in the Clinical
Laboratory Improvement Fund to be deposited and maintained in the
fund. Continuously appropriates moneys in the fund to DPH and
prohibits redirecting the funds for any other purpose.
18)Requires city or county public health laboratories to be
certified or registered within DPH and to pay for fees as set
forth:
a) A laboratory performing tests or examinations that are
waived under CLIA must register with DPH must pay an annual
registration fee of $100.
b) A laboratory performing tests or examinations waived under
CLIA and provider-performed microscopy must register with DPH
and pay an annual registration fee of $150.
c) A laboratory performing tests or examinations classified as
of moderate or of high complexity under CLIA must obtain a
certificate, and the application fees is based on the number
of tests performed, similar to the fees for clinical
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laboratories specified in #9) above.
d) The annual renewal fee would also be similar to the fees
specified for clinical laboratories specified in item #10)
above.
19)Requires the DPH to issue a public health microbiologist
certificate to each person who has applied for the certificate,
as specified. Requires such practitioner to pay an application
fee of $97.
20)Requires the DPH to issue a public health laboratory certificate
to each person who has applied for the certificate, as specified.
Requires such practitioner to pay an application fee of $162.
21)States that a certificate issued to a public health
microbiologist or a public health laboratory director is valid
for one year.
22)Indicates that a person certified as a public health
microbiologist or a public health laboratory director shall, as a
condition of renewal of that certificate, do both of the
following: Complete 12 hours of continuing education and pay a
renewal fee of sixty-six dollars ($66) for a microbiologist
certificate or one hundred sixty-two dollars ($162) for a public
health laboratory director certificate.
23)Allows DPH to issue public health microbiologist certificates or
public health laboratory director certificates without
examination to applicants who have passed examinations offered by
a national accrediting board whose requirements are equal to or
greater than those imposed by this bill and the regulations
established by the DPH.
24)States that the total fees collected by DPH should not exceed
the costs it incurs for certification, registration, inspection,
or other activities relating to the regulation of public health
laboratories and their personnel.
25)Makes other technical nonsubstantive changes.
FISCAL EFFECT: Unknown. This bill has been keyed "fiscal" by
Legislative Counsel.
COMMENTS:
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1)Purpose. According to the DPH, the Sponsor of this bill, DPH is
currently unable to adequately enforce state laws and regulations
regarding licensing, certification and registration of clinical
laboratories, because of insufficient funding. DPH points out
that this funding shortage has resulted in an inability for LFS
to conduct inspections, investigate complaints, promptly process
licensure applications, and take enforcement action when needed.
It states that the provisions in this bill will help address this
problem, by adjusting and imposing new fees for facility and
personnel licensure and certification, charging for
re-inspections of laboratories, fining for delinquent laboratory
license renewals, and charging fees for licensure of multiple
laboratory locations. DPH also indicates that in order to
improve LFS inspection activities, this bill implements a
recommendation by the California State Auditor to leverage
accrediting organizations for the purposes of clinical laboratory
inspections. A strong clinical laboratory oversight program is
necessary to protect public health, and that this bill would
provide additional resources for the laboratory oversight program
within DPH.
2)Background.
a) Clinical laboratories. According to DPH, there are
currently approximately 19,000 clinical laboratories in
California, 3,000 of which are licensed laboratories
performing moderate and/or high complexity testing. The
remaining 12,000 are registered labs performing waived tests
and/or provider-performed microscopy. California clinical
laboratories are subject to both federal and state oversight.
Federal CLIA requirements establish standards for laboratories
to ensure the accuracy, reliability, and timeliness of patient
test results, and specify numerous quality standards,
including those for facility administration, personnel
qualifications, quality control, and proficiency testing, a
process used by laboratories to verify the accuracy and
reliability of their test results. CLIA standards apply to
laboratory testing in all states, and in all settings,
including commercial, hospital, or physician office
laboratories. CLIA standards are based on the complexity of
the testing (waived, moderate, or high complexity). To become
certified under CLIA, a clinical laboratory must pay
applicable fees, meet all applicable standards, and be
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surveyed biennially. In California, DPH is contracted by CMS
to conduct the biennial CLIA survey on behalf of the federal
government. CLIA fees are based on the type of certification
sought by a laboratory, and the annual volume and types of
testing performed.
In addition to CLIA standards, California clinical laboratories
must meet state licensure requirements in order to operate.
Similar to CLIA, state licensing law requires biennial
surveys, proficiency testing, and specified personnel
requirements. However, state clinical laboratory licensing
law establishes certain standards that differ with, or exceed,
CLIA standards. For example, state law requires LFS to
investigate complaints made against clinical laboratories.
State law also requires clinical laboratories to pay annual
fees to DPH in order to be licensed or registered. Fee
amounts for the 2008-2009 fiscal year for initial licensure
are $1,023, and $952 for renewal. Fees for initial and
renewal registration are $62 for laboratories
performing waived tests, and $92 for laboratories performing
provider-performed microscopy.
Some clinical laboratories voluntarily seek accreditation from
accrediting organizations, which are private, nonprofit
organizations approved by CMS to provide laboratory oversight.
Accrediting organizations set forth their own standards and
requirements for clinical laboratories. CLIA allows CMS to
deem a laboratory as having met federal requirements through
accreditation by one of these organizations, as long as the
standards of the organization meet or exceed those in federal
regulations. California law also requires DPH to deem
accredited clinical laboratories as having met state licensure
or registration requirements if the organization allows DPH to
inspect its accredited labs at random, and the organization
has been approved by CMS. Accreditation is optional, and
clinical laboratories that seek accreditation pay fees to the
accrediting organization, in addition to fees for CLIA
certification and state licensure. There are currently six
accrediting organizations approved by CMS, including the
College of American Pathologists, and the Joint Commission.
b) State Auditor Report. In 2008, the California State
Auditor published a report concluding that LFS had not
provided the clinical laboratory oversight mandated by state
law and regulations. Major findings of the report revealed
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that LFS was not inspecting laboratories every two years, as
required, inconsistently monitored laboratory proficiency
testing, closed many complaints without taking action,
sporadically imposed sanctions against laboratories for
violations, and, in three instances since fiscal year 2003-04,
and incorrectly adjusted licensing fees resulting in more than
$1,000,000 in lost revenue. In light of these findings, the
Auditor proposed a number of recommendations to leverage
existing resources to improve oversight of clinical
laboratories, including a recommendation for DPH to approve
accrediting organizations to conduct clinical laboratory
inspections. The Auditor stated in the report that DPH had
not approved any accreditation organizations to perform such
activities, and reported that LFS had expressed concern over
the quality of the inspections conducted by accrediting
organizations. The Auditor pointed out that LFS would need to
approve accrediting organizations and monitor their
compliance, so LFS would have the tools to address these
concerns.
In response to the audit report, DPH generally concurred with
the Auditor's findings, and attributed much of its inability
to meet its mandated responsibilities to a lack of staffing
resources. DPH stated that LFS would take steps to determine
how to maximize the use of existing resources, as well as
assess how many additional resources would be needed. DPH
stated that licensing revenues would likely be increased to
cover costs associated with state oversight mandates. DPH
also stated that it would explore the use of accrediting
organization inspectors to conduct inspections for compliance
with state law, and that it would work with the appropriate
parties to ensure that clinical laboratory licensing fees are
properly adjusted in accordance with the Budget Act.
c) Public Health Laboratories. This bill contains provisions
relating to public health laboratories. According to DPH,
there are currently 38 public health laboratories located in
California that are administered locally by city or county
public health departments. Local public health laboratories
provide services relating to the examination of specimens from
suspected cases of infectious and environmental diseases,
including specimens from humans, milk, water, food, vectors,
and the environment. While public health laboratories may
conduct patient diagnostic testing, they differ from clinical
laboratories in that the scope of their work, including their
patient diagnostic testing, revolves around the prevention and
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control of communicable disease, community surveillance of
infectious or communicable disease, and promoting and
maintaining public health.
Local public health laboratories are approved by DPH, and are
certified to meet state and federal law and regulations. DPH
also certifies public health microbiologists and public health
laboratory directors to ensure that they meet all educational
and training requirements required by state regulations.
Existing state regulations set forth specific requirements and
standards public health laboratories must meet, including
requirements pertaining to personnel, reporting, and safety
procedures and precautions. Existing regulations require a
public health laboratory microbiologist, and a public health
laboratory director to meet specified education and training
requirements, and to be certified by DPH. Local public health
laboratories currently do not pay fees to DPH for laboratory
or personnel certification. With regard to public health
microbiologists and laboratory directors, DPH issues a
lifelong certificate at no charge, with no renewal
requirements.
3)Committee Fee Bill Worksheet. Included with this analysis is a
"Fee Background Information Questionnaire" which is to be
completed by the Author's Office and the board requesting a fee
increase. This Questionnaire is required by the Committee to
justify any fee increases and provide background information on
requested fee increases by the boards under DCA. The
Questionnaire is to include fund condition statements displaying
five years of actual and five years of projected expenditures and
revenues with (a) current statutory maximum fee amounts and (b)
proposed statutory maximum fee amounts. It must also include a
schedule of fee revenue by various fee "categories" displaying
five years of actual and five years of projected revenue based on
(a) current fees and (b) proposed fees and includes the workload
(e.g., number of licensees) and fee charged per category. It is
to provide a schedule displaying two years of expenditures by
program components; such as application review, examination,
enforcement, administration and other licensing activities for
each licensing category. It is to provide a table of comparison
of existing and proposed fees which includes the percentage by
which the fee will change. Lastly, it should provide the history
for the past 10 years of legislative fee increase authorizations.
According to the worksheet submitted by the Author, there is no
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projected deficit that this bill is trying to address but because
of inadequate revenue DPH has not been able to perform
legislatively mandated activities as cited in the Bureau of State
Audits report. The worksheet also indicates that the licensing
fee proposals for clinical laboratories in this bill would
generate a projected revenue of $2,163,934 and the estimated
expense would be at $1,047,729. The difference of $1,116,205
will be used for other programs or deposited into the fund
reserve.
4)Previous Legislation. SB 113 (Maddy), Chapter 510, Statutes of
1995, conformed state laboratory licensing law to federal CLIA
law.
5)Support if Amended. The California Medical Association (CMA) has
taken a support if amended position on this bill because it is
concerned that physicians who operate physician office
laboratories may be required to pay duplicate fees if federal
CLIA exemptions are not approved. CMA has suggested several
amendments to ensure that physicians and surgeons are not caught
up in overlapping fees including adding sunset provisions if
federal CLIA exemption is not achieved, and changing the annual
fee and licensing requirement to a bi-annual requirement instead
of an annual requirement.
6)Arguments in Opposition. According to the California
Association of Public Health Laboratory Directors (CAPHLD), it
opposes the provisions of this bill pertaining to public health
laboratories. The CAPHLD states that public health laboratories
are an extension of the state's authority to protect public
health, are non-profit governmental entities, and have a
different function and mission than the clinical laboratories
addressed by this bill. The CAPHLD opposes the bill's provisions
that establish licensing fees for public health laboratory
facilities and personnel, and states that the bill would
undermine existing personnel standards by allowing DPH to issue
public health microbiologist certification based on passage of
national accrediting board examinations, which have less
stringent standards than the state's existing certification
process, and which do not generally cover training, testing, and
handling of the type of specimens handled by public health
laboratory personnel. CAPHLD states that there is no shortage of
public health microbiologists in California, and thus no need to
use national accreditation in lieu of state certification.
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NOTE : Double-referral to Health Committee first.
SUPPORT AND OPPOSITION:
Support:
California Department of Public Health (Sponsor)
Support if Amended:
California Medical Association
Opposition:
California Association of Public Health Laboratory Directors
Consultant:Rosielyn Pulmano