BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
744 (Strickland)
Hearing Date: 5/18/2009 Amended: 5/14/2009
Consultant: Katie Johnson Policy Vote: Health 11-0 B, P &
ED 6-1
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BILL SUMMARY: SB 744, an urgency measure, would increase
licensing fees on clinical laboratories and their personnel, as
administered by the Laboratory Field Services (LFS) within the
California Department of Public Health (CDPH).
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Clinical laboratory ($4,200)
($5,100) ($5,100) Special*
licensing fee revenue
Clinical laboratory ($1,200)
($1,400) ($1,400) Special*
registration fee revenue
Phlebotomy technician ($2,000) ($2,000)
($2,000) Special*
fee revenue
*Clinical Laboratory Improvement Fund (CLIF)
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Existing federal law, the Clinical Laboratory Improvement
Amendments of 1988 (CLIA), regulates laboratories that perform
tests on human specimens. CLIA includes laboratory standards for
proficiency testing, facility administration, personnel
qualifications, and quality control. CLIA applies to all
laboratory settings, including hospital, commercial, and
physician offices. Existing federal law permits states to seek
an exemption from CLIA.
This bill would state that, consistent with the intent of SB 113
(Chapter 510, Statutes of 1995), it is the intent of the
Legislature to enact provisions in state law that would enable
the state to seek approval from the United States Secretary of
Health and Human Services to exempt clinical laboratories
licensed or registered under state law from CLIA. Commencing FY
2013-2014, this bill would require the CDPH to report during the
annual budget hearing process on the status of the department's
work toward seeking a CLIA exemption, any deficiencies
identified, the extent to which the federal government is
accepting applications for exemption, and the cost to the state
for an exemption.
Currently, California clinical laboratories pay approximately
$6.5 million in fees to the federal government for CLIA
oversight and the state receives $1.5 million in federal funds
to administer CLIA oversight. Thus, the federal government
retains $5 million in
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SB 744 (Strickland)
clinical laboratory fees. Were the state to seek and be granted
a CLIA exemption, clinical laboratories would no longer pay fees
to both the federal government and the state; they would only
pay state fees. However, the CDPH estimates that if the state
were to be granted CLIA exemption, it would be required to pay
the $5 million in administrative fees to the federal government.
Language and reporting requirements contained in this bill state
intent that the CDPH seek that exemption, which could result in
a cost and duties that, at this time, the state cannot afford.
Staff recommends deleting the intent language in Section 1 of
this bill and the CLIA exemption reporting requirement.
Existing state law establishes the Laboratory Field Services
(LFS) within the CDPH, which provides for the licensing and
registration of clinical laboratories, as specified, and
collects specified fees to support its activities, including
licensing, registration, inspection, and certification efforts.
In September 2008, the California State Auditor released a
report entitled, "Department of Public Health: Laboratory Field
Services' Lack of Clinical Laboratory Oversight Places the
Public at Risk." The report detailed the lack of oversight,
inspection, and imposition of sanctions of clinical laboratories
by the CDPH. The department stated that this lack of oversight
was primarily due to insufficient financial resources.
Existing state law permits the CDPH to certify a clinical
laboratory as meeting licensing or registration requirements
that is accredited by a private, nonprofit organization that is
federally approved by CLIA. This bill would require these
accrediting agencies to conduct inspections of clinical
laboratories in a way that would determine compliance with state
and federal laws and would allow the CDPH to implement this
provision by means of an All Clinical Laboratories Letter. This
bill would place additional requirements on accrediting agencies
relating to inspections of laboratories, as specified.
This bill would increase the certification and biennial renewal
fee of a phlebotomy technician from $25 to $100. According to a
fee worksheet submitted by the CDPH to the Senate Committee on
Business, Professions, and Economic Development, the CDPH
expects to certify approximately 36,000 phlebotomists in FY 2009
- 2010 and to generate approximately $2 million in revenues
annually.
This bill would also increase fees on various clinical personnel
in specified amounts.
This bill would require clinical laboratories that perform tests
classified as moderate to high complexity under CLIA that would
be applying for licensure or annual renewal to pay a fee based
on the number of tests performed at the laboratory, which would
be capped at 15 million tests per facility annually. The current
fees generated approximately $1.8 million in FY 2007-2008. The
fee worksheet mentioned above shows that the CDPH predicts
revenues of $4.2 million in FY 2009-2010 and $5.1 million
ongoing.
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SB 744 (Strickland)
This bill would increase the annual fee for the clinical
laboratories registered by the CDPH that perform tests waived by
CLIA and/or provider-performed microscopy. This fee increase is
expected to generate approximately $1.2 million in FY 2009-2010
and $1.4 million ongoing.
This bill would prohibit the total fees collected from exceeding
the costs incurred by the department for licensing,
certification, inspection, or other activities relating to the
regulation of clinical laboratories.
This bill would continuously appropriate the moneys deposited in
the Clinical Laboratory Improvement Fund (CLIF). Under existing
law, CLIF moneys are subject to appropriation in the annual
Budget Act. Staff recommends that the bill be amended to remove
the continuous appropriation to ensure Legislative oversight
over the expenditures of this program.
This bill would provide that the costs of the CDPH to conduct a
reinspection of a laboratory applying for initial licensure
would be paid by the laboratory in the amount of the initial
application fee unless the reinspection was due to an error or
omission by the department.
This bill would require a clinical laboratory to pay a
delinquency fee equal to 25 percent of the annual renewal fee if
its license or registration is not renewed before the expiration
date.