BILL ANALYSIS
SB 744
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Date of Hearing: August 19, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
SB 744 (Strickland) - As Amended: July 14, 2009
Policy Committee: Health Vote:16-0
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill increases oversight of California clinical
laboratories and the funding dedicated to oversight activities.
Specifically, this bill:
1)Revises and increases various fee schedules paid by facilities
and professionals.
2)Requires a private, non-profit organization (PNO) seeking
licensure by the California Department of Public Health to
provide the following information:
a) A detailed comparison of accreditation or approval
requirements.
b) A detailed description of its inspection process.
c) A description of the monitoring of proficiency testing.
d) A list of its current California licensed or registered
laboratories.
3)Requires a PNO to conduct laboratory inspections in compliance
with federal and state laws, pay the applicable fees
established by this bill, furnish proficiency testing results,
and requires specified actions if accreditation is withdrawn
or revoked.
4)Modifies current law licensure fee schedules to move to a
sliding scale that incorporates volume of testing by labs.
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5)Requires DPH to report to the Legislature during budget
hearings about meeting or exceeding federal standards and the
status of federal exemption efforts.
FISCAL EFFECT
Annual increased fee-supported special fund costs of $4 million
to support DPH inspectors who conduct training and inspections
that have been identified by the Bureau of State Audits as
inadequate under current law. The increased funding is derived
from moving from a flat fee schedule to one that accounts for
the volume of testing performed at specific labs.
COMMENTS
1)Rationale . This bill is sponsored by DPH to increase oversight
of clinical laboratories, move to a sliding fee scale, and to
set standards for the approval of accrediting organizations
and their lab inspectors. Strong lab oversight is fundamental
to protecting the health and safety of Californians. Labs
currently pay a fee established in 1951. According to DPH,
because this fee has never been adjusted, Laboratory Field
Services within the department has been chronically
underfunded, resulting in weak enforcement of state laws and
regulations regarding licensing, certification, and
registration of labs.
2)Background . DPH oversees more than 10,000 licensed and
registered clinical laboratories statewide, including those at
physician offices, clinics, hospitals, and public health
agencies. These labs analyze medical specimens, such as blood,
tissue, and urine so that providers can make diagnoses and
provide treatment. Under state law, DPH is required to inspect
clinical laboratories, monitor proficiency testing, renew
laboratories' licenses and registrations, investigate
complaints, and sanction clinical laboratories that violate
the law or regulations. These activities help ensure that
clinical laboratories are providing safe, quality services to
the public. Labs are required to be licensed or registered
each year. The complexity of the testing determines whether a
lab is licensed or registered. For example, labs performing
complex tests are licensed whereas labs performing
prepackaged, manufactured tests are registered.
3)Recent Audit Report . In the fall of 2008 the Bureau of State
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Audits (BSA) released a review of DPH lab services oversight
and concluded the department's lack of oversight places the
public at risk. For example, the BSA concluded DPH fails to
inspect labs every two years and fails to take action prior to
closing a complaint. The department is inconsistent in
monitoring laboratory proficiency testing, closes many
complaints without taking action, and has been inconsistent in
imposing sanctions against laboratories for violations of law
and regulations. The department concurred with many of the
findings and indicated a lack of funding has been a barrier to
more effective oversight. This bill increases funding and
support for oversight efforts.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081