Amended in Assembly May 6, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2264

Introduced by Assembly Member Levine

February 21, 2014

An act to begin delete amend Section 1206 of end delete begin insert add Section 1220.1 to end insert the Health and Safety Code, relating to clinics.

LEGISLATIVE COUNSEL’S DIGEST

AB 2264, as amended, Levine. Clinics: licensure and regulation: exemptions.

Existing law provides for and regulation the licensure, of clinics, as defined, by the State Department of Public Health. Under existing law, specified types of clinics are exempted from these licensing provisions, including a clinic that is conducted, maintained, or operated by a federally recognized Indian tribe and is located on land recognized as tribal land by the federal government.

begin delete

This bill would expand that exemption to also include a federally recognized Indian tribe under a contract with the United States pursuant to federal law, without regard to the location of the clinic.

end delete begin insert

This bill would require the department to negotiate with any federally recognized tribe for a program under which the tribe would be responsible for carrying out the department’s duties regarding the licensing and regulation of certain primary care clinics if the tribe and the clinic meet specified requirements.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 1220.1 is added to the end insert begin insert Health and Safety
Code end insert begin insert , end insert immediately following Section 1220 begin insert , to read: end insert

begin insert

begin insert 1220.1. end insert   

(a) The State Department of Public Health shall
negotiate with any federally recognized tribe for a delegated
program under which the tribe shall assume responsibility for
carrying out the department’s duties regarding licensing and
regulation of a primary care clinic subject to this chapter,
including any implementing regulations.

(b) A tribe is qualified to participate in a program under
subdivision (a) if the tribe operates or intends to operate a clinic
under contract with the Indian Health Service (IHS) pursuant to
the Indian Self-Determination and Education Assistance Act
(Public Law 93-638) and the tribe is operating or intends to
operate the clinic within its IHS contract health service delivery
area, as described in Section 1680 of Title 25 of the United States
Code.

(c) A clinic under this section shall be enrolled in the Medi-Cal
program or pending enrollment because the tribe intends to enroll
the clinic when a license to operate the clinic is granted.

(d) The department shall ensure an agreement entered into
under this section retains the department’s authority to ensure the
clinic and tribe are meeting the requirements of state law regarding
the operation of clinics.

(e) This section shall not be construed to extend state authority
over the operation of a primary care clinic beyond what is required
by this chapter, including any implementing regulations.

(f) The department may approve a process carried out by the
tribe that deviates from state requirements if the process is as
protective of the public and complies with federal law, regulations,
or contract requirements.

end insert

begin delete

SECTION 1.  

Section 1206 of the Health and Safety Code is
amended to read:

1206.  

This chapter does not apply to the following:

(a) Except with respect to the option provided with regard to
surgical clinics in paragraph (1) of subdivision (b) of Section 1204
and, further, with respect to specialty clinics specified in paragraph
(2) of subdivision (b) of Section 1204, any place or establishment
owned or leased and operated as a clinic or office by one or more
licensed health care practitioners and used as an office for the
practice of their profession, within the scope of their license,
regardless of the name used publicly to identify the place or
establishment.

(b) Any clinic directly conducted, maintained, or operated by
the United States or by any of its departments, officers, or agencies,
and any primary care clinic specified in subdivision (a) of Section
1204 that is directly conducted, maintained, or operated by this
state or by any of its political subdivisions or districts, or by any
city. Nothing in this subdivision precludes the state department
from adopting regulations that utilize clinic licensing standards as
eligibility criteria for participation in programs funded wholly or
partially under Title XVIII or XIX of the federal Social Security
Act.

(c) (1) Any clinic conducted, maintained, or operated by a
federally recognized Indian tribe or tribal organization, as defined
in Section 450 or 1603 of Title 25 of the United States Code, that
is located on land recognized as tribal land by the federal
government.

(2) Any clinic conducted, maintained, or operated by a federally
recognized Indian tribe or tribal organization, as defined in Section
450 or 1603 of Title 25 of the United States Code, under a contract
with the United States pursuant to the Indian Self-Determination
and Education Assistance Act (Public Law 93-638), regardless of
the location of the clinic.

(d) Clinics conducted, operated, or maintained as outpatient
departments of hospitals.

(e) Any facility licensed as a health facility under Chapter 2
(commencing with Section 1250).

(f) Any freestanding clinical or pathological laboratory licensed
under Chapter 3 (commencing with Section 1200) of Division 2
of the Business and Professions Code.

(g) A clinic operated by, or affiliated with, any institution of
learning that teaches a recognized healing art and is approved by
the state board or commission vested with responsibility for
regulation of the practice of that healing art.

(h) A clinic that is operated by a primary care community or
free clinic and that is operated on separate premises from the
licensed clinic and is only open for limited services of no more
than 20 hours a week. An intermittent clinic as described in this
subdivision shall, however, meet all other requirements of law,
including administrative regulations and requirements, pertaining
to fire and life safety.

(i) The offices of physicians in group practice who provide a
preponderance of their services to members of a comprehensive
group practice prepayment health care service plan subject to
Chapter 2.2 (commencing with Section 1340).

(j) Student health centers operated by public institutions of
higher education.

(k) Nonprofit speech and hearing centers, as defined in Section
1201.5. Any nonprofit speech and hearing clinic desiring an
exemption under this subdivision shall make application therefor
to the director, who shall grant the exemption to any facility
meeting the criteria of Section 1201.5. Notwithstanding the
licensure exemption contained in this subdivision, a nonprofit
speech and hearing center shall be deemed to be an organized
outpatient clinic for purposes of qualifying for reimbursement as
a rehabilitation center under the Medi-Cal Act (Chapter 7
(commencing with Section 14000) of Part 3 of Division 9 of the
Welfare and Institutions Code).

(l) A clinic operated by a nonprofit corporation exempt from
federal income taxation under paragraph (3) of subsection (c) of
Section 501 of the Internal Revenue Code of 1954, as amended,
or a statutory successor thereof, that conducts medical research
and health education and provides health care to its patients through
a group of 40 or more physicians and surgeons, who are
independent contractors representing not less than 10
board-certified specialties, and not less than two-thirds of whom
practice on a full-time basis at the clinic.

(m) Any clinic, limited to in vivo diagnostic services by
magnetic resonance imaging functions or radiological services
under the direct and immediate supervision of a physician and
surgeon who is licensed to practice in California. This shall not
be construed to permit cardiac catheterization or any treatment
modality in these clinics.

(n) A clinic operated by an employer or jointly by two or more
employers for their employees only, or by a group of employees,
or jointly by employees and employers, without profit to the
operators thereof or to any other person, for the prevention and
treatment of accidental injuries to, and the care of the health of,
the employees comprising the group.

(o) A community mental health center, as defined in Section
5601.5 of the Welfare and Institutions Code.

(p) (1) A clinic operated by a nonprofit corporation exempt
from federal income taxation under paragraph (3) of subsection
(c) of Section 501 of the Internal Revenue Code of 1954, as
amended, or a statutory successor thereof, as an entity organized
and operated exclusively for scientific and charitable purposes and
that satisfied all of the following requirements on or before January
1, 2005:

(A) Commenced conducting medical research on or before
January 1, 1982, and continues to conduct medical research.

(B) Conducted research in, among other areas, prostatic cancer,
cardiovascular disease, electronic neural prosthetic devices,
biological effects and medical uses of lasers, and human magnetic
resonance imaging and spectroscopy.

(C) Sponsored publication of at least 200 medical research
articles in peer-reviewed publications.

(D) Received grants and contracts from the National Institutes
of Health.

(E) Held and licensed patents on medical technology.

(F) Received charitable contributions and bequests totaling at
least five million dollars ($5,000,000).

(G) Provides health care services to patients only:

(i) In conjunction with research being conducted on procedures
or applications not approved or only partially approved for payment
(I) under the Medicare program pursuant to Section 1359y(a)(1)(A)
of Title 42 of the United States Code, or (II) by a health care service
plan registered under Chapter 2.2 (commencing with Section 1340),
or a disability insurer regulated under Chapter 1 (commencing
with Section 10110) of Part 2 of Division 2 of the Insurance Code;
provided that services may be provided by the clinic for an
additional period of up to three years following the approvals, but
only to the extent necessary to maintain clinical expertise in the
procedure or application for purposes of actively providing training
in the procedure or application for physicians and surgeons
unrelated to the clinic.

(ii) Through physicians and surgeons who, in the aggregate,
devote no more than 30 percent of their professional time for the
entity operating the clinic, on an annual basis, to direct patient care
activities for which charges for professional services are paid.

(H) Makes available to the public the general results of its
research activities on at least an annual basis, subject to good faith
protection of proprietary rights in its intellectual property.

(I) Is a freestanding clinic, whose operations under this
subdivision are not conducted in conjunction with any affiliated
or associated health clinic or facility defined under this division,
except a clinic exempt from licensure under subdivision (m). For
purposes of this subparagraph, a freestanding clinic is defined as
“affiliated” only if it directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, a clinic or health facility defined under this division,
except a clinic exempt from licensure under subdivision (m). For
purposes of this subparagraph, a freestanding clinic is defined as
“associated” only if more than 20 percent of the directors or trustees
of the clinic are also the directors or trustees of any individual
clinic or health facility defined under this division, except a clinic
exempt from licensure under subdivision (m). Any activity by a
clinic under this subdivision in connection with an affiliated or
associated entity shall fully comply with the requirements of this
subdivision. This subparagraph shall not apply to agreements
between a clinic and any entity for purposes of coordinating
medical research.

(2) By January 1, 2007, and every five years thereafter, the
Legislature shall receive a report from each clinic meeting the
criteria of this subdivision and any other interested party
concerning the operation of the clinic’s activities. The report shall
include, but not be limited to, an evaluation of how the clinic
impacted competition in the relevant health care market, and a
detailed description of the clinic’s research results and the level
of acceptance by the payer community of the procedures performed
at the clinic. The report shall also include a description of
procedures performed both in clinics governed by this subdivision
and those performed in other settings. The cost of preparing the
reports shall be borne by the clinics that are required to submit
them to the Legislature pursuant to this paragraph.

end delete