Amended in Senate April 14, 2015

Senate BillNo. 396


Introduced by Senator Hill

February 25, 2015


An act to amend Sections 805 and 805.5 of, and to add Section 2216.5 to, the Business and Professions Code,begin insert to amend Section 12529.7 of the Government Code,end insert and to amend Sections 1204, 1248.15, 1248.3, and 1248.35 of the Health and Safety Code, relating to healthbegin delete and care facilities.end deletebegin insert care.end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 396, as amended, Hill. Healthbegin delete and care facilities:end deletebegin insert care:end insert outpatient settings and surgicalbegin delete clinics.end deletebegin insert clinics: facilities: licensure and enforcement.end insert

Existing law provides for the licensure and regulation of clinics by the State Department of Public Health. A violation of those provisions is a misdemeanor. Existing law provides that certain types of specialty clinics, including surgical clinics, as defined, are eligible for licensure.begin insert Existing law excludes from the definition of surgical clinic any place or establishment owned or leased and operated as a clinic or office by one or more physicians or dentists in individual or group practice. Existing law requires a surgical clinic that is licensed or seeking licensure to comply with federal certification standards for an ambulatory surgical clinic until the department adopts regulations relating to the provision of services by a surgical clinic.end insert

This bill wouldbegin delete clarifyend deletebegin insert provideend insert that a surgical clinicbegin insert that has met the federal certification standards and requirements for an ambulatory surgical clinicend insert is eligible for licensure by the department regardless of physicianbegin insert, podiatrist,end insert or dentist ownership.begin insert The bill would provide that a surgical clinic is deemed to have met the licensure requirements under the chapter upon presenting documentation, within a 3-year period, that the surgical clinic has met the federal certification requirements for an ambulatory surgical clinic.end insert

The Medical Practice Act provides for the licensure and regulation of physicians and surgeons by the Medical Board of California. Existing law provides that it is unprofessional conduct for a physician and surgeon to perform procedures in any outpatient setting except in compliance with specified provisions. Existing law prohibits an association, corporation, firm, partnership, or person from operating, managing, conducting, or maintaining an outpatient setting in the state unless the setting is one of the specified settings, which includes, among others,begin insert an ambulatory surgical clinic that is certified to participate in the Medicare program,end insert a surgical clinic licensed by the State Department of Publicbegin delete Healthend deletebegin insert Health,end insert or an outpatient setting accredited by an accreditation agency approved by the Division of Licensing of the Medical Board of California.

Existing law provides that an outpatient setting that is accredited shall be inspected by the accreditation agency and may be inspected by the Medical Board of California. Existing law requires that the inspections be conducted no less often than once every 3 years by the accreditation agency and as often as necessary by the Medical Board of California to ensure quality of care provided. Existing law requires that certificates for accreditation issued to outpatient settings by an accreditation agency shall be valid for not more than 3 years.

This bill would require that all subsequent inspections after the initial inspection for accreditation be unannounced. This bill would require an outpatient setting accredited by the divisionbegin insert and a facility certified to participate in the federal Medicare program as an ambulatory surgical centerend insert to pay certain fees and to comply with certain data submission requirements. The bill would also instead require that an initial certificate of accreditation by an accreditation agency be valid for not more than 2 years and that a renewal certificate be valid for not more than 3 years.

Existing law requires members of the medical staff and other practitioners who are granted clinical privileges in an outpatient setting to be professionally qualified and appropriately credentialed for the performance of privileges granted and requires the outpatient setting to grant privileges in accordance with recommendations from qualified health professionals, and credentialing standards established by the outpatient setting.

This bill would additionally require that eachbegin delete physician and surgeonend deletebegin insert licenseeend insert who performs procedures in an outpatient setting that requires the outpatient setting to be accredited be peer reviewedbegin insert, at least every 2 years,end insert bybegin delete California licensed physiciansend deletebegin insert licenseesend insert who are qualified by educationbegin insert andend insert experience to perform the same types ofbegin insert, or similarend insert procedures.begin insert The bill would require the findings of the peer review to be reported to the accrediting body who shall determine if the licensee continues to be professionally qualified and appropriately credentialed for the performance of privileges granted.end insert By expanding the scope of a crime, this bill would impose a state-mandated local program.

Existing law requires specified entities, including any health care service plan or medical care foundation, to request a report from the Medical Board of California, the Board of Psychology, the Osteopathic Medical Board of California, or the Dental Board of California, prior to granting or renewing staff privileges, to determine if a certain report has been made indicating that the applying physician and surgeon, psychologist, podiatrist, or dentist has been denied staff privileges, been removed from a medical staff, or had his or her staff privileges restricted.

This bill would also require an outpatient setting and a facility certified to participate in the federal Medicare program as an ambulatory surgical center to request that report. By expanding the scope of a crime, this bill would impose a state-mandated local program.

begin insert

Existing law establishes a vertical enforcement and prosecution model for cases before the Medical Board of California, and requires the board to report to the Governor and the Legislature on that model by March 1, 2015.

end insert
begin insert

This bill would extend the date that report is due to March 1, 2016.

end insert

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

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

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

P4    1

SECTION 1.  

Section 805 of the Business and Professions Code
2 is amended to read:

3

805.  

(a) As used in this section, the following terms have the
4following definitions:

5(1) (A) “Peer review” means both of the following:

6(i) A process in which a peer review body reviews the basic
7qualifications, staff privileges, employment, medical outcomes,
8or professional conduct of licentiates to make recommendations
9for quality improvement and education, if necessary, in order to
10do either or both of the following:

11(I) Determine whether a licentiate may practice or continue to
12practice in a health care facility, clinic, or other setting providing
13medical services, and, if so, to determine the parameters of that
14 practice.

15(II) Assess and improve the quality of care rendered in a health
16care facility, clinic, or other setting providing medical services.

17(ii) Any other activities of a peer review body as specified in
18subparagraph (B).

19(B) “Peer review body” includes:

20(i) A medical or professional staff of any health carebegin delete facility orend delete
21begin insert facility, of aend insert clinic licensed under Division 2 (commencing with
22Section 1200) of the Health and Safety Code, of a facility certified
23to participate in the federal Medicare program as an ambulatory
24surgical center, or of an outpatient setting accredited pursuant to
25Section 1248.1 of the Health and Safety Code.

26(ii) A health care service plan licensed under Chapter 2.2
27(commencing with Section 1340) of Division 2 of the Health and
28Safety Code or a disability insurer that contracts with licentiates
29to provide services at alternative rates of payment pursuant to
30Section 10133 of the Insurance Code.

31(iii) Any medical, psychological, marriage and family therapy,
32social work, professional clinical counselor, dental, or podiatric
33professional society having as members at least 25 percent of the
34eligible licentiates in the area in which it functions (which must
35include at least one county), which is not organized for profit and
36which has been determined to be exempt from taxes pursuant to
37Section 23701 of the Revenue and Taxation Code.

P5    1(iv) A committee organized by any entity consisting of or
2employing more than 25 licentiates of the same class that functions
3for the purpose of reviewing the quality of professional care
4provided by members or employees of that entity.

5(2) “Licentiate” means a physician and surgeon, doctor of
6podiatric medicine, clinical psychologist, marriage and family
7therapist, clinical social worker, professional clinical counselor,
8dentist, or physician assistant. “Licentiate” also includes a person
9authorized to practice medicine pursuant to Section 2113 or 2168.

10(3) “Agency” means the relevant state licensing agency having
11regulatory jurisdiction over the licentiates listed in paragraph (2).

12(4) “Staff privileges” means any arrangement under which a
13licentiate is allowed to practice in or provide care for patients in
14a health facility. Those arrangements shall include, but are not
15limited to, full staff privileges, active staff privileges, limited staff
16privileges, auxiliary staff privileges, provisional staff privileges,
17temporary staff privileges, courtesy staff privileges, locum tenens
18arrangements, and contractual arrangements to provide professional
19services, including, but not limited to, arrangements to provide
20outpatient services.

21(5) “Denial or termination of staff privileges, membership, or
22employment” includes failure or refusal to renew a contract or to
23renew, extend, or reestablish any staff privileges, if the action is
24based on medical disciplinary cause or reason.

25(6) “Medical disciplinary cause or reason” means that aspect
26of a licentiate’s competence or professional conduct that is
27reasonably likely to be detrimental to patient safety or to the
28delivery of patient care.

29(7) “805 report” means the written report required under
30subdivision (b).

31(b) The chief of staff of a medical or professional staff or other
32chief executive officer, medical director, or administrator of any
33peer review body and the chief executive officer or administrator
34of any licensed health care facility or clinic shall file an 805 report
35with the relevant agency within 15 days after the effective date on
36which any of the following occur as a result of an action of a peer
37review body:

38(1) A licentiate’s application for staff privileges or membership
39is denied or rejected for a medical disciplinary cause or reason.

P6    1(2) A licentiate’s membership, staff privileges, or employment
2is terminated or revoked for a medical disciplinary cause or reason.

3(3) Restrictions are imposed, or voluntarily accepted, on staff
4privileges, membership, or employment for a cumulative total of
530 days or more for any 12-month period, for a medical disciplinary
6cause or reason.

7(c) If a licentiate takes any action listed in paragraph (1), (2),
8or (3) after receiving notice of a pending investigation initiated
9for a medical disciplinary cause or reason or after receiving notice
10that his or her application for membership or staff privileges is
11denied or will be denied for a medical disciplinary cause or reason,
12the chief of staff of a medical or professional staff or other chief
13executive officer, medical director, or administrator of any peer
14review body and the chief executive officer or administrator of
15any licensed health care facility or clinic where the licentiate is
16employed or has staff privileges or membership or where the
17licentiate applied for staff privileges or membership, or sought the
18renewal thereof, shall file an 805 report with the relevant agency
19within 15 days after the licentiate takes the action.

20(1) Resigns or takes a leave of absence from membership, staff
21privileges, or employment.

22(2) Withdraws or abandons his or her application for staff
23privileges or membership.

24(3) Withdraws or abandons his or her request for renewal of
25staff privileges or membership.

26(d) For purposes of filing an 805 report, the signature of at least
27one of the individuals indicated in subdivision (b) or (c) on the
28completed form shall constitute compliance with the requirement
29to file the report.

30(e) An 805 report shall also be filed within 15 days following
31the imposition of summary suspension of staff privileges,
32membership, or employment, if the summary suspension remains
33in effect for a period in excess of 14 days.

34(f) A copy of the 805 report, and a notice advising the licentiate
35of his or her right to submit additional statements or other
36information, electronically or otherwise, pursuant to Section 800,
37shall be sent by the peer review body to the licentiate named in
38the report. The notice shall also advise the licentiate that
39information submitted electronically will be publicly disclosed to
40those who request the information.

P7    1The information to be reported in an 805 report shall include the
2name and license number of the licentiate involved, a description
3of the facts and circumstances of the medical disciplinary cause
4or reason, and any other relevant information deemed appropriate
5by the reporter.

6A supplemental report shall also be made within 30 days
7following the date the licentiate is deemed to have satisfied any
8terms, conditions, or sanctions imposed as disciplinary action by
9the reporting peer review body. In performing its dissemination
10functions required by Section 805.5, the agency shall include a
11copy of a supplemental report, if any, whenever it furnishes a copy
12of the original 805 report.

13If another peer review body is required to file an 805 report, a
14health care service plan is not required to file a separate report
15with respect to action attributable to the same medical disciplinary
16cause or reason. If the Medical Board of California or a licensing
17agency of another state revokes or suspends, without a stay, the
18license of a physician and surgeon, a peer review body is not
19required to file an 805 report when it takes an action as a result of
20the revocation or suspension.

21(g) The reporting required by this section shall not act as a
22waiver of confidentiality of medical records and committee reports.
23The information reported or disclosed shall be kept confidential
24except as provided in subdivision (c) of Section 800 and Sections
25803.1 and 2027, provided that a copy of the report containing the
26information required by this section may be disclosed as required
27by Section 805.5 with respect to reports received on or after
28January 1, 1976.

29(h) The Medical Board of California, the Osteopathic Medical
30Board of California, and the Dental Board of California shall
31disclose reports as required by Section 805.5.

32(i) An 805 report shall be maintained electronically by an agency
33for dissemination purposes for a period of three years after receipt.

34(j) No person shall incur any civil or criminal liability as the
35result of making any report required by this section.

36(k) A willful failure to file an 805 report by any person who is
37designated or otherwise required by law to file an 805 report is
38punishable by a fine not to exceed one hundred thousand dollars
39($100,000) per violation. The fine may be imposed in any civil or
40administrative action or proceeding brought by or on behalf of any
P8    1agency having regulatory jurisdiction over the person regarding
2whom the report was or should have been filed. If the person who
3is designated or otherwise required to file an 805 report is a
4licensed physician and surgeon, the action or proceeding shall be
5brought by the Medical Board of California. The fine shall be paid
6to that agency but not expended until appropriated by the
7Legislature. A violation of this subdivision may constitute
8unprofessional conduct by the licentiate. A person who is alleged
9to have violated this subdivision may assert any defense available
10at law. As used in this subdivision, “willful” means a voluntary
11and intentional violation of a known legal duty.

12(l) Except as otherwise provided in subdivision (k), any failure
13by the administrator of any peer review body, the chief executive
14officer or administrator of any health care facility, or any person
15who is designated or otherwise required by law to file an 805
16report, shall be punishable by a fine that under no circumstances
17shall exceed fifty thousand dollars ($50,000) per violation. The
18fine may be imposed in any civil or administrative action or
19proceeding brought by or on behalf of any agency having
20regulatory jurisdiction over the person regarding whom the report
21was or should have been filed. If the person who is designated or
22otherwise required to file an 805 report is a licensed physician and
23surgeon, the action or proceeding shall be brought by the Medical
24Board of California. The fine shall be paid to that agency but not
25expended until appropriated by the Legislature. The amount of the
26fine imposed, not exceeding fifty thousand dollars ($50,000) per
27violation, shall be proportional to the severity of the failure to
28report and shall differ based upon written findings, including
29whether the failure to file caused harm to a patient or created a
30risk to patient safety; whether the administrator of any peer review
31body, the chief executive officer or administrator of any health
32care facility, or any person who is designated or otherwise required
33by law to file an 805 report exercised due diligence despite the
34failure to file or whether they knew or should have known that an
35805 report would not be filed; and whether there has been a prior
36failure to file an 805 report. The amount of the fine imposed may
37also differ based on whether a health care facility is a small or
38rural hospital as defined in Section 124840 of the Health and Safety
39Code.

P9    1(m) A health care service plan licensed under Chapter 2.2
2(commencing with Section 1340) of Division 2 of the Health and
3Safety Code or a disability insurer that negotiates and enters into
4a contract with licentiates to provide services at alternative rates
5of payment pursuant to Section 10133 of the Insurance Code, when
6determining participation with the plan or insurer, shall evaluate,
7on a case-by-case basis, licentiates who are the subject of an 805
8report, and not automatically exclude or deselect these licentiates.

9

SEC. 2.  

Section 805.5 of the Business and Professions Code
10 is amended to read:

11

805.5.  

(a) Prior to granting or renewing staff privileges for
12any physician and surgeon, psychologist, podiatrist, or dentist, any
13health facility licensed pursuant to Division 2 (commencing with
14Section 1200) of the Health and Safety Code, any health care
15service plan or medical care foundation, the medical staff of the
16institution, a facility certified to participate in the federal Medicare
17program as an ambulatory surgical center, or an outpatient setting
18accredited pursuant to Section 1248.1 of the Health and Safety
19Code shall request a report from the Medical Board of California,
20the Board of Psychology, the Osteopathic Medical Board of
21California, or the Dental Board of California to determine if any
22report has been made pursuant to Section 805 indicating that the
23applying physician and surgeon, psychologist, podiatrist, or dentist
24has been denied staff privileges, been removed from a medical
25staff, or had his or her staff privileges restricted as provided in
26Section 805. The request shall include the name and California
27license number of the physician and surgeon, psychologist,
28podiatrist, or dentist. Furnishing of a copy of the 805 report shall
29not cause the 805 report to be a public record.

30(b) Upon a request made by, or on behalf of, an institution
31described in subdivision (a) or its medical staff the board shall
32furnish a copy of any report made pursuant to Section 805 as well
33as any additional exculpatory or explanatory information submitted
34electronically to the board by the licensee pursuant to subdivision
35(f) of that section. However, the board shall not send a copy of a
36report (1) if the denial, removal, or restriction was imposed solely
37because of the failure to complete medical records, (2) if the board
38has found the information reported is without merit, (3) if a court
39finds, in a final judgment, that the peer review, as defined in
40Section 805, resulting in the report was conducted in bad faith and
P10   1the licensee who is the subject of the report notifies the board of
2that finding, or (4) if a period of three years has elapsed since the
3report was submitted. This three-year period shall be tolled during
4any period the licentiate has obtained a judicial order precluding
5 disclosure of the report, unless the board is finally and permanently
6precluded by judicial order from disclosing the report. If a request
7is received by the board while the board is subject to a judicial
8order limiting or precluding disclosure, the board shall provide a
9disclosure to any qualified requesting party as soon as practicable
10after the judicial order is no longer in force.

11If the board fails to advise the institution within 30 working days
12following its request for a report required by this section, the
13institution may grant or renew staff privileges for the physician
14and surgeon, psychologist, podiatrist, or dentist.

15(c) Any institution described in subdivision (a) or its medical
16staff that violates subdivision (a) is guilty of a misdemeanor and
17shall be punished by a fine of not less than two hundred dollars
18($200) nor more than one thousand two hundred dollars ($1,200).

19

SEC. 3.  

Section 2216.5 is added to the Business and Professions
20Code
, to read:

21

2216.5.  

An outpatient setting accredited pursuant to Section
221248.1 of the Health and Safety Codebegin delete isend deletebegin insert and a facility certified to
23participate in the federal Medicare program as an ambulatory
24surgical center areend insert
subject to the requirements of Sectionbegin delete 1216,end delete
25begin insert 1216 of,end insert subdivision (f) of Sectionbegin delete 127280,end deletebegin insert 127280 of, Section
26127285 of,end insert
and Section 128737begin delete ofend deletebegin insert of,end insert the Health and Safety Code.
27begin insert Any fees collected pursuant to subdivision (f) of Section 127280
28of the Health and Safety Code shall not exceed the reasonable
29costs incurred by the Office of Statewide Health Planning and
30Development in regulating the outpatient setting and the facility.end insert

31begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 12529.7 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
32to read:end insert

33

12529.7.  

By March 1,begin delete 2015,end deletebegin insert 2016,end insert the Medical Board of
34California, in consultation with the Department of Justice and the
35Department of Consumer Affairs, shall report and make
36recommendations to the Governor and the Legislature on the
37vertical enforcement and prosecution model created under Section
3812529.6.

P11   1

begin deleteSEC. 4.end delete
2begin insertSEC. 5.end insert  

Section 1204 of the Health and Safety Code is amended
3to read:

4

1204.  

Clinics eligible for licensure pursuant to this chapter are
5primary care clinics and specialty clinics.

6(a)  (1)  Only the following defined classes of primary care
7clinics shall be eligible for licensure:

8(A)  A “community clinic” means a clinic operated by a
9tax-exempt nonprofit corporation that is supported and maintained
10in whole or in part by donations, bequests, gifts, grants, government
11funds or contributions, that may be in the form of money, goods,
12or services. In a community clinic, any charges to the patient shall
13be based on the patient’s ability to pay, utilizing a sliding fee scale.
14No corporation other than a nonprofit corporation, exempt from
15 federal income taxation under paragraph (3) of subsection (c) of
16Section 501 of the Internal Revenue Code of 1954 as amended, or
17a statutory successor thereof, shall operate a community clinic;
18provided, that the licensee of any community clinic so licensed on
19the effective date of this section shall not be required to obtain
20tax-exempt status under either federal or state law in order to be
21eligible for, or as a condition of, renewal of its license. No natural
22person or persons shall operate a community clinic.

23(B)  A “free clinic” means a clinic operated by a tax-exempt,
24nonprofit corporation supported in whole or in part by voluntary
25donations, bequests, gifts, grants, government funds or
26contributions, that may be in the form of money, goods, or services.
27In a free clinic there shall be no charges directly to the patient for
28services rendered or for drugs, medicines, appliances, or
29apparatuses furnished. No corporation other than a nonprofit
30corporation exempt from federal income taxation under paragraph
31(3) of subsection (c) of Section 501 of the Internal Revenue Code
32of 1954 as amended, or a statutory successor thereof, shall operate
33a free clinic; provided, that the licensee of any free clinic so
34licensed on the effective date of this section shall not be required
35to obtain tax-exempt status under either federal or state law in
36order to be eligible for, or as a condition of, renewal of its license.
37No natural person or persons shall operate a free clinic.

38(2)  Nothing in this subdivision shall prohibit a community
39clinic or a free clinic from providing services to patients whose
40services are reimbursed by third-party payers, or from entering
P12   1into managed care contracts for services provided to private or
2public health plan subscribers, as long as the clinic meets the
3requirements identified in subparagraphs (A) and (B). For purposes
4of this subdivision, any payments made to a community clinic by
5a third-party payer, including, but not limited to, a health care
6service plan, shall not constitute a charge to the patient. This
7paragraph is a clarification of existing law.

8(b)  The following types of specialty clinics shall be eligible for
9licensure as specialty clinics pursuant to this chapter:

10(1)  (A) A “surgical clinic” means a clinic that is not part of a
11hospital and that provides ambulatory surgical care for patients
12who remain less than 24 hours. A surgical clinic does not include
13any place or establishment owned or leased and operated as a clinic
14or office by one or more physiciansbegin insert, podiatrists,end insert or dentists in
15individual or group practice, regardless of the name used publicly
16to identify the place or establishment.

17(B) A physicianbegin insert, podiatrist,end insert or dentist may, at his or her option,
18apply for licensure. A surgical clinic shall be eligible for licensure
19by the department regardless of physicianbegin insert, podiatrist,end insert or dentist
20ownership.begin insert A surgical clinic that has met the federal certification
21standards and requirements for an ambulatory surgical clinic, as
22specified in Part 416 of Title 42 of the Code of Federal
23Regulations, shall be eligible for licensure by the department
24pursuant to this chapter.end insert

begin insert

25(C) Until the department adopts regulations relating to the
26provision of services by a surgical clinic pursuant to Section 1225,
27a surgical clinic is deemed to have met the licensure requirements
28under this chapter upon presenting documentation, within a
29three-year period, that the surgical clinic has met the federal
30certification standards for an ambulatory surgical clinic.

end insert

31(2)  A “chronic dialysis clinic” means a clinic that provides less
32than 24-hour care for the treatment of patients with end-stage renal
33disease, including renal dialysis services.

34(3)  A “rehabilitation clinic” means a clinic that, in addition to
35providing medical services directly, also provides physical
36rehabilitation services for patients who remain less than 24 hours.
37Rehabilitation clinics shall provide at least two of the following
38rehabilitation services: physical therapy, occupational therapy,
39social, speech pathology, and audiology services. A rehabilitation
P13   1clinic does not include the offices of a private physician in
2individual or group practice.

3(4)  An “alternative birth center” means a clinic that is not part
4of a hospital and that provides comprehensive perinatal services
5and delivery care to pregnant women who remain less than 24
6hours at the facility.

7

begin deleteSEC. 5.end delete
8begin insertSEC. 6.end insert  

Section 1248.15 of the Health and Safety Code is
9amended to read:

10

1248.15.  

(a) The board shall adopt standards for accreditation
11and, in approving accreditation agencies to perform accreditation
12of outpatient settings, shall ensure that the certification program
13shall, at a minimum, include standards for the following aspects
14of the settings’ operations:

15(1) Outpatient setting allied health staff shall be licensed or
16certified to the extent required by state or federal law.

17(2) (A) Outpatient settings shall have a system for facility safety
18and emergency training requirements.

19(B) There shall be onsite equipment, medication, and trained
20personnel to facilitate handling of services sought or provided and
21to facilitate handling of any medical emergency that may arise in
22connection with services sought or provided.

23(C) In order for procedures to be performed in an outpatient
24setting as defined in Section 1248, the outpatient setting shall do
25one of the following:

26(i) Have a written transfer agreement with a local accredited or
27licensed acute care hospital, approved by the facility’s medical
28staff.

29(ii) Permit surgery only by a licensee who has admitting
30privileges at a local accredited or licensed acute care hospital, with
31the exception that licensees who may be precluded from having
32admitting privileges by their professional classification or other
33administrative limitations, shall have a written transfer agreement
34with licensees who have admitting privileges at local accredited
35or licensed acute care hospitals.

36(iii) Submit for approval by an accrediting agency a detailed
37procedural plan for handling medical emergencies that shall be
38reviewed at the time of accreditation. No reasonable plan shall be
39disapproved by the accrediting agency.

P14   1(D) The outpatient setting shall submit for approval by an
2accreditation agency at the time of accreditation a detailed plan,
3standardized procedures, and protocols to be followed in the event
4of serious complications or side effects from surgery that would
5place a patient at high risk for injury or harm or to govern
6emergency and urgent care situations. The plan shall include, at a
7minimum, that if a patient is being transferred to a local accredited
8or licensed acute care hospital, the outpatient setting shall do all
9of the following:

10(i) Notify the individual designated by the patient to be notified
11in case of an emergency.

12(ii) Ensure that the mode of transfer is consistent with the
13patient’s medical condition.

14(iii) Ensure that all relevant clinical information is documented
15and accompanies the patient at the time of transfer.

16(iv) Continue to provide appropriate care to the patient until the
17transfer is effectuated.

18(E) All physicians and surgeons transferring patients from an
19outpatient setting shall agree to cooperate with the medical staff
20peer review process on the transferred case, the results of which
21shall be referred back to the outpatient setting, if deemed
22appropriate by the medical staff peer review committee. If the
23medical staff of the acute care facility determines that inappropriate
24care was delivered at the outpatient setting, the acute care facility’s
25peer review outcome shall be reported, as appropriate, to the
26accrediting body or in accordance with existing law.

27(3) The outpatient setting shall permit surgery by a dentist acting
28within his or her scope of practice under Chapter 4 (commencing
29with Section 1600) of Division 2 of the Business and Professions
30Code or physician and surgeon, osteopathic physician and surgeon,
31or podiatrist acting within his or her scope of practice under
32Chapter 5 (commencing with Section 2000) of Division 2 of the
33Business and Professions Code or the Osteopathic Initiative Act.
34The outpatient setting may, in its discretion, permit anesthesia
35service by a certified registered nurse anesthetist acting within his
36or her scope of practice under Article 7 (commencing with Section
372825) of Chapter 6 of Division 2 of the Business and Professions
38Code.

39(4) Outpatient settings shall have a system for maintaining
40clinical records.

P15   1(5) Outpatient settings shall have a system for patient care and
2monitoring procedures.

3(6) (A)  Outpatient settings shall have a system for quality
4assessment and improvement.

5(B) (i) Members of the medical staff and other practitioners
6who are granted clinical privileges shall be professionally qualified
7and appropriately credentialed for the performance of privileges
8granted. The outpatient setting shall grant privileges in accordance
9with recommendations from qualified health professionals, and
10credentialing standards established by the outpatient setting.

11(ii) Eachbegin delete physician and surgeonend deletebegin insert licenseeend insert who performs
12procedures in an outpatient setting that requires the outpatient
13setting to be accredited shall bebegin insert, at least every two years,end insert peer
14reviewed, as described inbegin insert subparagraph (A) of paragraph (1) of
15subdivision (a) ofend insert
Section 805 of the Business and Professions
16Code, including when the outpatient setting has onlybegin delete one physician
17and surgeon.end delete
begin insert one licensee.end insert The peer review shall be performed by
18begin delete California licensed physiciansend deletebegin insert licenseesend insert who are qualified by
19educationbegin insert andend insert experience to perform the same types ofbegin insert, or similarend insert
20 procedures.begin insert The findings of the peer review shall be reported to
21the accrediting body who shall determine if the licensee continues
22to meet the requirements described in clause (i).end insert

23(C) Clinical privileges shall be periodically reappraised by the
24outpatient setting. The scope of procedures performed in the
25outpatient setting shall be periodically reviewed and amended as
26appropriate.

27(7) Outpatient settings regulated by this chapter that have
28multiple service locations shall have all of the sites inspected.

29(8) Outpatient settings shall post the certificate of accreditation
30in a location readily visible to patients and staff.

31(9) Outpatient settings shall post the name and telephone number
32of the accrediting agency with instructions on the submission of
33complaints in a location readily visible to patients and staff.

34(10) Outpatient settings shall have a written discharge criteria.

35(b) Outpatient settings shall have a minimum of two staff
36persons on the premises, one of whom shall either be a licensed
37physician and surgeon or a licensed health care professional with
38current certification in advanced cardiac life support (ACLS), as
39long as a patient is present who has not been discharged from
40supervised care. Transfer to an unlicensed setting of a patient who
P16   1does not meet the discharge criteria adopted pursuant to paragraph
2(10) of subdivision (a) shall constitute unprofessional conduct.

3(c) An accreditation agency may include additional standards
4in its determination to accredit outpatient settings if these are
5approved by the board to protect the public health and safety.

6(d) No accreditation standard adopted or approved by the board,
7and no standard included in any certification program of any
8 accreditation agency approved by the board, shall serve to limit
9the ability of any allied health care practitioner to provide services
10within his or her full scope of practice. Notwithstanding this or
11any other provision of law, each outpatient setting may limit the
12privileges, or determine the privileges, within the appropriate scope
13of practice, that will be afforded to physicians and allied health
14care practitioners who practice at the facility, in accordance with
15credentialing standards established by the outpatient setting in
16compliance with this chapter. Privileges may not be arbitrarily
17restricted based on category of licensure.

18(e) The board shall adopt standards that it deems necessary for
19outpatient settings that offer in vitro fertilization.

20(f) The board may adopt regulations it deems necessary to
21specify procedures that should be performed in an accredited
22outpatient setting for facilities or clinics that are outside the
23definition of outpatient setting as specified in Section 1248.

24(g) As part of the accreditation process, the accrediting agency
25shall conduct a reasonable investigation of the prior history of the
26outpatient setting, including all licensed physicians and surgeons
27who have an ownership interest therein, to determine whether there
28have been any adverse accreditation decisions rendered against
29them. For the purposes of this section, “conducting a reasonable
30investigation” means querying the Medical Board of California
31and the Osteopathic Medical Board of California to ascertain if
32either the outpatient setting has, or, if its owners are licensed
33physicians and surgeons, if those physicians and surgeons have,
34been subject to an adverse accreditation decision.

35

begin deleteSEC. 6.end delete
36begin insertSEC. 7.end insert  

Section 1248.3 of the Health and Safety Code is
37amended to read:

38

1248.3.  

(a)  An initial certificate of accreditation issued to an
39outpatient setting by an accreditation agency shall be valid for not
P17   1more than two years, and a renewal certificate shall be valid for
2not more than three years.

3(b)  The outpatient setting shall notify the accreditation agency
4within 30 days of any significant change in ownership, including,
5but not limited to, a merger, change in majority interest,
6consolidation, name change, change in scope of services, additional
7services, or change in locations.

8(c)  Except for disclosures to the division or to the Division of
9Medical Quality under this chapter, an accreditation agency shall
10not disclose information obtained in the performance of
11accreditation activities under this chapter that individually identifies
12patients, individual medical practitioners, or outpatient settings.
13 Neither the proceedings nor the records of an accreditation agency
14or the proceedings and records of an outpatient setting related to
15performance of quality assurance or accreditation activities under
16this chapter shall be subject to discovery, nor shall the records or
17proceedings be admissible in a court of law. The prohibition
18relating to discovery and admissibility of records and proceedings
19does not apply to any outpatient setting requesting accreditation
20in the event that denial or revocation of that outpatient setting’s
21accreditation is being contested. Nothing in this section shall
22prohibit the accreditation agency from making discretionary
23disclosures of information to an outpatient setting pertaining to
24the accreditation of that outpatient setting.

25

begin deleteSEC. 7.end delete
26begin insertSEC. 8.end insert  

Section 1248.35 of the Health and Safety Code is
27amended to read:

28

1248.35.  

(a) Every outpatient setting that is accredited shall
29be inspected by the accreditation agency and may also be inspected
30by the Medical Board of California. The Medical Board of
31California shall ensure that accreditation agencies inspect outpatient
32settings.

33(b) Unless otherwise specified, the following requirements apply
34to inspections described in subdivision (a).

35(1) The frequency of inspection shall depend upon the type and
36complexity of the outpatient setting to be inspected.

37(2) Inspections shall be conducted no less often than once every
38three years by the accreditation agency and as often as necessary
39by the Medical Board of California to ensure the quality of care
P18   1provided. After the initial inspection for accreditation, all
2subsequent inspections shall be unannounced.

3(3) The Medical Board of California or the accreditation agency
4may enter and inspect any outpatient setting that is accredited by
5an accreditation agency at any reasonable time to ensure
6compliance with, or investigate an alleged violation of, any
7standard of the accreditation agency or any provision of this
8chapter.

9(c) If an accreditation agency determines, as a result of its
10inspection, that an outpatient setting is not in compliance with the
11standards under which it was approved, the accreditation agency
12may do any of the following:

13(1) Require correction of any identified deficiencies within a
14set timeframe. Failure to comply shall result in the accrediting
15agency issuing a reprimand or suspending or revoking the
16outpatient setting’s accreditation.

17(2) Issue a reprimand.

18(3) Place the outpatient setting on probation, during which time
19the setting shall successfully institute and complete a plan of
20correction, approved by the board or the accreditation agency, to
21correct the deficiencies.

22(4) Suspend or revoke the outpatient setting’s certification of
23accreditation.

24(d) (1) Except as is otherwise provided in this subdivision,
25before suspending or revoking a certificate of accreditation under
26this chapter, the accreditation agency shall provide the outpatient
27setting with notice of any deficiencies and the outpatient setting
28shall agree with the accreditation agency on a plan of correction
29that shall give the outpatient setting reasonable time to supply
30information demonstrating compliance with the standards of the
31accreditation agency in compliance with this chapter, as well as
32the opportunity for a hearing on the matter upon the request of the
33outpatient setting. During the allotted time to correct the
34deficiencies, the plan of correction, which includes the deficiencies,
35shall be conspicuously posted by the outpatient setting in a location
36accessible to public view. Within 10 days after the adoption of the
37plan of correction, the accrediting agency shall send a list of
38deficiencies and the corrective action to be taken to the board and
39to the California State Board of Pharmacy if an outpatient setting
40is licensed pursuant to Article 14 (commencing with Section 4190)
P19   1of Chapter 9 of Division 2 of the Business and Professions Code.
2The accreditation agency may immediately suspend the certificate
3of accreditation before providing notice and an opportunity to be
4heard, but only when failure to take the action may result in
5imminent danger to the health of an individual. In such cases, the
6accreditation agency shall provide subsequent notice and an
7opportunity to be heard.

8(2) If an outpatient setting does not comply with a corrective
9action within a timeframe specified by the accrediting agency, the
10accrediting agency shall issue a reprimand, and may either place
11the outpatient setting on probation or suspend or revoke the
12accreditation of the outpatient setting, and shall notify the board
13of its action. This section shall not be deemed to prohibit an
14outpatient setting that is unable to correct the deficiencies, as
15specified in the plan of correction, for reasons beyond its control,
16from voluntarily surrendering its accreditation prior to initiation
17of any suspension or revocation proceeding.

18(e) The accreditation agency shall, within 24 hours, report to
19the board if the outpatient setting has been issued a reprimand or
20if the outpatient setting’s certification of accreditation has been
21suspended or revoked or if the outpatient setting has been placed
22on probation. If an outpatient setting has been issued a license by
23the California State Board of Pharmacy pursuant to Article 14
24(commencing with Section 4190) of Chapter 9 of Division 2 of
25the Business and Professions Code, the accreditation agency shall
26also send this report to the California State Board of Pharmacy
27within 24 hours.

28(f) The accreditation agency, upon receipt of a complaint from
29the board that an outpatient setting poses an immediate risk to
30public safety, shall inspect the outpatient setting and report its
31findings of inspection to the board within five business days. If an
32accreditation agency receives any other complaint from the board,
33it shall investigate the outpatient setting and report its findings of
34investigation to the board within 30 days.

35(g) Reports on the results of any inspection shall be kept on file
36with the board and the accreditation agency along with the plan
37of correction and the comments of the outpatient setting. The
38inspection report may include a recommendation for reinspection.
39All final inspection reports, which include the lists of deficiencies,
40plans of correction or requirements for improvements and
P20   1correction, and corrective action completed, shall be public records
2open to public inspection.

3(h) If one accrediting agency denies accreditation, or revokes
4or suspends the accreditation of an outpatient setting, this action
5shall apply to all other accrediting agencies. An outpatient setting
6that is denied accreditation is permitted to reapply for accreditation
7with the same accrediting agency. The outpatient setting also may
8apply for accreditation from another accrediting agency, but only
9if it discloses the full accreditation report of the accrediting agency
10that denied accreditation. Any outpatient setting that has been
11denied accreditation shall disclose the accreditation report to any
12other accrediting agency to which it submits an application. The
13new accrediting agency shall ensure that all deficiencies have been
14corrected and conduct a new onsite inspection consistent with the
15standards specified in this chapter.

16(i) If an outpatient setting’s certification of accreditation has
17been suspended or revoked, or if the accreditation has been denied,
18the accreditation agency shall do all of the following:

19(1) Notify the board of the action.

20(2) Send a notification letter to the outpatient setting of the
21action. The notification letter shall state that the setting is no longer
22allowed to perform procedures that require outpatient setting
23accreditation.

24(3) Require the outpatient setting to remove its accreditation
25certification and to post the notification letter in a conspicuous
26location, accessible to public view.

27(j) The board may take any appropriate action it deems necessary
28pursuant to Section 1248.7 if an outpatient setting’s certification
29of accreditation has been suspended or revoked, or if accreditation
30has been denied.

31

begin deleteSEC. 8.end delete
32begin insertSEC. 9.end insert  

No reimbursement is required by this act pursuant to
33Section 6 of Article XIII B of the California Constitution because
34the only costs that may be incurred by a local agency or school
35district will be incurred because this act creates a new crime or
36infraction, eliminates a crime or infraction, or changes the penalty
37for a crime or infraction, within the meaning of Section 17556 of
38the Government Code, or changes the definition of a crime within
P21   1the meaning of Section 6 of Article XIII B of the California
2Constitution.



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