BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: SB 396 Hearing Date: April 20,
2015
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|Author: |Hill |
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|Version: |April 14, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Bill Gage |
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Subject: Health and care facilities: outpatient settings and
surgical clinics.
SUMMARY: This bill will allow ambulatory surgical clinics which
are Medicare certified to have the option of being licensed by
the California Department of Public Health and also clarifies
that they are deemed to be licensed if they are already Medicare
certified. The bill also specifies that an accredited
outpatient setting shall be defined as a peer review body and
subject to the specified requirements of a peer review body,
including the filing of an 805 report, and that the accredited
outpatient setting and a Medicare certified clinic must also
request a report from the Medical Board of California as to
whether an 805 has been filed; specifies that licensees in these
clinics must be peer reviewed at least every two years and the
findings of the peer review reported to an accrediting agency of
the outpatient setting. The bill further provides that an
outpatient setting and Medicare certified clinic must also
report specific data to the Office of Statewide Health Planning
and Development and makes other minor and technical changes
regarding the accreditation and inspection of outpatient
settings.
Existing law, the Business and Professions Code (BPC):
1) Provides for the licensure and regulation of physicians and
surgeons by the Medical Board of California (MBC), for
podiatrists by the California Board of Podiatric Medicine
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(BPM) and for dentists by the Dental Board of California
(DBC) under the Department of Consumer Affairs (DCA).
2) Defines "peer review" as a process in which a peer review
body reviews the basic qualifications, staff privileges,
employment, medical outcomes, or professional conduct of
licentiates to make recommendations for quality improvement
and education, if necessary, in order to determine whether a
licentiate may practice, or continue to practice in a health
care facility, clinic, or other setting providing medical
services, and if so, to determine the parameters of that
practice, and/or to assess and improve the quality of care
rendered in a health care facility, clinic, or other setting
providing medical services. (BPC § 805 (a)(1)(A))
3) Provides that a "peer review body" includes a medical or
professional staff of any licensed health care facility or
clinic or of a facility certified to participate in the
federal Medicare programs as an ambulatory surgical center.
(§ 805 (a)(1)(B))
4) Defines "licentiate" as a physician and surgeon, doctor of
podiatric medicine, clinical psychologist, marriage and
family therapist, clinical social workers, professional
clinical counselor, dentist, or physician assistant. (§ 805
(a)(2))
5) Requires a peer review body to file a so-called "805 report"
with the MBC within 15 days alerting the Board if a
licentiate's application for staff privileges is denied or
rejected; his or her membership, staff privileges, or
employment is terminated of revoked for medical disciplinary
reasons; or if restrictions are imposed, or voluntarily
accepted, on staff privileges, membership or employment for a
cumulative total of 30 days or more for any 12 month period,
for a medical disciplinary cause or reason. (§ 805 (b))
6) Requires that prior to granting or renewing staff privileges
for any physician and surgeon, psychologist, podiatrist, or
dentist, any licensed health facility or any health care plan
or medical care foundation or medical staff of the
institution shall request a report from the MBC, the Board of
Psychology, the Osteopathic Medical Board of California, or
the DBC to determine if any report has been made pursuant to
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Section 805 indicating that the licensee has been denied
staff privileges, been removed from a medical staff, or had
his or her staff privileges restricted as provided in Section
805. (BPC § 805.5 (a))
7) Requires that an accredited "outpatient setting" shall report
an "adverse event" (both of which are defined in the Health
and Safety Code) to the MBC no later than five days after the
adverse event has been detected, or, if that event is an
ongoing urgent or emergency threat to the safety of patients,
the report the adverse event within 24 hours. (BPC § 2216.3)
8) Specifies that if an outpatient setting fails to report an
adverse event that specified penalties may apply. (BPC §
2216.4)
Existing law, the Government Code (GC):
1)Creates within the Department of Justice (DOJ) the Health
Quality Enforcement Section (Section) and provides that the
primary responsibility of this Section is to investigate and
prosecute proceedings against licensees within the
jurisdiction of the MBC and other specified boards. (GC §
12529)
2)Provides that it is the intent of the Legislature to ensure
quality and safety of medical care and that because of the
critical importance of the MBC's public health and safety
function, and the complexity of cases involving misconduct of
physicians and surgeons, and the evidentiary burden placed on
the MBC's, that a vertical enforcement prosecution model for
investigation of these cases is in the best interests of the
people of California. (GC § 12529 (a))
3)Provides that each complaint that is referred to the district
office of the MBC for investigation shall be simultaneously
and jointly assigned to an investigator and to a deputy
attorney general within the Section. (GC § 12529.6 (b))
4)Requires the MBC, in consultation with the DOJ and the DCA, to
report and make recommendations to the Governor and the
Legislature on the vertical enforcement and prosecution model
by March 1, 2015.
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Existing law, the Health and Safety Code (HSC):
1) Provides that a "clinic" means an organized outpatient health
facility that provides direct medical, surgical, dental,
optometric, or podiatric advice, services, or treatment to
patients who remain less than 24 hours, and that may also
provide diagnostic or therapeutic services to patients in the
home as incident to care provided at the clinic facility.
(HSC § 1200)
2) Provides that a specialty clinic, including a surgical
clinic, shall be eligible for licensure with the California
Department of Public Health (DPH). (HSC § 1204 (b))
3) Defines a "surgical clinic" as a clinic that is not part of a
hospital and that provides ambulatory surgical care for
patients who remain less than 24 hours, but that a surgical
clinic does not include any place or establishment owned or
leased and operated as a clinic or office by one or more
physicians or dentists in individual group practice,
regardless of the name used publicly to identify the place or
establishment, provided, however, that physicians or dentists
may, at their option, apply for licensure. (HSC § 1204
(b)(1))
4) Specifies that every clinic holding a license shall annually
file with the Office of Statewide Health and Planning and
Development (OSHPD) a verified report with specified
information regarding patients served, type of medical
services provided, gross patient charges, and other
information as required by OSHPD; and the failure to report
would subject the clinic to suspension of their license.
(HSC § 1216)
5) Requires a surgical clinic to comply with federal
certification standards for an ambulatory surgical clinic, as
specified in Section 416.1 to 416.52, inclusive, of Title 42
of the Code of Federal Regulations. (HSC § 1225 (d)(2))
6) Provides that the DPH shall adopt, and may from time to time
amend or repeal such reasonable rules and regulations as may
be necessary. (HSC § 1225)
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7) Provides that for every clinic for which a license or special
permit has been issued shall be periodically inspected and
should be conducted no less often than once every three
years; an ambulatory surgical center is exempt from this
requirement.
(HSC § 1228)
8) Provides that the DPH shall notify any clinic of all
deficiencies in its compliance with the provisions of Section
1200 et seq., or the rules and regulations of the DPH, and
provides for penalties to be assessed for noncompliance or
for the DPH to initiate action against the clinic to revoke
or suspend the license. (HSC § 1229)
9) Provides that the DPH may suspend or revoke any license upon
specified grounds and that the Director of DPH may suspend
any license issued to a specialty clinic when in the opinion
of the Director such action is necessary to protect the
public welfare. (HSC § 1240 and § 1242)
10)Defines an "outpatient setting" as any facility, clinic,
unlicensed clinic, center, office, or other setting that is
not part of a general acute care facility where anesthesia is
used in compliance with the community standard of practice,
in doses that, when administered have the probability of
placing a patient at risk for loss of the patient's
life-preserving protective reflexes. (HSC § 1248 (b)(1))
11)Defines an "accrediting agency" as a public or private
organization that is approved by the MBC to issue
certificates of accreditation to outpatient settings pursuant
to specified requirements. (HSC § 1248 (c))
12)Provides that no association, corporation, firm, partnership,
or person shall operate, mange, conduct, or maintain an
outpatient setting in this state unless it is accredited as
provided under Section 1248 et seq., it is an ambulatory
surgical center that is certified to participate in the
Medicare program under Title XVIII (42 U.S.C. Sec. 1395 et
seq.) of the federal Social Security Act, a surgical clinic
licensed under Section 1204 et seq., or another clinic or
dentist's office as specified.
(HSC § 1248.1)
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13)Provides that the MBC shall adopt standards for accreditation
and, in approving accreditation agencies to perform
accreditation of outpatient settings, shall ensure that the
certification program meets specified standards and
requirements.
(HSC § 1245.15)
14)Provides that any outpatient setting may apply to an
accreditation agency for a certificate of accreditation and
that accreditation shall be issued on the basis of compliance
with the standards and requirements of the accreditation
agency as approved by the MBC. (HSC § 1248.2 (a))
15)Requires the MBC to obtain and maintain a list of accredited
outpatient settings from the information provided by the
accreditation agencies approved by the MBC, and shall notify
the public, by placing the information on its Internet Web
site, whether an outpatient setting is accredited or the
setting's accreditation has been revoked, suspended, or
placed on probation, or the setting has received a reprimand
by the accreditation agency; and specifies the information to
be provided on the MBC's Web site. (HSC § 1248.2 (b))
16)Provides that if the outpatient setting does not meet the
standards approved by the MBC, accreditation shall be denied
by the accreditation agency. (HSC § 1248.25)
17)Specifies that certificates of accreditation issued to
outpatients settings by an accreditation agency shall be
valid for not more than three years. (HSC § 1248.3)
18)Requires that every outpatient setting which is accredited
shall be inspected by the accreditation agency and may also
be inspected by the MBC, that inspections shall be conducted
no less that once every three years to ensure the quality of
care provided, and that the MBC shall ensure that
accreditation agencies inspect outpatient settings pursuant
to specified requirements. (HSC § 1248.35 (a)(b))
19)Provides that an accreditation agency, before suspending or
revoking a certificate of accreditation, shall provide the
outpatient setting with notice of any deficiencies and that
the outpatient setting shall provide to the accreditation
agency a plan of correction; the accreditation agency may
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however suspend the certificate of
accreditation if it finds that there may be imminent danger to
the health of an individual. (HSC § 1248.35 (d) (1))
20)Provides that if the outpatient setting does not comply with
a corrective action then the accrediting agency shall issue a
reprimand and may place the outpatient setting on probation
or suspend or revoke the accreditation and shall notify the
MBC of such action. (HSC § 1248.35 (d) (2))
21)Provides that the MBC may bring an action to enjoin the
outpatient setting's operation if it has failed to correct
deficiencies or is operating without accreditation or is in
violation of any other provisions as required under Section
1248 et seq.
(HSC § 1248.7 and § 1248.75)
22)Creates OSHPD within the Health and Welfare Agency which is
responsible for the collection of data and dissemination of
information about California's healthcare infrastructure,
promotes an equitably distributed healthcare workforce, and
published valuable information about healthcare outcomes.
(HSC § 127000 et seq.)
23)Requires each general acute care hospital and freestanding
ambulatory surgery clinic to provide specified information
regarding patient encounters, surgical procedures performed
and disposition of patients. (HSC § 128737)
24)Provides for reimbursement of OSHPD by ambulatory surgical
clinics for the collection and disbursement of information
regarding Item #22 above and provides that any fees collected
in regulating the outpatient setting and the facility shall
not exceed the reasonable costs incurred by the OSHPD. (HSC
§ 127280)
25)Requires health facilities and clinics to annually report to
OSHPD regarding the current inventory of beds and service and
acquisition of diagnostic and therapeutic equipment at a
specified amount, or commencement of projects at a specified
amount. (HSC § 127285)
Existing law, the Code of Federal Regulations (42 CFR 416 et
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seq.):
1)Specifies that an ambulatory surgical clinic (ASC) means any
distinct entity that operates exclusively for the purpose of
providing surgical services to patients not requiring
hospitalization and in which the expected duration of services
would not exceed 24 hours following an admission. (CFR §
416.2)
2)Requires that an ASC must have an agreement with the Center
for Medicare and Medicaid Services (CMS) and must meet
specified requirements to participate in Medicare. (Id.)
3)Provides that an ASC may have the option of becoming Medicare
certified on the basis of receiving accreditation by a CMS
approved accrediting organization instead of a survey by CMS
or the state as long as they are in compliance with the
coverage conditions of CMS. (CFR § 416.28)
4)Provides that as a condition of [Medicare] coverage, an ASC
must comply with state licensure requirements and provide for
the following: have an effective procedure for hospital
transfer requiring emergency medical care; maintain a written
disaster preparedness plan; perform surgical procedures in a
safe manner by qualified physicians who have been granted
clinical privileges; have standards in place for the
administration of anesthesia; develop and implement and
maintain an ongoing, data-driven quality assessment and
performance improvement program; track and implement
preventative strategies for adverse events; provide for a safe
and sanitary environment; maintain an infection control
program; and provide for other standards and meet other
requirements as specified. (CFR § 416.40 to
§ 416.52)
This bill:
1) Specifies that an accredited outpatient setting shall also be
defined as a "peer review body" and subject to certain
specified requirements as a peer review body.
2) Requires that a facility certified to participate in the
federal Medicare program as an ASC, or an accredited
outpatient setting shall also request a report from the MBC,
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the Board of Psychology, the Osteopathic Medical Board of
California or the DBC, prior to granting or renewing staff
privileges for any licentiate, to determine if any report has
been made indicating that the licensee has been denied staff
privileges, been removed from a medical staff, or had his or
her staff privileges restricted, as specified.
3) Requires that each licensee who performs procedures in an
outpatients setting that requires the outpatient setting to
be accredited shall be peer reviewed at least every two
years, as specified, including when the outpatient setting
has only one such licensee; and that the peer review shall be
performed by licensees who are qualified by education and
experience to perform the same types or similar procedures.
4) Requires the findings of the peer review to be reported to
the accrediting agency who shall determine if the physician
and surgeon who are granted clinical privileges are
professionally qualified and appropriately credentialed for
the performance of privileges granted.
5) Provides for the MBC to report its recommendations regarding
the vertical enforcement and prosecution model to the
Governor and Legislature by March 1, 2016.
6) Requires an accredited outpatient setting and a facility
certified to participate in the federal Medicare program as
an ASC to report specified information to OSHPD as indicated
in Items #4, #22 and #24 above, and that any fees collected
shall not exceed the reasonable costs incurred by the OSHPD
in regulating the outpatient setting and the facility.
7) Provides that a physician, podiatrist or dentist may, at his
or her option, apply for licensure and provides that a
surgical clinic that has met the federal certification
standards for an ASC shall be eligible for licensure by the
DPH regardless of physician, podiatrist or dentist ownership.
8) Specifies that until the DPH adopts regulations relating to
the provision of services by a surgical clinic, a surgical
clinic is deemed to have met the licensure requirements upon
presenting documentation, within a three-year period, that
the surgical clinic has met the federal certification
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standards for an ASC.
9) Provides that an initial certificate of accreditation issued
to any outpatient setting by an accrediting agency shall be
valid for not more than two years, and a renewal certificate
shall be valid for not more than three years.
10)Provides that after the initial inspection for accreditation,
all subsequent inspections shall be unannounced.
11)Makes other technical and minor clarifying changes.
FISCAL EFFECT: Unknown. This bill has been keyed "fiscal" by
Legislative Counsel.
COMMENTS:
1.Purpose. This measure is sponsored by the Author . According
to the Author, the primary focus of this bill is to allow
ambulatory surgical clinics (ASCs) which are Medicare
certified and are currently required to seek accreditation as
an "outpatient setting," and meet both accreditation
requirements of an accrediting agency and those of the MBC as
well as those of the DPH, to have the option of becoming
licensed by the DPH which has primary responsibility and
oversight of those ASCs which are Medicare certified. This
will allow one agency (DPH) to have primary jurisdiction and
responsibility for those ASCs operating within California and
to ensure they meet all standards and requirements of both DPH
and the federal regulations for ASCs. This measure will also
clear up any confusion as to where a patient may file a
complaint regarding an ASC that may be accredited and at the
same time Medicare certified. Currently, a complaint may have
to be filed both with MBC and DPH so that appropriate action
may be taken against the ASC. This measure will also require
that current outpatient settings are also subject to peer
review and that any peer review findings be reported to their
appropriate accrediting agency.
2.MBC Accreditation ("Outpatient Settings"), DPH Licensure
("Surgical Clinics") and Medicare Certification of ASCs. ASCs
are generally facilities for surgical patients who do not need
to be admitted to a hospital. An ASC patient typically
arrives for admission, has surgery performed in a full-service
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operating room with specialized staff to recover safely and
quickly from anesthesia and returns safely home within hours
of surgery. Some procedures may require a patient to stay for
several hours to be attended to by nurses or other staff to
monitor their recovery. Depending on the ASC, the facility
may specialize in one type of service such as plastic surgery
or eye care, while other facilities may offer multiple
specialties such as ear, nose and throat procedures,
colonoscopies, gynecological procedures, general procedures,
orthopedic procedures and podiatry procedures. As medical
care continues to shift from inpatient (hospital) type
settings to clinics, many patients are using ASCs or
"same-day" surgery centers for a wide variety of procedures.
According to a study of ASCs by the California Healthcare
Foundation ("Ambulatory Surgery Centers: Big Business, Little
Data") (CHF Study) there are at least 1,600 operating rooms in
750 ASCs. However, this number is misleading since it only
accounts for those ASCs which are Medicare certified. As
indicated by the CHF Study, little is known about ASCs
operating in California because little data is being reported
to the DPH or to the OSHPD. Since a legal decision in 2007
which said that ASC's which are physician-owned are no longer
under the jurisdiction of the DPH, and therefore could not be
licensed by DPH, most ASCs are now accredited as an
"outpatient setting", or are Medicare certified, or most
likely both.
(It should be noted that an ASC does not have to be an
accredited outpatient setting if they are certified pursuant
to CMS. However, if they are accredited, CMS allows ASCs to
be "deemed" certified if they meet the requirements of
accreditation and other standards as required by CMS.)
As indicated, an outpatient setting is any facility, clinic,
center, office or other setting where anesthesia is used and
when administered has the probability of placing a patient at
risk for loss of their reflexes. It can be owned by an
association, corporation, firm, partnership, or individual
person. Only licensed physicians and other medical staff who
are professionally qualified and appropriately credentialed
can be granted privileges to practice in an outpatient
setting. As also indicated, the outpatient setting must be
accredited by an accrediting agency approved by the MBC. (The
four accrediting agencies approved by the MBC are the American
Association for Accreditation of Ambulatory Surgery Facilities
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Inc., Accreditation Association for Ambulatory Health Care,
the Institute for Medical Quality and the Joint Commission on
accreditation of Healthcare Organizations.)
The following provides some background on the changes that have
been brought about regarding both accredited "outpatient
settings" which includes ASCs and other types of surgical
clinics.
a) Advent of SB 100 (2011). In 2007, Donda West, mother of
musician Kanye West, died less than 24 hours after
undergoing several cosmetic procedures at an "outpatient
setting." Her death revealed that there was little
oversight of these outpatient clinics, including the clinic
where Ms. West had her surgical cosmetic procedures
performed. For example, there was a lack of specific
requirements at the clinics dealing with pre- and
post-operative procedures for emergencies; standards were
unclear as to the regularity of inspections and the
reporting of corrective action or serious problems with the
clinics or of the physician to the MBC. DPH, on the other
hand, licensed clinics and had more extensive oversight of
the clinics which they licensed. (Surgical clinics
actually have always had a choice as to whether they want
to be accredited or licensed, but they have to be one or
the other if they meet the definition of an "outpatient
setting." Most clinics which provide cosmetic procedures
opt for accreditation rather than licensing by DPH.)
Since the MBC only had limited jurisdiction over these
outpatient settings, the Board could only take enforcement
action against the licensee (physician) and not the clinic,
and the physician continued to practice within the clinic
until the license of the physician was possibly revoked or
placed on probationary status. This could take years and
the MBC had no authority to shut down the clinic in the
meantime if serious problems existed with procedures
performed by physicians in the clinic. DPH on the other
hand had the authority to immediately revoke the license of
the clinic to operate.
It was determined that there was a need to conform the
requirements for outpatient settings with those that apply
to clinics licensed by the DPH, so as to improve and ensure
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quality and effectiveness of medical procedures performed
within these clinics. The prior attempts at legislation
included SB 1494 (Ridley-Thomas, 2008) which was held on
the Assembly floor; SB 674 (Negrete McLeod, 2009) which was
vetoed by the Governor; and SB 1150 (Negrete McLeod, 2010)
which was held in the Assembly Committee on Appropriations.
SB 100 (Price, Chapter 645, Statutes of 2011) was finally
approved by the
Governor and provided greater oversight and regulation of
outpatient settings (surgical clinics), and ensured that
quality of care standards are in place at these clinics and
checked by the appropriate accreditation agency and by the
MBC. As enacted, SB 100 also required MBC to obtain and
maintain a web site listing of information on outpatient
settings on its Web site, including name and accreditation
status. The bill also made a number of changes regarding
the approval, oversight, and inspection of outpatient
settings by MBC and accreditation agencies approved by the
MBC.
b) Capen Decision. Existing law's distinction on which
clinics are licensed by the DPH and which clinics fall
under the jurisdiction of the MBC and require accreditation
has been unclear and has been the subject of litigation.
In Capen v. Shewry (2007) 147 Cal.App.4th 680, the issue
before the court was whether a surgical clinic that is
wholly owned and operated by a licensed physician, in which
non-owner, non-licensee, physicians will practice, is
required to obtain a license from DPH. The facts of the
case reveal that the plaintiff, Dr. Capen, is a licensed
physician who is building a surgical clinic that he will
wholly own and operate, in which non-owner, non-licensee
physicians will practice. He was informed by DPH (then
Department of Health Services) that a license is required
of the clinic because of the physicians who do not share in
its ownership and operation. Dr. Capen sued DHS and argued
that the existing law provisions governing the authority of
DPH to license facilities is ambiguous. At issue in Capen
was Section 1204 (b)(1) of the Health and Safety Code which
states that "a surgical clinic is a clinic that is not part
of a hospital and that provides ambulatory surgical care
for patients who remain less than 24 hours. A surgical
clinic does not include any place or establishment owned or
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leased and operated as a clinic or office by one or more
physicians or dentists in individual or group practice,
regardless of the name used publicly to identify the place
or establishment, provided; however, that physicians or
dentists may, at their option, apply for licensure." The
Court indicated that the provisions of Section 1204(b)(1)
where clinics "owned or leased by one or more physicians in
individual or group practice" was ambiguous because it
could be interpreted to require an ownership or lease
interest either by one physician in group practice or by
all of the physicians in the group. As a result, the Court
held that Section 1204(b)(1) is void since it did not
follow the Administrative Procedure Act. The Court
concluded that physician-owned-and-operated surgical
clinics are not subject to licensing by DPH and are to be
regulated by the MBC.
In an effort to clarify the MBC's authority over outpatient
settings and surgical clinics, the MBC submitted a letter
on October 18, 2007 to Judge Coleman Blease, who issued the
opinion in the Capen case. The MBC stated that "the law
does not give the MBC the authority to regulate clinics
owned and operated by physicians. It just gives the MBC
the authority to approve accrediting agencies that are in
compliance with the standards set forth in Health and
Safety Code Section 1248 et.seq." However, as a result of
this decision former surgical clinics licensed by DPH would
need to be accredited or Medicare certified to meet the
requirements of California law.
On May 15, 2008, the DPH issued a memo to its district office
managers and supervisors and indicated that pursuant to the
Capen decision the DPH no longer has authority to license a
surgical clinic, if a physician or group of physicians owns
the clinic in whole or in part. Accordingly, the DPH could
not issue or renew a license for any surgical clinic that
is partly or entirely physicians owned, and indicated that
until this issue is resolved by legislation, the DPH will
permit only non-owner/operator licensed health care
practitioners to practice at a clinic that otherwise
qualifies for exemption from licensure under Section
1206(a) of the Health and Safety Code. (It should be noted
that dental clinics owned by a dentist or group of dentist
could still be licensed as a surgical clinic.)
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c) Medicare Certification. Becoming Medicare certified
either requires certification by CMS or by a CMS approved
accreditation organization. Generally, the MBC and CMS
approved accreditation organizations are the same. CMS
also allows ASCs to be "deemed" certified if they meet the
requirements of accreditation and other standards as
required by CMS.
As indicated, the Code of Federal Regulations requires that
as a condition of Medicare certification, an ASC must
comply with the following requirements and standards: have
an effective procedure for hospital transfer requiring
emergency medical care; maintain a written disaster
preparedness plan; perform surgical procedures in a safe
manner by qualified physicians who have been granted
clinical privileges; have standards in place for the
administration of anesthesia; develop and implement and
maintain an ongoing, data-driven quality assessment and
performance improvement program; track and implement
preventative strategies for adverse events; provide for a
safe and sanitary environment; maintain an infection
control program; and provide for other standards and meet
other requirements as specified.
The DPH is the contracting state agency for CMS and assures
that required surveys of ASCs are performed and submitted
to CMS for approval and that all of the above standards and
requirements are being met. (If an ASC is accredited, then
the survey may also be conducted by the accrediting
agency.)
1.805 Peer Review Reporting. Section 805 et seq. of the
Business and Professions Code provides for both the
requirements and the process for peer review of specified
health care professionals. It defines who the peer review
body should consist of, including licensed medical or
professional staff of any health facility, or clinic or an ASC
that is Medicare certified. It defines peer review as a
process in which a peer review body reviews the basic
qualifications, staff privileges, employment, medical outcome,
or professional conduct of licensees to make recommendations
for quality improvement and education, if necessary, to
determine whether a licensee may practice or continue to
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practice in a health care facility, clinic or other setting
providing medical services and determine the parameters of
that practice, and assess and improve the quality of care
rendered in a health care facility, clinic, or other setting
providing medical services.
An "805 report" is required to be filed with the MBC (and other
health related boards as specified) by the chief of staff of a
medical or professional staff or other chief executive
officer, medical director, or administrator of any peer review
body and the chief executive officer or administrator of any
licensed health care facility or clinic within 15 days if a
licensees application for staff privileges or membership is:
(1) denied or rejected for "medical disciplinary cause or
reason" (which is defined as that aspect of a licensees
competence or professional conduct that is reasonably likely
to be detrimental to patient safety or to the delivery of
patient care); (2) their membership, staff privileges, or
employment is terminated or revoked for a medical disciplinary
cause or reason; or (3) restrictions are imposed, or
voluntarily accepted, on staff privileges, membership, or
employment for a cumulative of 30 days or more for any
12-month period, for medical disciplinary cause or reason.
Those who are required to file an 805 report must also file an
805 report if the licensee, pursuant to any of the actions
taken as indicated above: (1) resigns or takes a leave of
absence from membership, staff privileges, or employment;
(2) withdraws or abandons his or her application for staff
privileges or membership;
or (3) withdraws or abandons his or her request for renewal of
staff privileges or membership.
A willful failure to file an 805 report could be punishable by a
fine of up to $100,000 per violation and for negligent or
unintentional reporting of a fine of up to $50,000 per
violation.
Prior to granting or renewing staff privileges for any physician
and surgeon (and other health care licensees as specified), it
is also required that any health care facility or the medical
staff of the institution request from the MBC (or other
related health board) a report to determine if any report has
been made pursuant to Section 805 indicating the applying
SB 396 (Hill) Page 17
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physician and surgeon (or other health care licensee as
specified) has been denied staff privileges, been removed from
a medical staff, or had his or her staff privileges restricted
as provided in Section 805.
This measure would require ASCs to report 805 actions to the MBC
and also allow ASCs access to any 805 reports. The language,
as it pertains to peer review for medical staff and other
practitioners within these clinics, requires physicians and
surgeons working in accredited outpatient settings to be
subjected to the peer review process every two years.
However, that process would not result in 805 actions/reports
at that time, the findings would be reported to the
accrediting agency, who would use the information as a tool
for existing accreditation requirements (specifically if the
members of the medical staff and other practitioners who are
granted clinical privileges are professionally qualified and
appropriately credentialed for the performance of privileges
granted. The outpatient setting is required to grant
privileges in accordance with recommendations from qualified
health professionals, and credentialing standards established
by the outpatient setting, the peer review report would be
another tool to accomplish this). However, if the accredited
outpatient setting takes an 805 reportable action against a
physician and surgeon based on the peer review process, this
information would need to be reported to the Board.
2.Reporting to OSHPD. Existing law, Section 1216 of the Health
and Safety Code, requires clinics that are licensed by the
DPH, including surgical clinics, to report aggregate date to
OSHPD. This data includes number of patients served and
descriptive background, number of patient visits by type of
service, patient charges and other additional information
required by OSHPD. Before the Capen decision, this data was
being collected for the majority of ASCs as they were licensed
rather than accredited. However, since Capen the ASCs have
become accredited (and considered as "outpatient settings")
and are under the MBC's jurisdiction and the reporting to
OSHPD is no longer required (although it should be noted that
some ASCs have continued to voluntarily submit the data to
OSHPD). This has created a serious deficiency in the
collection of important data regarding clinical care in
California. This measure would now require that all
accredited outpatient settings are to report the Section 1216
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data to OSHPD. This measure would similarly require those
ASCs that are Medicare certified to also report the Section
1216 data to OSHPD. This would effectively cover then all
ASCs which operate within this state. Two other reporting
requirements under Section 127285 and Section 128737 would
also be required for accredited outpatient settings and those
ASCs that are Medicare certified. This would provide similar
data to OSHPD that is provided by other clinics and health
facilities license by DPH. Section 127280 would provide for
reimbursement to OSHPD for the collection of data from the
accredited outpatient settings and the Medicare certified
ASCs.
3.Prior Related Legislation. SB 100 (Price, Chapter 645,
Statutes of 2011) required the MBC to adopt regulations
on or before January 1, 2013, on the appropriate level of
physician availability necessary within clinics using
laser or intense pulse light devices for elective
cosmetic surgery. Made a number of changes regarding the
approval, oversight and inspection of outpatient
settings, as defined, by MBC and accreditation agencies
approved by the MBC, and in developing a plan of
corrective action for any deficiencies found by the
accreditation agencies or the MBC during inspections, or
otherwise. Revised the existing definition of
"outpatient settings" to include fertility clinics that
offer in vitro fertilization.
SB 1150 (Negrete McLeod) of 2010 required license
designations on health care provider advertising,
required MBC to adopt regulations regarding the
appropriate level of physician availability needed within
clinics or other settings using laser or intense pulse
light devices, required MBC to post a factsheet on
cosmetic surgery, required MBC to adopt standards for
settings that offer in vitro fertilization, and made
changes to MBC oversight of accreditation agencies.
( Status : This measure was held in the Assembly
Appropriations Committee.)
SB 674 (Negrete McLeod) of 2009 required a health care
practitioner, as specified, to include specific
professional designation following the health care
SB 396 (Hill) Page 19
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practitioner's name in advertisements; required the MBC
to adopt regulations on the appropriate level of
physician availability necessary within clinics or other
settings using laser or intense pulse light devices for
elective cosmetic surgery; required certain healing arts
licensees to include in advertisements certain words or
designations following their names indicating the
particular educational degree they hold or healing art
they practice, as specified; and, authorized the MBC to
issue an accreditation agency a citation, including an
administrative fine, in accordance with a specified
system established by the MBC if the agency is not
meeting the criteria set by the MBC. ( Status : This
measure was vetoed by the Governor.
The Governor's veto message stated, "While some provisions
may provide marginal improvements to consumer protection,
I cannot support this bill when it fails to address the
need for stronger licensing and oversight of outpatient
surgical centers. The continued reliance by the medical
community on external accreditation agencies without
enforcement capability is an insufficient solution for
protecting patients. As outpatient surgeries continue to
increase in number and complexity, surgical centers
cannot continue to perform procedures in an unregulated
and unenforced environment.")
AB 832 (Jones) of 2009, was sponsored by DPH and would have
required DPH to convene a workgroup, no later than
February 1, 2010, to consider and develop recommendations
for state oversight and monitoring of ASCs, to ensure
public health and safety. ( Status : This measure was
held in the Assembly Appropriations Committee.)
SB 1494 (Ridley-Thomas) of 2008 required for purposes of
advertising that a health care practitioner, as
specified, provide the type of license under which the
licensee is practicing and the type of degree received
upon graduation from professional training and that a
health care practitioner who is practicing in an
outpatient setting, as defined, wear a name tag which
includes his or her name and their license status.
Required the MBC to adopt regulations on the appropriate
level of physician supervision necessary within clinics
SB 396 (Hill) Page 20
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using laser or intense pulse light devices for elective
cosmetic surgery, and that the MBC establish as one of
its priorities the investigation of unlicensed activity
within such clinics. Required the MBC to post on its
website a fact sheet to educate the public about cosmetic
surgery, and the risks involved with such surgeries.
Made a number of changes regarding the approval,
oversight and inspection of outpatient settings, as
defined, by the MBC and accreditation agencies approved
by the MBC, and in developing a plan of corrective action
for any deficiencies found by the accreditation agencies
or the MBC during inspections, or otherwise. ( Status :
This measure was held on the Assembly Floor.)
AB 2122 (Plescia) of 2008 would have established the
California Outpatient Surgery Patient Safety and
Improvement Act which would have required surgical
clinics to meet prescribed licensing requirements and
standards, including compliance with Medicare Conditions
of Participation. ( Status : This measure was held in the
Assembly Appropriations Committee.)
AB 543 (Plescia) of 2007 would have established licensing
requirements for surgical clinics and would have
required, effective January 1, 2008, that all surgical
clinics meet specified operating and staffing standards.
( Status : AB 543 was vetoed by the Governor.
The Governor's veto message stated, "While I support the
intent of this legislation, I am unable to sign it as it
lacks critical patient safety protections. This bill
doesn't establish appropriate time limits for performing
surgery under general anesthesia. Further, it
inappropriately restricts administrative flexibility and
creates state fiscal pressure during ongoing budget
challenges. I am directing the Department of Public
Health to pursue legislation that establishes licensure
standards for these facilities that are consistent with
federal requirements and protect the health and safety of
patients.")
AB 2308 (Plescia) of 2006, would have required the
Department of Health Services (now DPH) to convene a
workgroup to develop licensure criteria to protect
SB 396 (Hill) Page 21
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patients receiving care in ASCs and to submit workgroup
conclusions and recommendations to the appropriate policy
committees of the Legislature no later than March 1,
2007. (Status : AB 2308 was vetoed by the Governor.
There was no veto message.)
4.Arguments in Support. The California Ambulatory Surgery
Association (CASA) is in support of this measure and indicates
that even though existing law provides adequate oversight for
ASCs utilizing certain levels of anesthesia, the Capen
decision has prohibited DPH from issuing state licenses to
physician and surgeon owned ASCs, which make up the vast
majority of ASCs in California. As a result, accreditation
and Medicare certification are the only other regulatory
oversight options for ASCs. As stated by CASA, "The
California ASC industry prides itself on providing convenient
access to the high quality medical care. To that end,
patients being treated in a California ASC deserve the
highest, most consistent, and concise and comprehensive set of
transparent state-specific licensure requirements for an
industry that has historically been regulated to ensure the
optimum health, welfare and safety of the general public."
CASA also believes that by adding their clinics to the list of
eligible facilities that can obtain reports from the MBC [805
reports], they will be able to ensure that physician and
surgeons and others providing care in those facilities have
not been denied staff privileges, been removed from a medical
staff, or have had his or her staff privileges restricted.
The Medical Board of California (MBC) is also in support of this
measure. In terms of peer review, the MBC believes that peer
review is important to ensure consumer protection, and that
procedures that are being done in ASCs should be subject to
peer review, as those in hospitals are. The requirement for
reporting to OSHPD for both accredited outpatients settings
and Medicare certified ASCs will ensure that there are no
serious deficiencies of important ASC data. Requiring also
that initial accreditation certificates will be valid for two
years instead of three will ensure that new outpatient
settings are inspected in a more timely manner and requiring
subsequent inspections to be unannounced will help ensure that
facilities do not have time to prepare for an inspection and
will be in line with inspections on other types of ASCs.
SB 396 (Hill) Page 22
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5.Arguments in Opposition. The California Society of Plastic
Surgeons is opposed to this measure and is primarily concerned
with the reporting of economic data information to OSHPD,
unannounced inspections by the MBC, as well as reducing the
amount of time the initial accreditation is approved from
three years to two years.
They argue that it creates additional onerous data reporting
with no obvious need or plan for use of the data, that the use
of unannounced inspections would put patient safety at risk,
as staff and physician attention would be diverted from
patient care by the inspectors and their reviewing manuals,
logs and patient records. They basically believe that these
requirements would not result in any improvement of the
accreditation process or enhance patient safety and only
increase costs for the accredited facility.
6.Policy Issue : Should the Data Provided by the DPH Regarding
Licensed Surgical Clinics be Consistent with that of
Accredited Outpatient Settings? Current law, subsection (b)
of Section 1248.2 of the Health and Safety Code requires the
MBC to obtain and maintain a list of accredited outpatient
settings from the information provided by the accreditation
agencies approved by the MBC, and shall notify the public, by
placing the information on its Internet Web site, whether an
outpatient setting is accredited or the setting's
accreditation has been revoked, suspended, or placed on
probation, or the setting has received a reprimand by the
accreditation agency; and specifies the information to be
provided on the MBC's Web site. It does not appear as if the
DPH maintains similar information regarding its licensed
surgical clinics (and those that would now be able to be
licensed by DPH) or for those ASCs which are Medicare
certified. Consideration should be given to requiring the DPH
to maintain a similar Web site for consumers so they be able
to access information regarding surgical clinics and ASCs they
license as well as for those which have Medicare certification
since DPH is the contracting agency with CMS.
NOTE : Double-referral to Senate Committee on Health.
SUPPORT AND OPPOSITION:
Support:
SB 396 (Hill) Page 23
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California Ambulatory Surgery Association
Medical Board of California
Opposition:
California Society of Plastic Surgeons
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