BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 396|
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THIRD READING
Bill No: SB 396
Author: Hill (D)
Amended: 5/5/15
Vote: 21
SENATE BUS, PROF. & ECON. DEV. COMMITTEE: 9-0, 4/20/15
AYES: Hill, Bates, Berryhill, Block, Galgiani, Hernandez,
Jackson, Mendoza, Wieckowski
SENATE HEALTH COMMITTEE: 9-0, 4/29/15
AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen,
Pan, Roth, Wolk
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/28/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
SUBJECT: Health care: outpatient settings and surgical
clinics: facilities: licensure and enforcement
SOURCE: Author
DIGEST: This bill (1) allows ambulatory surgical clinics (ASC)
which are Medicare certified to have the option of being
licensed by the California Department of Public Health (DPH)
regardless of physician, podiatrist, or dentist ownership and
states that they are deemed to be licensed if already Medicare
certified; (2) specifies that each licensee who performs
procedures in an accredited outpatient setting be peer reviewed,
as specified, at least every two years and that the findings of
the peer review be reported to the accrediting body of the
outpatient setting; (3) requires an ASC or outpatient setting to
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request a report from Medical Board of California (MBC) or state
other licensing body to determine if there have been any
restrictions or changes to a licensee's staffing privileges; (4)
requires that all subsequent inspections after the initial
inspection for accreditation of the outpatient setting be
unannounced; and (5) requires an outpatient setting and Medicare
certified clinic to report specific data to the Office of
Statewide Health Planning and Development (OSHPD)
ANALYSIS:
Existing law:
1) Defines a clinic as 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. (Health
and Safety Code (HSC) § 1200)
2) 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))
3) Defines an ASC to mean 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 will not exceed 24 hours
following an admission. (Title 42, Code of Federal
Regulations (CFR) § 416.2)
4) Specifies that an ASC means any distinct entity that operates
exclusively for the purpose of providing surgical services to
patients not requiring hospitalization and in which the
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expected duration of services would not exceed 24 hours
following an admission. (42 CFR § 416.2)
5) Requires that an ASC must have an agreement with the Centers
for Medicare and Medicaid Services (CMS) and must meet
specified requirements to participate in Medicare. (Id.)
6) 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. (42 CFR § 416.28)
7) Provides that as a condition of Medicare coverage, an ASC
must comply with state licensure requirements and provide for
specified requirements. (CFR §§ 416.40 - 416.52)
This bill:
1) Includes an ambulatory surgical center certified to
participate in the federal Medicare program and an accredited
outpatient setting in the facilities required to request a
report from the MBC, the Board of Psychology, the Osteopathic
Medical Board of California, or the Dental Board of
California prior to granting or renewing staff privileges for
any physician and surgeon, psychologist, podiatrist, or
dentist to determine if any 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.
2) Requires an accredited outpatient setting and an ASC
certified to participate in the federal Medicare program to
report specified information to the OSHPD.
3) Extends by one year, until March 1, 2016, the due date for
the report regarding the vertical enforcement and prosecution
model required of the MBC, in consultation with the
Department of Justice and the Department of Consumer Affairs.
4)Authorizes a physician, podiatrist, or dentist to, at his or
her option, apply for licensure of a surgical clinic by the
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DPH, and states that a surgical clinic shall be eligible for
licensure by the DPH regardless of physician, podiatrist, or
dentist ownership. States that a surgical clinic that has met
the federal certification standards and requirements for an
ASC, as specified, shall be eligible for licensure by DPH.
5)States that a surgical clinic is deemed to have met specified
licensure requirements upon presenting documentation that the
surgical clinic has met the ASC federal certification
standards in the three years prior to applying for licensure
until DPH adopts regulations.
6)Requires each licensee who performs procedures in an
outpatient setting that requires accreditation to be peer
reviewed at least every two years. The peer review shall be a
process in which the basic qualifications, staff privileges,
employment, medical outcomes, or professional conduct of a
licensee is reviewed to make recommendations for quality
improvement and education, if necessary, including when the
outpatient setting has only one licensee. The peer review
shall be performed by licensees who are qualified by education
and experience to perform the same types of, or similar,
procedures. The findings of the peer review shall be reported
to the accrediting body who shall determine if the licensee
continues to meet the specified requirements.
7)Requires that, after the initial inspection for accreditation,
all subsequent inspections by the accreditation agency shall
be unannounced.
8) Makes technical and minor clarifying changes.
Background
ASC regulation. ASCs are facilities for surgical patients who do
not need to be admitted to a hospital and remain on site for
less than 24 hours. 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 (CHF Study) there are at least 750 ASCs in
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California. This number is likely larger because there is no
centralized source for data on ASCs due to their diffuse
regulation. Generally, ASCs which are non-physician owned are
regulated by DPH, and physician-owned ASCs are regulated by the
MBC, which, in turn, requires accreditation by one of four
approved accrediting agencies.
Existing law was unclear as to the authority of DPH and MBC over
ASCs until Capen v. Shewry (2007) 147 Cal.App.4th 680, which
determined that physician owned and operated surgical clinics
are not subject to licensing by DPH and are to be regulated by
the MBC. However, MBC interpreted the law as giving it only the
authority to approve accrediting agencies that are in compliance
with existing state standards.
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. Most ASCs are accredited as an outpatient setting, are
Medicare certified, or both.
This bill authorizes a physician, podiatrist, or dentist to
voluntarily apply for licensure of a surgical clinic by the DPH,
regardless of ownership.
OSHPD reporting. Existing law requires clinics licensed by the
DPH, including surgical clinics, to report aggregate data to
OSHPD. This data includes number of patients served, number of
patient visits by type of service, patient charges and other
additional information. Before the Capen decision, this data
was collected for the majority of ASCs. However, since Capen,
the ASCs have become accredited through MBC instead of licensed
by DPH and the reporting to OSHPD is no longer required. This
has created a serious deficiency in the collection of important
data regarding clinical care in California.
This bill requires that all accredited and Medicare certified
outpatient settings are to report specified data to OSHPD. This
would provide similar data to OSHPD that is provided by other
clinics and health facilities license by DPH.
FISCAL EFFECT: Appropriation: No Fiscal
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Com.:YesLocal: Yes
According to the Senate Appropriations Committee:
Likely one-time costs of about $125,000 over two years for the
adoption of regulations by DPH (Licensing and Certification
Fund).
Projected initial licensing costs of about $800,000 to review
license application information and conduct initial site
inspections of surgical clinics (Licensing and Certification
Fund). This cost estimate assumes that the number of licensed
surgical clinics under this bill will increase to
approximately 500, the number that were previously licensed by
DPH. These costs would be incurred once DPH completed the
required regulations. After the initial increase in licensing
activity due to the new ability for surgical clinics to be
licensed, the ongoing costs should be substantially reduced.
Unknown costs for data collection and analysis by OSHPD. Any
costs incurred by OSHPD under this bill would be reimbursed by
fees paid by licensed surgical clinics
SUPPORT: (Verified5/29/15)
California Ambulatory Surgery Association
Medical Board of California
OPPOSITION: (Verified6/1/15)
California Medical Association
California Society of Plastic Surgeons
ARGUMENTS IN SUPPORT: The California Ambulatory Surgery
Association (CASA) is in support of this bill and indicates that
even though existing law provides adequate oversight for ASCs
utilizing certain levels of anesthesia, the Capen decision has
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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.
The Medical Board of California (MBC) is also in support of this
bill. 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.
ARGUMENTS IN OPPOSITION: The California Society of Plastic
Surgeons is opposed to this bill 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.
Prepared by:Sarah Huchel / B., P. & E.D. / (916) 651-4104
6/1/15 11:45:11
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