Bill Text: CA AB941 | 2015-2016 | Regular Session | Chaptered
Bill Title: Clinics: licensure and regulation: exemption.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2015-10-05 - Chaptered by Secretary of State - Chapter 502, Statutes of 2015. [AB941 Detail]
Download: California-2015-AB941-Chaptered.html
BILL NUMBER: AB 941 CHAPTERED
BILL TEXT
CHAPTER 502
FILED WITH SECRETARY OF STATE OCTOBER 5, 2015
APPROVED BY GOVERNOR OCTOBER 5, 2015
PASSED THE SENATE AUGUST 31, 2015
PASSED THE ASSEMBLY SEPTEMBER 2, 2015
AMENDED IN SENATE AUGUST 26, 2015
AMENDED IN SENATE AUGUST 18, 2015
INTRODUCED BY Assembly Member Wood
FEBRUARY 26, 2015
An act to amend Section 1206 of the Health and Safety Code,
relating to clinics.
LEGISLATIVE COUNSEL'S DIGEST
AB 941, Wood. Clinics: licensure and regulation: exemption.
Existing law provides for the regulation and licensure of clinics,
as defined, by the State Department of Public Health. Under existing
law, specified types of clinics are exempted from these licensing
provisions, including a clinic that is conducted, maintained, or
operated by a federally recognized Indian tribe and is located on
land recognized as tribal land by the federal government.
This bill would expand that exemption to also include a clinic
conducted, maintained, or operated by a federally recognized Indian
tribe under a contract with the United States pursuant to federal
law, without regard to the location of the clinic, except that if the
clinic chooses to apply to the department for a state facility
license, then the department would retain authority to regulate that
clinic as a primary care clinic.
This bill would incorporate additional changes to Section 1206 of
the Health and Safety Code proposed by AB 1130 that would become
operative if this bill and AB 1130 are chaptered and this bill is
chaptered last.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1206 of the Health and Safety Code is amended
to read:
1206. This chapter does not apply to the following:
(a) Except with respect to the option provided with regard to
surgical clinics in paragraph (1) of subdivision (b) of Section 1204
and, further, with respect to specialty clinics specified in
paragraph (2) of subdivision (b) of Section 1204, any place or
establishment owned or leased and operated as a clinic or office by
one or more licensed health care practitioners and used as an office
for the practice of their profession, within the scope of their
license, regardless of the name used publicly to identify the place
or establishment.
(b) Any clinic directly conducted, maintained, or operated by the
United States or by any of its departments, officers, or agencies,
and any primary care clinic specified in subdivision (a) of Section
1204 that is directly conducted, maintained, or operated by this
state or by any of its political subdivisions or districts, or by any
city. Nothing in this subdivision precludes the state department
from adopting regulations that utilize clinic licensing standards as
eligibility criteria for participation in programs funded wholly or
partially under Title XVIII or XIX of the federal Social Security
Act.
(c) (1) Any clinic conducted, maintained, or operated by a
federally recognized Indian tribe or tribal organization, as defined
in Section 450 or 1603 of Title 25 of the United States Code, that is
located on land recognized as tribal land by the federal government.
(2) Any clinic conducted, maintained, or operated by a federally
recognized Indian tribe or tribal organization, as defined in Section
450 or 1603 of Title 25 of the United States Code, under a contract
with the United States pursuant to the Indian Self-Determination and
Education Assistance Act (Public Law 93-638), regardless of the
location of the clinic, except that if the clinic chooses to apply to
the State Department of Public Health for a state facility license,
then the State Department of Public Health will retain authority to
regulate that clinic as a primary care clinic as defined by
subdivision (a) of Section 1204.
(d) Clinics conducted, operated, or maintained as outpatient
departments of hospitals.
(e) Any facility licensed as a health facility under Chapter 2
(commencing with Section 1250).
(f) Any freestanding clinical or pathological laboratory licensed
under Chapter 3 (commencing with Section 1200) of Division 2 of the
Business and Professions Code.
(g) A clinic operated by, or affiliated with, any institution of
learning that teaches a recognized healing art and is approved by the
state board or commission vested with responsibility for regulation
of the practice of that healing art.
(h) A clinic that is operated by a primary care community or free
clinic and that is operated on separate premises from the licensed
clinic and is only open for limited services of no more than 20 hours
a week. An intermittent clinic as described in this subdivision
shall, however, meet all other requirements of law, including
administrative regulations and requirements, pertaining to fire and
life safety.
(i) The offices of physicians in group practice who provide a
preponderance of their services to members of a comprehensive group
practice prepayment health care service plan subject to Chapter 2.2
(commencing with Section 1340).
(j) Student health centers operated by public institutions of
higher education.
(k) Nonprofit speech and hearing centers, as defined in Section
1201.5. Any nonprofit speech and hearing clinic desiring an exemption
under this subdivision shall make application therefor to the
director, who shall grant the exemption to any facility meeting the
criteria of Section 1201.5. Notwithstanding the licensure exemption
contained in this subdivision, a nonprofit speech and hearing center
shall be deemed to be an organized outpatient clinic for purposes of
qualifying for reimbursement as a rehabilitation center under the
Medi-Cal Act (Chapter 7 (commencing with Section 14000) of Part 3 of
Division 9 of the Welfare and Institutions Code).
( l ) A clinic operated by a nonprofit corporation
exempt from federal income taxation under paragraph (3) of subsection
(c) of Section 501 of the Internal Revenue Code of 1954, as amended,
or a statutory successor thereof, that conducts medical research and
health education and provides health care to its patients through a
group of 40 or more physicians and surgeons, who are independent
contractors representing not less than 10 board-certified
specialties, and not less than two-thirds of whom practice on a
full-time basis at the clinic.
(m) Any clinic, limited to in vivo diagnostic services by magnetic
resonance imaging functions or radiological services under the
direct and immediate supervision of a physician and surgeon who is
licensed to practice in California. This shall not be construed to
permit cardiac catheterization or any treatment modality in these
clinics.
(n) A clinic operated by an employer or jointly by two or more
employers for their employees only, or by a group of employees, or
jointly by employees and employers, without profit to the operators
thereof or to any other person, for the prevention and treatment of
accidental injuries to, and the care of the health of, the employees
comprising the group.
(o) A community mental health center, as defined in Section 5601.5
of the Welfare and Institutions Code.
(p) (1) A clinic operated by a nonprofit corporation exempt from
federal income taxation under paragraph (3) of subsection (c) of
Section 501 of the Internal Revenue Code of 1954, as amended, or a
statutory successor thereof, as an entity organized and operated
exclusively for scientific and charitable purposes and that satisfied
all of the following requirements on or before January 1, 2005:
(A) Commenced conducting medical research on or before January 1,
1982, and continues to conduct medical research.
(B) Conducted research in, among other areas, prostatic cancer,
cardiovascular disease, electronic neural prosthetic devices,
biological effects and medical uses of lasers, and human magnetic
resonance imaging and spectroscopy.
(C) Sponsored publication of at least 200 medical research
articles in peer-reviewed publications.
(D) Received grants and contracts from the National Institutes of
Health.
(E) Held and licensed patents on medical technology.
(F) Received charitable contributions and bequests totaling at
least five million dollars ($5,000,000).
(G) Provides health care services to patients only:
(i) In conjunction with research being conducted on procedures or
applications not approved or only partially approved for payment (I)
under the Medicare program pursuant to Section 1359y(a)(1)(A) of
Title 42 of the United States Code, or (II) by a health care service
plan registered under Chapter 2.2 (commencing with Section 1340), or
a disability insurer regulated under Chapter 1 (commencing with
Section 10110) of Part 2 of Division 2 of the Insurance Code;
provided that services may be provided by the clinic for an
additional period of up to three years following the approvals, but
only to the extent necessary to maintain clinical expertise in the
procedure or application for purposes of actively providing training
in the procedure or application for physicians and surgeons unrelated
to the clinic.
(ii) Through physicians and surgeons who, in the aggregate, devote
no more than 30 percent of their professional time for the entity
operating the clinic, on an annual basis, to direct patient care
activities for which charges for professional services are paid.
(H) Makes available to the public the general results of its
research activities on at least an annual basis, subject to good
faith protection of proprietary rights in its intellectual property.
(I) Is a freestanding clinic, whose operations under this
subdivision are not conducted in conjunction with any affiliated or
associated health clinic or facility defined under this division,
except a clinic exempt from licensure under subdivision (m). For
purposes of this subparagraph, a freestanding clinic is defined as
"affiliated" only if it directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, a clinic or health facility defined under this
division, except a clinic exempt from licensure under subdivision
(m). For purposes of this subparagraph, a freestanding clinic is
defined as "associated" only if more than 20 percent of the directors
or trustees of the clinic are also the directors or trustees of any
individual clinic or health facility defined under this division,
except a clinic exempt from licensure under subdivision (m). Any
activity by a clinic under this subdivision in connection with an
affiliated or associated entity shall fully comply with the
requirements of this subdivision. This subparagraph shall not apply
to agreements between a clinic and any entity for purposes of
coordinating medical research.
(2) By January 1, 2007, and every five years thereafter, the
Legislature shall receive a report from each clinic meeting the
criteria of this subdivision and any other interested party
concerning the operation of the clinic's activities. The report shall
include, but not be limited to, an evaluation of how the clinic
impacted competition in the relevant health care market, and a
detailed description of the clinic's research results and the level
of acceptance by the payer community of the procedures performed at
the clinic. The report shall also include a description of procedures
performed both in clinics governed by this subdivision and those
performed in other settings. The cost of preparing the reports shall
be borne by the clinics that are required to submit them to the
Legislature pursuant to this paragraph.
SEC. 1.5. Section 1206 of the Health and Safety Code is amended to
read:
1206. This chapter does not apply to the following:
(a) Except with respect to the option provided with regard to
surgical clinics in paragraph (1) of subdivision (b) of Section 1204
and, further, with respect to specialty clinics specified in
paragraph (2) of subdivision (b) of Section 1204, any place or
establishment owned or leased and operated as a clinic or office by
one or more licensed health care practitioners and used as an office
for the practice of their profession, within the scope of their
license, regardless of the name used publicly to identify the place
or establishment.
(b) Any clinic directly conducted, maintained, or operated by the
United States or by any of its departments, officers, or agencies,
and any primary care clinic specified in subdivision (a) of Section
1204 that is directly conducted, maintained, or operated by this
state or by any of its political subdivisions or districts, or by any
city. Nothing in this subdivision precludes the state department
from adopting regulations that utilize clinic licensing standards as
eligibility criteria for participation in programs funded wholly or
partially under Title XVIII or XIX of the federal Social Security
Act.
(c) (1) Any clinic conducted, maintained, or operated by a
federally recognized Indian tribe or tribal organization, as defined
in Section 450 or 1603 of Title 25 of the United States Code, that is
located on land recognized as tribal land by the federal government.
(2) Any clinic conducted, maintained, or operated by a federally
recognized Indian tribe or tribal organization, as defined in Section
450 or 1603 of Title 25 of the United States Code, under a contract
with the United States pursuant to the Indian Self-Determination and
Education Assistance Act (Public Law 93-638), regardless of the
location of the clinic, except that if the clinic chooses to apply to
the State Department of Public Health for a state facility license,
then the State Department of Public Health will retain authority to
regulate that clinic as a primary care clinic as defined by
subdivision (a) of Section 1204.
(d) Clinics conducted, operated, or maintained as outpatient
departments of hospitals.
(e) Any facility licensed as a health facility under Chapter 2
(commencing with Section 1250).
(f) Any freestanding clinical or pathological laboratory licensed
under Chapter 3 (commencing with Section 1200) of Division 2 of the
Business and Professions Code.
(g) A clinic operated by, or affiliated with, any institution of
learning that teaches a recognized healing art and is approved by the
state board or commission vested with responsibility for regulation
of the practice of that healing art.
(h) A clinic that is operated by a primary care community or free
clinic and that is operated on separate premises from the licensed
clinic and is only open for limited services of no more than 30 hours
a week. An intermittent clinic as described in this subdivision
shall, however, meet all other requirements of law, including
administrative regulations and requirements, pertaining to fire and
life safety.
(i) The offices of physicians in group practice who provide a
preponderance of their services to members of a comprehensive group
practice prepayment health care service plan subject to Chapter 2.2
(commencing with Section 1340).
(j) Student health centers operated by public institutions of
higher education.
(k) Nonprofit speech and hearing centers, as defined in Section
1201.5. Any nonprofit speech and hearing clinic desiring an exemption
under this subdivision shall make application therefor to the
director, who shall grant the exemption to any facility meeting the
criteria of Section 1201.5. Notwithstanding the licensure exemption
contained in this subdivision, a nonprofit speech and hearing center
shall be deemed to be an organized outpatient clinic for purposes of
qualifying for reimbursement as a rehabilitation center under the
Medi-Cal Act (Chapter 7 (commencing with Section 14000) of Part 3 of
Division 9 of the Welfare and Institutions Code).
( l ) A clinic operated by a nonprofit corporation
exempt from federal income taxation under paragraph (3) of subsection
(c) of Section 501 of the Internal Revenue Code of 1954, as amended,
or a statutory successor thereof, that conducts medical research and
health education and provides health care to its patients through a
group of 40 or more physicians and surgeons, who are independent
contractors representing not less than 10 board-certified
specialties, and not less than two-thirds of whom practice on a
full-time basis at the clinic.
(m) Any clinic, limited to in vivo diagnostic services by magnetic
resonance imaging functions or radiological services under the
direct and immediate supervision of a physician and surgeon who is
licensed to practice in California. This shall not be construed to
permit cardiac catheterization or any treatment modality in these
clinics.
(n) A clinic operated by an employer or jointly by two or more
employers for their employees only, or by a group of employees, or
jointly by employees and employers, without profit to the operators
thereof or to any other person, for the prevention and treatment of
accidental injuries to, and the care of the health of, the employees
comprising the group.
(o) A community mental health center, as defined in Section 5667
of the Welfare and Institutions Code.
(p) (1) A clinic operated by a nonprofit corporation exempt from
federal income taxation under paragraph (3) of subsection (c) of
Section 501 of the Internal Revenue Code of 1954, as amended, or a
statutory successor thereof, as an entity organized and operated
exclusively for scientific and charitable purposes and that satisfied
all of the following requirements on or before January 1, 2005:
(A) Commenced conducting medical research on or before January 1,
1982, and continues to conduct medical research.
(B) Conducted research in, among other areas, prostatic cancer,
cardiovascular disease, electronic neural prosthetic devices,
biological effects and medical uses of lasers, and human magnetic
resonance imaging and spectroscopy.
(C) Sponsored publication of at least 200 medical research
articles in peer-reviewed publications.
(D) Received grants and contracts from the National Institutes of
Health.
(E) Held and licensed patents on medical technology.
(F) Received charitable contributions and bequests totaling at
least five million dollars ($5,000,000).
(G) Provides health care services to patients only:
(i) In conjunction with research being conducted on procedures or
applications not approved or only partially approved for payment (I)
under the Medicare program pursuant to Section 1359y(a)(1)(A) of
Title 42 of the United States Code, or (II) by a health care service
plan registered under Chapter 2.2 (commencing with Section 1340), or
a disability insurer regulated under Chapter 1 (commencing with
Section 10110) of Part 2 of Division 2 of the Insurance Code;
provided that services may be provided by the clinic for an
additional period of up to three years following the approvals, but
only to the extent necessary to maintain clinical expertise in the
procedure or application for purposes of actively providing training
in the procedure or application for physicians and surgeons unrelated
to the clinic.
(ii) Through physicians and surgeons who, in the aggregate, devote
no more than 30 percent of their professional time for the entity
operating the clinic, on an annual basis, to direct patient care
activities for which charges for professional services are paid.
(H) Makes available to the public the general results of its
research activities on at least an annual basis, subject to good
faith protection of proprietary rights in its intellectual property.
(I) Is a freestanding clinic, whose operations under this
subdivision are not conducted in conjunction with any affiliated or
associated health clinic or facility defined under this division,
except a clinic exempt from licensure under subdivision (m). For
purposes of this subparagraph, a freestanding clinic is defined as
"affiliated" only if it directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, a clinic or health facility defined under this
division, except a clinic exempt from licensure under subdivision
(m). For purposes of this subparagraph, a freestanding clinic is
defined as "associated" only if more than 20 percent of the directors
or trustees of the clinic are also the directors or trustees of any
individual clinic or health facility defined under this division,
except a clinic exempt from licensure under subdivision (m). Any
activity by a clinic under this subdivision in connection with an
affiliated or associated entity shall fully comply with the
requirements of this subdivision. This subparagraph shall not apply
to agreements between a clinic and any entity for purposes of
coordinating medical research.
(2) By January 1, 2007, and every five years thereafter, the
Legislature shall receive a report from each clinic meeting the
criteria of this subdivision and any other interested party
concerning the operation of the clinic's activities. The report shall
include, but not be limited to, an evaluation of how the clinic
impacted competition in the relevant health care market, and a
detailed description of the clinic's research results and the level
of acceptance by the payer community of the procedures performed at
the clinic. The report shall also include a description of procedures
performed both in clinics governed by this subdivision and those
performed in other settings. The cost of preparing the reports shall
be borne by the clinics that are required to submit them to the
Legislature pursuant to this paragraph.
SEC. 2. Section 1.5 of this bill incorporates amendments to
Section 1206 of the Health and Safety Code proposed by both this bill
and Assembly Bill 1130. It shall only become operative if (1) both
bills are enacted and become effective on or before January 1, 2016,
(2) each bill amends Section 1206 of the Health and Safety Code, and
(3) this bill is enacted after Assembly Bill 1130, in which case
Section 1 of this bill shall not become operative.
