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AB-251 Health and care facilities: dialysis clinics.(2017-2018)

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Date Published: 06/29/2017 09:00 PM
AB251:v97#DOCUMENT

Amended  IN  Senate  June 29, 2017
Amended  IN  Assembly  March 30, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 251


Introduced by Assembly Member Bonta

January 30, 2017


An act to amend Sections 1225 and 1275.3 of add Section 1226.7 to the Health and Safety Code, relating to health and care facilities.


LEGISLATIVE COUNSEL'S DIGEST


AB 251, as amended, Bonta. Health and care facilities. facilities: dialysis clinics.
Existing law establishes the State Department of Public Health and sets forth its powers and duties, including, but not limited to, the licensure and regulation of chronic dialysis clinics. Existing law requires the department to adopt regulations to implement these provisions, and requires those regulations to prescribe, among other things, minimum standards for providing the services offered. Violation of these provisions is a crime.
This bill would, for each fiscal year starting on or after January 1, 2019, require a chronic dialysis clinic to submit a report to the department detailing the total treatment revenue of the clinic, and the percentages of that total treatment revenue the clinic has expended on direct patient care services costs, health care quality improvements costs, federal and state taxes, facility license fees, and all other costs. The bill would, for each fiscal year starting on or after January 1, 2019, require a chronic dialysis clinic, if its direct patient care services costs, health care quality improvements costs, federal and state taxes, and facility license fees total less than 85% of the treatment revenue, to issue a rebate and reduction in billed amount to payers on a pro rata basis, as specified.
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.

Existing law establishes the State Department of Public Health and sets forth its powers and duties, including, but not limited to, the licensure and regulation of primary care clinics and specialty clinics. Violation of these provisions is a crime.

Existing law, until the department adopts regulations relating to the provision of services by a chronic dialysis clinic, a surgical clinic, or a rehabilitation clinic, requires those clinics to comply with prescribed federal certification standards in effect immediately preceding January 1, 2013. These provisions become inoperative on January 1, 2018.

This bill would instead make those provisions inoperative on January 1, 2019. By extending the duration of a crime, the bill would impose a state-mandated local program.

Existing law requires the State Department of Public Health and the State Department of Developmental Services to jointly develop and implement licensing regulations appropriate for an intermediate care facility/developmentally disabled-nursing and an intermediate care facility/developmentally disabled-continuous nursing. Existing law, until the departments adopt those regulations, requires that the facilities comply with applicable federal certification standards for intermediate care facilities for individuals with intellectual disabilities in effect immediately preceding January 1, 2013. These provisions would become inoperative on January 1, 2018.

This bill would instead make those provisions inoperative on January 1, 2020. By extending the duration of a crime, this bill would impose a state-mandated local crime.

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   Local Program: YES  

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


SECTION 1.

 The Legislature finds and declares all of the following:
(a) Dialysis is a critical, lifesaving treatment for Californians suffering from end-stage renal disease.
(b) There are currently more than 66,000 dialysis patients and more than 570 licensed chronic dialysis clinics in California.
(c) Dialysis clinics in California frequently charge private health insurance plans four or more times as much, and sometimes 15 to 20 times as much, as they charge Medicare for the very same dialysis treatment, but do not spend sufficient funds on ensuring quality patient care.
(d) The disparity in amounts that dialysis clinics charge to Medicare and private health insurance plans does not enhance health outcomes, but it produces substantial profits for dialysis clinics while raising the cost of private health insurance for patients and all Californians.
(e) In recent years, considerable consolidation of the private dialysis clinic industry has prevented the marketplace from effectively ensuring that the clinics spend sufficient funds on quality patient care.
(f) Two multinational, for-profit companies operate or manage nearly three quarters of the dialysis clinics in California and treat more than 70 percent of dialysis patients nationwide. These companies can largely dictate the quality of patient care provided to the dialysis patients, as well as the pricing of such treatments.
(g) Regulation of the dialysis clinic industry is necessary to protect all Californians, including those suffering from end-stage renal disease, and to ensure that the focus of these clinics is on providing quality patient care.

SEC. 2.

 Section 1226.7 is added to the Health and Safety Code, to read:

1226.7.
 (a) For purposes of this section, the following terms have the following meanings:
(1) “Administrator” means the administrator as that term is used in Section 494.180(a) of Title 42 of the Code of Federal Regulations as it read on December 31, 2016.
(2) “Chief Executive Officer” means the chief executive officer as that term is used in Section 494.180(a) of Title 42 of the Code of Federal Regulations as it read on December 31, 2016.
(3) “Direct patient care services costs” means costs claimed by a chronic dialysis clinic under lines one to 10, inclusive, 12, and 14 to 21, inclusive, of the Centers for Medicare and Medicaid Services Worksheet A of Form CMS-265-11, as it read on December 31, 2016, and similar costs as the department may identify through regulation.
(4) “Health care quality improvement costs” means costs required to maintain, access, or exchange electronic health information, support health information technologies, train nonmanagerial personnel engaged in direct patient care, and provide patient-centered education and counseling.
(A) Upon request by a chronic dialysis clinic, the department may deem other expenditures to have been made for health care quality improvements if all of the following apply:
(i) The chronic dialysis clinic shows that its expenditure was for activities or items designed to improve health quality and increase the likelihood of desired health outcomes in ways that are capable of being objectively measured and of producing verifiable results and achievements.
(ii) The chronic dialysis clinic actually paid the cost.
(iii) The cost was spent on services offered at the chronic dialysis clinic to chronic dialysis patients.
(B) The department may permit the chronic dialysis clinic to apply a health care quality improvement cost incurred in one year proportionally over a period not to exceed five years upon a finding that the chronic dialysis clinic has demonstrated that the cost is reasonably expected to provide health care quality improvements for that period.
(5) “Payer” means the person or persons who paid or are financially responsible for payments for a treatment provided to a particular patient, and may include the patient or other individuals, primary insurers, secondary insurers, and other entities, including Medicare and any other federal, state, county, city, or other local government payer.
(6) “Treatment” means each instance when the chronic dialysis clinic provides services to a patient for which costs are reported to the department under subparagraph (A) of paragraph (1) of subdivision (b).
(7) “Treatment revenue” means the total amount the chronic dialysis clinic collects from payers for treatments.
(b) (1) For each fiscal year starting on or after January 1, 2019, a chronic dialysis clinic shall submit to the department a report concerning the total treatment revenue of the chronic dialysis clinic for the fiscal year and the amounts and percentages of that total treatment revenue the chronic dialysis has expended on all of the following:
(A) Direct patient care services costs.
(B) Health care quality improvements costs.
(C) Federal and state taxes, and facility license fees paid pursuant to Section 1266.
(D) All other costs.
(2) The chronic dialysis clinic shall annually submit the report required by this subdivision to the department on a schedule, in a format, and on a form prescribed by the department, provided that the chronic dialysis clinic shall submit the information no later than 150 days after the end of its fiscal year. The chief executive officer or administrator of the chronic dialysis clinic shall personally certify that he or she is satisfied, after review, that the report submitted to the department under paragraph (1) is accurate and complete.
(c) (1) For each fiscal year starting on or after January 1, 2019, a chronic dialysis clinic shall calculate the costs described in subparagraphs (A), (B), and (C) of paragraph (1) of subdivision (b) and the total treatment revenue. If the costs described in subparagraphs (A), (B), and (C) of paragraph (1) of subdivision (b) total less than 85 percent of treatment revenue, the chronic dialysis clinic shall issue a rebate and a reduction in billed amount to payers, other than Medicare or any other federal, state, county, city, or other local government payer, on a pro rata basis, in an amount that is sufficient to result in a ratio of at least 85 percent of costs described in subparagraphs (A), (B), and (C) of paragraph (1) of subdivision (b) to total treatment revenue less rebates and reductions in billed amounts to payers issued in the same fiscal year, as follows:
(A) The chronic dialysis clinic shall issue the rebate or reduction in billed amount together with interest thereon of 10 percent per annum, which shall accrue from the last day of the fiscal year to which the rebate or reduction relates.
(B) Where a rebate must be paid or an amount billed but not yet paid must be reduced pursuant to this section, and more than one payer is responsible, the clinic shall divide and distribute the total required rebate or reduction in billed amounts among the payers consistent with the payers’ relative obligations to pay for the treatment.
(C) The chronic dialysis clinic shall issue the rebate or reduction in billed amount no later than 210 days after the end of the fiscal year to which the rebate or reduction relates.
(2) For each fiscal year starting on or after January 1, 2019, a chronic dialysis clinic shall maintain and provide to the department, on a form and schedule prescribed by the department, a report of all rebates and reductions it issued under paragraph (1), including a description of each instance during the period covered by the submission when the rebate or reduction required under paragraph (1) was not timely issued in full, and the reasons and circumstances therefore. The chief executive officer or administrator of the chronic dialysis clinic shall personally certify that he or she is satisfied, after review, that all information submitted to the department under this paragraph is accurate and complete.
(d) It is the intent of the Legislature that California taxpayers not be financially responsible for implementation and enforcement of this section. In order to effectuate that intent, when calculating, assessing, and collecting fees imposed on chronic dialysis clinics pursuant to Section 1266, the department shall take into account all costs associated with implementing and enforcing this section.

SEC. 3.

 Nothing in this act is intended to affect health facilities licensed pursuant to subdivision (a), (b), or (f) of Section 1250 of the Health and Safety Code.

SEC. 4.

 The State Department of Public Health shall issue regulations necessary to implement this act no later than 180 days following its effective date.

SEC. 5.

 The provisions of this legislation are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

SEC. 6.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
SECTION 1.Section 1225 of the Health and Safety Code, as amended by Section 1 of Chapter 722 of the Statutes of 2013, is amended to read:
1225.

(a)The department shall adopt, and may from time to time amend or repeal, in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, reasonable rules and regulations as may be necessary or proper to carry out the purposes and intent of this chapter and to enable the department to exercise the powers and perform the duties conferred upon it by this chapter, not inconsistent with any of the provisions of any statute of this state.

(b)The rules and regulations for primary care clinics shall be separate and distinct from the rules and regulations for specialty clinics.

(c)All regulations relating to licensed clinics in effect on December 31, 1977, that were adopted by the department, shall remain in full force and effect until altered, amended, or repealed by the director.

(d)Until the department adopts regulations relating to the provision of services by a chronic dialysis clinic, a surgical clinic, or a rehabilitation clinic, the following clinics licensed or seeking licensure shall comply with the following federal certification standards in effect immediately preceding January 1, 2013:

(1)A chronic dialysis clinic shall comply with federal certification standards for an end stage renal disease clinic, as specified in Sections 494.1 to 494.180, inclusive, of Title 42 of the Code of Federal Regulations.

(2)A surgical clinic, as defined in subdivision (b) of Section 1204, shall comply with federal certification standards for an ambulatory surgical clinic, as specified in Sections 416.1 to 416.52, inclusive, of Title 42 of the Code of Federal Regulations.

(3)A rehabilitation clinic shall comply with federal certification standards for a comprehensive outpatient rehabilitation facility, as specified in Sections 485.50 to 485.74, inclusive, of Title 42 of the Code of Federal Regulations.

(e)The department shall, by July 1, 2017, conduct at least one public hearing and submit a report to the appropriate legislative committees that describes the extent to which the federal certification standards are or are not sufficient as a basis for state licensing standards. The report shall make recommendations for any California-specific standards that may be necessary.

(f)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.

SEC. 2.Section 1225 of the Health and Safety Code, as added by Section 2 of Chapter 722 of the Statutes of 2013, is amended to read:
1225.

(a)The department shall adopt, and may from time to time amend or repeal, in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, such reasonable rules and regulations as may be necessary or proper to carry out the purposes and intent of this chapter and to enable the department to exercise the powers and perform the duties conferred upon it by this chapter, not inconsistent with any of the provisions of any statute of this state. The rules and regulations for primary care clinics shall be separate and distinct from the rules and regulations for specialty clinics.

(b)All regulations relating to licensed clinics in effect on December 31, 1977, which were adopted by the department, shall remain in full force and effect until altered, amended, or repealed by the director.

(c)This section shall become operative on January 1, 2019.

SEC. 3.Section 1275.3 of the Health and Safety Code, as amended by Section 81 of Chapter 71 of the Statutes of 2014, is amended to read:
1275.3.

(a)The State Department of Public Health and the State Department of Developmental Services shall jointly develop and implement licensing regulations appropriate for an intermediate care facility/developmentally disabled-nursing and an intermediate care facility/developmentally disabled-continuous nursing.

(b)The regulations adopted pursuant to subdivision (a) shall ensure that residents of an intermediate care facility/developmentally disabled-nursing and an intermediate care facility/developmentally disabled-continuous nursing receive appropriate medical and nursing services, and developmental program services in a normalized, least restrictive physical and programmatic environment appropriate to individual resident need.

In addition, the regulations shall do all of the following:

(1)Include provisions for the completion of a clinical and developmental assessment of placement needs, including medical and other needs, and the degree to which they are being met, of clients placed in an intermediate care facility/developmentally disabled-nursing and an intermediate care facility/developmentally disabled-continuous nursing and for the monitoring of these needs at regular intervals.

(2)Provide for maximum utilization of generic community resources by clients residing in a facility.

(3)Require the State Department of Developmental Services to review and approve an applicant’s facility program plan as a prerequisite to the licensing and certification process.

(4)Require that the physician providing the certification that placement in the intermediate care facility/developmentally disabled-nursing or intermediate care facility/developmentally disabled-continuous nursing is needed, consult with the physician who is the physician of record at the time the person’s proposed placement is being considered by the interdisciplinary team.

(c)Until the departments adopt regulations pursuant to this section relating to services by an intermediate care facility/developmentally disabled-nursing, the licensed intermediate care facilities/developmentally disabled-nursing shall comply with federal certification standards for intermediate care facilities for individuals with intellectual disabilities, as specified in Sections 483.400 to 483.480, inclusive, of Title 42 of the Code of Federal Regulations, in effect immediately preceding January 1, 2013.

(d)This section shall not supersede the authority of the State Fire Marshal pursuant to Sections 13113, 13113.5, 13143, and 13143.6 to the extent that these sections are applicable to community care facilities.

(e)This section shall remain in effect only until January 1, 2020, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2020, deletes or extends that date.

SEC. 4.Section 1275.3 of the Health and Safety Code, as amended by Section 82 of Chapter 71 of the Statutes of 2014, is amended to read:
1275.3.

(a)The State Department of Public Health and the State Department of Developmental Services shall jointly develop and implement licensing regulations appropriate for an intermediate care facility/developmentally disabled-nursing and an intermediate care facility/developmentally disabled-continuous nursing.

(b)The regulations adopted pursuant to subdivision (a) shall ensure that residents of an intermediate care facility/developmentally disabled-nursing and an intermediate care facility/developmentally disabled-continuous nursing receive appropriate medical and nursing services, and developmental program services in a normalized, least restrictive physical and programmatic environment appropriate to individual resident need.

In addition, the regulations shall do all of the following:

(1)Include provisions for the completion of a clinical and developmental assessment of placement needs, including medical and other needs, and the degree to which they are being met, of clients placed in an intermediate care facility/developmentally disabled-nursing and an intermediate care facility/developmentally disabled-continuous nursing and for the monitoring of these needs at regular intervals.

(2)Provide for maximum utilization of generic community resources by clients residing in a facility.

(3)Require the State Department of Developmental Services to review and approve an applicant’s program plan as part of the licensing and certification process.

(4)Require that the physician providing the certification that placement in the intermediate care facility/developmentally disabled-nursing or intermediate care facility/developmentally disabled-continuous nursing is needed, consult with the physician who is the physician of record at the time the person’s proposed placement is being considered by the interdisciplinary team.

(c)Regulations developed pursuant to this section shall include licensing fee schedules appropriate to facilities which will encourage their development.

(d)This section shall not supersede the authority of the State Fire Marshal pursuant to Sections 13113, 13113.5, 13143, and 13143.6 to the extent that these sections are applicable to community care facilities.

(e)This section shall become operative on January 1, 2020.

SEC. 5.

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