Physician-operated laboratories (POLs), by definition, are clinical laboratories run by 5 or fewer physicians, for their own patients.
In 1995, SB113 (Maddy) passed both houses of the State Legislature and was signed into law by Governor Wilson with an effective date of 1/1/96. This bill codified State oversight over clinical laboratories and allowed the State to assess fees for the registration and/or licensing of clinical laboratories in the State. The bill was likley a mistake. It's intent was well meaning, that is, to give the State oversight in order to petition the Federal CLIA to remove its oversight. However the bill's language did not say that; only the intent language did.
Thus, when the Federal government only agreed to exempt the State from Federal oversight at a fee of $2.4 million per year (which the State could not afford) clinical laboratories were stuck with BOTH State and Federal law and fees on the books. Because of this, CMA has spent numerous hours of the past 10 years (since January 1996) fighting the enactment of a statute that was in fact codified. We have been successful for over 10 years. The State has never assessed fees against POLs.
Unfortunately, Governor Schwarzenneger has decided to implement the bill (as enacted in the regulations that CMA has fought). His main purpose for enacting the regulations implementing SB 113 is financial.
Most POLs (those that perform waived and physician-performed microscopy procedures) will be assessed a $59 fee to register in the State. About a quarter of the POLs, those who perform moderate or high-complexity tests, will have to pay about $1000 to become licensed in the State.
CMA has been working with the State to a) get an official notice of the change and b) a clear description of what changes are being made and how they will affect POLs. CMA has been told that a letter from the Governor and a FAQ document are being drafted (the FAQ will be shared with us, and the State welcomes questions that need to be answered).
CMA has asked the State to respond to:
1) when will this change become effective?
2) how much money will the State raise and what will the State do with these funds?
3) what changes will POLs have to make to comply with the State requirements? CMA has been told that the State does not believe there are any requirements in the State law that POLs don't already have to meet in CLIA. CMA has been specifically told that POLs will NOT have to hire laboratory technicians to run their lab so long as the lab is run by MDs for his/her own patients.
4) when will the State promulgate regulations allowing organizations to become deemed by the State (such as COLA and others are deemed by Federal CLIA)?
5) what laboratories are to be effected (or rather, which will be exempted)? CMA has been told that those labs that were in effect prior to 1/1/96 are grandfathered in to old rules, and thus do not have to pay fees. Unfortuntately, despite CMA's ongoing complaints, adding a new doctor does constitute a change and would therefore disqualify a lab for being grandfathered in.
6) under what timeframe will the State pursue Federal exemption from CLIA?
CMA did sponsor legislation this year to exempt all POLs from State laboratory law. Unfortunately, the large clinical labs organized and Assemblyman Nava was not willing to fight them and did not move the bill forward. In addition, CMA has been led to believe that even had the bill passed, the Governor was likely to veto it.
In this time of big issues and concerns facing physicians throughout California (e.g., balance billing, mandatory CMEs, challenges to self-governance, MICRA, SGR, GPCI, etc.) POLs did not appear to be the best legislative battle for CMA to prioritize.
Nevertheless, CMA will continue to work against dual fees and dual regulation.