California Healthcare Laws That Were Passed in 2021

Every year, new state laws mean that medical practices and companies need to speak with an experienced California healthcare lawyer. These new laws affect the ways hospitals, concierge and direct medical practices, anti-aging and functional medicine practices, and many other medical companies conduct medicine and operate their businesses.

A failure to understand and comply with these laws can result in substantial fines and penalties. In some cases, the failure may directly affect your ability to practice medicine or operate your business. Some violations can land you in jail.

According to the National Law Review, California Governor Newsom signed numerous laws in 2021. Many laws were in response to the COVID-19 pandemic.

SB 362. Chain community pharmacies: quotas.

This law was signed by Governor Newsom and is effective January 1, 2022. The California State Board of Pharmacy licenses and regulates the practice of pharmacy in California – through the California Pharmacy Law. Violations of the Pharmacy Law may result in criminal charges.

The Pharmacy Law applies to different types of pharmacies including “community pharmacies.” Before the law was passed, community pharmacies could not require that a pharmacist engage in the practice of pharmacy (when the pharmacy is open to the public) – unless there was another employee who could assist the pharmacist.

The law, effective January 1, 2022, prohibits a chain community pharmacy, from:

“establishing a quota, defined as a fixed number or formula related to the duties for which a pharmacist or pharmacy technician license is required, against which the chain community pharmacy or its agent measures or evaluates the number of times either an individual pharmacist or pharmacy technician performs tasks or provides services while on duty.”

The new law also prohibits a chain community pharmacy (through employees, contractors, or third parties) from:

“communicating the existence of quotas to pharmacists or pharmacy technicians who are its employees or with whom it contracts.”

The law authorizes the California State Board of Pharmacy to enforce the law in actions against the chain community pharmacy.

Quotas include formulas that relate to:

  • The number of prescriptions that are filled.
  • Services for patients.
  • Programs offered to patients.
  • Revenue obtained.

Quotas do not apply to any of the following:

  • A measurement of the revenue earned by a particular licensed chain community pharmacy not calculated in relation to, or measured by, the tasks performed, or services provided by, individual pharmacists or pharmacy technicians.
  • Any evaluation or measurement of the competence, performance, or quality of care provided to patients of a pharmacist or pharmacy technician if the evaluation does not use quotas.
  • Any performance metric required by state or federal regulators that does not use quotas.

The law doesn’t preclude chain community pharmacies from setting policies to help assess a pharmacist or a pharmacy technician’s competency and performance – in providing patient care – if the policies don’t include quotas.

AB-1064 Pharmacy practice: vaccines: independent initiation and administration.

This law was signed by the Governor on October 8, 2021. It addresses the authority of a pharmacist to administer vaccines. The law provides that a pharmacist:

“May independently initiate and administer any vaccine that has been approved or authorized by the federal Food and Drug Administration and received a federal Advisory Committee on Immunization Practices (ACIP) individual vaccine recommendation published by the federal Centers for Disease Control and Prevention (CDC) for persons three years of age and older.”

The requirements for initiating and administering the vaccine include:

  • Completing an immunization training program endorsed by the CDC or the Accreditation Council for Pharmacy Education.
  • Certification in basic life support.
  • Compliance with federal and state recordkeeping and reporting requirements.

SB-409 Pharmacy practice: testing.

This law, signed on October 5, 2021, grants pharmacists and pharmacies (provided certain conditions are met), the authority to perform:

“Any aspect of an FDA-approved or-authorized test that is classified as waived under CLIA [Clinical Laboratory Improvement Amendments of 1988] if the test is used to detect or screen for certain illnesses, conditions, or diseases identified in the bill or the test is approved by the [California State Pharmacy] board, in conjunction with the Medical Board of California and Laboratory Field Services in the State Department of Public Health, by regulation.”

The tests authorized by this law should detect or screen for:

  • SARS-CoV-2 or other respiratory illness, condition or disease
  • Mononucleosis.
  • Sexually transmitted infection.
  • Strep throat.
  • Anemia.
  • Cardiovascular health.
  • Conjunctivitis.
  • Urinary tract infection.
  • Liver and kidney function or infection.
  • Thyroid function.
  • Substance use disorder.
  • Diabetes.

The pharmacy and pharmacist-in-charge must comply with other compliance requirements.

AB 532 Health care: fair billing policies.

AB 532 was signed on October 4, 2021. The law provides that hospitals that provide “charity care and discount policy notices” provide conscious patients who can receive written notices – notices before the patient is discharged. The notices should include:

  • The Health Consumer Alliance Internet address (
  • An “explanation that there are organizations that will help the patient understand the billing and payment process as well as information regarding Covered California and Medi-Cal presumptive eligibility (if the hospital participates in the presumptive eligibility program).”
  • An internet address for the hospital’s list of shoppable services under 45 C.F.R. 180.60.

AB-451 Health care facilities: treatment of psychiatric emergency medical conditions

This law was approved on October 1, 2021.Some smaller psychiatric facilities may be exempt from the law. The law essentially requires that “psychiatric hospital units, psychiatric health facilities, and acute psychiatric hospitals (regardless of whether the facility operates an emergency department)”

  • Accept the transfer of a patient who has an emergency psychiatric medical condition.
  • From a licensed health care facility with an emergency department.
  • Provide emergency services to that person if all of the following requirements are met:
  • The treating physician at the sending facility has determined that the patient is medically stable and appropriate for treatment in a psychiatric setting and has included that determination in the patient’s medical record.
  • The facility has an available bed.
  • The facility has appropriate facilities and qualified personnel available to provide the services or care.

SB-650 Skilled nursing facilities.

SB 650 was signed on October 4, 2021.  The law is not effective until December 31, 2023. The provides (with some exceptions) that an organization that “operates, conducts, owns, manages, or maintains a skilled nursing facility or facilities:”

“Prepare and file with the office an annual consolidated financial report that includes data from all operating entities, license-holders, and related parties in which the organization has an ownership or control interest of 5% or more and that provides any service, facility, or supply to the skilled nursing facility.”

The law requires that a duly authorized official of the organization certify the report. This generally means that the report should be reviewed by a certified public accountant.

The office should also:

  • Develop policies and procedures to comply with additional requirements such as determining if the submitted information is complete.
  • Post those reports and related documents to its internet website.

AB-1280 California Hospice Licensure Act of 1990

This law was signed into law on October 4, 2021. The law sets new requirements for hospice referrals. The law prohibits:

  • Hospice providers (and hospice staff and agents for the hospice) from “paying referral sources for the referral of patients to the hospice.”
  • “A hospice salesperson, recruiter, agent, or employee who receives compensation or remuneration for hospice referrals or admissions from providing consultation on hospice services, hospice election, or informed consent to a patient, patient’s family, or patient’s representative.”

Certain authorized persons, such as a registered nurse or a medical social work can “complete the election of hospice, informed consent, completed signatures, and counsel on the election of hospice with a patient, patient’s family, or patient’s representative.”

The new law also requires that that hospice give a patient or his/her representative a verbal and written notice of the patient’s rights and responsibilities – in a language and manner the patient or representative can understand – before providing any care.

Our skilled healthcare lawyers understand how various anti-referral laws such as Stark Law and the Anti-Kickback Statute apply to your medical practice or medical business. These laws regulate referrals between physicians and entities that do business with the physician practices.

SB-353 Hospice: services to seriously ill patients.

This bill became law on October 4, 2021. The prior law provided the authority for a hospice licensee to provide any of the authorized interdisciplinary hospice services, including palliative care, to a patient who has a serious illness until January 1, 2022. The law extends the authority to provide these services until January 1, 2027. The law also extends other hospice-related requirements.

SB-664 Hospice licensure: moratorium on new licenses.

SB 664, signed in October 2021, temporarily stops the issuance of new hospice licenses effective January 1, 2022. The law provides that the California Department of Public Health cannot issue new hospice licenses unless the department, based on an application for a new license, finds that there is “a demonstrable need for hospice services in the area where the applicant proposes to operate based on the concentration of all existing hospice services in that area.”

The law does provide that the California Department of Public Health can renew existing hospice licenses.

Hospices generally provide care for people who are in the terminal stages of disease that will take their life.

SB-434 Substance abuse and mental health services: advertising and marketing.

This law was signed by the Governor on October 1, 2021.

This law prohibits an operator of a licensed alcoholism or drug abuse recovery or treatment facility, a certified alcohol or other drug program, and a licensed mental health rehabilitation center, psychiatric health facility, or social rehabilitation facility – from engaging in various acts. These acts include making false or misleading statements about the operator’s products, services, goods, or geographical locations.

The law also prohibits “a picture, description, staff information, or the location of an entity from being included on an internet website along with false contact information that surreptitiously directs the reader to a business that does not have a contract with the entity.”

The law authorizes investigations of the allegations and civil sanctions and civil penalties. The law does not make violations of the act a crime.

Pharmacies, hospitals, mental health facilities, hospices, and substance abuse facilities need to understand how the recently passed California healthcare laws apply to their practice. Some violations of these new laws may result in criminal charges. Other offenses can result in civil penalties. The new laws regulate various services such as vaccines, licensing, billing requirements, referrals, and advertising.

Medical practice and facilities should contact Cohen Healthcare Law Group, PC on a yearly basis to update their compliance requirements based on new federal and state laws. Our experienced healthcare attorneys help medical practices and healthcare companies understand how regulatory compliance issues affect their practice and business.

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