The California Department of Public Health is informing ambulatory surgery centers seeking to renew their licenses that the agency no longer has the authority to issue new licenses or renew existing licenses for facilities owned by a single physician, the Los Angeles Daily Journal reports.
Kathleen Billingsley, a deputy director of DPH, explained that the department is acting in compliance with a 2007 appeals court ruling, noting that the change "was not an elective decision made by the department."
In the case -- Capen v. Shewry -- the 3rd District Court of Appeals in California ruled that such facilities should not be licensed by DPH because the centers oftentimes have just one physician.
DPH oversees licensing for hospitals and nursing homes.
Implications
Scott Leggett -- manager of three physician-owned surgery centers in San Diego and a former president of a California group representing surgery centers -- said facilities are particularly concerned that health plans, including Medi-Cal, will not cover services at the surgery centers if they are not licensed by the state.
Medi-Cal is California's Medicaid program.
Bryan Liang, executive director of the Institute of Health Law Studies for California Western School of Law, said physicians also could face malpractice penalties for performing procedures at facilities that lack licenses from the state.
Other Licensing Options
The Daily Journal reports that facilities have the option to seek certification from Medicare or accreditation through a private consulting firm.
However, Leggett says that surgery centers are reluctant to pursue those options because they do not provide the same legal weight or benefits.
Next Steps
Legal experts maintain that legislation could be enacted to overturn the court decision (George, Los Angeles Daily Journal, 5/23).