California Health Care Legislation Signed Into Law By Governor Newsom – Food, Drugs, Healthcare, Life Sciences

October 10th was the last day for Governor Newsom to sign or
veto laws that were passed by the legislature this year. 2021 was a
busy year for California legislators, who put forth hundreds of
health-related bills in the wake of the COVID-19 pandemic.
Unsurprisingly, not all of the bills became law (although some of
them may be revisited next year). Below is a summary of a few of
the new health care laws that were signed into law by Governor
Newsom, covering a wide range of health care providers.


SB 362 Prohibits Community Pharmacy

SB 362 was approved by the Governor on
September 27, 2021. Effective January 1, 2022, community pharmacies
will be prohibited from establishing performance quotas. For
purposes of the new law, a “quota” is 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. A “quota”
includes a fixed number or formula related to any of the

  • Prescriptions filled;
  • Services rendered to patients;
  • Programs offered to patients; and
  • Revenue obtained.

A “quota” does not mean 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; or
  • Any performance metric required by state or federal regulators
    that does not use quotas.

A chain community pharmacy is also prohibited from communicating
the existence of quotas to pharmacists or pharmacy technicians who
are its employees or with whom it contracts, through employees,
contractors, or third parties.

The new law does not prohibit a chain community pharmacy from
establishing policies and procedures that assist in assessing the
competency and performance of a pharmacist or pharmacy technician
in providing care to patients if the measurements used are not, or
do not include, quotas.

AB 1064 Authorizes Pharmacists to Initiate and Administer
Certain Vaccines

AB 1064 was signed by Governor Newsom on
October 8, 2021 and authorizes a pharmacist to independently
initiate and administer any vaccine that has been approved or
authorized by the FDA and received a federal Advisory Committee on
Immunization Practices individual vaccine recommendation published
by the CDC for persons 3 years of age and older.

SB 409 Authorizes Pharmacists to Perform Certain CLIA
Waived Tests

Governor Newsom signed SB 409 on October 6, 2021 which authorizes
pharmacists and pharmacies to perform, in accordance with specified
requirements and conditions, any aspect of an FDA-approved or
authorized test that is classified as waived under CLIA if the test
is used to detect or screen for the below illnesses, conditions, or

  • SARS-CoV-2 or other respiratory illness, condition or
  • 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; and
  • Other conditions as specified by regulation.

The pharmacy and pharmacist-in-charge will be required to
maintain policies and procedures and other documents related to
quality, safety, and testing and comply with mandatory reporting


AB 1020 Creates New Health Care Debt and Fair Billing Rules
for Hospitals

AB 1020 was signed by the Governor on October
4, 2021, which will impose new limitations on hospital debt
collections and raise the income level for hospital charity care
eligibility as further discussed below. According to the bill’s
author, this law is necessary to avoid further economic fallout
from the COVID-19 pandemic.

Under the new law, the definition of “high medical
costs” is revised to include a patient who has a family income
that does not exceed 400 percent of the federal poverty level. This
is an increase from the current law’s definition, which is 350
percent of the federal poverty level. Patients with high medical
costs are by law eligible to apply for participation under a
hospital’s charity care or discount payment policy.

AB 1020 also requires that hospitals display charity care and
discount payment notices regarding the hospital’s policy for
financially qualified and self-pay patients on the hospital’s
internet website. However, hospitals will be required to give
patients financial assistance in accordance with the policy
published on the California Department of Public Health
(CDPH)/Department of Health Care Access and Information

Additionally, hospitals will be required to wait 180 days (an
increase from the 150 days under current law) before reporting to
consumer credit agencies or filing collection actions for
nonpayment and must do all of the following prior to selling
patient debt to a debt buyer:

  • Determine that the patient is ineligible for financial
    assistance or confirm that the patient has not responded to any
    attempts to bill or offer financial assistance for 180 days;
  • Include contractual language in the sales agreement in which
    the debt buyer agrees to return, and the hospital agrees to accept,
    any account in which the balance has been determined to be
    incorrect due to the availability of a third-party payer, including
    a health plan or government health coverage program, or the patient
    is eligible for charity care or financial assistance;
  • Require debt buyers to not charge interest or fees on patient
    debt; and
  • Confirm that the debt buyer is licensed by the Department of
    Financial Protection and Innovation.

Additionally, before assigning a bill to collections or selling
patient debt to a debt buyer, hospitals will be required to send
the patient a notice containing the following information:

  • The date or dates of service of the bill that is being assigned
    to collections or sold;
  • The name of the entity the bill is being assigned or sold
  • A statement informing the patient how to obtain an itemized
    hospital bill from the hospital;
  • The name and type of health coverage plan for the patient on
    record with the hospital at the time of services, or a statement
    that the hospital does not have that information;
  • An application for the hospital’s charity care and
    financial assistance; and
  • The date or dates the patient was originally sent a notice
    about applying for financial assistance, the date or dates the
    patient was sent a financial assistance application, and, if
    applicable, the date a decision on the application was made.

At the same time, debt collectors collecting consumer hospital
debt will be required to first send a notice to the debtor that
contains the name and address of the hospital, information on how
to obtain an itemized hospital bill and a statement that the debt
collector will wait at least 180 days from the initial bill for
hospital services causing the debt before reporting adverse
information to a credit reporting agency or filing a lawsuit
against the debtor. AB 1020 also imposes new requirements on debt
collectors in terms of what must be alleged in a complaint in
action to collect general acute care hospital debt, which among
other things must include copies of the application for hospital
assistance that was provided to the debtor by the hospital and the
notice that was provided to the debtor by the hospital about
applying for financial assistance (which may take the form of a
redacted or sample hospital bill).

Finally, AB 1020 creates a new civil penalty regime and shifts
responsibility for enforcement of the law to the Department of
Health Care Access effective January 1, 2024. Prior to this date,
CDPH will be responsible for enforcement of the requirements, which
will go into effect January 1, 2022.

AB 532 Adds Charity Care and Discount Policy Notice

The Governor approved AB 532 on October 4, 2021, which will require
hospitals to provide their patient charity care and discount policy
notices to patients at the time of service if the patient is
conscious and able to receive written notice and no later than the
discharge process/when the patient leaves the facility. The new law
also requires that the patient notices be revised to include:

  • The internet address for the Health Consumer Alliance;
  • 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); and
  • An internet address for the hospital’s list of shoppable
    services under 45 C.F.R. 180.60.

AB 532 also clarifies that the patient notice must be posted in
observation units.

AB 451 Creates New Psychiatric Unit/Facility Emergency
Service Requirements

AB 451 was approved by Governor Newsom on
October 1, 2021. Psychiatric facilities that are county-owned and
operated and those with 16 or fewer beds are exempt from the new
law, which will require psychiatric hospital units, psychiatric
health facilities, and acute psychiatric hospitals (regardless of
whether the facility operates an ED) to accept the transfer of a
person with an emergency psychiatric medical condition from a
licensed health care facility with an emergency department and
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; and
  • The facility has appropriate facilities and qualified personnel
    available to provide the services or care.

Skilled Nursing Facilities

SB 650 Creates New Ownership Transparency Requirements for
Skilled Nursing Facilities

Governor Newsom approved SB 650 on October 4, 2021. Effective December
31, 2023, organizations that operate, conduct, own, manage, or
maintain a skilled nursing facility or facilities will be required
to prepare and file an annual consolidated financial report with
the Office of Statewide Planning. The report must be reviewed by a
certified public accountant in accordance with GAAP principles on
an accrual basis. The report, among other things, must include a
combined financial statement that includes all entities reported in
the consolidated financial report, unless the organization is
prohibited from including a combined financial statement in a
consolidated financial report pursuant to a state or federal law or
regulation or a national accounting standard. In such cases, the
organization must disclose to the Office of Statewide Planning the
applicable state or federal law or regulation or national
accounting standard that prohibits the inclusion of a combined
financial statement.


AB 1280 Imposes New Limitations on Hospice

SB 1280 was approved by the Governor on
October 4, 2021. The new law prohibits hospice providers (and their
employees and agents) from paying referral sources for the referral
of patients. It will also prohibit hospice salespeople, recruiters,
agents, and employees who receive compensation or other
remuneration for hospice referrals or admissions from consulting
with a patient/patient’s representative or a patient’s
family regarding hospice services, hospice election, or informed
consent to a patient, patient’s family, or patient’s
representative. Instead, specified persons including a registered
nurse or medical social worker must 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. Finally, hospices will be required to
provide verbal and written notice of the patient’s rights and
responsibilities to the patient or the patient’s representative
in a language and manner the person understands before providing

SB 353 Extends Hospice Laws and Will Require Online Data

The Governor signed SB 353 on October 4, 2021, extending the
ability for hospice licensees under the act to provide any of the
authorized interdisciplinary hospice services, including palliative
care, to a patient who has a serious illness until January 1,

Existing law requires a licensee, on or before January 1, 2019,
January 1, 2020, and January 1, 2021, to provide the department
with designated information for the period of time the licensee
provided palliative care. AB 353 will extend this requirement to
each April 30, beginning April 30, 2022, until April 30, 2025.
However, the reporting will be through the department’s online
reporting portal, as specified, rather than on a form prescribed by
the department.

SB 664 Creates Moratorium on New Hospice Licenses

On October 4, 2021, Governor Newsom signed SB 664, which temporarily halts the issuance
of new hospice licenses. The CDPH will be prohibited from issuing
new hospice licenses on and after January 1, 2022, and until 365
days from the date that the California State Auditor publishes a
report on hospice licensure. CDPH may grant an exception to the
moratorium imposed by this article upon making a written finding
that an applicant for a new license has shown 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. CDPH would not be prohibited from renewing existing

Substance Abuse and Mental Health Services

SB 434 Prohibits Fraudulent Marketing of Substance Use
Disorder Treatment Services

Governor Newsom approved SB 434 on October 1, 2021, which 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, including making false or misleading statements about
the entity’s products, goods, services, or geographical
locations. SB 434 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 department responsible for the
facility’s licensure or certification of the facility or
program will be authorized to investigate allegations of a
violation of these provisions and, upon finding a violation, to
impose the civil sanctions and other penalties available pursuant
to existing law.

SB 541 Requires Disclosure of Licensing and Certification

Governor Newsom signed SB 541 on October 8, 2021, which requires a
facility licensed or program certified by the Department of Health
Care Services (DHCS) to provide substance use disorder treatment
services to disclose its license or certification number and the
date that the license or certification is scheduled to expire.

These disclosures must be made:

  • To any person who inquires about the facility’s license in
    writing, verbally, electronically, or by any other method of
    communication between the person and the facility;
  • On the internet website of the facility with a link to the DHCS
    website; and
  • In any print, audio, or electronic advertising or marketing of
    the facility.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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