Think Tank

New Oversight for Outpatient Surgery

Outpatient surgery centers in California face new regulations and oversight under a brand-new law.

After much discussion and several amendments, the California Legislature last month passed SB 396, by state Sen. Jerry Hill (D-San Mateo). Gov. Jerry Brown (D) signed it last week.

The new law, which takes effect Jan. 1, addresses some of the concerns raised in a report released this summer that suggested that the public does not know much about California’s outpatient surgery industry, or the quality of care it delivers. The report, “Limited Visibility: Making Information Available on Outpatient Surgery in California,” was commissioned by the California HealthCare Foundation, which publishes California Healthline.

Although language changes in the bill tempered the strength of the state’s oversight, the law does include new regulatory requirements, including peer-review evaluations every two years for physicians and surgeons working in ambulatory surgery centers, and unannounced inspections of facilities.

We asked stakeholders and consumer advocates if California consumers will be better off once the law takes effect.

We received responses from:

Progress Made, but More To Be Done

SB 396 will help to better ensure the quality of care provided to patients through requiring peer review, and less-predictable oversight of outpatient surgery centers regulated by the Medical Board of California. While all efforts to improve quality of care are important steps in the right direction, there is too much that is unknown about many outpatient surgery settings.

State oversight of outpatient settings is divided between the California Department of Public Health and the Medical Board of California. There are additional steps that could be taken to provide more consistent transparency and accountability for the essential health care services provided to patients in outpatient surgery settings:

  • Consumers need access to an online list of outpatient surgery settings, including the particular specialty services provided in each setting. A list of settings regulated by the Medical Board of California is provided online. There is no list of settings for those regulated under the California Department of Public Health.
  • Consumers should have online access to a copy of all surveys and investigations conducted at all outpatient surgery settings. Only survey reports conducted in settings regulated by the Medical Board of California are posted online.
  • Reports from surveys conducted in outpatient settings that have Medicare-deemed status through an accreditation organization are not considered to be public information, and are not even shared with the regulatory agency, the California Department of Public Health. These reports should be considered public information.
  • All outpatient surgery settings should be required to report serious, adverse events that occur in their facility to state regulators for possible investigation.
  • All outpatient surgery settings should be required to submit utilization data on the costs, charges, patient outcomes and the types of procedures that are being performed, as well as quality/performance improvement measures.
  • A common array of enforcement tools should be available to state regulators to take prompt action against egregious violations that harm patients — something that is not universally available today.

Consumers deserve to have basic information about this increasingly-utilized segment of the health care delivery system, and regulators need the information and tools to be able to hold accountable those few outpatient surgery settings that provide poor quality care.

New Law Builds on Past Accomplishments

The California Ambulatory Surgery Association (CASA) is proud to have strongly supported SB 396 regarding ambulatory surgery centers. We did so in collaboration with the Medical Board of California (MBC) because patient safety and consumer protection is our number one priority. CASA has a 10-year history of sponsoring and supporting legislation to ensure patients receive the safest, highest-quality and most cost effective care possible.

CASA asked for one specific provision in SB 396 — allowing an “accredited outpatient setting” or “Medicare-certified ambulatory surgical center” to access specific reports from the MBC to ensure patient protection when credentialing, granting or renewing staff privileges for providers at that facility. Under existing law, only “surgical clinics” licensed by the California Department of Public Health have access to this information. Without adding an accredited outpatient setting and Medicare certified ambulatory surgical center to the list of eligible facilities that can obtain reports from the MBC, ambulatory surgery centers — known as ASCs — are unable to ensure that physician and surgeons and others providing care in those facilities have not been denied staff privileges, been removed from a medical staff, or have had his or her staff privileges restricted at another medical facility. This provision in SB 396 will go a long way to ensuring patient safety and consumer protection.

SB 396 builds on various other attempts and accomplishments by the California Legislature in getting their hands around the role ASCs play in the larger health care system. One area that can be improved upon and that was deleted from SB 396 is mandatory quality metric data reporting. More than 150 CASA members voluntarily and annually report quality benchmarking data to the association. This quality data is a valuable tool in analyzing the high-quality and safe care being provided in the outpatient setting. CASA hopes that future legislation might require ASCs to report similar data in a purposeful and actionable format.

The California ASC industry prides itself on providing convenient access to high-quality patient-centered medical care. Patients being treated in California ASCs deserve the highest, most consistent and comprehensive set of transparent state-specific oversight requirements. That is why CASA is delighted that Gov. Brown signed SB 396 into law.

Important Enhancements for Consumer Protection

The Medical Board of California is pleased to be a strong supporter of SB 396, which was recently signed into law. The board’s primary mission is consumer protection, and the board feels that SB 396 is a good start when it comes to protecting consumers who utilize services in outpatient settings. 

Existing law allows a physician who owns his or her own outpatient setting to choose not to have a peer review of his or her practice. The board feels that allowing this “opt out” does not ensure consumer protection. The board believes that for consumer protection, physicians working in outpatient settings should be subject to peer-review evaluations every two years.

These evaluations would be given to the governing body of the outpatient setting and then reviewed by the accreditation agencies at the next inspection of the outpatient setting. Making physician peer review mandatory will help ensure quality care in outpatient settings.

Another key factor in SB 396 is that it will allow routine inspections performed by the accreditation agencies (AAs) for outpatient setting accreditation to be unannounced. Allowing AAs to perform unannounced inspections will help to ensure that facilities do not have time to prepare for these inspections and will also be in line with inspections on other types of outpatient settings and ambulatory surgery centers.

AAs would be required to provide a 60-day window to the outpatient setting when performing an unannounced inspection. Unannounced inspections will help to ensure that outpatient settings are operating in compliance with existing law and that they are meeting the standards set in law and by the AA, which will help to ensure that consumers utilizing outpatient settings are in a safe environment.

While SB 396 does not include all the enhancements the board would like to see for accredited outpatient settings, like requiring health quality data collection, the board believes it is a good first step. The board is committed to continuing to work with stakeholders and the Legislature on ways to enhance consumer protection in outpatient settings.

What We Don't Know Can Hurt Us

SB 396 makes minor changes to current law, but it does nothing to lift the current veil of secrecy concerning outpatient surgery centers. It also takes a step backward in defining “unannounced visits” by accreditors as requiring 60 days’ notice. Much more needs to be done to make public information concerning the safety and quality of these settings, as well as the qualifications of providers practicing at them.

The volume and kinds of procedures performed on an outpatient basis has increased dramatically in recent years: nationally, about 60% of lower-risk procedures, such as glaucoma surgeries and colonoscopies, are performed in outpatient settings. And increasingly, higher risk, serious procedures — such as orthopedic surgery, heart stents, and weight-loss surgery — are also performed outside of hospitals.

High-profile cases — such as Joan Rivers’ death at a New York outpatient facility, and examples closer to home on lap-band surgeries — have called into question the safety of these surgery centers. Sadly, we know little to nothing about the safety of the procedures being performed at California outpatient settings, and how it compares with hospital performance. SB 396 does nothing to address this foundational problem.

Take medical errors: state law requires public reporting of “adverse events” for each hospital. The Department of Public Health posts them in detail by facility. But state law on outpatient surgery centers simply requires those under the jurisdiction of the Medical Board to report adverse events to the Board; there is no public reporting requirement. Further, for outpatient facilities that are under the DPH — Medicare-certified facilities — there is no state requirement at all for reporting of adverse events. The same goes for infections, including those caused by superbugs: state law requires public reporting for each hospital, but we have no such data on outpatient surgery centers. They may do far better — or worse — than hospitals. We currently have no way to know.

The public needs comparable evidence on how outpatient surgery settings are performing, regardless of which agency or accreditor has jurisdiction over a surgical setting. Instead, California has a fragmented oversight system, reliant on several accrediting agencies, each with their own standards. We should have ready access to comparable data on medical errors and infections. Consumers need information to make the right choices and policymakers need it to contain health system costs without compromising patient safety.