Ambulatory Surgery Center Definition
While California’s definition for “surgical clinic” describes an ASC, due to the California Department of Health’s interpretation of the decision in Capen v. Shewry physician-owned ASCs in the state are not considered surgical clinics.
“Surgical clinics” are defined as a a clinic that is not part of a hospital and that provides ambulatory surgical care for patients who remain less than 24 hours. A surgical clinic does not include any place or establishment owned or leased and operated as a clinic or office by one or more physicians or dentists in individual or group practice, regardless of the name used publicly to identify the place or establishment, provided, however, that physicians or dentists may, at their option, apply for licensure.
“Outpatient setting” is defined as any facility, clinic, unlicensed clinic, center, office, or other setting that is not part of a general acute care facility, as defined in Section 1250, and where anesthesia, except local anesthesia or peripheral nerve blocks, or both, is used in compliance with the community standard of practice, in doses that, when administered have the probability of placing a patient at risk for loss of the patient’s life-preserving protective reflexes. The definition also includes facilities that offer in vitro fertilization.
Excluded from the definition of “outpatient setting” are, among other settings, any setting where anxiolytics and analgesics are administered, when done so in compliance with the community standard of practice, in doses that do not have the probability of placing the patient at risk for loss of the patient’s life-preserving protective reflexes.
License Requirements
California Health and Safety Code §1204(b)(1) states that a “surgical clinic” (a clinic that is not part of a hospital and provides ambulatory surgical care for patients who remain less than 24 hours) is eligible for licensure as a specialty clinic.
However, the California Department of Public Health (CDPH) interpreted the decision in Capen v. Shewry (2007) to mean that it lacked the jurisdiction to license physician-owned ASCs. Since that time, CDPH has prohibited physician-owned ASCs from seeking state licensure.
State law does require oversight for ASCs, with California Health and Safety Code §1248.1 requiring outpatient settings (settings that are not part of a general acute care facility and where anesthesia is used) to be Medicare certified, licensed by CDPH as a surgical clinic or accredited by an approved accrediting agency. Additionally, California Health and Safety Code §1225(c)(2) provides that, “a surgical clinic, as defined in subdivision (b) of Section 1204, shall comply with federal certification standards for an ambulatory surgical clinic, as specified in Section 416.1 to 416.54, inclusive, of title 42 of the Federal Code of Regulations.” California Health and Safety Code §1248.15 also defines minimum standards for accreditation of outpatient surgery settings.
While most ASCs are not required to seek state licensure, for surgical clinics that are subject to licensing requirements the 2024-2025 statewide license fee is $8,885.
Upon discovery that an outpatient surgery setting is not in compliance with a specified provision, the Medical Board can bring action through or in conjunction with a district attorney to enjoin the outpatient setting's operation.
Certificate of Need
California does not have a CON program.
Length of Stay Restriction
California Health and Safety Code §1204(b)(1) defines “surgical clinic” as a clinic that provides ambulatory surgical care for patients who remain less than 24 hours. While physician-owned ASCs are not licensed as surgical clinics in the state, the requirement at California Health and Safety Code §1248.1(a) which states that ASCs may only operate in the state if they are certified to participate in the Medicare program under Title XVIII (42 U.S.C. Sec. 1395 et seq.) of the federal Social Security Act means ASCs are subject to the CMS length of stay restrictions for ASCs, which provides that surgical services at an ASC have an expected duration not exceeding 24 hours.
Medical History and Physical Examination
California does not have a state-level medical history and physical examination requirement. However, California Health and Safety Code §1248.1(a) provides that an ASC may only operate in the state if it is, "...certified to participate in the Medicare program under Title XVIII (42 U.S.C. Sec. 1395 et seq.) of the federal Social Security Act." Therefore, ASCs operating in the state would need to be in compliance with the CMS requirement that ASCs develop and maintain a policy that identifies those patients who require a medical history and physical examination prior to surgery.
Transfer Agreement
California Health and Safety Code §1248.15(a)(2)(C) provides that for procedures to be performed in an outpatient setting, the outpatient setting shall do one of the following:
- Have a written transfer agreement with a local accredited or licensed acute care hospital, approved by the facility's medical staff.
- Permit surgery only by a licensee who has admitting privileges at a local accredited or licensed acute care hospital.
- Submit for approval by an accrediting agency a detailed procedural plan for handling medical emergencies that shall be reviewed at the time of accreditation.
However, due to the fact that physician-owned ASCs are not licensed by the state, many ASCs in the state are instead required to follow the CMS requirements, per California Health and Safety Code §1248.1(a) which provides that an ASC may only operate in the state if it is, "...certified to participate in the Medicare program under Title XVIII (42 U.S.C. Sec. 1395 et seq.) of the federal Social Security Act." Therefore, ASCs operating in the state would need to be in compliance with the CMS requirement that ASCs periodically provide a local hospital with written notice of its operations and patient population served while also having an effective procedure for the immediate transfer, to a hospital, of patients requiring emergency medical care beyond the capabilities of the ASC.
Price Transparency
California does not impose state-level price transparency requirements on ASCs.
Workers' Compensation
ASCs are reimbursed at 80.81% of the Medicare OPPS/ASC fee schedule. Fee schedules are available at the California Department of Industrial Relations' Official Medical Fee Schedule page.
Patient Safety Reporting Requirements
California Business and Professions Code §2216.3 requires outpatient settings accredited pursuant to California Health and Safety Code §1248.1 (which includes physician-owned ASCs) to report an adverse event to the California Medical Board no later than five days after the adverse event has been detected or, if that event is an ongoing urgent or emergent threat to the welfare, health or safety of patients, personnel or visitors not later than 24 hours after the adverse event has been detected.
Charity Care
California does not impose charity care requirements on ASCs.
Surgical Smoke
California has required promulgation of rules to require health care facilities to evacuate or remove plume to the extent technologically feasible through the use of a plume scavenging system in all settings that employ techniques that involve the creation of plume. The rules must be considered for adoption by June 1, 2027.
Advance Directives
Health Care Decisions Act
Advance Directive Form
State Regulator
California Department of Public Health
*Oversees CMS-certified ASCs (If an ASC is CMS-certified and accredited, the ASC would also fall under Medical Board of CA jurisdiction)
PO Box 997377, MS 0500
Sacramento, CA 95899
Medical Board of California
*Oversees accredited ASCs
2005 Evergreen Street, Suite 1200
Sacramento, CA 95815
Cassie Dunham, Acting Deputy Director, Center for Health Care Quality, Licensing & Certification Program
cassie.dunham@cdph.ca.gov
916.440.7360
Statutory & Regulatory References
California Statutes: Business and Professions Code §2216; Health and Safety Code §1248.2