FTC Staff Comment Before the Kentucky Cabinet for Health and Family Services Concerning Proposed Rule to Regulate Limited Service Clinics

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
Office of Policy Planning
Bureau of Economics
Bureau of Competition
January 28, 2010
Kentucky Cabinet for Health and Family Services
Attention: Jill Brown, Office of Legal Services
275 East Main Street 5 W-B
Frankfort, KY 40601
Dear Ms. Brown,
The staffs of the Federal Trade Commission=s Office of Policy Planning, Bureau of
Economics, and Bureau of Competition1 are pleased to respond to the invitation for
comments on the proposed regulation of limited service clinics (LSCs) in Kentucky.2 LSCs
are health care clinics located in retail settings, such as pharmacies and supermarkets, that
offer consumers a convenient way to obtain basic medical care at competitive prices.3 The
types of care offered at LSCs are similar to those offered in urgent care centers and other
limited care, outpatient settings.4 A typical LSC provides basic screening services (such as
cholesterol screening, pregnancy testing, diabetes screening, and strep throat infection
testing), administers certain common vaccines (such as flu vaccine), and treats certain basic
complaints (such as cold sores, flu, and minor burns and rashes).5 The American Medical
1 This letter expresses the views of the Federal Trade Commission’s Office of Policy Planning, Bureau of
Economics, and Bureau of Competition. The letter does not necessarily represent the views of the Federal
Trade Commission (“Commission”) or any individual Commissioner. The Commission has, however, voted to
authorize us to submit these comments.
2 See Kentucky Cabinet for Health and Family Services, Office of Inspector General, Division of Health Care,
New Administrative Regulation, 902 KAR 20:400. Limited services clinics (filed Dec. 15, 2009), available at
http://www.lrc.ky.gov/kar/902/020/400reg.htm [hereinafter Proposed Rule] (public hearing and pubic comment
period announced at draft p. 17).
3 See Massachusetts Dept. Pub. Health, Commonwealth to Propose Regulations for Limited Service Clinics:
Rules May Promote Convenience, Greater Access to Care (Jul. 17, 2007), available at
http://www.mass.gov/?pageID=pressreleases&agId=Eeohhs2&prModName=dphpressrelease&prFile=070717_
clinics.xml.
4 LSCs offer a subset of primary care services – an overlapping, but narrower range of basic health care services
than that offered at primary care centers, ambulatory care clinics, and urgent care centers. See, e.g., Ateev
Mehrotra et al., et al., Retail Clinics, Primary Care Physicians, and Emergency Departments: A Comparison of
Patients Visits, 27 H EALTH A FFAIRS 1272, 1279 (September/October, 2008) (“ten complaints account for more
than 90 percent of all retail clinic visits. . . . [but] 13 percent of adult PCP [primary care practice] visits, 30
percent of pediatric PCP visits, and 12 percent of ED [Emergency Department] visits.”).
5 See id.
Page 1 of 10

Association has reported that consumers perceive advantages to LSCs, including factors such
as convenient locations, shorter wait times, longer operating hours, and lower prices.6
The New Administrative Regulation for LSCs (Proposed Rule) would regulate the
operation of LSCs. Numerous provisions of the Proposed Rule – such as the requirement
that licensed health care professionals at LSCs operate within the scope of their licensure –
mirror basic consumer protection standards that are imposed on competing providers of basic
health care services.7 As such, they do not raise competition concerns. However, several
provisions impose costs and restrictions on both LSCs and the health care professionals who
practice there, such as physicians and advanced registered nurse practitioners (ANPs),8 that
do not apply in other limited care settings, such as urgent care centers.
Imposing disparate regulations on competitors can reduce competition among them
and thereby harm consumers. By reducing competition among providers of basic health care
services, the Proposed Rule is likely to raise prices and decrease the availability of health
care services for Kentucky consumers. Consumers may conceivably benefit from this
disparate regulation only if is necessary to protect consumers’ interests. Studies indicate,
however, that the quality of LSC care is just as good as that in other clinic settings.9 LSCs
are operating successfully in more than thirty states, including Kentucky.10 Thus, the
available evidence does not appear to suggest a need for additional costs and limits on LSCs
that do not apply in analogous limited care settings.11 Moreover, the Proposed Rule does not
articulate a justification for treating LSCs and other limited care settings differently.
In the absence of a justification, the Proposed Rule appears likely unnecessarily to
limit competition from LSCs to provide basic health care services. Therefore, FTC staff
6 See American Medical Association, Report 7 of the Council on Medical Service (A-06), Store-Based Health
Clinics 1 (June 2006).
7 For the purposes of this comment, FTC staff have not analyzed, and do not address, Kentucky’s basic
requirements for the licensure of health care professionals or the state’s basic standards of care for health care
clinics. This comment addresses only the competitive implications of those requirements that (a) discriminate
between licensed providers of basic health care based on clinic ownership or setting without (b) any evident
health or safety rationale for that discrimination.
8 FTC staff understands that the nurse practitioners, or advanced practice nurses, who would help staff LSCs in
Kentucky are advanced registered nurse practitioners (ANPs), whose scope of practice generally is established
pursuant to KRS Chapter 314.
9 See, e.g., Ateev Mehrotra et al., Comparing Costs and Quality of Care at Retail Clinics with that of Other
Medical Settings for 3 Common Illnesses, 151 A NNALS I NTERNAL M ED. 321, 326 (2009) (analysis of 14 quality
metrics for commonly treated ailments otitis media [ear infection], streptococcal pharyngitis [strep], and urinary
tract infections); infra text accompanying notes 22-25.
10 See Rena Rudavsky, Craig Evan Pollack, & Ateev Mehrotra, The Geographic Distribution, Ownership,
Prices, and Scope of Practice at Retail Clinics, 151 A NNALS I NTERNAL M ED. 315, 315 (2009) (LSCs in 33
states in August 2008).
11 FTC staff do not mean to suggest that the published evidence regarding LSCs health care is definitive.
Rather, published data tend to support the contention that LSCs offer high quality and low prices for certain
basic health care services, provided by licensed health care professionals, and we are unaware of countervailing
empirical findings.
Page 2 of 10

recommend that The Kentucky Cabinet for Health and Family Services (Cabinet) eliminate
the provisions of the Proposed Rule that would impose greater costs and limits on LSCs (and
the professionals who practice there) than on other limited care settings.
The Cabinet also might wish to consider whether a separate rule for LSCs is
necessary or whether existing standards for licensing comparable facilities, such as primary
care centers, might be adapted to regulate Kentucky LSCs as well. We understand that LSCs
in Kentucky already operate successfully under such regulations,12 and that primary care
centers, hospitals, and other providers can offer the same basic services and staffing at
satellite or extension facilities.13 The Proposed Rule does not clearly distinguish when such
services, staff, and facilities would be regulated under LSC regulations or otherwise. To the
extent that the Cabinet does not identify distinct health and safety concerns associated with
doctor and ANP provision of basic health care services in these settings, this ambiguity might
be resolved better by modifying existing clinic regulations to accommodate LSCs.
Interest and Experience of the Federal Trade Commission
The FTC is charged under the FTC Act with preventing unfair methods of
competition and unfair or deceptive acts or practices in or affecting commerce.14
Competition is at the core of America’s economy,15 and vigorous competition among sellers
in an open marketplace gives consumers the benefits of lower prices, higher quality products
and services, more choices, and greater innovation. Because of the importance of health care
competition to the economy and consumer welfare, anticompetitive conduct in health care
markets has long been a key target of FTC law enforcement16 and research.17 The FTC and
its staff also encourage health care competition through advocacy, and have urged several
states to reject or narrow restrictions that limit health care access and raise prices to
consumers by limiting competition among health care providers and professionals.18
12 FTC staff have been told that LSCs presently operate in Kentucky under primary care center licensure,
ambulatory care clinic licensure, and otherwise. Cf. Kentucky Cabinet for Health and Family Services, Office
of Inspector General, Directory of Licensed Health Care Facilities: Miscellaneous Directory (OIG directories
available at http://chfs.ky.gov/os/oig/directories.htm) (listing, among others, Walgreens-Option Care, Inc.
clinics in the Louisville, Paducah, and Somerset, KY areas, most affiliated with Integrity Healthcare Services,
Inc.).
13 See supra notes 4, 12, 37 - 39, and accompanying text.
14 Federal Trade Commission Act, 15 U.S.C. § 45.
15 See National Society of Professional Engineers v. United States, 435 U.S. 679, 695 (1978) (“The heart of our
national economy long has been faith in the value of competition.”).
16 See generally, e.g., F EDERAL TRADE C OMMISSION (FTC), FTC A NTITRUST A CTIONS IN H EALTH C ARE
S ERVICES AND P RODUCTS (Mar. 2008), available at http://www.ftc.gov/bc/0608hcupdate.pdf ; see also
Competition in the Health Care Marketplace: Formal Commission Actions, available at
http://www.ftc.gov/bc/healthcare/ antitrust/commissionactions.htm.
17 See, e.g., FTC AND U.S. D EP ’T OF J USTICE, I MPROVING H EALTH CARE: A D OSE OF C OMPETITION , Chapter 7
(2004), available at http://www.ftc.gov/reports/healthcare/040723healthcarerpt.pdf.
18 See, e.g., Letter from FTC Staff to Hon. Timothy Burns, Louisiana Legislature, (May 1, 2009) (regarding
proposed restrictions on mobile dentistry); available at http://www.ftc.gov/os/2009/05/V090009
louisianadentistry.pdf; Letter to Senator James L. Seward, New York Senate re Pharmacy Benefit Manager
Page 3 of 10

A Brief Background on Limited Service Clinics
LSCs – sometimes called “retail clinics” or “store-based clinics” – are one way to
deliver a limited range of basic health care services in a clinic setting. LSCs are staffed by
licensed health care professionals, typically nurse practitioners or ANPs who are overseen by
physicians, and sometimes physicians or physician assistants.19 LSCs tend to be located in
non-traditional provider settings, such as pharmacies and supermarkets, and tend to offer
more extensive evening and weekend hours of operation than many primary care clinics.20
LSCs generally provide only a pre-specified menu of basic health care services, with retail
prices posted so that they are conspicuous to consumers prior to treatment.21
Evidence shows that the quality of care in LSCs is “similar to that provided in
physician offices and urgent care centers and slightly superior to that of emergency
departments.”22 Indeed, “[f]or most measures, quality scores of retail clinics were equal to or
higher than those of other care settings.”23 Patients at LSCs and other primary care clinics
appear equally likely to receive preventive care, including follow-up visits to doctors’ offices
where such care is typically delivered.24 In addition, prescription rates are similar at LSCs,
Provisions of Senate Bill 58, Matter No. V090006, available at
http://www.ftc.gov/os/2009/04/V090006newyorkpbm.pdf; Letter from FTC Staff to Elain Nekritz, Illinois
Legislature (May 29, 2008) (regarding proposed LSC regulations); available at
http://www.ftc.gov/os/2008/06/V080013letter.pdf; Letter from FTC Staff to Massachusetts Dep’t of Health
(September 27, 2007) (regarding proposed LSC regulations); available at
http://www.ftc.gov/os/2007/10/v070015massclinic.pdf. Many of these advocacy efforts have been successful in
preserving competition. For example, following the above referenced advocacy letters, the Louisiana and
Illinois legislatures rejected the proposed restrictions on competition, and Massachusetts followed FTC Staff
recommendations in adopting its final LSC regulations.
19 See generally William M. Sage, Might the Fact that 90% of Americans Live Within 15 Miles of a Wal-Mart
Help Achieve Universal Health Care?, 55 U. K AN . L. REV. 1233, 1238 (2007) (describing the size and scope of
limited service clinics); Mary Kay Scott, Scott & Company, Health Care in the Express Lane: Retail Clinics Go
Mainstream, Sept. 2007, at 22 (Report prepared for the California HealthCare Foundation), available at
http://www.chcf.org/publications.
20 See supra note 19; Rudavsky et al., supra note 10 at 317 (“In a random sample of 98 clinics, all had weekday
and weekend hours and 95 (97%) had evening hours (after 6 p.m.) on weekdays.”).
21 See supra note 19. According to a recent RAND study, more than 90% of LSC patients present with one of
ten common conditions, including upper respiratory issues, pharyngitis, sinusitis, and conjunctivitis. Mehrotra
et al., et al., Retail Clinics, supra note 4, at 1278.
22 Mehrotra et al., Comparing Costs, supra note 9, at 326 (analysis of 14 quality metrics for commonly treated
ailments otitis media [ear infection], streptococcal pharyngitis [strep], and urinary tract infections).
23 Id. at 325; see also Mary Kay Scott, supra note 19, at 21 (comparing Minute Clinic compliance with evidence
based guidelines for sore throat and strep throat – over 99% – with New England Journal of Medicine study
indicating that “Americans receive evidence-based care only 55% of the time at other kinds of health care
providers,” citing Elizabeth A. McGlynn et al., The Quality of Health Care Delivered to Adults in the United
States, 348 N EW ENG. J. MED . 2635, 2641 (2003)).
24 Comparing LSCs, physician offices, and urgent care centers, Mehrotra et al. found that “rates of preventive
care received at the initial visit through the subsequent 3 months were similar for retail clinics and physician
offices. For patients who visit a retail clinic, preventive care was typically delivered in a physician’s office,
Page 4 of 10

physician offices, and urgent care centers (perhaps slightly lower on average at LSCs),25
assuaging earlier concerns that LSCs connected with retail pharmacies might over-prescribe
antibiotics.
Furthermore, “[o]verall costs of care for episodes initiated at retail clinics were
substantially lower than those of matched episodes initiated at physician offices, urgent care
centers, and emergency departments.”26 This is likely to be especially important for the
uninsured and underinsured patients who often visit LSCs.27 Such patients may face stark
health care choices. When they lack regular health care providers, they may need to choose
between costly emergency room care and no care at all.28 When LSCs function as a safety-
net provider for patients who do have regular health care providers, LSCs can relieve some of
the stress placed on emergency rooms by patients who require care, but not emergency
care.29
Discussion
Several provisions of the Proposed Rule appear to impose costs and limits on LSCs
and LSC-employed health care professionals that do not apply in comparable health care
which suggests that the clinics are not disrupting opportunities for preventive services.” See Mehrotra et al.,
Comparing Costs, supra note 9, at 326.
25 Id.
26 Id. at 324; see also Marcus Thygeson et al., Use and Costs of Care in Retail Clinics Versus Traditional Care
Sites, 27 HEALTH A FFAIRS 1283, 1287-88 (2008) (“average total cost for a MinuteClinic episode was $51 less
than in the urgent care setting, $55 less than in the physician office setting, and $279 less than in the ED
setting.”) These studies provide some evidence not just that LSC retail prices are lower for individual services,
but that prices per episode-of-care are lower when treatment is begun at an LSC instead of a physician office,
urgent care center, or emergency department. That observation has been made by researchers taking reasonable
steps to control for systematic differences in case-mix across these different types of facilities. FTC staff also
note that differences in case-mix may themselves represent an efficiency: LSCs provide consumers an
opportunity to sort themselves across types of facilities, seeking care for lower-severity complaints
disproportionately at LSCs, where labor and other costs generally are lower.
27 A recent study indicates that one third of LSC visits were not paid for with health insurance, Ateev Mehrotra
et al., RAND Health, Research Highlights, Health Care on Aisle 7: The Growing Phenomenon of Retail Clinics
3 (2009), available at http://www.rand.org/pubs/research_briefs/RB9491/. Additional RAND research
indicates that “almost all (97%) [LSCs] accepted private insurance and Medicare fee-for-service (93%),” and
most accepted some form of Medicaid. Rudavsky et al., supra note 10, at 317.
28 Data indicate that LSC patients are much “less likely to have a personal doctor” than patients generally.
Mehrotra et al., Health Care on Aisle 7, supra note 27, at 3 (39% of LSC patients reported having personal
doctor versus 80% of patients nationally). The evening and weekend hours typically offered by LSCs may be
of special benefit to working people who are uninsured or underinsured, and may reinforce the stark choice
between LSCs (when available) and costly emergency room care for non-emergent conditions. Cf. Rudavsky et
al., supra note 10, at 317 (“In a random sample of 98 clinics, all had weekday and weekend hours and 95 (97%)
had evening hours (after 6 p.m.) on weekdays.”)
29 “If retail clinics were not available, it is unclear whether these patients would have gone to a PCP office,
urgent care clinic, or ED or if they would have sought medical care at all. It is possible that retail clinics could
serve as a safety-net provider for some patients who now seek care in EDs.” Mehrotra et al., Comparing Costs ,
supra note 9, at 1279 (regarding younger population of LSC patients who pay out-of-pocket).
Page 5 of 10

settings. In turn, these additional restrictions are likely to increase prices and decrease
choices for Kentucky patients, without providing any countervailing benefits.
A. 	The Proposed Rule
The Proposed Rule contains three categories of regulatory provisions that are likely to
raise competitive concerns. The first involves limits on the scope of professional services
that may be provided at an LSC – limits that do not apply to the same credentialed
professionals in comparable limited care settings. The second involves certain physical or
operational restrictions that do not apply to comparable limited care clinics. The third
involves mandatory licensing fees in excess of those required of any other health care
facility.
(1) Scope of Service. The Proposed Rule, while listing thirty-nine services that
LCSs may provide,30 appears to prevent credentialed health care professionals from
providing basic health care services in LSCs that they can provide in comparable limited care
settings, such as urgent care clinics. If this list were to exhaust the types of care that
physicians and ANPs may provide at LSCs, it would restrict the basic care that credentialed
professionals may provide based solely on the setting in which that care is offered. For
example, under the Proposed Rule, a physician or ANP at an LSC may provide a physical
examination for sports or camp, but not for school.31 The same physician or nurse could
provide a school physical at a comparable clinic, however. The Proposed Rule also would
restrict physicians and ANPs – only at an LSC – from providing a vaccination unless the
patient were 16 or older.32 Similar questions are presented by, e.g., the provision that LSCs
may treat “[f]ever, excluding patients who have had a fever longer than seventy-two (72)
hours;” and may treat “[u]rinary infection for females only, age twelve (12) to sixty-five
(65).”33
More generally, the Proposed Rule prohibits licensed health care professionals at
LSCs from treating people with chronic or recurring ailments that the same professionals
could treat in similar limited care settings, such as urgent care clinics.34 For example, the
Proposed Rule appears to prohibit licensed professionals from treating in an LSC
intermittent, mild, and moderate asthma, which are chronic ailments that the same
professionals would be permitted to treat elsewhere.35 There do not appear to be comparable
30 Proposed Rule at § 3(4)(b).
31 Proposed Rule at § 3(4)(b)(32).
32 Id. at § 3(4)(b)(34).
33 Id. at §§ 3(4)(b)(14) and (31).
34 “A clinic shall not: (a) Treat a person with a recurring or chronic illness; or (b) Refill a prescription for a
patient who requires continuity of care.” Proposed Rule at § 3(3) (a) and (b).
35See generally National Institutes of Health, Asthma, available at http://health.nih.gov/topic/Asthma
(describing asthma as chronic condition and providing links to detailed information provided by the National
Heart, Lung, and Blood Institute, the National Institute of Allergy and Infectious Diseases, and other NIH
sources). In addition, health care professionals may be concerned about liability issues if they do – or do not –
provide, e.g., emergency treatment of an immediate asthma flare-up that could be life-threatening: such
Page 6 of 10

restrictions on the scope of practice in primary care centers, special health clinics, or
ambulatory care clinics.36
We are unaware of any justification for restricting the types of services physicians
and ANCs may provide based solely on the type of basic care settings in which they provide
it.
(2) 	Unnecessary Costs. The Proposed Rule imposes conditions regarding LSC
operations, equipment, and environment that are not imposed on outpatient clinics offering
even broader types of basic health care services, such as ambulatory care clinics,37 primary
care centers,38 or special health clinics.39 For example, the off-hours coverage provisions in
the Proposed Rule would require that an LSC offer some form of answering and referral
service around the clock.40 There are no such requirements for primary care centers or
special health clinics, which are more likely than LSCs to be treating conditions that require
follow-up care.41 Under the Proposed Rule, LSCs – but not primary care centers, special
health clinics, or ambulatory care clinics – would be required to have an automated external
defibrillator on-site, to provide a separate “waiting room or waiting area,” and to meet other
equipment, plumbing, and construction requirements.42
treatment may be well within their scope of practice generally, but prohibited by LSC licensure restrictions on
the treatment of chronic illness. Following the general point at note 7, supra, FTC staff do not rely on any
analysis regarding asthma treatment guidelines or professional qualifications requisite to asthma treatment.
Rather, staff are concerned about the competitive impact of restrictions that discriminate against one type of
provider without an apparent health and safety justification for the discrimination.
36 See generally, 902 KAR 20: 058 (Operation and services; primary care center); 902 KAR 20: 260 (Special
health clinics); and 902 KAR 20: 073 (Clinics: Ambulatory care).
37 See generally 902 KAR 20: 073 (Clinics: Ambulatory care).
38 See generally, 902 KAR 20: 058 (Operation and services; primary care center.) FTC staff also notes that a
primary care center may provide services “on a temporary or regular basis in locations separate from its
permanent facility,” 902 KAR 20:058, with special provisions possible for operating extensions at schools. Id.
and KRS 216B.176. The extent to which primary care center regulations restrict facilities, staffing, and scope
of practice at physician satellite or temporary extensions is unclear.
39 See generally, 902 KAR 20: 260 (Special health clinics.)
40 An LSC must “make arrangements for the delivery of the services it provides during the hours when it is not
open, which may include an answering service referring patients to another provider of the same services that is
open at those hours.” Proposed Rule at § 5(4). The range of off-hours services that might satisfy this
requirement is not clear.
41 There do not appear to be comparable requirements for primary care centers under 902 KAR 20:058 or
special health clinics under 902 KAR 20:260. Ambulatory care clinics providing much broader services are
required to “provide telephone screening and referral services for prospective patients after regularly scheduled
hours of operation.” 902 KAR 20:073 § 4(3). Comparing service offerings, see supra note 4 (“ten complaints
account for more than 90 percent of all retail clinic visits. . . . [but] 13 percent of adult PCP [primary care
practice] visits, 30 percent of pediatric PCP visits, and 12 percent of ED visits.”).
42 Proposed Rule at § 5(5) (equipment). Proposed § 7, regarding physical and sanitary environment, requires,
among other things, that an LSC have “a waiting room or waiting area,” and that each exam room is a minimum
square footage and includes “a handwashing facility with hot and cold water and blade type operating handles
or knee or foot controls.” Also, although an LSC “located on the premises of another entity may share toilet
facilities with that entity,” [i]f a clinic provides services in which a urine sample is needed, the clinic’s toilet
Page 7 of 10

(3) 	Fees. Both initial and annual licensure fees for LSCs are set at $800 under the
Proposed Rule.43 No other type of clinic must pay as much.44 For example, annual licensing
fees are $270 for primary care centers45 and ambulatory surgical centers,46 $140 for rural
health clinics, and $10 per bed – with a minimum total fee of $155 – for accredited
hospitals.47 In addition, the Proposed Rule appears to impose the $800 annual fee on each
individual LSC. By contrast, Kentucky regulations impose only a $25 fee on each satellite
primary care center.48
B. 	Likely Effects on Kentucky Consumers
At least some of the costs of the Proposed Rule are likely to be passed on to Kentucky
consumers through higher prices or fewer health care options. First, the costs and restrictions
discussed above can be significant for small clinics seeking to provide very basic care at a
low price, likely causing some LSCs to curtail services or hours or to raise prices. Further,
faced with higher costs of operations, some LSCs that would otherwise open may fail to do
so, and some existing LSCs may close their doors. Finally, because the Proposed Rule
disadvantages LSCs, it will reduce the competitive pressure that LSCs place on other
providers of basic health care services. This reduction in competition may lead those
providers that compete with LSCs also to raise their prices or reduce the quality or
convenience of the services that they offer.
The impact of the Proposed Rule is likely to be felt most by the uninsured,
underinsured, and other vulnerable citizens of Kentucky. To justify the increased prices for,
and decreased access to, basic health care services that the Proposed Rule likely would
impose, there should be a showing that the disparate regulatory treatment of LSCs is
necessary to protect patients seeking care in limited service settings. We are unaware of any
such justifications. To the contrary, the available evidence does not point to any need to
facilities shall be located within the clinic.” There appear to be neither automated external defibrillator (AED)
nor other medical device requirements imposed upon primary care centers under 902 KAR 20:058 or
ambulatory care clinics under 902 KAR 20:073, and although limited “physical environment” requirements are
imposed upon special health clinics under 902 KAR 20:260 § 5, these have chiefly to do with basic
housekeeping and maintenance standards and basic waste disposal requirements that are among the general
procedural requirements for all health care clinics – they do not include AEDs.
43 Proposed Rule at § 2(2).
44 See generally 902 KAR 20:008 (License procedures and fee schedule). New fees for health care “personal
services agencies” under emergency administrative regulation 906 KAR 1:180E also are lower than proposed
LSC fees.
45 Id. at § 3(2)(l).
46 Id. at § 3(2)(c).
47 Id. at § 3(2)(l)(1).
48 See supra note 44. Hence licensing fee disparities may be magnified if, e.g., a primary care clinic with four
satellite centers need pay only $370 in annual fees, while a competing cluster of five LSCs under common
ownership and management, with roughly the same categories of health care providers offering very similar
services, must pay $4,000 in annual fees.
Page 8 of 10

impose distinct regulatory burdens on LSCs and the professionals who practice at LSCs. As
noted above, studies suggest that LSCs provide care that is equal to or better than that found
in other settings.49 Further, we are unaware of any health-related justification for the scope
of service restrictions, such as prohibiting professionals from vaccinating younger children or
providing physical examinations for schools in an LSC, just as they could in another limited
care setting. Finally, we are also unaware of any administrative rationale for imposing
disproportionately high licensing fees on LSCs.
Conclusion
Consumers are paying more for health care every year, and rising prices continue to
leave many people without reliable or meaningful access to health care services. LSCs have
the potential to expand access to health care by making very basic medical care more
convenient and less costly. Many who visit LSCs may need to chose between the LSC, an
emergency room, and no care at all; not all consumers can afford or have easy access to a
regular treating physician in a consistent primary care clinic setting. We urge the Cabinet not
to adopt regulatory provisions that have the unnecessary and unintended consequences of
making care less affordable and less convenient for Kentucky health care consumers.
Two alternative approaches should be considered. First, to avoid unnecessary costs
and restrictions on LSCs, the Cabinet can strike needlessly disparate requirements from the
final Rule. Alternatively, the Cabinet may wish to consider whether LSC scope of service,
physical plant, and operations requirements could be better specified through amendments to
Kentucky’s existing licensing rules for health care clinics. If distinct health and safety
problems are not associated with doctor and ANP provision of basic health care services in
LSCs, adaptation of existing clinic rules may help preserve a competitive playing field, with
greater benefits and lower costs to Kentucky health care consumers.
We appreciate your consideration of these issues.
49 See notes 22-25, supra, and accompanying text.
Page 9 of 10

Page 10 of 10
Respectfully submitted,
Susan S. DeSanti, Director
Office of Policy Planning
Joseph Farrell, Director
Bureau of Economics
Richard A. Feinstein, Director
Bureau of Competition