Much like the “House of Mirrors” at a carnival, the legislative session that ended in the wee hours of the morning on Saturday, September 12th, proved to be a maze of distorted, confusing, humorous and frightening turn of events. Most notably was passage and Governor Brown signing into law CASA-supported SB 396 (Hill) and defeat of CASA-opposed AB 533 (Bonta) that would have applied Medicare rates to non-contracted physicians who are providing services to patients in a contracted facility (i.e. hospital, ASC, etc.) Please read on for more details on these two bills and much more.
Just remember: “If you miss a day “Under the Dome” – you miss a lot!”
LEGISLATIVE UPDATE
SB 396 (Hill): Outpatient Settings and Surgical Clinics Oversight BRIEF SUMMARY: This legislation is authored by Senate Business and Professions Committee Chair Jerry Hill (D-San Mateo). CASA requested one specific provision in the bill, which allows not only a licensed surgical clinic but now also an accredited or Medicare certified ASC, to have access to the Medical Board of California (MBC) 805 reports for purposes of credentialing physicians performing cases in an ASC. This original bill also included some provisions requested by the MBC. First, it would have required an “accredited outpatient setting” (i.e. ASC) and Medicare certified ASC to report the same aggregate utilization and patient encounter data to the Office of Statewide Health Planning and Development (OSHPD) that licensed surgical clinics are already required to report. Second, the bill requires peer review evaluations for physicians working in accredited ASCs at least every two-years. Third, requires that accredited outpatient setting facility (i.e. ASC) inspections performed by Accreditation Agencies be unannounced (after the initial inspection) conditional on a 60-day window. However, due to overwhelming opposition from CMA and the California Society of Plastic Surgeons (CSPS), language was struck from the bill that required accredited outpatient settings to report the same aggregate utilization and patient encounter data to OSHPD that licensed surgical clinics are already required to report.
Ultimately, the only three provisions that remained in the bill are the following: 1.) Allowing an accredited outpatient setting or “Medicare certified ambulatory surgical center” (i.e. ASC) to access reports from the MBC to ensure patient protection when credentialing, granting or renewing staff privileges for providers at that facility; 2.) Requiring peer review evaluations at least every two-years for physicians and surgeons working in accredited ASCs; and 3.) Requiring that accredited outpatient setting facility (i.e. ASC) inspections performed by Accreditation Agencies are unannounced (after the initial inspection) conditional on a 60-day window.
NOTE: CASA also participated in the California Healthcare Foundation (CHCF) Sacramento briefing unveiling their follow-up study on California ASC oversight, transparency and quality. This briefing was held on Wednesday, July 29th from 12:00 – 1:30 PM. Click here for more information on the briefing and to watch the webcast recording. Yours truly responds to the report at the 40 minute mark. CASA also participated in a California Healthline “Think Tank” on ASC oversight, stemming from the most recent CHCF report and recent signing of SB 396. Click here to read CASA’s response and those of the MBC, CMA, Consumers Union and Brenda Klutz. CASA continues to monitor media response to the study, briefing, SB 396 and fielding questions from reporters.
STATUS: Signed into law by Governor Brown on Wednesday, September 9, 2015 CASA POSITION: SUPPORT
AB 533 (Bonta): Out-of-Network Healthcare Coverage BRIEF SUMMARY: This legislation is authored by Assembly Health Committee Chair Rob Bonta (D-Alameda) and sponsored by Health Access California and strongly supported by the Western Center on Law and Poverty, Consumers Union, AARP, organized labor, health insurance plans, the California Chamber of Commerce and many others. On the other side strongly opposing were CASA, CMA, the California Dental Association (CDA) and a handful of other medical specialties. AB 533 was one of the most heavily lobbied bills in the last days of session. This bill requires non-contracted/out-of-network providers at in-network facilities (i.e. ASCs) to bill the patient only for their portion of in-network cost sharing as if the provider is contracted.
CASA agrees with the stated intent of this bill – to rid patients of “surprise bills” from non-contracted providers when they are seeking care in an in-network facility. However, the inevitable solution in AB 533 is completely misguided. For example, this bill would require non-contracted/out-of-network providers to bill patients only for their portion of in-network cost on the same terms as if the provider were under contract.
It also establishes an interim payment from the health plan and/or insurer to the non-contracted provider pegged at Medicare. This interim payment methodology would result in grossly undervalued payment to many physicians and surgeons. For example, Medicare pays physician anesthesiologists approximately 33 percent of commercial rates, whereas physicians practicing in other specialties receive about 80 percent of the commercial rate from Medicare. The “House of Medicine” articulated to the Legislature that extending the inequity of Medicare rates to non-contracted physician and surgeons would lead to severe reductions in access to care.
Furthermore, CASA and others asserted that AB 533 undermines physicians' rights to negotiate fair rates and gives health plans and/or insurers even less incentive to offer reasonable contracts. The payment standard established in AB 533 is significantly below existing contract rates and will result in health plans and/or insurers cancelling contracts or significantly reducing contract rates.
Another troubling provision of the bill would force untold number of claims to go through an Independent Dispute Resolution Process (IDRP) because of a legislatively-imposed, unworkable payment standard. Non-contracted providers could utilize a “to-be-determined” IDRP developed by the Department of Managed Health Care (DMHC) and the Department of Insurance. The IDRP would be mandatory and binding on the non-contracted provider and health plan and/or insurer. However, the Medicare interim payment rate set by the bill takes effect immediately but the IDRP will take months if not years to be established, resulting in physicians being underpaid and without any recourse.
Eventually, AB 533 was held on the Assembly Floor for failure to concur in amendments taken in the Senate. The bill needed 41 “AYE” votes and failed by only THREE VOTES (38-10-32). Click here to watch the Senate Floor debate, which starts at approximately 3:44 and continues for 30 minutes. Click here to watch the final Assembly Floor debate, which starts at approximately 1:26 and continues for another 30 minutes.
It is rare a bill fails in this fashion, meaning that CASA and other allies convinced enough members of Assembly Member Bonta’s own house that the bill in front of them was not the right solution to the problem, resulting in their abstaining from the vote. Several legislators spoke in support of the bill based on their personal experiences but special recognition goes out to the following legislators who spoke in opposition to the bill on their respective floor: Senator Pan (D-Sacramento); Assembly Member Jim Wood (D-Healdsburg) and Assembly Member Lorena Gonzalez (D-San Diego).
STATUS: Assembly Floor Concurrence File - DEAD CASA POSITION: OPPOSE
SECOND EXTRAORDINARY SESSION on HEALTHCARE FINANCING
On Tuesday, June 16th, Governor Brown issued a proclamation calling for an extraordinary Special Session on Healthcare Financing. This special session is set to adjourn on Thursday, December 31st. This was the second extraordinary session he declared that day with the other being focused on transportation and infrastructure financing. The focus of the Special Session on Healthcare Financing is to address the financial integrity of the Medi-Cal Program. California’s recent expansion of healthcare coverage under the Affordable Care Act (ACA) has resulted in more than four million additional Californians or 30 percent of the population receiving coverage under Medi-Cal.
Since 2005, the state has levied a tax on Medi-Cal managed care plans. That revenue is matched by the federal government and used to both increase payments to Medi-Cal providers and offset healthcare costs that would otherwise be paid from the General Fund. This funding mechanism has helped the state pay for the increased number of Californians receiving coverage under federal healthcare reform.
However, California’s current managed care organization (MCO) tax structure fails to comply with new federal requirements that such a tax be broad-based and not limited narrowly to Medi-Cal plans. The current structure, which expires at the end of fiscal year 2015-16, generates $1.1 billion. The Governor’s January budget proposed a modified MCO tax that would be levied on a per-enrollee basis and cover most healthcare plans regulated by the Department of Managed Health Care (DMHC).
In the Special Session on Healthcare Financing, the Governor proposes that the Legislature enact permanent and sustainable funding to provide at least $1.1 billion annually to stabilize the state’s General Fund costs for Medi-Cal, sufficient funding to continue the restoration of the seven percent of In-Home Supportive Services hours and funding for Medi-Cal provider rate increases. The funding could come from the proposed MCO tax and/or alternative sources (i.e. tobacco tax) and is ultimately necessary to prevent over $1 billion in program cuts next year (i.e. further provider rate reductions).
Click here for the full text of the proclamation declaring the Special Session on Healthcare Financing.
SENATOR RICHARD PAN, MD, FACING POTENTIAL RECALL
One of the most contentious bills in recent memory was SB 277, authored by Senator Richard Pan, MD (D-Sacramento). This legislation eliminated specific personal exemptions claimed by parents who wish to keep their children from getting immunized. Drafted in response to the measles outbreak at Disneyland and the problem of a growing number of non-vaccinated children, this legislation was signed into law by Governor Brown on June 30th. Anti-vaccination advocates packed legislative hearing rooms and brought thousands of protesters to the Capitol. Threats were issued against Senator Pan’s life and family, necessitating additional security detail everywhere Senator Pan went. Now the same anti-vaccination movement aims to recall Senator Pan. This effort is meant to intimidate legislators across the country and discourage them from supporting immunization mandates. The California Secretary of State has now approved recall petitions. Backers of the recall must collect 36,000 signatures from Senator Pan’s district by December 31st in order for the recall to qualify for the June 2016 ballot. Simultaneously, the anti-vaccination movement also seeks to repeal SB 277 on the same ballot. However, supporters only have 90 days to collect more than 300,000 statewide signatures, so this statewide effort will most likely fail.
CMA and many other supporters of Dr. Pan are planning a counteroffensive. The first campaign account has been established: “Keep California Healthy. Keep Dr. Pan. Vote No on the Recall.” Click here for more details on the recall attempt. CASA members are strongly encouraged to visit www.KeepDrPan.com to “Stand with Dr. Pan” and sign the petition opposing the recall. You can also “Like” and “Share” his Facebook page. Click here for an excellent California HealthLine article on SB 277 and Dr. Pan’s response to the recall effort. CASAPAC will strongly consider working with CMA and others to financially support efforts to defeat the recall attempt along the same lines as the strategy that defeated Proposition 46 last year. Stay tuned to learn how you can help Dr. Pan!
“If you miss a day “Under the Dome” – you miss a lot!”