2005 Legislative Wrap Up
By Dustin Corcoran
CMA Vice President of Government Relations

The 2005 legislative year was almost entirely eclipsed by the special election called by Governor Arnold Schwarzenegger. Very few people actually focused on legislation, including the legislators themselves. Legislative leadership, staff, lobbyists, and members of the media were preoccupied by the election. Political pundits speculated: If there were a deal to avoid a ballot box clash, how would the Governor fare? What if he wins? What if he loses? These were the questions that consumed leaders of both parties for the majority of the legislative session. As a result, getting any attention at all paid to the major issues facing California proved to be extremely difficult as politics ruled the day.

In addition to the political volatility of Sacramento leading up to the special election, 2005 saw significant changes to the staff in CMA’s Center for Government Relations. Following the devastating loss of longtime friend and Vice-President of Government Relations, Steve Thompson, I faced the difficult task of rebuilding the Government Relations team. I am extremely proud of the accomplishments of this outstanding group of individuals. Astrid Meghrigian, Syrus Devers, Brett Michelin, and Lisa Folberg did an outstanding job representing the physicians of this state and deserve much of the credit for the tremendous outcomes CMA achieved in a difficult year.

In keeping with the maxim “First, Do No Harm” CMA opposed 71 bills this year and I am pleased to report that of those 71 bills not a single one passed. Despite the uncertain political climate and new staff, our defense was stronger than ever. CMA successfully defeated bills that would have created new CME requirements and mandatory reporting requirements for adverse drug reactions among others. In fact, CMA defeated a bill by the largest margin of any in the legislature this year. Nevertheless, the sponsors of these bills are persistent, and we are likely to face many of these same bills next year when the Legislature reconvenes on January 4.

Perhaps the biggest challenge CMA faced this year was a proposal to prohibit balance billing by hospital-based physicians. The resulting fight split the physician community driving a wedge between medical groups and hospital-based physicians. The fight also caused CMA-sponsored AB 598 (De La Torre) and AB 757 (Chan) to stall as the Assembly attempted to deal with all three proposals as a package. Discussions around these proposals continue, as the house of medicine tries to reach a compromise on the issue of balance billing that satisfies all parties. This issue will remain at the forefront as legislative interest in this sensitive subject is unlikely to wane anytime soon.

Despite these defensive challenges, CMA was able to achieve some important victories for physicians including elimination of a looming retroactive 5% Medi-Cal rate reduction, substantial reform of PPO regulation and securing of additional funds for emergency providers. Below is a synapses of the key issues and bills of 2005.

Budget
CMA was Successful in Securing $3 million for the Steve Thompson Loan Repayment Program – In 2002, the Governor signed AB 982 (Firebaugh), which established a loan repayment program for medical and dental practitioners who serve in underserved areas. Last year the Legislature renamed the program in honor of the late Steve Thompson. Despite projected deficits, the CMA was able to secure $3 million in the budget to continue the program.

Budget Included $24.8 to fund Uncompensated Emergency Services – For the sixth year in a row, the administration recognized the crises facing California's emergency system and allocated $24.8 million in Proposition 99 (cigarette and tobacco products surtax) funds for reimbursement of uncompensated emergency services.

CMA Helped to Defeat the Expansion of Medi-Cal Managed Care to the Aged, Blind and Disabled – The CMA and other groups were successful in defeating the Governor's proposal to expand managed care to over 1/2 a million aged, blind and disabled Medi-Cal enrollees. The budget did include a modified version of the Governor's proposal to expand managed care for non-aged, blind and disabled (ABDs) in 13 counties.

Budget Included Additional Funding for Various Public Health Programs – The budget included one-time funding for a variety of public health programs including, a scaled-down version of the Governor's obesity prevention program, augmentation of various public health programs for indigent care, asthma prevention, rural health, prostate cancer treatment and tobacco education.

CMA-Sponsored Bills

Fairness in Contracting—AB 598 (De La Torre, D-South Gate) was intended to increase access to care by establishing new protections to ensure fair and reasonable contracting between health care providers and managed care plans. Under existing law, health care service plans and health insurers are required to have an adequate network of contracting health care providers to ensure access to care. Unfortunately, health care providers are increasingly unable to participate in managed care plans because many times the contract terms are unfair and, in some cases, illegal. AB 598 (De La Torre) proposed various protections that included prior regulatory approval of standardized form contracts, contract renewal on a yearly basis and clear delineation of contractual amendments. This bill was held in the Assembly Appropriations Committee.

Silent PPOs—AB 757 (Chan, D-Oakland) would have ensured that PPOs are no longer "silent" by, among others, forcing transparency of profits, forcing PPOs to seek the provider's affirmative permission before selling his/her name to another payer and, if agreed to, ensuring that the provider has actual knowledge of who that payer is. This bill would have ensured that a provider would not be forced to participate in any product or business line that is materially different from that to which the underlying agreement applies either as it relates to increased workload or other responsibilities imposed on the provider or decreased benefits conferred on the provider. This bill was held in the Assembly Appropriations Committee.

Standing Orders—AB 1711 (Strickland, R-Moorpark) authorizes skilled nursing facilities to implement standing orders programs for their patients over the age of 50. This bill permits nurses and pharmacists to deliver immunizations based on a physician-established, facility-wide protocol, without requiring a physician order for every patient. A committee of physicians would establish a protocol for the entire facility, subject to periodic reviews. Signed by the Governor.

Medi-Cal Provider Reimbursement—AB 1735 (De La Torre, D-South Gate, and Aghazarian, R-Stockton) blocks implementation of Medi-Cal reimbursement rate cuts approved by the Legislature two years ago. This bill was introduced in response to a decision by the US 9th Circuit Court of Appeals which found that private parties, such as Medi-Cal patients and providers, do not have a private right to challenge California's compliance with Federal Medicaid Law. This ruling overturns an injunction CMA had secured in an earlier ruling, which prevented the State from cutting Medi-Cal reimbursements rates by 5%. Signed by the Governor.

Reporting Lapses of Consciousness—SB 212 (Lowenthal, D-Long Beach) repeals the requirement that mandates physicians report to the county health officer the name of individuals diagnosed as having a disorder characterized by lapses of consciousness, and instead allows for discretionary physician reporting except for dementia-related disorders. This bill also provides immunity from liability for physicians if they choose to file a report. SB 212 is a reintroduction of last year's AB 2547. This bill was held in the Assembly Judiciary Committee.

Patient & Physician PPO Protection Act—SB 367 (Speier, D-Hillsborough) gives the Department of Insurance (DOI) the same level of oversight that the Department of Managed Health Care (DMHC) has for regulating insurance products. In recent years, HMOs regulated by the DMHC have seen their enrollment decline as patients move to PPOs and similar products regulated by the Department of Insurance. The DOI does not have the same level of oversight that the DMHC has nor a dedicated unit to resolve complaints by physicians and patients concerning PPOs. SB 367 allows physicians to file complaints with the DOI and allows the department to take enforcement actions against insurance companies. This bill also requires insurance companies to state the factual and legal reasons for denying a claim. Signed by the Governor.

Medi-Cal Liens—SB 399 (Escutia, D-Whittier) is a reintroduction of SB 494 from last year, which was vetoed by the Governor. This bill would have restored a physician's ability to obtain a lien for the cost of medical services provided to a Medi-Cal recipient if the injuries were caused by a third party, such as in the case of an auto accident. Last year the California Supreme Court suspended the law and asked the Legislature to narrow the language in order to comply with federal Medicaid law. CMA worked closely this year with the Consumer Attorneys to craft language that addresses the concerns stated in the Supreme Court decision while protecting the right of physicians to recover the full cost of the medical services provided. This bill would have applied to counties, physicians, and public hospitals only. Vetoed by the Governor.

Unfair Payment Practices—SB 634 (Speier) extends many of the current protections afforded to providers in DMHC-regulated health plans to products regulated by the Department of Insurance.
Under existing law, HMOs and PPOs regulated by the Department of Managed Health Care (DMHC) are subject to a host of regulations to prevent unfair payment practices against health care providers. PPOs and other entities regulated by the Department of Insurance are not subject to many of these regulations, leaving providers and their patients without similar protections. SB 634 protections include disclosure of the fee schedule and payment rules the insurer uses to pay contracted providers and a prohibition against unreasonable claims deadlines for submitting a claim. Signed by the Governor.

Medi-Cal Provider Enrollment—SB 770 (Romero, D-Los Angeles) would help facilitate physician enrollment in the Medi-Cal program. Currently, there are over 7,000 physicians waiting to be approved as Medi-Cal providers. SB 770 would shorten the time the Department of Health Services has to make a physician enrollment determination. The bill would also create a more efficient provider enrollment process by making Medicare and hospital-based physicians eligible for presumptive eligibility, and allow a physician to submit a supplemental document (rather than a new application) when they change their address. This bill was held in the Assembly Appropriations Committee.

CMA-Opposed Bills

Prescription Drug Labeling—AB 657 (Karnette, D-Long Beach) would require all health care professionals that prescribe pharmaceuticals, to ask their patient if they would like the "intended purpose" of that drug to be placed on the prescription label. This bill would also make it unprofessional conduct if the prescribing physician fails to ask the patient if they would like a concise description of the intended purpose of the drug to be included on the prescription label. Held in the Senate Business and Professions Committee.

Interpreters—AB 775 (Yee, D-San Francisco) would have prohibited any government or private entities from using a child as an interpreter, even with patient consent. The bill is silent as to who is responsible for paying a qualified interpreter and may leave it up to the physician to cover these costs. Held in the Senate Judiciary Committee.

Acupuncturists—AB 1113 (Yee, D-San Francisco) would have allowed an acupuncturist to "diagnose" for the purpose of providing treatment or performing oriental massage, acupressure or other defined techniques of acupuncture. Vetoed by the Governor.

Chiropractors—AB 1256 (Bermudez, D-Norwalk) would have added chiropractors to the list of providers who can perform medical examinations for drivers' license issuance and renewal relative to school buses, public transit and farm vehicles. AB 1256 is a reintroduction of last year's AB 1812. Held in Senate Transportation and Housing Committee.

Adverse Drug Reactions—SB 380 (Alquist, D-Santa Clara) would have required a physician and a health facility to report serious adverse drug events to MedWatch or face criminal charges for failure to report. Defeated on the Assembly Floor.

Oral and Maxillofacial Surgery—SB 438 (Migden, D-San Francisco) is a reintroduction of SB 1336 (Burton) of last year, which CMA opposed and was vetoed by the Governor. This bill greatly expands the scope of practice of an oral and maxillofacial surgeon by allowing them to perform facial cosmetic surgery procedures (i.e., eyebrow lifts, face lifts, skin peels, and rhinoplasty). Held in the Assembly Business and Professions Committee.

CME for Depression—SB 524 (Torlakson) would require physicians and surgeons who treat patients for depression and other related ailments to complete a mandatory continuing education course on that subject. Defeated in the Assembly.

Other Legislation of Interest

Funding for ER/Trauma Care—SB 57 (Alarcón, D-Sun Valley) would have established an additional penalty to be assessed by each county on fines, penalties, and forfeitures imposed for criminal offenses and parking penalties to be used for, among other programs, emergency medical care. The bill stipulated that up to 15% of the new funds could be set aside for pediatric trauma care. Vetoed by the Governor.

Medical Board of California—SB 231 (Figueroa, D-Sunol) was a heavily negotiated bill to reauthorize the Medical Board of California and make various reforms. Major components of the legislation include: elimination of cost recovery being used as a hammer in physician discipline settlement talks, increased biennial fee to $790 (reduced from a proposed $900), in-depth audit of the financial status of the board by an outside, independent agency with the ability to require rebates if the reserve fund is over the two month minimum, integration of board investigators into attorney general staff, preservation of the Diversion Program, and various changes in board operations. Signed by the Governor.

Payment of Provider Claims—SB 417 (Ortiz, D-Sacramento) would require the Department of Managed Health Care (DMHC) to review complaints by providers concerning the payment practices of a health plan, to determine if the practice constitutes an unfair payment practice. The DMHC could then assess fines and penalties against health plans if the disputed payment is found to constitute an unfair payment practice. This bill was an attempt to forge a compromise on the issue of balance billing. Held in the Assembly Health Committee.

Triplicate Prescriptions—SB 734 (Torlakson, D-Antioch) is "clean up" legislation for last year's SB 151. This bill would provide that the prescription forms for controlled substances shall be obtained from security printers approved by the Department of Justice and that the department shall provide the applicant with the means and direction to provide fingerprints and related information for the purpose of completing state, federal, or foreign criminal background checks. SB 734 would further stipulate that prescription forms include the feature of an identifying number assigned to the approved security printer by the Department of Justice. Signed by the Governor.

Hospital Financing Waiver—SB 1100 (Perata, D-Oakland) establishes a framework for a five-year federal waiver for the funding of public and private safety net hospitals. Thanks to the lobbying efforts of CMA and other organizations, the federal waiver does not include the proposed expansion of mandatory enrollment in Medi-Cal Managed Care for over half a million seniors and people with disabilities. Signed by the Governor.

2006 Legislative Agenda
CMA is prepared to push a strong pro-active agenda next year focusing on expansion of health coverage, reform of managed care, protection of consumer-directed health plans and Medi-Cal provider rates.

This coming year represents an opportunity to refocus legislative leaders and the Governor on the opportunities that are available to California if we work together. The Governor and some legislators have struck a much more conciliatory tone since the special election and CMA is poised and ready to help channel that into positive action on health care. CMA will aggressively push a positive bi-partisan agenda in the hopes that we can capitalize on this environment.

The CMA Government Relations team has grown even stronger with the recent addition of Teresa Stark and Francisco Silva. They bring many years of legislative experience to CMA and we are very excited about their energy, enthusiasm, and knowledge. There is certainly no stronger group of lobbyists in any association in Sacramento.