CMA's 2006 Legislative Wrap-Up
by Dustin Corcoran
CMA Vice President
of Government Relations
[Posted 10/26/06]

After sweeping Gray Davis from office with a moderate, reform based agenda, it seemed that Governor Schwarzenneger would dominate Sacramento. Democrats cowered in the glow of his Hollywood tan and it appeared to all that the Capitol would be his to remake as he wished. Cue 2005 and the “Year of Reform.” The invincible Governator suddenly seemed very vulnerable after the voters who sent him to Sacramento to battle with special interests gave his ambitious special election agenda a stunning “two thumbs down.”

Just as in the movies, the venerable hero picked himself up, brushed the dust off, and came back stronger than ever. After moving to the right in the special election, Schwarzenneger spent most of this year moderating his image. The Governor reached a number of compromises with Democrats that left his fellow Republicans shaking their heads. Major deals were struck, including an increase in the minimum wage, changes in the pricing of pharmaceutical drugs for the uninsured, and major public work bonds that will appear on the November ballot. These compromises seem to have solidified the Governor’s image as a moderate willing to forge bipartisan agreements. Political experts agree that the November election is his to lose.

While a few of the Governor’s actions were positive for physicians (such as his support of SB 162, which establishes the new Department of Public Health), he took other actions that were interpreted as direct attacks on physicians. Most notably he encouraged his Department of Managed Health Care (DMHC) to prohibit physicians from billing for services rendered as a means of “protecting patients.” CMA is currently engaged in a high-profile fight with the Administration over this issue. DMHC initially filed emergency regulations to prevent physicians providing emergency and on-call services from billing patients who have insurance. The emergency regulations were quickly pulled back and permanent regulations to do exactly the same thing were filed instead. The new regulations do three things: 1) Prohibit a physician from billing for services rendered; 2) Establish a dispute resolution process to adjudicate payment disputes; and 3) Change the criteria for determining fair payment to include consideration of Medicare, Medi-Cal, and other payment rates.

For physicians these regulations represent a tremendous threat to the viability of the practice of medicine in California. The net result of these regulations will be lower payments to physicians, full regulation of medical groups and IPAs, and a slow but steady move toward rate setting by the State of California. Make no mistake that CMA intends to fight these regulations with every resource available. Stay tuned to CMA Alert for up to date information.

CMA’s list of sponsored bill this year was broad and complex, with measures affecting every aspect of health care in California. The most notable was SB 162 (Ortiz, D-Sacramento), which establishes a new California Department of Public Health, effective July 1, 2007. This measure divides the functions of the current Department of Health Services (DHS), separating the public health functions from the administration of Medi-Cal. CMA had long sought this change after watching public health continue to be buried in the massive DHS bureaucracy. This new department will give appropriate attention to public health issues and hopefully be able to more effectively address pressing public health concerns, such as bioterrorism, emergency response, and the prevention and detection of communicable diseases. CMA will continue to work closely with the Administration to help ensure the proper creation and structure of the new Department.

There are many bills that CMA defeats each year that would have major repercussions on the practice of medicine. For example, every year CMA must defend MICRA from the lurking trial attorney lobby who would love to drive malpractice premiums through the roof. Most notably this year, CMA killed AB 2212 (Torrico), a bill that would have imposed a ban on new specialty hospitals – even after the federal ban expired.

Below are details the bills supported and opposed by CMA in this year’s legislative session.

The 2005-2006 Legislative Session

CMA Sponsored Bills

AB 1954 Lieu (D-Torrance)
This bill would have prohibited the Department of Corrections from utilizing physicians in executions. The impetus for this legislation came when a judge ruled that the state must use a physician to carry out the execution of Michael Morales. AMA, CMA, and the California Society of Anesthesiologists vehemently objected to this ruling. After several tries the state failed to find any physicians willing to participate. CMA may pursue this legislation next year pending a new hearing in this case.

Died in Assembly Appropriations Committee.

AB 2452 Richman (R-Northridge)
This bill would have provided relief for physician office laboratories from duplicative regulation and fees.

Failed in Assembly Business & Professions Committee.

AB 2585 Pavley (D-Agoura Hills)
This bill would have prohibited health plans from requiring a physician to accept a “materially different” type of work as a result of signing a contract to provide standard care in a medical provider network.

Failed in Assembly Insurance Committee.

SB 212 Lowenthal (D-Long Beach)
This bill would have repealed and reformed the requirement that physicians report to the county health officer the name of individuals diagnosed as having a disorder characterized by lapses of consciousness.

Vetoed by the Governor.

SB 912 Ducheny (D-San Diego)
This bill reversed the 5 percent Medi-Cal provider rate cut.

Signed by the Governor.

SB 1353 Romero (D-Los Angeles)
This bill would have expedited the Medi-Cal provider enrollment process. Specifically, the bill would have shortened the time that the Department of Health Services has to process provider applications, and authorized Medi-Cal to expedite enrollment using a new short-form application for Medicare providers and physicians with privileges at acute care hospitals.

Vetoed by the Governor.

SB 1366 Aanestad (R-Grass Valley)
This bill would have eliminated the required use of individualized secure prescription pads for all scheduled drugs.

Withdrawn by author.

SB 1584 Runner (R-Antelope Valley)
This bill would have created conformity between federal and state tax law with regard to Health Savings Accounts.

Died in Senate Revenue & Taxation Committee.

SB 1591 Kuehl (D-Santa Monica)
This bill would have required health plans to limit administrative costs and profit to 15 percent of gross premium revenues.

Failed in Assembly Health Committee.

SB 1804 Florez (D-Shafter)
This bill would have required DMHC and the Department of Insurance to maintain a database of health plans and coverage, product lines for all, number of enrollees per line, and participating physicians by specialty for each county in California.

Failed in Assembly Health Committee.

CMA Opposed Bills

AB 651 Berg (D-Eureka), Levine (D-Van Nuys)
This bill would have authorized an adult who met certain criteria to request a prescription for medication to provide comfort with an assurance of peaceful dying.

Failed in Senate Judiciary Committee.

AB 657 Karnette (D-Long Beach)
Would have required physicians to ask patients if they would like the intended purpose of the drug to be placed on the label.

Failed in Senate Business, Professions & Economic Development Committee.

AB 2152 Chan (D-Oakland)
This bill would have required physicians who wished to incorporate acupuncture into their practices to be separately licensed by the Acupuncture Board.

Failed in Assembly Business & Professions Committee.

AB 2427 Canciamilla (D-Pittsburg)
Would have gutted the motorcycle helmet law.

Failed in Assembly Transportation Committee

AB 2855 Parra (D-Hanford)
This bill would have legalized “discount health programs” that sell lists of physicians to uninsured individuals.

Withdrawn by author.

AB 2856 Hancock (D-Berkeley)
This bill would have required a physician to obtain informed consent from a patient before prescribing a prescription medication for off-label use.

Withdrawn by author.

AB 2868 Bogh (R-Beaumont)
This bill authorizes physical therapists with doctorates to use the term “doctor” in written and verbal communications if it is clarified that their doctorate is in physical therapy or in a related health science.

Signed by the Governor.

SB 438 Migden (D-San Francisco)
Allows oral and maxillofacial Surgeons to perform certain cosmetic procedures.

Signed by the Governor.

SB 524 Torlakson (D-Antioch)
This bill would have added mandatory CME on depression.

The bill was defeated on the Assembly Floor and was later amended to a subject of no interest to CMA.

SB 1555 Speier (D-Hillsborough)
This bill would have required physicians give prenatal patients a brochure on umbilical cord blood banking. (Amendments were taken to remove CMA opposition.)

Signed by the Governor.

2007 and Beyond
Next year will be a fascinating time for those with an interest in health care policy. If Governor Schwarzenegger wins reelection, will he continue to govern from the center and seek bipartisan compromises? Or will he swing back to the right and become more aggressive in his final term? The answer will have major implications for physicians and patients as health care appears to be the dominant issue in the next legislative session. A more centrist approach could mean funding for public health projects and increases for programs such as Medi-Cal. A more aggressive, partisan approach could translate to more managed care programs. The Governor has stated he will pursue legislation to expand health insurance to all Californians and legislative Democrats are preparing to counter with their own proposals.

Next year will also bring a slew of new legislators, as this year was the last for those who entered the legislature before the term-limit era. New legislators often come to Sacramento with little experience in health policy and tend to “think-small” in terms of solutions for health care. These “solutions” skew heavily towards mandates on physicians, and can include anything from requiring physicians to hand out another patient information pamphlet to an additional CME mandate. It is fascinating that legislators love to nit-pick at medicine given their failure to address the larger systemic problems facing health care in California. CMA will engage early and often to ensure that physicians are well represented and their interests and those of their patients are protected.

The 2007-08 Legislature will convene in December to organize and will begin meeting in earnest in January. CMA’s agenda for the 2007-08 legislative session will be developed at CMA’s Council on Legislation meeting in December. §