New Legislative Session and State Budget Healthcare Priorities for California

  • Conte, Antonio, MD, MBA, FASA
| Jan 28, 2020

Antonio-Conte-MD-MBAThe start of the New Year brings a busy legislative session and debate over the state budget.  On Friday, January 10, Governor Gavin Newsom introduced his initial $222.2 billion budget for 2021 which highlighted his focus on reducing healthcare costs. In his budget, Governor Newsom proposed establishing a new “Office of Health Care Affordability” to improve price transparency and identify potential healthcare savings.

At the same time, he proposed extending Medi-Cal coverage to an estimated 27,000 undocumented seniors over the age of 65 at a cost of $64.2 million a year. The Governor also called for the state to establish its own generic drug label, leveraging the state’s marketplace to increase competition and make generic prescription drugs affordable for all Californians. In December 2019, the Governor named appointees to the “Healthy California for All Commission” which is looking at a “Single Payor” system and is charged with developing an analysis of the state's existing health care delivery system with detailing of cost and provider consolidation trends.

Governor Newsom’s proposed budget will go through the legislative review process and will be revised before it is enacted this summer. CSA will continue to engage in the budget discussions and ensure that anesthesiologists priorities and concerns are represented. We also are engaged in legislative advocacy with our main policy priority focused on improving the provisions of AB 72 (Bonta), the out-of-network billing legislation, to ensure there are adequate networks of anesthesia providers. 

AB 72 successfully removed patients from payment disputes between their health insurance company and an out-of-network provider when they experience an unanticipated coverage gap. However, CSA has heard from anesthesiologists across the state that some payors and delegated entities have taken advantage of the law by initiating terminations of long-standing contracts with several anesthesia groups or demanding significant reductions in their contracted reimbursement rates. Unfortunately, the bill has shifted marketplace leverage to health insurers at the expense of providers, and anesthesia groups are forced to decide if they will accept a large rate cut or leave the health plan and go out-of-network -- which would leave most of them in breach of contract with the facilities they serve, as well as leaving patients without sufficient access to in-network anesthesia providers. AB 72 has severe implications not only for anesthesiologists currently practicing in the state, but for anesthesia residents who are considering whether it is financially viable to practice medicine in California. 

In 2019, CSA sponsored AB 1174, authored by Assembly Health Committee Chair Jim Wood, D.D.S. (D-Santa Rosa), which was an anesthesiology-specific effort aimed at improving upon the negative impact AB 72 has created. While that bill was held in the Assembly Appropriations Committee due to state costs incurred by the Department of Managed Health Care (DMHC) and downward pressure on the state budget, CSA continues to work with Assemblymember Wood on new CSA sponsored legislation to level the playing field for anesthesiologists and ensure there are adequate anesthesia provider networks. Specifically, CSA is seeking legislation that would provide the following: 

  1. Allow anesthesia groups to have more time to negotiate new contracts with health plans by establishing a rolling rate for a designated period of time until a new, equitable contract can be negotiated. 

  2. Focus on fixing the Independent Dispute Resolution Process (IDRP) and the method by which the DMHC contracted arbitrator (Maximus) accepts and utilizes information submitted by physicians to ensure that the review is not completely one-sided in favor of the health plans. 

  3. Revise the methodology for determining the Average Contracted Rate (ACR) so that it represents a true market rate and is weighted to account for group size, number of physicians and geographic location.

In addition to strengthening AB 72, CSA is monitoring several other important policy issues including opioid-related and scope of practice legislation such as AB 890 (Wood) that would inappropriately expand the scope of practice for nurse practitioners. February 21, 2020 is the deadline to introduce new legislation for the year and we will be participating in policy discussions, monitoring committee hearings and lobbying for or against proposed bills to ensure anesthesiologists’ voices are heard. We will share more information as we move through the legislative process and stayed tuned for opportunities to get engaged in CSA’s grassroots advocacy efforts. In the meantime if you would like more information about AB 72 and are willing to share how it is impacting you please visit CSA’s AB 72 resource page.

Antonio Hernandez Conte, MD, MBA, FASA is Chair of the Legislative and Practice Affairs Division.

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