Legislative and Policy Update

Dietmar GrellmannSr. Vice President, Managed Care &

Professional ServicesCalifornia Hospital Association

November 21, 2013

Supermajority in the Legislature

Democratic Caucus achieved the two-thirds supermajority in both houses through special elections this yearSENATE : 40 ASSEMBLY:

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Powers of Supermajority: Raise taxes, amend the constitution, place propositions on ballot, suspend rules. No minority party consent required.

This Year’s Statistics

• 2256 bills introduced

• 800 bills signed

• 96 bills vetoed

• 10% veto rate

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2013 Health Legislation Volume

January

Sept. 13

Oct. 13

Numbers are approximated, CAHP, CHA and CAPG track & categorize differently

ACA Implementation Special Session

Both “special” and “regular” sessions occurred simultaneously during 2013: 3 core principles: continuity w/ federal law,

level playing field in and out of Exchange, & maintain state-level consumer protection:

Very compressed timeline over the winter and early springSuccessful resolution of implementation issues left open at the end of 2012 session

Special Sessions Called for Health Care Reform

• ACA: AB 1X (Perez) & SB 1X (Hernandez)

• Health Plan Coverage: AB 2x (Pan) and SB 2x (Hernandez)

• Exchange: SB 3x bridge option for low-cost coverage to individuals in the Exchange

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“We Care California” Coalition Held Rally at Capitol

Close to 10,000 People Rally

AB 900 (Alejo) to restore Medi-Cal Cuts and Access to Care

Backdrop: Budget deficits & cuts; AB 97 of 2011 imposed 10% or higher rate cuts

Litigation – Injunction – Appeals – Denials – More Appeals

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Two Paths to a Partial Solution to AB 97 Medi-Cal Cuts

Access is Key: 42 U.S.C. §1396a(a)(30)(A)

DHCS Announcement: Exempts rural DP/SNF from AB 97 cuts due to decreased access to care

SB 239 (Hernandez) Lifts rate freeze & restores all DP/NF cuts prospectively; Claw-back remains

Other Provider Rate Cuts Remain in Place

State Budget Trailer Bills Impact Health Care Policy – $96.3 Billion

Health care related trailer bills:

• AB 82: Medi-Cal Expansion –

• Partially restored Medi-Cal Dental benefits

• Mandatory enrollment into Managed Care

• SB 82: Appropriates $142 Million for Mental health crisis centers & mobile crisis teams

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SB 239 Creats a 30-Month Hospital Fee Program

SB 239 (Hernandez) 3-year fee program from 2013 forward Creates framework for future fee programs Stable funding for children’s health care

coverage Lifts rate freeze and restores Medi-Cal rates to

DP/SNFs

New Requirements for Districts, Drugs & Home Care

AB 130 (Alejo): Limits on Retirement Plan Benefits for Health Care District CEOs.

AB 1202 (Skinner): OSHA facility standards for antineoplastic drugs

AB 1217 (Lowenthal): DSS licensing and registry for home care agencies and staff

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Hospital Facilities Bills Focus on Secondary Costs & Wages

• SB 563 (Galgiani) requires costs for producing construction plans.

• SB 615 (Galgiani), would have required prevailing wages for certain hospital construction. Vetoed

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Two-year Bills Remain

• AB 333 (Wieckowski) Amendments to the Medical Waste Management Act.

• AB 676 (Fox): Hospital Discharge Care Coordination

• AB 975 (Wieckowski): Health Facilities Community Benefit & Charity Care

• SB 718 (Yee): Workplace Violence

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Out-of-Pocket Maximums

SB 639 applies to individual & small group market products:Limits individual and small group products to annual OOP of 6,350/12,700 annuallyAllows plans to use quarterly rate-adjustment indexingLimits small group deductibles to 2,000/4,000Compliance date triggers vary – complicatedPediatric Dental is a work in progress

Non-English Translation Standards

(SB 353) requires translation of documents in individual and small group markets if you advertise in a non-threshold, non-English speaking language to anyone:

Applications, Welcome letters or notices of initial coverage, grievance process notices

Not applicable to specialized plans

Does not apply to the large group market

Not the same list of documents required to be translated under the Language Access regulation

Minimum Stop Loss Standards

(SB 161) sets minimum dollar standards at which stop loss policies can indemnify small employer self-funded plans:

“small employers” are 100 or less employees

standards increase after 1/1/2016: $40,000 individual attachment point Aggregate attachment point of either:

(i) $5,000 times the total number of group members; (ii) 120 % of expected claims; (iii) $40,000;

New Coverage Mandates for 2014

AB 219: Copayment limits for Oral Chemo - $200 cap on OOP limits. Signing message makes it clear that the law will sunset so that unintended consequences can be evaluated

AB 460: Nondiscrimination in infertility treatment – refers back to existing law on non-discrimination

SB 126: Autism coverage – continues sunset date of SB 946 bill, extended to 2017 when EHBs are revisited under federal review

Up Next: Bills that were Vetoed

And Bills that Stalled

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Last Day Veto of Prevailing Wages & Other Defeats

SB 615 (Galgiani): Vetoed

Out-of-Network Billing: SB 351 (Hernandez)

Out-of-Network Notices: SB 266 (Lieu)

MICRA attempt

Provider Oversight & Scope

SB 352: PA supervision of Medical Assistants

SB 493: Advanced Practice Pharmacists

SB 494: Empanelment expansion for NPs and PAs at 1,000 additional lives per midlevel practitioner

SB 670: Medical Board investigative authority in drug-related patient deaths

AB 154: Midlevel autonomy from physician supervision for abortions

AB 1000: Patient direct referral to physical therapists

AB 1308: Midwife autonomy from physician supervision

Regulatory Activity

Exchange Premium Payment Grace Periods3 month period. 1st month covered pend claims under months 2-3. Allowed under Federal rule, but prohibited by State law – what to do? Reconciled California law (requiring all 3 mos.) with the federal rule. Allowed to suspend coverage during mos. 2-3.Formal DMHC regulations to follow

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The 2014 Initiative Landscape

2014 Initiatives:

Charitable Hospital Executive Compensation

Fair Health Pricing

The Medi-Cal Funding & Accountability Act of 2014

MICRA

Health Plan Rate Review

QUESTIONS?

Dietmar Grellmanndgrellmann@calhospital.org

916.552.7572