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Friday, February 13, 2015

Legislative Deadlines

Two more weeks remain before the legislative deadline, February 27, for new bills to be introduced.  We expect bill hearings to begin in earnest in mid to late March. Both the Assembly and Senate Health Committees are planning to hold informational hearings, which they reportedly want to conclude before hearing bills. A little over 575 bills have been introduced to date.  A typical session has close to 2000 new bills introduced.

Latest News on Assisted Suicide

California Lawsuit:
On Wednesday, Kathryn Tucker, formerly with Compassion & Choices and now with the Disability Rights Legal Center (DRLC), filed a lawsuit in San Francisco Superior Court asking the court to declare that physicians who provide a lethal prescription for medication to a mentally competent terminally ill patient for the purpose of hastening their death should not be subject to criminal prosecution under existing California law. Penal Code Section 401 currently provides “that every person who deliberately aids or advises, or encourages another to commit suicide, is guilty of a felony.”  The lawsuit argues that the choice of such a dying patient is not "suicide," nor is the physician assisting such a patient in "committing suicide."  Additionally, the case argues that patients facing the end of their lives have a right under the California State Constitution to make autonomous decisions about their bodies and how they will die. Tucker also filed a similar case in New York last week.  The plaintiffs in the California lawsuit include a cancer patient and five physicians, two of whom have cancer.

Colorado Bill Defeated: Last Friday, Colorado’s newly-introduced assisted suicide bill was rejected by the Public Health and Human Services Committee in the state’s House of Representatives on a 9-to-4 bipartisan vote.  According to Compassion & Choices, there is “legislative action” in 21 states and Washington, DC.  Colorado is the first of, what is hoped to be, many defeats this year.


Friday, February 6, 2015

Informational Hearing on Health Care Costs

On Wednesday, the Senate Health Committee held one of the first hearings of the new legislative session. This informational hearing – "Making Health Care Affordable: What's Driving Costs?” – generally explored the drivers of health care costs, focusing on hospital and drug costs specifically. The committee heard from three panels: payers (including the Department of Health Care Services, CalPERS, labor organizations and health plans); the biomedical industry; and, health care providers (including the California Hospital Association).  The California Health Care Foundation (CHCF) wrapped up the remarks with their perspective on potential remedies.   A main focus of the hearing was the cost of specialty drugs, such as the $1,000 drug used to treat Hepatitis C.  However, drug prices were just one of the many areas that were scrutinized.  Speakers said that physician fees and hospital facility fees are also a major factor with consumers be asked to shoulder more out of pocket costs for their care. In public comment patient groups voiced disapproval that they were not invited to offer their perspective.   It should be noted that Senator Hernandez, chair of the Senate Health Committee, is the author of SB 26 to create the "California Health Care Cost and Quality Database," known as the All-Payer Claims Database (APCD), a concept which has been promoted by CHCF. The APCD concept is specifically mentioned in the committee background paper for the hearing that, along with other committee background documents, can found at:

Friday, February 6, 2015

Assited Suicide Double Referred

SB 128 (Wolk-Monning): Physician Assisted Suicide.
While no hearing dates have yet been set, the measure has been double referred to the Senate Health and Judiciary Committees by the Senate Rules Committee.


Friday, January 30, 3015


Bill Introductions

Today, January 30, marks the legislative deadline for legislators to submit bill requests to the Office of Legislative Counsel for drafting and review.  Newly-introduced legislation (those in print), is still trickling in; however, there are a few bills of interest (see below) that will require attention, and several “spot bills” that will warrant close monitoring.  The deadline for new bills to be introduced is February 27.

SB 4 (Lara). Health Care Coverage-Immigration Status: Declares the intent of the Legislature for all Californians, regardless of immigration status, to have access to affordable health coverage and care. This spot bill likely will be similar to Senator Lara’s bill from last session (SB 1005), which proposed to offer full-scope Medi-Cal or coverage through the state’s health benefit exchange to all residents of California, regardless of immigration status.  The bill stalled due to the lack of identified funding. Federal law will not allow federal funding to be used for undocumented immigrants, so the bill will need a state-only funding mechanism.

SB 19 (Wolk). POLST Registry: Enacts the California POLST Registry Act, requiring the California Health and Human Services Agency to establish and operate a statewide registry system for the purpose of collecting POLST forms received from health care providers. Health care providers who complete a POLST form would be required to include the POLST form in the patient’s medical record and would be required to submit the form to the registry, unless a patient or his or her health care decisionmaker chooses not to participate in the registry.

SB 128 (Wolk-Monning). End of Life: As reported last week, this bill would enact the End of Life Option Act that sets forth a process to legalize assisted suicide in California.

SB 145 (Pan). Patient Transport: Prohibits a general acute care hospital, acute psychiatric hospital, or special hospital from causing a patient with a blood alcohol content of 0.8% percent or greater to be transported to another location except when the patient is either medically stabilized or appropriately transferred to another health facility.  According to the announcement on the bill’s introduction, it basically imposes significant financial penalties on hospitals that call law enforcement to have severely intoxicated patients arrested rather than treat them.  Dr. Pan held a press conference today and was expected to single out Prime Healthcare hospitals that “routinely call 911 and have patients with potentially lethal levels of alcohol in their systems taken to jail.” There likely is some nexus with SEIU’s support of Dr. Pan and the union’s opposition to the sale of the Daughters of Charity Health System hospitals to Prime Healthcare that is pending approval by the state’s Attorney General (who has until February 20 decide whether to approve the sale).

SB 149 (Stone) and AB 159 (Calderon). Investigational Drugs: Dubbed “Right to Try,” these bills permit a manufacturer of an investigational drug, biological product, or device to make the product available to eligible patients with terminal illnesses with specified conditions.  Simply stated, the bills would give terminally ill patients the right to try experimental drugs not yet fully approved by the FDA.

Friday, January 23, 2015

Assisted Suicide Bill Introduced

On Wednesday, Senators Wolk (D-Davis) and Monning (D-Carmel) were joined by several Senate and Assembly colleagues, along with family members of Brittany Maynard and other patients with terminal illness, in a press conference to introduce SB 128, “End of Life Options Act,” which proposes to legalize assisted suicide in California. Compassion & Choice, the lead advocacy organization promoting public policies to legalize assisted suicide throughout the U.S., was given prominence at this press event.   The proponents of SB 128 are well-funded and have developed a carefully crafted media campaign; thus, we expect continual media coverage during this legislative session.

The Alliance is working in coalition with physicians, disability rights advocates, Latino organizations and faith communities to oppose this measure; and, are an active participant in the statewide coalition, Californian Against Assisted Suicide.

Friday, January 16, 2015

Physician Assisted Suicide Legislation

Senators Monning (D-Carmel) and Wolk (D-Davis) have confirmed that they will be introducing a physician assisted suicide bill this year.  Language is being finalized and they indicated that they plan to hold a press conference within the last two week of January.  The coalition – Californians Against Assisted Suicide – is preparing talking points and will field media calls.  The Alliance will also prepare its advocacy toolkit.  More to come once we see the actual language of the proposed measure.

LAO Summary of Governor's Budget Proposal

As we reported last week, Governor Brown released his $113.3 billion FY 2015-2016 budget proposal. This week the nonpartisan Legislative Analyst Office (LAO) released itsoverview of the Governor’s budget. According to the LAO report, California's revenue could be $1 billion to $2 billion higher than projected in Brown's budget proposal. However, the LAO stated that any additional revenues will largely or entirely go to school and community colleges, as required under the state’s Proposition 98 constitutionalschool funding formula.  On a related note regarding state revenue projections, State Controller Betty Yee, in a public address earlier this week, noted that her officeanticipates that revenue collections are likely to be so strong this year that California may avoid resorting to short-term borrowing to pay its bills.  In most years the state mustborrow money from financial markets to pay its bills in between revenue collection cycles.  The State Controller went on to note that with revenue growth projected to be sostrong, it may make it more difficult to not consider restoring some of the budget cuts made during the recent recession.

The LAO stated that the Governor’s budgeting philosophy “continues to be a prudent one for the most part.  In the near term, the Governor’s reluctance to propose significantnew program commitments outside of Proposition 98 could help avoid a return to the boom and bust budgeting of the past.  Moreover, his proposal to address the state’sretiree health liabilities over the next few decades would, if fully funded, address the last of state government’s large unaddressed liabilities.”  The report does question thelack of specifics on how the Administration intends to cover the unfunded liability.

Relative to health and human services, the LAO notes that it will continue to evaluate enrollment estimates that are driving proposed spending on Medi-Cal.  The Governor’sbudget assumes that General Fund spending for Medi-Cal is up by hundreds of millions of dollars in 2014-15, compared to last year’s budget assumptions, and by about $800million above that level in 2015-16.   The complete LAO summary can be found at:

Friday, January 9, 2015

Swearing in and “State of the Union.”

On Monday, Governor Jerry Brown was sworn in for his unprecedented fourth and final term of office, and delivered his Inaugural address that was essentially his State of the Union address.  The Governor acknowledged the strides made during his first four years in office in, among other things, balancing the budget (“more precariously that I would like”), creating a Rainy Day Fund, reducing unemployment, passing a water bond and creating a fairer system of school funding.

Also over the last several years, a clear priority of the Brown Administration has been the successful implementation of the Affordable Care Act with the realization of the fiscal impact on the state.  Acknowledging that reality, the Governor stated, “Two years ago California embraced the Affordable Care Act, dramatically increasing its health insurance coverage under the Medi-Cal program. The state will enroll 12.2 million people during this new budget year, a more than 50 percent increase. Providing the security of health coverage to so many Californians who need it is the right thing to do. But it isn’t free. Although the federal government will temporarily foot much of the bill, new state costs – now and more so in the future – will run into the billions.”

And finally, a fair amount of time in his speech was spent on his vision for alternative and clean energy for California’s future.  He proposed three ambitious goals to be accomplished within the next 15 years: increase from one-third to 50 percent the state’s electricity derived from renewable sources; reduce today's petroleum use in cars and trucks by up to 50 percent; and, double the efficiency of existing buildings and make heating fuels cleaner.

Concluding his remarks, Governor Brown stated that “… With big and important new programs now launched and the budget carefully balanced, the challenge is to build for the future, not steal from it, to live within our means …”

2015-16 Budget. This morning (Friday), Governor Brown released his initial draft of the 2015-16 State Budget.  Based on projections of a steadily improving economy, the Budget projects that the state will end the next fiscal year with a surplus of $1.5 billion out of a Budget of $164.7 billion (all funds).  In addition, the document foresees that the state will continue to show large surpluses for the next several years, even as the temporary taxes approved by the voters in Proposition 30 begin to expire.

Despite calls from his own party for spending these surpluses on Medi-Cal, home health, health care for immigrants, etc., the Governor continues to urge extreme caution.  He continues to point to the state’s massive unfunded liabilities for state employee and teacher retirements and health care.  This Budget proposes to invest much of the excess funding coming into state coffers to make a sizable down payment on those liabilities.  Other proposed investments include funding for high-speed rail and infrastructure projects.

For the hospital industry, this appears to be a neutral budget, with no major proposals either positive or negative.  Several big picture items, such as coverage for immigrants and the 1115 Waiver, could be important to the industry but are not well fleshed out in this proposal.  It is expected that more detail will be available as the budget process continues.

Major Health Care Proposals in Governor’s Budget Proposal

The following is a summary of the major health care proposals contained in the Governor’s initial budget plan.  A summary of the full budget plan can be found at:

Coverage for Undocumented Immigrants. One of the most interesting policy proposals that health care advocates have been waiting for is the Governor’s reaction to the President’s executive order on immigration.  Because California provides full-scope Medi-Cal to so-called Permanent Resident under Color of Law (PRUCOL) aliens, the executive order could make up to 1.2 million people eligible for Medi-Cal.  The Budget cites this as a possibility but indicates that the state is awaiting further federal guidance.

Medi-Cal provider rates/AB 97 Cuts. The Budget proposes no changes to Medi-Cal provider rates, either positive or negative.  This means that the budget contains no proposed relief for hospitals from the “clawback” faced by distinct part nursing facilities.  It includes $130 million to account for previously exempted providers and drugs, but no new policy changes.

Medi-Cal Section 1115 Waiver.  The Budget assumes funding from the current 1115 Waiver, set to expire in Fall 2015. It also indicates that Finance will update the estimates after the new Waiver is submitted to CMS sometime in the Spring.

High Cost Drugs.  The Budget allocates $300 million to cover the cost of high-cost pharmaceuticals, such as newly-approved Hepatitis C drugs.  This funding is intended to cover costs of these drugs in Medi-Cal, prisons, state hospitals, and AIDS Drug Assistance Program (ADAP).

Coordinated Care Initiative (the Dual Eligibles Program).  When the Legislature originally approved the move of dual eligibles into managed care, they included a “poison pill” allowing the Department of Finance to stop the program if it did not pencil out financially for the state.  For a variety of reasons, it appears that is coming to pass.  For the past several years, the Legislature has papered over the program’s costs by counting revenue from the MCO Tax (see below) as savings from the program.  The document indicates that, without that revenue, the program would have cost the state $398 million last year alone. The Budget indicates that, if the program is not substantially restructured to create savings, the state will cease operation of the program by January 1, 2016.

Managed Care Organization (MCO) Tax.  California’s MCO tax currently offsets more than $1.1 billion in General Fund spending. Recently, however, CMS has informed the state that the tax is out of compliance with recent federal regulations, and will not be renewed after it expires in 2016.  The Budget proposes to restructure the program to comply with the federal regulations, although there is limited detail regarding what that will entail.

Next Steps

Now that the Governor has submitted his initial proposal, the Assembly and Senate Budget Committees will begin their review.  Hearings in the Budget Subcommittees will likely begin later this month or in February.

Since this preliminary analysis is based on a summary of the Governor’s proposed budget, more details may emerge upon review of the more detailed budget document when it becomes publicly available.

Final Rule for Tax-Exempt Hospitals

As reported by the Catholic Health Association of the U.S. (CHAusa), “the Internal Revenue Service has issued its final rules implementing the Affordable Care Act's requirements for tax-exempt hospital organizations. The rules concern community health needs assessments (CHNAs) and implementation strategies, financial assistance and emergency medical care policies, limitations on charges for persons eligible for financial assistance and billing and collection policies. Some changes from the 2013 proposed rules on CHNAs include the addition of an evaluation step in subsequent assessments; requiring that community members be involved in setting priorities as well as assessments; and adding examples of needs that include reference to social and environmental determinants of health.            
Financial assistance and billing rules include requiring translations of financial assistance policies must be available in languages spoken by limited English proficient groups that constitute the lesser of 1,000 persons or 5 percent of the community served (as opposed to 10%) to persons; requiring certain notifications only for persons the hospital intends to engage in extraordinary collection actions; and adding to the list of these actions deferring or denying or requiring prepayment of medically necessary care because of an individual's nonpayment of previous bills.”  Cick here for a summary of the final rule prepared by CHAusa.

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