Focused on finishing the task by the Constitutionally-mandated June 15 deadline, the Legislature took up—and passed—the budget bill (AB 110) on June 14. The measure passed on party-line votes of 54-25 in the Assembly and 28-10 in the Senate (with one abstention and one vacancy). On Thursday, the Governor signed it into law a $96.3 billion fiscal year 2013-2014 state budget plan (AB 110), along with ABX 1-1 to implement the Medi-Cal expansion in California.
The budget as passed includes a number of significant actions impacting SFMS and our physicians, including the adoption of the MCO tax, enacting the ‘optional expansion’ of Medi-Cal to childless adults pursuant to federal healthcare reform, reauthorizing the Coordinated Care Initiative/Duals Pilots, and passage of a $200 million mental health wellness package.
The MCO tax, originally proposed to be a permanent tax, now has a 3 year sunset. The tax will go to fund better rates for children, SPDs, and the Duals pilots. The Brown Administration indicated that they would work with the coalition to set up the “maximum rate allowed” by CMS without impacting the general fund. With this agreement, the health plans removed their opposition and changed the political dynamics of stopping the MCO tax without a provider solution.
California continues its efforts to pioneer implementation of the Affordable Care Act by passing legislation today to expand the Medi-Cal program to childless adults making at or below 138% of the Federal Poverty Level beginning January 1, 2014. Language added to the bill yesterday allows the state to abandon the Medi-Cal expansion if the federal funding for it is reduced below certain levels. SFMS/CMA remains actively involved in the implementation of this expansion, as the state’s efforts to enact the expansion and modify managed care plans’ contracting processes could have significant impacts on physician practices throughout California.
The budget also includes a reauthorization of the Coordinated Care Initiative/CCI, also known as the ‘duals pilots’ or CalMediConnect. This was a main item on the Governor’s wish list, allowing the Administration to continue to pursue federal approval for the CCI.
Another trailer bill included a complicated new formula meant to alter the allocation methodology for counties’ 1991 realignment funds. One of the centerpieces of the Governor’s final commitment to expand Medi-Cal pursuant to federal health care reform was the need to adequately reassess counties’ funding needs once a large number of those currently uninsured are covered. There are multiple options for counties to choose as to how much of their funding is diverted to the state based on their having to cover potentially smaller numbers of uninsured. SFMS/CMA is following this issue closely as there will likely remain many uninsured following January 1st, as the take up rate for coverage, even with ACA implemented, could be slow. The counties rely on these realignment funds as a resource to provide coverage to the uninsured, and any substantial funding hit to the counties could adversely impact the physicians that work with them to treat the uninsured.
On a positive note, the budget includes a significant investment of over $200 million for a mental health wellness package that will help develop critical infrastructure throughout the state allowing localities to better respond to the mental health needs of Californians, especially the poor and underserved. The budget also removed the 7 doctor visit limit from statute and also makes all Medi-Cal plan amendments and waiver proposals available to the public for review and comment, both items SFMS/CMA strongly supported and advocated for.
Additionally, the budget deal included $3.9 million, using reserves from 10 licensing board contingent funds, for upgrading the Controlled Substances Utilization Review and Evaluation System (CURES). The Medical Board of California (MBC) will contribute $1.6 million of the total. The funding is authorized until 2015, so over two budget years.
The Medical Injury Compensation Reform Act (MICRA) provisions work to ensure quality medical care for consumers, stabilize out-of-control medical liability costs to keep providers in practice, and preserve patients' access to fair compensation when they have justifiable claims. Any changes to MICRA to weaken its protections will result in higher healthcare costs overall, no improvement in quality, and reduced access to services. That is why SFMS and CMA are long-time supporters of the Californians Allied for Patient Protection (CAPP), and are committed to ensuring MICRA remains intact and viable in California.
There has been an increase in paid anti-MICRA activities by the trial lawyers. Thus far, it appears to be limited to the Sacramento area and clearly aimed at the legislature. With the trial lawyers' heightened lobbying campaign, CAPP's large and diverse coalition has also ramped up its efforts as described below.
CAPP and its members have been meeting with legislators individually to discuss trial lawyer efforts, explain the negative consequences of changing MICRA, and solidify our support in both houses of the legislature. These meetings are ongoing and our team of lobbyists and supporters is coordinating very closely on all legislative activities.
To send a strong message to legislators (and to supplement individual lobbying efforts), CAPP has drafted and distributed an "open letter" to legislators that was delivered today. The goal is to demonstrate to legislators the depth and breadth of CAPP's supporters and the 700+ coalition members that would be affected by any changes to MICRA. Furthermore, the letter reiterated that we stand in support with our lawmakers in striving to improve healthcare access and affordability while, conversely, the trial lawyers are promoting divisive and risky changes that threaten our healthcare safety net.
We need our supporters throughout the state to help us protect MICRA if there is a bill or a ballot measure to change the law and weaken MICRA's protections. CAPP is seeking advocates who would be willing to meet with legislators; testify in legislative committee hearings; and engage in media activities like news interviews, authoring letters-to-the-editor or op-eds.
CAPP is organizing a series of message training webinars to give supporters the necessary tools to be an effective advocate. These trainings will help you understand how to best tell your story about why MICRA is important to you and provide you with background information so you know what to expect in a press interview, legislative hearing, and/or press conference. If you would like to participate in media training, please email CAPP at email@example.com.
SFMS/CMA, along with the California Dental Association, the California Hospital Association, and the American Medical Association, filed an amicus brief with the California Court of Appeal defending the constitutionality of our state’s landmark Medical Injury Compensation Reform Act (MICRA), which allows non-economic damage awards up to $250,000. This case is just the latest in many legal challenges to MICRA that have been funded by trial lawyer groups from across the country.
In this case, Rashidi v. Moser, M.D., the jury awarded the plaintiff $125,000 in economic damages and $1,325,000 in non-economic (subjective pain and suffering) damages. The judge reduced the non-economic damages portion of the award to $250,000, in accordance with MICRA. The plaintiff appealed, asserting that MICRA’s cap on non-economic damages (Cal. Civ. Code Sec. 3333.2) violates California's constitutional guarantees of trial by jury, separation of powers and equal protection of the laws.
Contrary to the plaintiff’s arguments that MICRA’s non-economic damages cap “irrationally singles out the victims of medical malpractice for unfair treatment,” the cap is fairly and evenly applied. MICRA’s non-economic damages cap applies uniformly to any patient in California who is injured by medical malpractice. And every Californian benefits from the access to care that MICRA fosters.
The arguments the plaintiff asserts in this case have already been flatly rejected by the California Supreme Court. As the supreme court has explained, the Legislature clearly had a reasonable basis for drawing a distinction between economic and non-economic damages, providing that the desired cost savings should be obtained only by limiting the recovery of non-economic damages. MICRA reflects a strong public policy to contain the costs of malpractice insurance by controlling or redistributing liability for damages, maximizing the availability of medical services to meet the state’s health care needs.
Today, MICRA is working to keep premium rates in California low and stable, while states without liability reform are seeing dramatically higher premiums. Because of MICRA, California has a system that is affordable, compensates patients for their full medical and economic losses, and promotes patient safety and improved patient care.
MICRA allows patients with substantiated medical negligence claims to receive the following forms of compensation:
MICRA also includes a sliding pay scale to control attorney contingency fees, ensuring that more money goes to patients, not lawyers. MICRA’s $250,000 cap on non-economic damages has proven to be an effective way of limiting meritless lawsuits and keeping health care costs lower, but has been targeted by the trial lawyers because it restricts the amount of money they can collect in attorney’s fees.
Reports began circulating that legislative leadership—the Speaker and Senate Pro Tem—had come to agreement on the major pieces of a budget ‘deal’ with Governor Brown. SFMS/CMA has been working to uncover the details and determine the main pieces of relevance to physicians.
To our knowledge, the deal does not include a fix for the rate cuts. Right before the public announcement of a deal, CMA was joined by the Calfiornia Hospital Association and SEIU-UHW in a meeting with Senate President Pro Tem Darrell Steinberg. In discussing the rate cuts, the Pro Tem committed to going to the Governor with the Speaker and securing a delay in implementing the AB 97 cuts until January 1, 2014 at the earliest, in order to allow time for a late summer/August legislative proposal to secure more funding in the Medi-Cal system through the state paying a higher rate for the expansion population (that rate increase being entirely federally funded for three years). We are anticipating receipt of a written agreement to delay within the next couple days.
There isn't much information about what form the managed care organization (MCO) tax would take in the ‘deal’. The health plan community still doesn’t know what form the MCO takes in the deal and if they’re opposed or not. They want CMA’s support in ‘dividing the question’ and only having one year (2012-13) of MCO, at only the MCO rate to fund finally paying the Healthy Families plans. They do not want to discuss the higher sales tax rate and where that funding stream should go until after the first of July, when they see their rates for next year.
We haven’t heard much yet about the county funding scheme, but have heard many rumors about a variety of potentially problematic proposals being included in the arrangement, potentially including an extension of the Low Income Health Programs/LIHPs as well as a potential renegotiation of the 2010 Medi-Cal 1115 Waiver, which doesn’t expire until 2015. The contents of the county funding arrangement will likely impact CMA’s positioning on the remainder of the budget items impacting physicians due to its pivotal role in the restructuring and expansion of the Medi-Cal system in preparation for health reform implementation in 2014.
The conference committee adopted action to appropriate $15 million to UCR. Their action seemed to have included the money but instead of appropriating additional funds, it was taken out of the existing UC appropriation.
The bicameral Budget Conference Committee finished their work just before 9:30 pm on June 10. Of note, the Pro Tem’s Mental Health Wellness package was approved ($142.5 million), and the DP-SNF facilities did not have their rates restored from the 2008/09 level instituted in AB 97 to the current year level, as originally proposed in the Senate Budget Subcommittee #3 on Health and Human Services.
More details should be emerging about the contents of the full deal in the coming days. SFMS/CMA will continue to keep you apprised of the situation as we receive updated information.
In the dispute over whether Gov. Jerry Brown's budget should do more to repair the state's tattered safety net, the fate of a planned cut in Medi-Cal payments to providers has taken a prominent role. A coalition of medical professional associations (including the California Medical Association and the California Hospital Association) and the Service Employees International Union-United Healthcare Workers West is busing thousands of advocates to Sacramento today for a huge Medi-Cal rally.
Lawmakers expected to speak during between 1 pm and 2 pm include Assemblyman Richard Pan, MD (D-Sacramento), and Assemblyman Luis Alejo (D-Watsonville). There are a couple of bills dealing with Medi-Cal payments before the Legislature right now—the one authored by Alejo made it out of the Assembly while the Senate version was re-referred to committee—and Brown's proposed budget includes a 10% reduction that has been ensnared in a court fight since being approved in 2011 but was just upheld by a federal appeals court.
Join thousands of physicians, hospitals, dentists, health care workers, community clinics and patients in the historic rally to urge Legislature and Governor Brown to support SB 640 and AB 900! The main event will take place on the West Steps of the State Capitol from 1pm to 2pm.
Source: Sacramento Bee Capitol Alert, June 4, 2013.