1. Legislative Update 2014 Legislative Session California Clinical Laboratory Association 2014 Annual Conference Arnold and Associates, Inc. Michael J. Arnold & Kristian Foy

2. What We Will Cover Sacramento Environment Key Legislation for 2014 Medi-Cal Reimbursement CCLA lawsuit vs CMS re the LCD Process State Budget November Election Outlook for 2015 Legislation

3. Sacramento Environment 2014 legislative year was the last year of the 2013-2014 Session Election Year Fiscal issues on everyone’s minds Difficult year for the Senate Rod Wright Ron Calderon Leland Yee Sergeant at Arms

4. Final Legislative Status Report Listing of all bills being followed. Shows bill, author, summary, location, hearing date, etc. Available to any member, anytime. Click on the bill number and it takes one to a copy of the bill, analyses, and other information. Shows final location of the bill.

5. 2014 Legislative Highlight

6. Key 2014 Legislation AB 333 Wieckowski Medical Waste Chapter 564, Statutes of 2014 Makes numerous changes to the Medical Waste Management Act (MWMA). Requires CDPH to meet with stakeholders to develop a report. Analyze state and federal laws on transport of medical waste. We will closely watch implementation of this bill and the stakeholder meetings during 2015.

7. Key 2014 Legislation AB 2143 Williams Clinical Laboratories: chiropractors Substantially amended at our request Amendments limit application of the bill Chapter 269, Statutes of 2014 Applies only to chiropractors listed on the federal Department of Transportation National Registry of Certified Medical Examiners. Can perform specific waived tests for sole purpose of DMV report. Must have certificate of waiver.

8. Key 2014 Legislation AB 2425 Quirk Forensic laboratories Chapter 570, Statutes of 2014 Temporary exemption from existing regulations for forensic alcohol analysis tests for accredited law enforcement laboratories. Gives Department of Public Health time to update regulations. Review and implement recommendations from Forensic Alcohol Review committee to update regulations to reflect current laboratory standards.

9. Key 2014 Legislation SB 973 Hernandez Narcotic treatment programs Chapter 484, Statutes of 2014 This bill revises existing law related to patient treatment in Narcotic Treatment Programs (NTPs).

10. Medi-Cal Reimbursement 10% provider payment reduction from 2011 now being applied to virtually all providers Provider groups lost lawsuit DHCS now implementing reduction

11. Medi-Cal Payment Cut to labs in 2012 – AB 1494 10% cut in lab reimbursement—retroactive to July 1, 2012. (In addition to 2011 10% cut) CMS has not yet approved this cut! AB 1494 also requires DHCS to produce a new rate development methodology--with stakeholder input 10% cut to stop when new rate methodology is approved by CMS DHCS “Rate Development” staff is overwhelmed by amount of data and variability in rates for lab testing AB 1124, 2014, extends lab exemption from “lowest charge” regulation 50501(a) for additional nine months to July 1, 2015. Gives state more time to develop new methodology.

12. Medi-Cal Lowest Price Reg Ca Administrative Code Section 51501(a): “…no provider shall charge (Medi-Cal) for any service…more than would have been charged for the same service…to other purchasers of comparable services…under comparable circumstances.” CA False Claims Act: Section 12650 of the Government Code

13. CCLA lawsuit California Clinical Laboratory Association and a Medicare beneficiary lawsuit against U. S. Department of Health & Human Services. Charges that Medicare Administrative Contractors (MACs) are adopting Local Coverage Determinations (LCDs) that deprive beneficiaries of critical laboratory tests. Oral arguments on government’s motion to dismiss set for February 2, 2015.

14. 2013 – 2014 State budget Proposition 25 is working – On Time Budget Proposition 30 – Increase in Revenue Governor Demanded Fiscal Restraint

15. 2014-2015 State Budget Billions in deficit now in the past Surplus going forward 10% Medi-Cal Provider Cut removal?

16. Election November 4, 2014 General Election Governor’s Race Statewide offices Senate Assembly Propositions

17. State Level Lab Issues for 2015 Reimbursement from Public Programs Frequency Limits Staffing requirements and standards Licensure regulations and fees Moratorium on new lab provider numbers Contracting for lab services Operational issues - e.g. auto verification, use of personnel Anti-mark up/direct billing legislation Direct access testing for any test sold OTC—other tests? Safe needle mandate Phlebotomy certification Specimen lock box mandates Cap on number of tests which may be provided to patients Medicaid “Lowest Charge” requirement Etc., etc., etc….