1. Legislative Update 2017 Legislative Session
CCLA Annual Conference
Sacramento Public Policy Report
Arnold and Associates, Inc.
Kristi Foy
Michael Arnold

2. What We Will Cover Sacramento Environment Key Legislation for 2017
State Budget
Medi-Cal Reimbursement Issues
Outlook for 2018 Legislation

3. Sacramento Environment
2017 legislative year was the first year of the Session
Democrats have a two-thirds majority in both houses
Assembly: Dems 55; Republicans 25
Senate: Dems 27; Republicans 13
Future outlook on politics in Sacramento
Who will be our next Governor?

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. Key 2017 Legislation AB 658 (Waldron)
9/10/15 – State Auditor Report: LFS collecting more than it should from labs
Millions in lab fees that LFS has not spent
Proposal: Suspend annual State licensure fee for two years (2018 and 2019).
Bill passed the Legislature.
Bill signed into law by Governor Brown!
Savings of over $8.8 million for California labs

6. Assembly Health Committee ROLL CALL SHEET   Bill Number: 658 Hearing Date: _3/21/2017
Member
Party
AYE NO
Note
Wood, Jim (Chair) D 
Maienschein, Brian (Vice-Chair) R 
Bonta, Rob
Burke, Autumn
Gallagher, James
Limon, Monique
McCarty, Kevin
Nazarian, Adrin
Patterson, Jim
Quirk-Silva Sharon D
Ridley-Thomas, Sebastian
Rodriguez, Freddie
Santiago, Miguel
Steinorth, Marc
Thurmond, Tony
Waldron, Marie
ASSEMBLY HEALTH
Chief Consultant: Rosielyn Pulman. Principal Consultant: Lara Flynn, Kristene Mapile. Senior Consultants: Dharia McGrew, Paula Villescaz. Secretaries: Marshall Kirkland, Patty Rodgers. Room Phone: (916) 319–2097. BILLS HEARD IN FILE ORDER. Fax: (916) REPUBLICAN CAUCUS: Peter Anderson and Bill Lewis website
BILL#: AB 658
AUTHOR: Waldron
DATE: 3/21/2017

7. AB 658 (Waldron) – Chapter 345, Statutes of 2017
SECTION 1. Section of the Business and Professions Code is amended to read:
(a)  The application and renewal fees for clinical laboratory licenses specified in Section 1300 shall be adjusted annually in the manner specified in Section of the Health and Safety Code. The adjustments shall be rounded off to the nearest whole dollar amount.
(b)  The annual renewal fee for clinical laboratory licenses specified in subdivision (g) of Section 1300 shall be suspended for the years 2018 and 2019.
(c)  This section shall remain in effect only until January 1, 2020, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2020, deletes or extends that date.
SEC. 2. Section is added to the Business and Professions Code, to read: (a)  The application and renewal fees for clinical laboratory licenses specified in Section 1300 shall be adjusted annually in the manner specified in Section of the Health and Safety Code. The adjustments shall be rounded off to the nearest whole dollar amount.
(b)  This section shall become operative on January 1, 2020.

8. Key 2017 Legislation AB 359 (Ridley-Thomas)
Changes data submission requirement from every year to once every 3 years for rate data
These data are used by DHCS to calculate new fee-for-service Medi-Cal rates
Saves money for labs and the State
Consistent with federal law for data reporting
Should eliminate delays in new rate information from DHCS and the need for retroactive recoupment by Medi-Cal

9. Key 2017 Legislation AB 1316 – Childhood lead poisoning
Could be important to labs doing lead testing
Changes definition of “lead poisoning” to include concentrations of lead in arterial or cord blood.
Makes other changes to the lead poisoning prevention statutes
Signed by the Governor
Labs doing lead testing should review bill

10. Key 2017 Legislation AB 1386 – Genomic Cancer Testing Info
Signed by the Governor
Requires DHCS to include information on breast cancer susceptibility gene (BRCA) mutations in written summary given to patients diagnosed with breast cancer.
Labs doing BRCA testing should review the contents of this legislation

11. Key 2017 Legislation SB 43 (Hill) – Failed to pass. 2-year bill.
Subject: Antimicrobial-resistant infection
The author wanted to include mandatory reporting by labs for “all pathogens.”
We met with author and convinced him to delete the bad language which would have required voluminous data reporting by labs.
Bill died due to costs and concern by DHCS, hospitals and labs.
Would have required annual reporting of an “antibiogram” for the prior year…

12. Medi-Cal Reimbursement
10% provider payment reduction from 2011 (AB 97) now
being applied to virtually all providers
Provider groups lost lawsuit
DHCS now implementing reductions
We joined with other providers to repeal the AB 97 10% cut. That would help the calculation under the AB mechanism to determine lab rates. Lost this fight.
New lawsuit by CCLA/Quest: AB 1494 language DOES NOT allow AB 97 10% cut to apply to new rates determined by the AB 1494 rate development mechanism. Status: Still in court. m

13. Medi-Cal Payment Cut to labs in 2012 – AB 1494
10% cut in lab reimbursement—retroactive to July 1, (In addition to 2011 AB 97 10% cut— until the new rates are developed—Lawsuit issue)
AB 1494 also required DHCS to produce a new rate development methodology-
Methodology compares rates of other payers
New rates went into effect on July1, 2015.
Second round of new rates went into effect on July 1, 2016.
Third round: July 1, 2017!
We now have 4 retroactive recoupment periods! Crazy!

14. Medi-Cal Recoupment Issues
DHCS is currently seeking retroactive recoupment from labs for “over payments”
AB 1494: 10% cut; 7/1/2012 – 6/30/2015
July 2015 Rates: 7/2015-2/2016
July 2016 Rates: 7/2016-2/2017
July 2017 Rates: 7/2017- ????
The current situation is a mess! AB 659 should help!

15. 2017 – 2018 State budget On Time Budget -- Prop 25 is working
Governor Advised Fiscal Restraint
Billions in deficit now in the past
Surplus going forward
2013

16. Lab Issues for 2018 Reimbursement from Public Programs
Medi-Cal Frequency Limits—still an issue
Staffing requirements and standards—Working Group Created
Licensure regulations and fees
Problems in processing applications for Medi-Cal provider status from labs—now that the moratorium has been lifted
PAMA implementation for Medicare
CERT audits for Medicare – documentation of intent to order
Etc., etc., etc….