AB 3087: California Health Care Cost, Quality, and Equity Commission.

Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacted various health care coverage market reforms that took effect January 1, 2014. PPACA required each state, by January 1, 2014, to establish an American Health Benefit Exchange to facilitate the purchase of qualified health benefit plans by qualified individuals and qualified small employers. PPACA defines a qualified health plan as a plan that, among other requirements, provides an essential health benefits package. Existing state law creates the California Health Benefit Exchange, also known as Covered California, to facilitate the purchase of qualified health plans by qualified individuals and qualified small employers.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene), provides for the licensure and regulation of health care service plans by the Department of Managed Health Care. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

This bill would create the California Health Care Cost, Quality, and Equity Commission, an independent state agency, to control in-state health care costs and set the amounts accepted as payment by health plans, hospitals, physicians, physician groups, and other health care providers, among other things. The bill would provide that funding for the commission would be provided from the Managed Care Fund and the Insurance Fund, subject to appropriation by the Legislature. The bill would provide that the commission would have 11 paid members, including the Secretary of California Health and Human Services or his or her designee, a CalPERS representative, and 9 members with specified experience appointed to staggered 6-year terms by the Governor, Senate Committee on Rules, and Speaker of the Assembly, as specified. The bill would require the commission to convene an advisory committee to meet at least quarterly with 15 19 volunteer members, including, but not limited to, a representative of a licensed health facility and a representative of CalPERS.

This bill would provide the powers of the commission, including authorization to adopt regulations and employ necessary staff, and would require the commission to meet at least quarterly and prepare a written report annually, as specified. The bill would require the commission, beginning July 1, 2019, to annually determine the base amounts that health care entities, as defined, are required to accept as full payment for health care services, and would specify that the base amount for a health care provider shall be a percentage of Medicare rates not lower than 100% of Medicare rates. The bill would permit a health care service plan or health insurer to negotiate a contracted rate that is not based on Medicare rates. The bill would exempt noncontracting physicians and other noncontracting health professionals, as defined, from the base amounts until health care service plans and health insurers provide information on average contracted amounts to the commission and the commission sets a base amount for noncontracting physicians and other noncontracting health professionals. The bill would require the commission, on or before July 1, 2019, to establish an appeal process to consider adjustments to the base amounts to be paid to health care providers, entities, and would require the commission to consider specified factors during an appeal. The bill would require the commission to adopt regulations to establish the Purchaser Participation Program on or before July 1, 2019, to allow the commissions executive director to award reasonable fees to a person or fees, not to exceed $400,000 annually, to an organization that represents purchasers or consumers interests and made a substantial contribution to a regulation, order, or decision, as specified. The bill would require the commission to obtain the information necessary to determine total health care expenditures and to set a global growth cap for total health care expenditures, as specified.

This bill would require the commission to estimate the cost savings to the General Fund from lower health care costs paid by public employers because of this bill, and require the Department of Finance to estimate the cost to increase reimbursement rates, as specified, and estimate how much of those costs could be paid using the estimated cost savings to the General Fund. The bill would express the intent of the Legislature to transfer that cost savings, upon appropriation, to programs that recruit and retain health professionals in underserved areas, as specified.

This bill would exempt a Medi-Cal managed health care plan or individuals receiving coverage through Medicare or another federal health program from the bills provisions. The bill would prohibit a health care provider from billing or collecting an amount other than the applicable cost sharing from an individual, and would provide that an individual would not owe a health care provider an amount other than that applicable cost sharing.

This bill would require all information to be submitted electronically to the commission to facilitate public disclosure, but would provide that specified information be kept confidential.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.