Senate Standing Committee on Health

Senate Committee on Health will come to order. Ladies and gentlemen, thank you for joining us this afternoon. As you know, we allow six minutes of testimony per side, so please divide it up and this hearing will proceed efficiently. We've had one Bill pulled from today's agenda.

AB 2376 Assemblymember Baines chemical dependency recovery hospitals, so we have 22 bills on the agenda, with nine of them being on our proposed consent calendar. The consent calendar consists of the following.

SJR 18 Senator Padilla, Tijuana River Item, number three, AB 869 Assemblymembers Wood and Garcia Hospitals Seismic Safety compliance with amendments, item number seven, AB 1859 Assemblymember Alanis Coroners, item number eight, AB 1996 Assemblymember Alanis Opioid Antagonists, item number 10, AB 2098 Assemblymember Garcia California Health Facilities Financing Authority Act, item number 16, AB 2613 Assemblymember Zbur Jacqueline Marie Zbur Rare Disease Advisory Council with amendments, Item number 17, AB 2637 Assemblymember Shivo Health Facilities Financing Authority Act, tem number 18, AB 2756 Assemblymember Boerner Pelvic Floor and Core Conditioning pilot program, and item number 21, AB 3045 Assemblymember Ta birth certificate. Let's proceed with our first item on the hearing.

Item number two, AB 236 Assemblymember Holden Healthcare Coverage Provider directories please proceed when ready, sir.

Good afternoon, Mr. Chairman, and I'd like to thank you and this Committee for your attention to care over this particular Bill and for the opportunity to present it today to you. AB 236 is my Ghost Network Prevention Bill, which will address rapid inaccuracies in health plan provider directories.

I want to begin by thanking the Chair and Committee staff for working with my office. The proposed Committee amendments help get this Bill to a better place by addressing recent concerns, and I'm more than happy to accept the amendments.

In 2015, California passed Senate Bill 137, which created some of the strongest standards for health plans in the nation. Despite this, we're still seeing health plans maintain inaccurate provider referral directories, a practice that restricts consumers' access to promised healthcare services. These inaccurate lists are often referred to as ghost networks because they do not actually exist.

In an effort to eliminate these ghost networks and address rampant directory inaccuracies, AB 236 will ensure accurate provider directories so patients can easily find care and better decide what plans meet their healthcare needs.

To streamline the process of updating provider information, and to maintain accuracy, the Bill gives Department of Health, DMHS and CDI the authority to require health plans and insurers to use central provider directory utilities. AB 236 also increases accountability by annually increasing accuracy benchmarks with effective enforcement methods.

With these benchmarks, provider directories will be required to have a 95% accuracy by July 2028. I would like to emphasize that health plans are already required to maintain accurate directories under current law, so each health plan should strive for close to 100% accuracy.

The Bill was amended to address recent concerns and to do the following: deletes requirements for providers to be removed from the directory if they have not been financially compensated by the plan. The Bill prohibits plans and insurers from using providers for reporting to departments data necessary for network adequacy, timely access to care, and other laws and regulations.

As a result, this will ensure the state has the information necessary to understand which providers are seen, patients in specific networks and where gaps in network adequacy are. Additional amendments address concerns with the use of utilities to meet benchmarks and clarifies an error in a directory should only be considered when it impacts a patient's access to care.

I would like to state that I remain committed to working with all stakeholders to ensure this Bill is in a better place, but I believe these amendments are a step in the right direction.

With me to testify and support is Sarah Soroken, a licensed marriage and family therapist, and Caitlin Van Deynze, policy advocate in Health Access California, respectfully asked for your aye vote when you have a quorum.

Thank you, sir. Thanks for joining us. I won't try the names, but let me have you identify yourselves for the record before you speak and please proceed when ready.

I'm Sarah Sorokin. I'm a licensed marriage and family therapist, and as a mental health therapist I have seen firsthand how inaccurate provider directories or, ghost networks, harm patients.

In my six years as a triage and crisis therapist at Kaiser, it was a rare day that I did not speak to at least one patient, reporting they had called through lists of mental health providers in an attempt to connect to treatment. None of the providers were either responsive or available.

All the while, the patient's mental health condition had worsened without the needed care being provided. These were patients experiencing anxiety disorders, depression and post traumatic stress, among other mental health concerns.

They were expected to call through provider lists of 25, 50 or more in an attempt to get connected to treatment, even though their symptoms made doing so extremely challenging.

When I worked at UCLA's student counseling center, we spent valuable time that could have been used to provide assessment or treatment, calling through lists of therapists in the anthem provider directory in order to create a more accurate list of available therapists to give to students to increase students likelihood of getting connected to needed care through the student health insurance program.

Frequently, patients who have the means end up paying out of pocket for psychotherapy when they cannot find an available provider covered by their insurance, and those unable to afford private pay are left without treatment, despite the fact that health insurers must provide out of network coverage when their networks are inadequate.

What we are left with is a two-tier healthcare system in which inequities are exacerbated and reinforced. Some patients experience severe negative outcomes as a result of these ghost networks.

As an example, I have evaluated a patient in an emergency department who had attempted suicide after calling through a list of 50 providers without success, losing hope and spiraling deeper into depression. This patient now has the traumas of a suicide attempt and having been harmed by our healthcare system to add to their treatment needs.

We would be negligent if we didn't do everything in our power to ensure patients get the healthcare they need pay for and are legally entitled to. AB 236 will hold health insurance companies accountable for the accuracy of their provider network lists, which will go far in improving access to essential healthcare services.

Thank you. Thanks for your testimony. Yes ma'am.

Good afternoon Mr. Chair and Senators. I'm Katie Van Dynze with Health Access California and we are proud to sponsor AB 236. Health plans and insurers are required to maintain directories of their contracted providers in order to facilitate care for their enrollees, and consumers deserve accurate provider directories.

But as you just heard, these directories are failing consumers and inaccuracies are creating barriers to consumers accessing the care that they need. As you heard from Mr. Holden, California has the strongest law in the nation on provider directories.

Yet recent studies have found that one of these directories was 80% inaccurate and most had inaccurate information for a quarter or a third of their providers. These inaccuracies are the worst for behavioral health providers, for services that are already so hard to reach. AB 236 takes important steps to improve provider directory accuracy.

First, it gives the Department of Managed Healthcare and CDI the authority to require plans and providers to use essential utility or essential utilities.

And with central utilities, we can address the concerns we've been hearing from providers around how time-consuming it is for providers to update information with their health plans for the provider directories because they're hearing so many from so many different health plans that they're contracted with via phone calls, mail, email.

Second, this Bill sets clear and enforceable standards for accuracy annually, increasing benchmarks starting at 60% and increasing over the next five years. You may hear that DMHC and CDI have existing authority to require these steps. However, in reality they lack the statutory authority to do so.

To take these concrete steps towards accountability, you may also hear that there are pending regulations and we should wait for those regulations. This is misleading. DMHC has issued detailed guidance annually since the existing law was passed in 2016, but the draft regulations are largely codifying existing guidance and do not take the concrete steps proposed in AB 236.

You may also hear that health plans cannot maintain accurate directories without providers updating their information, and this is a shared responsibility. It is a health plans provider directory, and health plans are not using the existing tools they have under existing law to incentivize providers to update their information and improve accuracy.

When consumers go to call providers listed in their directories, the phone number is wrong, the provider is not taking new patients, the provider says they do not have a contract with the health plan or they're not a primary care doctor, contrary to what's in their health plan provider directory, and on and on the inaccuracies go we have met and met with the opposition and taken many amendments, but they have never offered concrete suggestions on how to improve the accuracy of the directories, just excuses about why these directories are so inaccurate.

But the existing law and provider directories has been on the books for nearly a decade. We can and we must do better for California consumers so that they can access the care that they need. Thank you and we respectfully ask for your aye vote on AB 236.

Thank you for your testimony today. Are there any other witnesses in support of this measure please step forward. Name, affiliation and position on the measure only, please.

Kat Bess with the California Alliance of Child and Family Services in support.

Thank you, ma'am.

Autumn Ogden Smith with the American Cancer Society Cancer Action Network in support.

Mel Assagai with the California Association of Orthodontists in support.

Thank you, sir.

Sandra Poole, on behalf of Western Center on Law and Poverty in support.

Thank you.

Adam Zarrin, Leukemia and Lymphoma Society, in support. Thank you.

Nora Lynn with Children Now in support.

Good afternoon. Beth Malinowski with SCIU California in support.

Good afternoon. Donna Woods on behalf of the California Coalition of the National Council of Negro Women, thank you.

Julie Nelson with the National Union of Healthcare Workers in Support.

Lauren Finke with the Kennedy Forum in support.

Grace Harrison with the Steinberg Institute in support.

Thank you. Any other witnesses in support? Seeing none, let's turn to witnesses in opposition. First lead opposition witnesses, if any. Please, lead opposition witnesses, feel free to take the table if you'd prefer.

Identify yourselves for the record and proceed when ready.

Good afternoon, Mister chair. Members of the Committee, Jed Hampton with the California Association of Health Plans here regrettably in opposition to AB 236. First and foremost, we would really genuinely like to thank the author and his staff and the sponsors.

We have had quite a few conversations, substantive conversations, over the last year and a half regarding the bill. We really appreciate the author's willingness to engage with us to address some of our concerns, and we do feel like we have made some progress on the bill.

So, you know, again, we are very appreciative of that, of the author's willingness to meet with us, and we certainly appreciate the intent of the bill and share the author's concerns around accurate provider directories and maintaining those provider directories.

We uniquely understand the frustration that can arise from inaccurate information being listed in the provider directories and again, have spent a substantial amount of time, not only through this bill, but through other avenues to ensure that we can fix the problems that currently exist. So we certainly acknowledge the problem that lies before us.

However, regrettably, we do not feel that AB 236 adequately addresses the root cause of the issue.

The accuracy of each individual provider directory is reliant upon practitioners and medical groups maintaining accurate records, providing that information to the plans and insurers in a timely manner, informing plans and insurers in real time of any relevant changes when they are made.

You know, I think, contrary to, you know, where we have, I guess, a disagreement with the sponsors is that we do believe that this is a shared responsibility.

We cannot update our information if we are one not receiving that information or receiving it timely, or if there is a broken line of communication between the plans and our contracted networks. So again, this is, from our perspective, a shared responsibility, and we would fundamentally disagree with the sponsors characterization of that.

I will say we certainly believe in the concept and the promise of, of a central utility that's listed in the bill. We think that there is some opportunity there. But again, we do need full stakeholder buy in amongst all plans and all providers to leverage that utility. So we're getting meaningful information out of that utility.

We've also proposed considerations around a safe harbor whereby if the plans use the central utility, that the plans would be protected from liability if the information that they're pulling from this central utility is inaccurate, that we would have some protections there.

And quite frankly, we offered a few suggestions earlier on in the process as well, again, much of which were, I think, not willing to be considered by the sponsors at the time. So again, we acknowledge the issue. We appreciate the author and the sponsors for working with us and getting this to a better place.

But as the Bill is drafted now, we don't believe that it's going to appropriately resolve the issue. So for the meantime, we are opposed to AB 236, but we do continue to hope to work with the author and the sponsors moving forward to address some of our concerns. Thank you.

Thank you, Mister chair. Members of the Committee, Brandon Marchy with the California Medical Association, regrettably here in opposition as well, want to thank the author for his constant work on this and meeting with us throughout the year.

Unfortunately, the amendments that are in print now and that this Committee is proposing make the bill worse for us in many respects. It is true that they have removed the financial compensation piece and the removal of a provider for not being financially compensated. We do appreciate that.

However, that language is still scattered throughout the bill in an attempt to get at network activity or whether a provider is active within a network. We don't believe that that is, that activity is proven through a contract in a contractual relationship that can be called up at any time.

We think that the best way to approach activity and these ghost networks or inflated networks is through increased enforcement and beefed up enforcement of network adequacy standards and timely access to care so that we know that health plans have an accurate network for patients to use a little thing on a provider directory that says active does nothing mean anything to an enrollee.

It does not show, it does not give them any information outside of was the physician paid, that doesn't provide the enrollee with any additional information that they would need.

The out of network rate provisions that are in the bill and the payment rate provisions absolve my health plan colleagues of their requirement to maintain accurate directories as it removes the that is the either incentive or disincentive, however you want to view it, of them maintaining accurate information on their directories by paying not what an out of network rate would be, but whatever they choose to pay at any given time.

We've seen situations similar to this in previous bills throughout the years, and that is the activity that we believe will happen. DMHC doesn't need any additional authority to improve provider directories. They have that ability through administrative penalties, enhanced APLs, again enforcing current laws around network adequacy and timely access standards.

And for those reasons, well, and what I will also say is that this is a very, this is very technical and sensitive subject. There is a lot at stake as it relates to whether or not a person is in network out of network. And this bill goes too far in regulating that space without that sensitivity.

So for those reasons, we would request your no vote today.

Thank you. Other witnesses in opposition. Name, affiliation, position on the measure only. Thank you.

Chair and Members. John Winger on behalf of America's Health Insurance Plans, we would align our comments with CAP.

Thank you. Next.

Mister Chairman and Members, John Valencia, representing VSP Vision. We remain opposed unless amended. Thank you

Thank you.

Ryan Spencer on behalf of the American College of OBGYNs District 9 and the California Podiatric Medical Association, opposition.

Thank you. Next, please.

Chloe Shin on behalf of the Association of California Life and Health Insurance Companies, in opposition.

Mister Chairman Matt Back, representing the Osteopathic Physicians And Surgeons of California, in opposition.

Chair Members Kathy Mossburg with the Local Health Plans of California regretfully remain in opposition.

Thank you.

Lisa Anne Hurt-Forsythe with the American Association of Payers Administrators and Networks, as well as the National Association of Vision Care Plans. Opposed as written, but looking forward to working with the author's office over the summer to kind of tweak the language a bit. Thank you.

Hi, good afternoon, Christy Weiss on behalf of the California Association of Dental Plans in Opposition.

Thank you. Any other opponents? You know, a couple weeks ago I had a staff Member come up to me. I guess they knew we were going to do this bill.

And the staff member told me a story and the staff member had a loved one and the staff member was attempting to helped the loved one find a provider and got ahold of the plan's directory in a particular area that they needed a provider for and went through two or three pages of providers and wasn't able to secure one that was available to provide any service called the plan.

Got the plan on the phone. I don't know what plan, who they spoke with, but they got somebody who professed to know what they were doing. Plan went through the list and couldn't find anybody to provide the health care that was needed. And I think it was pretty serious health care or this person wouldn't have been involved.

Next thing that happened is there were, the plan did ultimately provide three names of providers that weren't on the list. And to the plan's credit, the person was able to find a provider to provide this level of care.

I was reminded of this as I listened to the two of you spat back and forth on this particular issue, and I realized you each have issues and you have constituencies that you represent, but none of that does anything to help a healthcare consumer in the State of California. Find a provider when they need one.

So I guess what I would ask you to do is figure out a way, if you put your heads together, figure out a way, what is it you do? You all need to do, your constituents need to do in order to timely create and maintain healthcare provider data so that people who need one can find one.

Now that can't possibly be that hard. We can have issues with healthcare, with network adequacy rules. We can have issues with, if you're a provider, how many contracts you have with plans and how many different ways you have to respond to the data calls and the data elements and all of that.

But there's got to be a way to resolve that. There's got to be a unif, maybe get everybody to agree on a uniform way to collect data and report data. So we make it a little easier on providers to do it.

Because I understand providers are underpaid, at least in terms of reimbursement rates in many cases, and overworked in some cases. And we'd all rather have them spend time providing care as opposed to submitting reports and responses to data calls from health plans. So that's my ask of you.

And we don't negotiate amendments from the dais and this Committee. But, you know, this isn't the end of the rodeo here this year, and certainly I'll be gone, but it may be not the end of the rodeo next year.

I would think we could figure this thing out because the conversation, if you weren't a party to it and you weren't one of us sitting here, you would think it sounded pretty ridiculous. That's not a, I'm not denigrating your positions.

I'm just saying to the outside observer, they would not understand this around the kitchen table or the kitchen counter. They wouldn't understand any of this. So that's my speech on the issue. I'm counting on you to fix it, and we'll be here to help.

But let me turn it over to my colleagues on the dais and see if anybody has any questions. Colleagues, questions, comment, comments.

Thank you. I agree with the Chairman. We need to do something. You've heard me for so many years as well up here is that, you know, one, we don't have enough providers out there. We all know that. We don't have, you know, access to doctors, to professionals. I've mentioned it.

I would take my kids to the urgent care instead, because I can't get into a doctor's office, I take myself to the urgent care. I can't get to a doctor's office and, you know, the provider's list is so important to the patient needing that. But I don't know if this is the right solution.

Penalizing one, the health plan, but they don't have access to the information. It needs to be. Everybody needs to come together and we got to figure out, I mean, there's need to be a portal that you all just have your admin staff sign in monthly or quarterly.

I don't know what it is, but I also know that providers jump in and out of networks frequently. So it's not just, you know, quarterly, it's not annually. It happens quite a bit because I've seen it with my doctors. They move in and out really quick and you're like, zero, you're not there anymore.

Okay, never mind, I'm going to another doctor. So I think there needs to be a solution. I don't know if this is the right one. Just penalizing folks that really doesn't have the full control over it.

But also intervening between the provider and their health plans and having symbols and showing that they are with the health plan doesn't necessarily mean that they are available either. I don't think that helps with the providers.

I think there needs to be a solution eventually, but I think this is something that we've talked about quite a bit already up here. I think it's time we got to find a solution. I appreciate the Assemblyman continuously making sure this is the forefront and that's always in the conversation and that we strive to get there.

But I think it's going to have to be as everybody's got to come together and come a solution. Technology is right in front of us. I mean, we can have everything on the phone. I can't believe that we can't get the yellow pages on our phone with the providers. We can have everything else.

So I think there's an opportunity and I hope that, you know, you continue to work with the author because at the end of the day, you yourself also want the information accurate for your family as well.

Thank you, Senator. Senator Menjivar.

Assemblymember or maybe the sponsors. Can you give it to me as if we were at a kitchen dinner table? The process, I think we all agree something has to happen. I think all of us have a personal story we can share because we are encountering the same thing.

If you can walk me through, because I just want to make sure, utilizing some of the steps that the opposition has mentioned regarding.

Do you see it differently in the steps that if someone goes out of the network and sees somebody, that provider will not get reimbursed at the rate that they should be, potentially decreasing the rates all around them. And how you see the enforcement part in layman's trim as much as possible from a to b, a to z.

I guess you do it, and I'll give my spin off.

Reimbursement on the enforcement piece. The way that this would work is that we have annual benchmarks. And so that's a requirement starting in July of 2025 that the health plan provider directories would have to be 60% accurate, and that'd be annually increasing up to that 95% mark in 2028.

And there's specifications in the bill around how the Department would determine that administrative penalty if there was a failure to meet those benchmarks. We feel that like the 60% place is a place to start, but we can hold folks accountable to a way.

To improve and penalty to the health plans? Yes. Okay.

Yes, it's a penalty to the health plans if they fail to meet those benchmarks. And with the Committee amendments, the inaccuracies that would be counted as not in that percentage of accuracy, they would have to have an impact on patient care.

And so if we're talking, and that would be determined by the Department, which kind of inaccuracies would have an impact on patient care? Because we know that some errors, like a typo for one of them, like that, could not impact patient care. Like maybe a difference in someone's name or something.

But if there's a typo in the address and the person can't find the place to go, or their phone number is wrong and they're calling and they can't reach the Doctor, like that's a typo that matters for someone's access to care.

So that's something that we appreciate the Committee working on and is in the Committee amendments and as well, for purposes of enforcement, there is language in the Committee amendments around if the health plans are using the central essential utility that we're talking about, the database, that would be that there are these existing systems where a provider could update their information for their contracted health plans, that that would be considered by the Department when they're deciding how much in the levying, the fines, and also like their process and the work that they've done so they can document.

This is the work we've done to improve accuracy.

Is this a potential accurate possibility? If the health plans get this fine, the client patient goes out of network, then the health plan has the ability to reimburse that provider, at any rate they choose, and because they got a fine, they're going to say, hey, why need to offset that fine?

I'm going to reimburse the provider at a lower rate to make myself whole.

There's specific language in the bill that says that the fines cannot be passed on to the providers or the enrollee.

Mister chair, can I hear from the officer?

The language that is currently in the bill says that the provider cannot pay the fine that is assessed on the health plan.

And then the language that is being offered today by the Committee says that the contracts between the health plan and the provider can contain fines, fees, disciplinary action, or what have you in order to get that information from the, from the provider. So that that's at least, that's what I understand the, the language to be doing today.

If I could, too, I, you know, we have to put this in the context of the first Bill that was put forward to establish these directories was over 10 years ago.

So what have we been waiting for? You know, it's to the Chairman's point and the Vice Chair's point. You know, while we're waiting, people are getting referred to go out and get additional health support.

So they turn to this directory that in their mind we're talking about across the kitchen table, that they shouldn't have to spend all day going through it before they get someone to respond. If they go through a whole day and get someone to respond, why is it that bad?

Now the 60% is basically looking at this from the standpoint that we're recognizing that most of these providers, most of these plans are already at that level. For the most part, there are some that are Low and there are some that are higher.

And so if I were them and this bill were to continue to move before we get to 2025, which then they still have that period of time to get up to that 60%, that this is the time that they should have already been at 80, but they still have enough time to be able to then add it.

Say you're at 30 now. So before 2025, that means you have to get up to another 30 increase. Well, we have in the build, if they're not able to organize and figure this out amongst themselves, we have a central utility option.

They can use it or they don't have to use it, but at least it's tested to be able to show that it can do the accuracy at the level that makes a lot of sense, and you start to see progress. And so we didn't put penalties on top of them.

As soon as this bill is passed and goes into law, they still have opportunity to get to just that basic baseline, really. It should be 100, and even the top number is 95%. So we're not even grinding them to 100, because we recognize that there may be some ebb and flows and dynamics.

We've sat down, as it said, for over a year, and then we've also, in recent, just in the last week or so, have taken a litany of amendments, and we're not stopping there. If there's some fine tuning or tweaking on words that we need to evaluate, we're happy to do that.

But the whole idea is family members are sitting and trying to collectively figure out for their loved one what's next. How do we help them get to a physician to help them address their unique issues? And you can't find one. And as was pointed out, they're not following these legislative debates.

They're not following what's going on here or in Washington or wherever. They are just trying to understand how to meet a crisis moment with a directory that on the first call should give them the answers that they need. They should be going down five and have five choices. That's not where it's at.

And from the time that the Department of Managed Healthcare had the opportunity to evaluate and to enforce, there were only five enforcement efforts that produce very small fines. So there's no incentive, there's no pressure. So here we are, 10 years later, and we're trying to figure it out to create urgency without being unfair.

And I think that that's what this bill is attempting to do. And we continue to be open, to have conversations to find out what additional language can or should be taken to cause the plans to feel a little bit more comfortable. But we've come a long way. And so that's my two cent.

Thank you, sir. Any other questions? Colleagues.

I have a question to the health plans. Ideally, how would this work? Because you ultimately hold that information, right? I mean, you're the one who provides that information. So I'm gonna. I'm gonna assume providers give you the information. You put together the package, and it's disbursed annually, right. What does it need to be done quarterly? What can.

I mean, ideally, what would make it so they would work?

Yeah. Thank you, madam. I share so a couple of different parts to that answer. I will start by saying yes. As the health plans, we are the holder of the directory. That is correct.

Now, we, throughout the year, periodically send out survey data collection to our contracted providers to receive that information back so we can update our directories accordingly. Again, I think my Member health plans have told me, you know, the challenge oftentimes is getting data back from the providers.

So it's one of those situations, right, where we may ultimately hold the directory if we're not getting, you know, accurate or timely information back from our contracted providers, it's very difficult to update the provider directory accurately. So, I mean, that that has proven to be a challenge.

Again, to the author's point, I think, you know, we do see promise in that central utility, you know, as a clearinghouse whereby, you know, plans and providers can pull and update information, you know, so we're all kind of feeding into the same mechanism, right, and being able to get that information accurately.

So I think, you know, we, I think that that is a positive step from our perspective, so that we're not inundating providers with, you know, a variety of notices, emails, phone calls, etcetera, you know, and trying to get that information. Because, again, there are a lot of factors that go into that.

I mean, it's whether the number changes that's got to be updated in the directory. If a name changes, updated in the directory, address changes updated in the directory, are they taking new patients? All of those factors, you need to get all that information, you know, every 90 days and update the provider directors accordingly.

So again, I think from our perspective, it is a challenge to get some of that information consistently and timely or when a change is made.

And to my provider colleague's point, I mean, I think I understand that can be challenging if you're getting notices from 51012 plans that you're contracted with every time you change your telephone number or change your name.

So I certainly think there's a pathway there potentially with a central utility whereby plans can draw from it, providers can enter into it, and we're all kind of operating from the same system, I would say, and again, I think in the conversations with the author's office and the sponsors, we've been fairly supportive of that concept, but we do need all stakeholder buy in for that to work.

And we do need, as the health plans safe harbor protections, whereby if we pull information from that central directory and that information was entered incorrectly, that we are held liable because the bill essentially finds the plans, we are the ones that are being fined in this current iteration of the bill for not meeting the benchmarks.

So if we're in good faith updating our provider directories, getting that information, and that information is wrong, we believe that we need a safe harbor protection in there to ensure that we are acting in good faith in using the central utility to update our provider directories accordingly.

And to the provider, I mean, how, I mean, what's the ideal way for you to provide the information? I mean, it really ultimately comes to you because you have the information and you're the one who we want to get access to.

Yeah. So I would agree with a lot of the points from both, I mean, from both the supporters and my colleague. It is bringing technology into the system. Right. A lot of times we get these requests for information via snail mail to a small practice does have upwards of 11 to 12 contracts with different health plans. Right.

So we're receiving those constantly. Right. Now, what we believe is that the credentialing process and the exchange of information and where that bulk exchange of information is happening is a great way to get that information in the door. A lot of my providers are using. It's not quite a central utility.

I think of it sort of as a data clearinghouse in which they upload their information into this system. They have to go in and attest to its accuracy every quarter.

Why we can't start pulling and encouraging and collaborating on that and opening up those lines of communication is extremely, that's the way that we think that we should go about doing this. Right. But that is the way in which we think that this should work. Now to the chair story.

My former President hasn't, has since retired from practice. He closed his practice. He has asked to be removed from his provider directory since he left for three years. And he is still on it. He has asked three times and he is still on his provider directory. So there's a problem here.

We do not deny that, but there is an easier way to facilitate that exchange of information and encourage it. That's how we would see it.

Well, my take on this is there's a lot of stuff to go around here. Plans have to maintain adequate networks, so they don't want to fire your providers who don't provide the information because then they just jeopardize their status as a plan because the network's inadequate.

And your providers, of course, have to provide a bunch of information through a variety of different portals and a variety of formats. My understanding is the data points aren't the same from plan to plan to plan. And so that creates a burden. So there's really a lot of blame to go around.

And then instead of figuring this thing out, I mean, the problem comes here for us to solve, and that's what's getting to me a little bit, and it seems to me that you all, as representatives of large organizations with a variety of Members, could come together at a table and figure this out, and you wouldn't need the people to your right because you could do it yourselves.

Make it easy on providers, get the information to the plans that the plans need to provide to consumers who depend on network, not only network adequacy, but the accuracy of the information regarding the networks.

I don't quite see how you could ever have timely information on whether you're accepting new patients, because I would imagine that changes or could change from day to day, from week to week, certainly from month to month.

So that information, that data point may or may not be worthless, depending on who you're talking to and what you're looking at. So, I mean, that's my point.

I think you all ought to be getting together and we shouldn't have to do it here, because if we had more time for this hearing, longer than we've taken on this particular point, we could sit here and we could work it out for you at the table, and our solution might not be the optimum one for you all.

So that's sort of my request. Did you want to say something, sir?

No. What I will say is that here you are seeing that play out. Yes, absolutely.

But since the bill in 2015 has, has been implemented and these provider directories have been a thing, we have partnered with our health plans individually and with the associations in order to provide webinars, in order to provide, we've even done it as part of a CME program.

We have been doing these types of things and encouraging both providers and the health plans to work collectively. This is what you're seeing ahead is my point.

Right. And what I'm seeing is, I mean, I don't know the central utility, but you could arrive on a portal, you could arrive on agreed upon data points as a bunch of plans, limiting those data points as much as possible, and then they could turn to their contracted providers and say, here's the deal, here's what we want, and we want it every 90 days or whatever the rule is.

Now, by the way, the brains of the operation, my Committee staff provided me with the some language on one of the amendments, and I'm sure you all saw it, which essentially says, the Department and Director shall take into consideration policies and procedures that have been established to obtain accurate provider information and the insurer's use of a central utility in assessing penalties pursuant to the section.

So you use a central utility central utility. And you have policies that are designed limited data points, information to providers. You're probably not going to be penalized. So why don't you all get to work on it after this hearing. And I won't be here after December 1.

But I can assure you I will tune in to see the next time this issue comes up if you fix the problem. Anything else, colleagues, otherwise.

Mister Chairman, I don't recommend that. You tune in.

Assemblymember. I don't see any other hands up, so maybe you should close.

To be honest with you, I don't think I could architect a better clothes than the one that you've laid out. I was talking to my staff before this hearing began. I said there should not be a need for a bill like this.

There has been enough time, enough understanding of how it's flawed to have been able to put something together by now that works.

From the time that the Bill came out till now, we've had a rover launched across the galaxy landing on Mars, sending back pictures telling us about what's on the Mars planet and we can't figure out a directory. It's hard to imagine that, but maybe. The rover can do it for us. Touche.

The bottom line to this Bill is access to care. And when you have so many people who are caught in this web, it's not their fault. And I'm not going to say it's fully the fault of those who are trying to figure it out on their and their way of doing that.

But in the gap of all that is a Bill here that I think can set some parameters, establish effective urgency, and with the mechanism out there to be utilized, start to see some progress. And so with that, I respectfully ask for your aye vote when you get a quorum.

As soon as we establish a quorum, we'll take a motion and we'll do just that. For those of you at the table, thank you for coming, thanks for putting up with me and we appreciate your testimony. Well, let's now turn to something easy. Item number four. AB 3129. Assemblymember Wood health care system consolidation proceed when ready, sir.

Maybe my colleagues will come down for this.

Or hopefully somebody's listening somewhere.

Hope so.

Appreciate your optimism on this too, as well. Appreciate that. Thank you Mister Chair and Members. And good afternoon. I'd like to thank the Chair for his thoughtful engagement on this important Bill and for the Committee staff's significant effort. I will be accepting the Committee amendments today. Also, while she's not here, I want to thank Senator Hurtado, proud to add her as a principal co author to the Bill. What is before you today is a product of many hours of discussion with committees and stakeholders.

AB 3129 is a Bill to protect our communities, our patients and all healthcare consumers from potentially negative impacts of private equity transactions in healthcare. The goal of this Bill is to protect the public by ensuring compatible access healthcare markets. Private equity investment in healthcare has increased significantly over the past two decades.

Private equity investment in healthcare in 2021 totaled $83 billion and $20 billion of that was in California. Compared that to 12 billion and 1 billion, respectively, in 2005. There is significant evidence that private equity investment across all outcome measures has most often increased costs to patients or payers and had mixed to harmful impacts on quality.

Private equity's timelines are short, often three to seven years. The transactions often use 60% to 80% debt to finance these, which then shifts the burden, shifts as a burden to the entity, followed by the investor's process of restructuring in order to make it more attractive for future buyers. That restructuring can include things like negatively impact patients and healthcare workers, including reducing staff, replacing staff with lower cost staff, selling assets and limiting services provided, such as maternity, labor and delivery, and reproductive healthcare.

In May of this year, Steward Healthcare, a struggling healthcare provider that relied on private equity to acquire its hospitals in Texas, Florida and Massachusetts, I believe there are 22 hospitals in all, most of them in small hospitals and rural communities, filed for Chapter 11 bankruptcy. They were in tremendous debt, about $1.2 billion. Steward Healthcare was founded in 2010 when the private equity firm Cerberus Capital Management bought out the failing Caritas Christi Healthcare system in Massachusetts. Cerberus, excuse me, owned the healthcare system from about 2010 to about 2020.

In its 10 year ownership, they made about $800 million off its investment in Steward while the hospital system fell further into debt. Those hospitals are now at risk for closure, and even more than they were before the acquisition. This is just one troubling example. Is making something more efficient bad? No. But when private equity purchases several practices or hospitals in a region, especially in more rural areas, it can create a monopoly that uses leverage to negotiate higher fees with health plans. In turn, increases health care premiums to employers and employees and to the cost of healthcare.

It's important to understand that this Bill does not prevent these transactions, but it allows the Attorney General to review them for what has become well documented disadvantages of private equity in healthcare. You know me, I hope. I'm a healthcare provider who has fought for increased access to quality and affordable health care for all Californians.

And I've dug into these issues deeply with much thought and commitment. I've taken on tough issues and I'm willing to fight for what I believe is in the patient's best interest. I'm data driven, and the data shows that oversight is needed. Why? Because there currently is none. This Bill establishes that oversight, and I've worked closely with Attorney General Bonta, the Chair, and many stakeholders, including those opposed, to make this a good Bill.

Many hands in the pot can be frustrating at times, but in the past 10 years, I've seen it result in good legislation that otherwise may not have thought about, may not have thought about at all. You have before you what I hope you will consider a thoughtful Bill. We're working through a complex issue and remain committed to continue working through it. Today, I have with me to testify Deputy Attorney General Tiffany Brokaw from the Attorney General's Office, joined by Emilio Varanini, who will be available to answer technical questions. And Katie Van Deynze, Policy and Legislative Advocate for Health Access California is our second witness.

Thank you, Assemblymember. Please proceed. Identify yourselves first for the record. Who wants to go first? Welcome.

I'll go first. Thank you. Good afternoon. Chair and Members Tiffany Brokaw, Deputy Attorney General and Legislative Advocate at the California Department of Justice. I'm here today on behalf of Attorney General Rob Bonta, who is a proud sponsor of AB 3129. And I'd first just like to thank you, the Chair and your staff for working with us on these amendments. We really appreciate the conversations that we've had to get us to where we are now.

As Doctor Wood has, you know, stated in his and opening remarks, AB 3129 authorizes the Attorney General to review health care transactions involving private equity and hedge fund groups, and it also reinforces the existing bar on the corporate practice of medicine as it applies to the interference of private equity groups or hedge funds in the medical care of patients. The Bill focuses on private equity because the private equity business model, which is designed to buy an asset, maximize profits, and then sell that asset, has, concerning effects when applied to our healthcare system.

And these transactions have been happening, have doubled in the past decade. So in the healthcare context, what this looks like is that a private equity group will come in and they will make cuts to staff, they will cut services, all to maximize profits. And then when that facility or provider group is sold, they are oftentimes susceptible to bankruptcy, further consolidation or shutting down, which jeopardizes the community's access to care.

AB 3129 would set up oversight over these transactions where the Attorney General would have authority to approve, deny, or approve with conditions these transactions, based on whether they would be in the public interest. The conditions that the AG would place on a transaction are designed to keep services open and affordable. So, for example, a condition that the AG uses in his current role reviewing nonprofit hospital transactions and that would be used in this context of private equity transactions, would be that services would need to be maintained.

So yes, this transaction can happen, but the hospital would need to continue serving Medi-Cal patients and would need to keep their labor and delivery unit open, a condition that also could come in the form of price increase caps. So, yes, the transaction can happen, but prices for services can't skyrocket and become unaffordable. This review process is not an automatic denial. The oversight is to help ensure that Californians have access to affordable health care and that services remain available to those who need it. And for these reasons, we respectfully ask for your aye vote.

Thank you. Next, please.

Good afternoon again, Mister chair and Senators. I'm Katie Van Deynze with Health Access California, the statewide Healthcare Consumer Advocacy Coalition, and we are proud to support AB 3129 by Assemblymember Wood. For more than 30 years, Attorneys General, both parties have had the authority to approve, deny, or approve with conditions mergers related to nonprofit hospitals.

And in these last 30 years, between 80 and 90% of these proposed mergers have been approved, mostly with conditions to protect consumers. In what conditions have AGs asked for? To keep emergency rooms open. To keep labor and delivery open, to keep cardiac care and more services open. To not hike up prices on consumers. To not drop Medi-Cal managed care contracts, to not close hospitals, exactly the sort of conditions needed to protect access to affordable care in the affected community. This process is not new.

What is new is that private equity is taking over hospitals, skilled nursing facilities, and doctors groups, and research is showing that this can lead to price increases, dangerous impacts on quality and risks for access to care and loss of services. AB 3129 would subject private equity transactions in healthcare to the same sort of scrutiny and oversight that nonprofit hospitals have been subject to for decades. While the Office of Health Care Affordability, or OHCA, will be reviewing acquisitions. They do not have the authority to deny or condition these acquisitions to protect consumers.

And while an AG could engage in antitrust litigation after an OCA review, this litigation takes time. The landmark Sutter settlement took more than 14 years, far longer than the 60 days the AG would have after an OHCA review. We need the AG to have the authority to act before an acquisition happens to prevent harmful impacts on communities and protect affordable access to care. When there is a merger or acquisition in healthcare.

We hear lots of promises about the wonderful things that will happen for the community, innovation, efficiency, and more. And we want those things to happen for the community and for healthcare. But we want the Attorney General to have the authority to hold private equity accountable to these promises and prevent the negative impacts that we're worried about for communities. I respectfully ask your aye vote on AB 3129. Thank you.

Thank you. Any other witnesses in support of this measure? Name, affiliation, and I position on the measure only, please.

Dylan Elliott, on behalf of the California State Association of Psychiatrists, in support.

Thank you.

Adam Zarrin, Leukemia and Lymphoma Society, in support. Thank you.

Thank you.

Tim Madden, representing the California Chapter of the American College of Emergency Physicians, in support.

Thank you.

Martin Radosevich, on behalf of Reproductive Freedom for All California, in support.

Thank you.

Brandon Marchy with the California Medical Association. Want to thank the author and the sponsor for working with us on the amendments. We are in support.

Thank you. Next, please.

Jessica Moran of the California Dental Association, also in support with the amendments. Thank you.

Thank you.

Beth Malinowski with SEIU California, in support.

Thanks.

Hi. Tiyesha Watts with the California Academy of Family Physicians, in support with the amendments. Thank you.

Thank you.

Katrina Dunn, California Black Health Network, also co-owner of a private practice in rural California, in support.

Thank you.

Benjamin Eichert with the National Union of Healthcare Workers, in support.

Good afternoon, Mr. Chair and Committee Members. Bryant Miramontes with the American Federation of State, County and Municipal Employees, in support.

Thank you. Next, please.

Good afternoon, Chair and Members. Mari Lopez with the California Nurses Association, in support.

Thank you. Yes, sir.

Good afternoon. Charlie Donlin with Stone Advocacy, on behalf of the California Orthopedic Association. We no longer oppose. Thank you.

Thank you. Any other witnesses in support? Now let's hear from witnesses in opposition if there are any. First lead witnesses. If you have lead witnesses, please take seats at the table if you prefer. We will call on other witnesses later. Welcome. Please identify yourselves to the record and proceed when ready. I'll let you flip a coin.

Mr. Chair and Members, Meghan Loper, representing the California Hospital Association, and as a non-lawyer, I am pleased to be joined by Lois Richardson of Council and Vice President at CHA should there be technical questions. While we appreciate the efforts of the Chair, CHA remains opposed to 3129.

Patients need access to effective and reliable health care, and these services do depend on constant innovation and investment. The state should continue to encourage investment in California's fragile health care delivery system rather than destabilize it. In recent years, California hospitals have partnered with private entities to bring new and expanded services online.

As a result, for example, inpatient rehabilitation hospitals have been built in communities including Sacramento, Irvine, Escondido, and Century City. This bill would create barriers to successful new investments such as these, when exactly the opposite is needed.

Unfortunately, the Department of Justice's existing authority over nonprofit hospital transactions has served as a barrier for investment that has significantly delayed or curtailed critical acquisitions, putting services in jeopardy. Access to all financial tools is critical, particularly in vulnerable communities where investments are needed to support underresourced providers so that they can better serve their patients.

As an example of the concerns that remain, the process to allow distressed entities to request a waiver from the full review is flawed and use criteria that go beyond objective measures used by lenders to address financial distress. To be eligible for a waiver, an entity must prove that it's been unable to pay its bills for three years or more and that it is at substantial risk of liquidation under chapter seven bankruptcy and that it is facing chapter 11 bankruptcy, among other criteria.

Through Covid, we've seen just how quickly hospital finances can change, and we question whether this multilayer waiver test would apply only when it's too late to help save the financially struggling entity and preserve access for patients. Additionally, the standards for review remain unclear, and the June 19th amendments do not resolve questions related to the application of the public interest standard. Without clear standards, we worry that entities will struggle to determine whether or not DOJ approval is likely to be required or granted.

Partnering health care entities that may believe that they are expanding and preserving patient access may continue to fail to receive approval as the bill continues to allow the Attorney General to consider, quote, 'any other factors that the Attorney General determines to be of public benefit,' while 3129 puts at risk innovation and additional investment in patient care. For these reasons, we respectfully request your no vote.

Thank you. Next, please.

Mr. Chair and Members of the Committee, Marc Aprea. I'm here on behalf of the American Investment Council. We want to thank the Chair and the committee for your work on this measure, and we want to thank the author as well as the sponsors for meeting with us to review our objections to the measure earlier this week.

I think it is fair to say that health care in California is underfunded, and reducing capital, as we believe this measure will do, reduces access and quality, contrary to the objectives of the bill. Given the recent passage of Senate Bill 184 in 2022 to create the Office of Healthcare Affordability, Assembly Bill 3192 establishes an unnecessary parallel regulatory notification process.

The American Investment Council has supported and continues to support the State of California's efforts to enhance an oversight over anticompetitive transactions and bad actors in the health care industry that pose a demonstrable threat to health care access, prices, and competition. For example, AIC supported the development of the regulations to implement Senate Bill 184, which, among other things, established the Office of Health Care Affordability to support health care affordability through the collection, analysis, and publicly reporting of data of total health care expenditures and transactions.

Under AB 3129, private equity groups and hedge funds would be required to submit health care transaction notifications to the AG rather than to OHCA. This is unnecessary as OHCA is empowered to refer transactions that they find problematic to the AG for review.

In particular, SB 184 provides a clear statement of the Legislature's intent in establishing OHCA as follows: it is the intent of the Legislature to establish a single entity within state government charged with referring transactions that may reduce market competition or increase cost to the Attorney General for further review.

However, AB 3129 materially undercuts OHCA's mandate by creating an unnecessary parallel process by requiring certain health care entities to file notice with the AG rather than OHCA, and AB 3129 effectively prevents OHCA from collecting and reporting data information because it will no longer receive that data to the Legislature and the public regarding health care expenditures and cost trends.

If we look at the definition of private equity, it is so broad that the members of the Legislature who sit on the dais who would pool their money would be considered a private equity group. Furthermore, it exempts an individual, so a single individual could buy a hospital and would not be required to go through the process. The definition of transactions subject to review also covers minor events such as changes to the board. We think this adds an unnecessary administrative process, and we would suggest that it does nothing to satisfy the intent of the of the measure.

And finally, to reiterate and to support the testimony of the California Hospital Association, we believe that this measure creates an overbroad consent requirement and poses due process issues that, in our view, is is a blunt instrument and not a surgical instrument designed to address the problems. For these reasons, we respectfully must continue to oppose the measure.

Thank you, sir. Any other witnesses in opposition, please step forward. Name, affiliation, and position on the measure only, please.

Thank you, Chair and Members. Ryan Pierini, on behalf of ATA Action, the advocacy arm for the American Telemedicine Association. I want to quickly thank the staff for their thorough analysis and want to thank the author and his staff for working closely to address our concerns. I think with the commitment made to accept the amendments, including the analysis, we'll be removing our opposed unless amended position. Thank you.

Thank you. Next, please.

Good afternoon. David Creager for the United Hospital Association, also in opposition.

Thank you. Next, please.

Thank you, Mr. Chair and Senators. My name is Fred Noteware, representing the Association of Dental Support Organizations. While we do remain opposed, we're reviewing the language and want to express a sincere appreciation for the amendments that are taken, and look forward to continue conversations and negotiation with the author's office. Thank you.

Thank you. Next, please.

Kelly Brooks, on behalf of the Santa Clara County Board of Supervisors with an opposed unless amended position. We apologize for the late notice on that. Thank you.

Thank you. Next, please, sir.

Thank you, Mr. Chair. Eduardo Martinez, on behalf of Western Dental Services. We have an opposed unless amended position, and we're requesting an amendment to exempt Knox-Keene related entities, those subject to the DMHC, from the AG's oversight provisions.

Thank you.

John Steinbrun. I'm with Children's Choice Dental Care. We are opposed.

Thank you.

Thank you. Preston Young from the California Chamber of Commerce, here today in opposition.

Thank you.

Jennifer Snyder with Capitol Advocacy, on behalf of the California Association of Health Facilities, in opposition.

Thank you.

Connie Delgado, on behalf of Newport Healthcare, with the position of concerns. Thank you.

Thank you. Any other opposition witnesses? Seeing none, we'll bring it back to the dais. Colleagues, questions, comments? Okay, well, I just have a comment to make for the records. You know, I've--my staff, actually, since they're the brains behind this operation--spent more time on this bill, probably than any other that we've had, at least since I've been the Chair, which I realize is a microsecond.

But the Attorney General, obviously, has been involved in reviewing nonprofit transactions in the health care arena for as long as I can remember, certainly sometime.

And as some of you may recall, I've had concerns over the Attorney General's entry into the private for-profit segment of the health care market for several years, dating back to, I think it was Senator Monning's effort in 2020. And frankly, the irony of the timing of this effort is not lost on me.

As you know, we're in this committee and elsewhere, we're pushing our hospitals to comply with seismic standards that should have been complied with a long time ago. And as a result, there's a scramble to try to find financing and funding to accomplish those retrofit operations.

And at the same time, we may be limiting funding sources by potentially restricting private equity involvement in the market. But I'm also fairly certain that there are transactions that are occurring every day in the State of California with regard to private equity that do require oversight and oversight by the Attorney General.

My concerns have related and continue to relate to the definition of private equity, the application of the Attorney General's review, and the approval process to transactions in the commercial space involving medical groups and other groups of health care providers, psychologists, and social workers, the overall breadth of the review process, and as was mentioned by one witness, issues regarding the restrictive waiver provisions that are currently embedded in the bill.

But beyond all that, one of my most significant concerns since I first examined a similar proposal in 2020 was the lack and has been the lack of due process and the effective review and oversight over the exercise of the Attorney General's authority in this area.

After reviewing some amendments, which I requested that were proposed by the Attorney General's Office to that process that set forth in, I think, Section 1190.30, we decided to redraft the decision-making process here.

And the process as redrafted now includes an initial determination by the Attorney General, an opportunity by the impacted party to elect a full evidentiary hearing on the issues associated with that initial determination, a hearing before an administrative law judge assigned to the state's Office of Administrative Hearings, a requirement that the Attorney General issue a final determination based on that hearing record, and, if desired, an opportunity for the impacted party to appeal that Attorney General's final determination to the courts.

The Attorney General accepted our due process revision and the amendment to that particular section, along with some other suggested amendments to the definition of 'hedge fund' and other issues that are set forth in the current version of the bill, and I just want to say that I certainly appreciate that level of cooperation and the help that we received from the Office of the Attorney General in trying to achieve those objectives.

And while issues certainly remain with regard to the other areas I identified and areas that some of the witnesses have identified, given the revisions to the decision-making and appeal process, which I consider to be extraordinarily significant, I will be voting to move the bill out of this committee today.

However, having said that and given the issues remaining with regard to the bill, I do recognize, and I'm saying this for those who are here and those who are listening, I hope, I do recognize that committee members all have health care providers in your districts and constituents who depend on them, both of whom may have strong feelings on this subject one way or the other.

And I want to assure the committee members, notwithstanding my vote, that you are free to vote on this measure as you and your constituents deem appropriate. But I will be voting aye.

If this measure moves out of the committee today, I want to assure all who are listening that I will continue to work to further improve this measure in the Judiciary Committee, which I sit on with its Chair. Having said that, do you have a question, Senator Menjivar? Please proceed. We'll turn to Senator Menjivar for a question.

I don't want to cut you off, Mr. Chair. I don't know if you were done or not.

I think I'm fully done. Thank you.

I just wanted to clarify because I thought the issue that the opposition brought up in terms of pulling together like five physicians, that was addressed. So I just want to clarify that that hasn't been addressed, that technically, if two physicians come together to buy out, to create, that would be considered private equity.

It depends, and I will defer to them, but I will say this, that the first transaction by a group--so if a group of physicians decided they wanted to do this, that first transaction would not be reviewable. It is subsequent transactions within a seven-year period that would be reviewable. So if a group of physicians get together and say, 'hey, we want to bail this out, we want to do this,' they could do that, and there would not be a review.

What would be, if they go on to buy something else, it would be review? Okay.

Yeah, exactly. And the reason for that is to try to ensure that the further acquisitions do not consolidate in a region, the control of that particular entity. For example, by multiple surgery centers, and suddenly the private equity firm owns more than half of those surgery centers.

I, definitely, Dr. Wood, you and I have spoken. I agree with the premise. Find a way to stop it. I also have a hospital in my district that was bought off by private equity, and it survived that way. And I'm just trying to figure out how we can approach that.

And I've heard, I think I heard, and you gave some examples, you read through some examples of, but you can still do this if there's a laundry list of things. But then I heard the opposition said that there's no, there isn't room for that. So I just want to clarify, if distressed hospital is distressed, they still have the ability to use this as a saving grace.

They do. There is a process, and I'm sure the Attorney General's Office could lay that out for you, but if this hospital has exhausted all other opportunities and the only opportunity available to them is private equity, they could do that without review. They would have to prove that they are truly distressed, which means opening their books, more than likely.

And are we creating a different kind of system of proof? Because what I've heard sometimes, what I've heard throughout this discussion in the past couple of weeks, that potentially in that review, there's two different tiers that we're creating now. Is that correct?

I don't believe so. Are you referring to the Office of Health Care Affordability?

Two tiers in terms of proof of distress. Is it still the same way as we approach our distress loans? Who's eligible for that? Is this a different kind of proof that we're setting forward?

I'd have to see them side by side, but I'm happy to look--this is the first this has come up from any questioning from anybody along the way, so I am happy to look into that and work to address that issue.

Do you feel confident that there's still an approach for distress hospitals?

Yes. It is not my desire to close a hospital, not at all.

Well, let me just, let me ask: we have the guru sitting here at the table. He and I have sparred on this issue for several years, but I respect his abilities. Would not the private equity group in the hospital situation have to apply for a waiver?

They can apply for a waiver, Mr. Chair. Mr. Chair, Senators--well, it's a pleasure to be able to address you all. I'm Emilio Varanini. I should identify myself from the California Department of Justice. Thank you, Mr. Chair, for the kind words. And of course, I appreciated the due process amendments, which we completely support.

As to the question, first of all, any hospital that comes in and says we're being acquired, we're going to look at their financial condition in our existing regs for the nonprofit hospital transaction, Senator. We ask for the financial statements. We want to look at that. We want to understand the hospital. If the hospital is having financial problems.

Now, we're not even talking about the waiver. We will look at that to determine what we should recommend to the General. We have an independent expert who will also look at that and determine what to recommend to us and to the General. And we have a public hearing where these issues can come up.

So even if an entity doesn't qualify for the waiver, we still will consider the financial condition. However, we have a waiver process. Why? Because over the years, people have asked us, why don't you have a waiver process for failing firms? That's the technical term of art from antitrust law.

Failing firm defense, antitrust law says, this is a bad merger, it's going to increase prices, but we have to tolerate it because the end result's going to be: the hospital's going to be gone, and nobody wants that. So we looked to federal antitrust law and we modified it.

We made it at least what we proposed, and then we worked with the Chair on further proposals to make it easier to meet than you can meet under federal antitrust laws. So we said, you have to have three years of financial performance where you're suffering from deficits.

Okay. That is your net patient revenue, as it were, isn't covering the costs for three years. We picked three years because every hospital we've ever reviewed has a bad year now and then. That is true in many businesses. It is true here. So we figured three years made sense. It's what we've seen in Covid, right?

There were hospitals who had good years and bad years in Covid, and there were other hospitals that had bad years. So we picked that. And then the question comes up, well, okay, what more do you need? Well, under federal antitrust law, you basically have to show that you're not only going to have to file for chapter 11, reorganization, but that you can't be reorganized.

That is a very difficult, if not impossible, standard to meet. But that's federal antitrust law. That is not what we are proposing. What we are proposing here, Senator, is that you are at substantial risk of having to file for chapter 11 and that you--

Okay. I think I got it.

Okay. Sorry, Senator.

Let me ask, so that we have private equity here?

Yes, sir.

Let me just let the other side give their spiel.

Through the Chair, if I can answer Senator Menjivar's question regarding the definition of private equity group, let me read from the bill. 'A private equity group means an investor or group of investors who primarily engage in the raising or returning of capital and who invests, develops, or disposes of specified assets.'

Specified assets, by the way, is not defined in the bill. Private equity group does not include natural persons or other entities that contribute or promise to contribute funds to the private equity group, but otherwise do not participate in the management of private equity or the group's assets or any change in control of the private equity group.

So, as I mentioned, the members of the Legislature that sit on the dais could pool their money and they would find themselves under the definition of private equity. Similarly, it exempts an individual. So the bill is creating some winners and losers, right?

A wealthy individual can go and buy a hospital and not be subject to this review, but if two or more individuals pool their capital to purchase a hospital or some other medical facility or practice, they would have to go through this process. So we think that there is a fundamental lack of fairness and equality in terms of who is covered by the bill.

Mr. Chair, I don't believe that's accurate. And maybe the Attorney General's Office can correct me if I'm wrong. I don't believe that's accurate at all.

There is a Section B here that I, that I think was added by the Attorney General. Private equity group does not include natural persons or other entities that contribute or promise to contribute funds to the private equity group, but otherwise do not participate in the management of the private equity group or the group's assets, et cetera. So late add, but you know--

And I read that, Senator, so I'm not being contradictory, but it says it's not including a natural person.

Right. Right. Anything else? This is the kind of hearing I like, so that's--apologize for the time, audience. Any other questions? Comments? Senator Menjivar? Are you done, too? Okay. Seeing none, Assembly Member, you should close.

With the Chair's permission, I'd like to address some of the opposition's polls.

Absolutely.

Thank you.

Please proceed.

First of all, with regards to the California Hospital Association, the first and only time we heard from the California Hospital Association was right after the bill was introduced in February. We have not received any request from the California Hospital Association since then to talk about this bill.

And so the concerns that are coming up from the California Hospital Association in many cases are new to us, and that is contrary to the way I work in my office. If you listen to the number of witnesses that came up, even those in opposition, they talk about amendments, and there have been a huge number of people coming through my office, and we have worked through amendments. It is difficult, it is impossible to address the concerns of an entity that does not choose to engage with us. That, I believe, is not fair.

The idea that this would somehow destabilize the marketplace is, I think, disingenuous as well. As I was listening to the opposition, I almost felt like I was hearing them talk about a different bill, quite frankly. I do not oppose the investment of private equity funds into health care.

What I oppose is the acquisition and control by a private equity entity. So if private equity wants to invest in a hospital and doesn't maintain control, I don't have a problem with that. If private equity wants to build a series of medical practices along the way, I don't have a problem with that.

What I have a problem with is the acquisition and control. Many of these are roll up type situations, classic private equity acquisitions, and that is what I object to. So I am very disappointed that the Hospital Association sits here with these amendments and concerns that they never brought to us. That's not fair. That's not fair.

With regards to the American Investment Council, folks, OHCA, this issue was a big time negotiation during OHCA. We never resolved this issue during OHCA. It was never resolved. And the reality is that OHCA--I know, I worked on it. My team worked on it for two and a half years with the Governor's Office.

We know what OHCA can and cannot do. This is about, they're about collecting data and looking at market impacts. They have no authority, no authority to affect a transaction. Zero. And so I sit here and listen and I go, I feel like I'm listening to two different sets of bills here. And I'm--and I find that, I find that really, really challenging as a Legislator who has worked on a number of issues and always had an open door. So my door remains open.

I hope that members give me the benefit of the doubt, understand that I am continuing to work with everybody who has an interest in this, and will continue if this bill moves on today. But that is a two-way street. And the American Investment Council, you know, they--what wasn't said, I don't believe--and if I missed it, I apologize to Mr. Aprea--is that we addressed some of their concerns.

We had an eight-page letter of opposition. We now have a three-page letter of opposition. I think we've made some progress there, and we don't have, haven't had that opportunity with the Hospital Association. And I think that's a disservice to the members of this committee and to constituents out there that we haven't been engaged with in a meaningful manner. And it's disappointing to hear these concerns today. So with that, I respectfully ask for your aye vote.

Well, I will say this: Dr. Wood, you have to be congratulated and commended on a Herculean effort on a subject. You've heard what I said during my statement. I am convinced that within the State of California, there are some private equity transactions going on every day that probably demand the oversight of the Attorney General.

And what we need to do is we need to make sure as this bill moves forward, that we get the language right so we focus the effort to the extent we can on the transactions that need oversight, demand oversight and review, and while we don't stifle investment in health care facilities where it's needed, I think we can do that. I didn't see very many amendments in terms of language to that effect either.

And that's my commitment to work with you if the bill moves forward, and the Chair of the Judiciary Committee, when I hear it next, to try to get this right, and to the extent--nothing's perfect in Sacramento, and to the extent that we stumble and make a few mistakes, I won't be here next year, but I'm confident that you will rise from your professional endeavors and make sure that we fix it.

I won't be here next year either, Senator.

The long arm of Dr. Wood will reach out and make sure.

Probably not going away.

That's right. So thank you very much. We'll--as soon as we get a quorum, we'll take a motion and we will take a vote. And for those of you at the table, I want to thank you for continuing to participate, for being here today, for your testimony, and for what I anticipate will be your continued effort to help us try to get this right as it moves forward in the Legislature. So, thank you.

Thank you.

Thank you.

Don't go anywhere Doctor Wood.

I have another easy bill.

Pardon me? You have item number five, AB 3218, unflavored tobacco list. Please proceed when ready.

Thank you. Mister Chair and Members of the Committee. I'd first like to thank the Committee staff for their efforts on this measure. And I will be accepting Committee amendments. State law prohibits flavored tobacco products in California, but unfortunately, they remain readily available throughout the state. The high rate of flavored tobacco use among youth is especially concerning.

A 2023 study by the CDC indicates that among middle and high school students who use tobacco, nearly 90% use flavored products. AB 3218 creates a pathway to ensuring flavored tobacco products that are no longer available on the shelves or retailers and in our communities.

By creating an affirmative listing of unflavored tobacco products legal in California, this approach will help retailers determine at a glance whether a product delivered to their stores is legal or not. Additionally, the bill authorizes the Attorney General to penalize distributors that sell illegal tobacco products and manufacturers that falsely certify their products are unflavored.

And finally, the bill authorizes law enforcement to seize illegal tobacco products. These comprehensive enforcement steps will help implement the flavored tobacco ban the way it was intended.

Here with me to testify in support again is Tiffany Brokaw with the Attorney General's Office and the sponsor of the bill, Byron Miller is with the Attorney General's Office, is also here to answer technical questions. I respectfully ask for your aye vote.

Greetings. Please proceed. Identify yourselves for the record first.

Good afternoon again. Tiffany Brokaw, Deputy Attorney General and legislative advocate, here on behalf of Attorney General Rob Bonta, who is a proud cosponsor of this bill. Along with campaign for Tobacco Free Kids, the American Lung Association, the American Cancer Society, and the American Heart Association.

The Attorney General would like to thank Doctor Wood for carrying this important piece of legislation that will ensure the successful implementation of the flavored tobacco ban. When the ban went into effect, our office received a number of inquiries asking for guidance and assistance with effectuating the law.

Our office drafted AB 3218 in response to these inquiries and as a next step in accomplishing the ban's policy goals of getting these flavored tobacco products out of the hands of our youth. AB 3218 will establish a publicly available list of all tobacco products that are permissibly unflavored and allowed to be sold in California.

The development of such a list has long been a recommendation of public health advocates who have looked to our office's tobacco directory list as a leading example of how a publicized, curated list can provide clarity to industry participants and law enforcement on what products can and cannot be sold.

This bill will also render illegal flavored products contraband so that such products can quickly be removed from commerce and never reach our kids. This bill will also hold the distribution chain accountable at a higher level. It will clarify the definition of characterizing flavor to specifically prohibit products that impart menthol like cooling sensations.

Our office saw that after the flavor ban went into effect, new tobacco products were introduced to the market aimed to work around the ban by clarifying this definition the ban will encompass these edge products and workaround products that have been subject to debate and litigation.

And AB 3218 will also authorize the Attorney General to omit from the unflavored list tobacco products lacking the required FDA authorization. AB 3218 would hold sellers of illegal tobacco products accountable and reduce access to flavored tobacco products, particularly among youth who gravitate towards these type of products, preventing them from entering a lifetime of addiction.

Thank you for your time today, and we respectfully ask for an aye vote.

Thank you. Next, please.

Byron Miller with the Department of Justice. I'm just here for technical questions.

Ah, okay. Any other individuals in support of this measure? Name, affiliation, and position on the measure only, please.

Good afternoon, Mister Chair and Members. My name is Jamie Morgan on behalf of the American Heart Association, a proud co sponsor here in support of the Bill. I'd also like to express the support of the American Lung Association in California.

Thank you. Next, please.

Chair and Members, Autumn Ogden-Smith with the American Cancer Society Cancer Action Network. Also proud co sponsor asks for your aye vote.

Thank you. Next, please.

Tim Gibbs, campaign for Tobacco Free Kids. Also a proud co sponsor.

Thank you. Next.

Jessica Moran with the California Dental Association in support.

Next.

Celeste Wicks with Clean Earth 4 Kids, in support. Also in support. North County Equity & Justice, Eco-Sustainability Peeps, Facts, Grandparents Taking Action, Moms Advocating Sustainability, and California Nurses for Environmental Health & Justice. Thank you.

Thank you.

Kelly Brooks, on behalf of the County Health Executives Association and the Santa Clara County Board of Supervisors, in support.

Thank you.

Hi, Taisha Watts with the California Academy of Family Physicians, in support.

Thank you.

Ryan Brigodeau here on behalf of Kaiser Permanente in support. Thank you.

Thank you.

Brandon Marchy with the California Medical Association in support.

Thank you, sir. Any other witnesses in support? Now let's take witnesses in opposition. First, lead opposition witnesses, if any. You may take the table. And we'll take other opposition witnesses after that. Please identify yourselves for the record. Proceed when ready.

Thank you, Mister Chair Members, John Winger here on behalf of the California Fuels and Convenience Alliance, we represent the majority of gas stations and convenience stores in the state. Want to thank the author and the sponsors for the ongoing dialogue on the Bill. I think the directory is something that we have supported in concept. We would love to have some statewide guidance on what can be sold and what can't be sold. We've seen a patchwork of regulatory work over the years on the local level, and so having some certainty, there is something that we would definitely encourage.

I think we continue to have an opposed, less amended position on the Bill related to two things in the Bill. One is around the characterizing flavor and the changes to that. We appreciate the Committee amendments, which I believe is removing numbing from that definition. But we still do think that cooling is a overly subjective term that could potentially push more products off the shelf and push it more to the illicit market, which we've seen over the years.

So we do have some concerns around that. We also have some additional concerns around the amount of discretion that the AG has on removing legal tobacco products from the list itself. And I think my colleague to the left will get a little more into that. But for those two reasons, we do still have an opposed1 unless amended, position on the Bill.

Have you submitted language with respect to cooling.

I think we've just asked for that to be removed from the characterizing flavor definition. We were comfortable or we have accepted the definition that was within the original Bill, SB 739. And so the expansion, I think, is something that we have objected to and continue to.

Does that relate to menthol?

No. I think menthol was pretty clearly banned in the characterizing flavor. I think cooling gets a little bit, is a little bit more subjective, and could be used in a discretionary way to remove products off the shelf that we don't believe fall within the definition of a flavored tobacco product.

Thank you. Yes, sir.

Mister Chairman of Members James Jack here, on behalf of the Cigar Association of America, first, I want to thank your Committee staff for their work with us over this past week, and also want to extend my appreciation to the author, his staff, and the Attorney General's Office.

We have had excellent and ongoing dialogue with all of those parties, and we're very appreciative of that. First, Mister Chairman, I want to state for the record that the Cigar Association strongly supports the creation of an unflavored tobacco list to address the enormous surge in illegal flavored tobacco products we've seen across the state.

Our issue really boils down to just one single word in the Bill, and that word is adulterated. The Bill uses a federal definition of adulterated as one of the reasons that the Ag could block a tobacco product from this list. Adulterated means a tobacco product that requires FDA approval and has not received it.

Problem is, adulterated is the wrong standard to use because the FDA itself allows certain tobacco products to be legally sold in the United States even though they are adulterated.

Specifically, the FDA has told manufacturers that if a product was on the market prior to August 2016 and applied for FDA approval by September 2020, it may continue to be legally sold in the US until the FDA decides on its application.

Now, the FDA reports that it has acted on over 99% of the, wait for it, 2.6 million applications that it has received. But here's the problem. There are still over 3000 applications for cigar products that are still pending FDA review.

All of these products are adulterated not because there's something wrong with the product, not because they're bad actors, but simply because the FDA hasn't approved their application yet.

The FDA has recognized that these manufacturers have done everything asked of them under the law, and is therefore using its enforcement discretion to allow these adulterated products to continue to be legally sold until the FDA decides on their application. That's why it's the wrong standard to use in the bill.

Adulterated is not the standard the FDA uses for these products. In fact, using this standard in the bill will put California in direct conflict with how the FDA is regulating these products.

So in closing, there are potentially thousands of cigar products that cannot meet this definition and would be at risk of being banned in California, even though they are unflavored, have done everything required of them under the law and are legal to sell today.

So we strongly urge Members to remedy this important issue before the bill leaves the Senate. Thank you.

Well, it's not adulterated. That's the problem then. It's. If you're saying there's, there are. These are unflavored tobacco products because we're talking about unflavored versus characterizing flavor. Are these unflavored tobacco products that are pending an approval?

Thank you, Mister Chairman.

Because why do you say they're adulterated? What do we put in them?

I think that's a common misconception. So adulterated just means that they have to be approved by the FDA and they have not received that approval. To your question, sir, that's not the.

Common understanding of adulterated because. Correct. We deal with that in a variety of places and spots in what we do in this Committee and elsewhere. Yes. Alterated means you put something in it that's not naturally occurring.

Correct. But in this case, it just means it has not received the required federal approval and therefore it is adulterated under the Tobacco Control Act, the federal law.

But as I mentioned, the FDA is using its enforcement discretion to allow these products to stay on the market because it's not the manufacturer's fault that the FDA hasn't gotten to all of these applications yet. And so they're staying on the market.

And so our only request is that if a product is unflavored number one and is legal to sell under the FDA, that it wouldn't be removed from this proposed list.

Well, that's a little different. Because if you propose language that includes the word adulterated, then that could include a lot of things. But unflavored pending approval, that's your request. Okay. Any other witnesses in opposition to this measure? I see none. Okay. Back to the Deus colleague. Any questions or comments?

Doctor Wood, the cigar people have an issue with unflavored cigars that are pending approval at the FDA level, that don't have anything injected in them that in the normal parlance we would consider to be adulterated. How do we deal with that?

Well, we're waiting for the FDA to actually deem that that's correct. And I recognize that the FDA is behind on their process. But I would disagree with the witness that these are being legally sold. There are only 27 products that I'm aware of.

I thought there were less, but apparently there are 27, according to our folks at the AG, that are deemed legal. What has happened here is, which means they're approved by the approved and so they can be legally sold.

The FDA has chosen not to enforce against these other products, so that to say that they are being legally sold.

Is not correct, and the other products are not included on, or not going to be included on this list.

So I think that from my understanding, I think there is some, the Attorney General would have discretion to decide what products could or could not be sold.

And I would imagine, although I don't know for sure, that they would be looking at, you know, what products are before the FDA and how they're characterized and use that as a way to help decide what's on the list or not. I guess for me, part of, part of this is a trust issue.

We trust that these are unflavored. Trust me, they're unflavored. Remember, trust me, it was good for pregnant women to smoke in the fifties. Trust me, tobacco doesn't cause cancer. And so, yes, while they have gone through a process and I, and have submitted for FDA approval, until the FDA actually approves these products, they're not legal to sell.

They've just chosen not to enforce, and the Attorney General could do likewise going forward.

Am I correct in the way I read the bill provision?

And that the Attorney General in this case receives a submission by a producer manufacturer of a product that includes a variety of certifications in terms of being unflavored, and describes whether or not FDA approval has been requested, certifies that the brand lacks a characterizing flavor, that having received that submission, the Attorney General could include the product on the list?

I believe that is correct.

Okay, well, there are no other questions, Doctor woods, so I guess you may close.

Thank you to the Chair and appreciate your indulgence with me here today. I have been a long advocate for protecting youth from tobacco my entire professional career. And I would just want to be sure that if products are on a list, that they are certified and they are not flavored. And with that, I would

Respectfully ask for your aye vote. When you get a quorum, as soon.

As I find a few more colleagues, we'll do just that. We'll take a motion and we'll take a vote. Doctor Wood, thank you sir, for being here. Okay. Item number six. AB 1830. Doctor Aramula, corn Masa Flour, etcetera. Please proceed when ready.

Thank you Mister Chair and Senators. I want to start by thanking the Committee staff for their work on this bill. Since expanding the bill, we've had conversations with small business owners, public health experts and industry partners. The amendments that we have taken over this past month address concerns and improve the bill.

All pregnancies should be supported by culturally appropriate means. Assembly Bill 1830 supports healthy pregnancies by expanding mandatory folic acid fortification to corn masa to prevent birth defects. Daily consumption of folic acid decreases the risk of neural tube defects such as Spina Bifida and Anencephaly by more than half.

Babies with spina bifida can experience symptoms ranging from mild nerve damage to severe paraplegia. Anencephaly is fatal in infants. Since neural tube defects occur in the earliest stages of fetal development, it can be too late to take folic acid supplements by the time a person knows that they are pregnant.

To address the high rate of neural tube defects, the FDA required that all enriched cereal grain products be fortified with folic acid in 1998. While Masa is a staple in many Latino cuisines, Masa was admitted from the 1998 mandate.

As a result, Latinos were left without a culturally appropriate way for obtaining folic acid in their diets through fortification. Unfortunately, Latino communities remain at a disproportionately high risk for neural tube defects. The higher rate of neural tube defects in Latino communities is a symptom in the broader disease of health inequity.

Mandatory fortification of Masa through Assembly Bill 1830 will right this wrong and prevent new mothers and parents from losing children to neural tube defects. Testifying in support of Assembly Bill 1830 is Doctor Claudia Lynn Lopez, a board certified OB/GYN and a maternal fetal medicine subspecialist.

Doctor, please proceed.

Mister Chair and Members of the Committee, Doctor Claudia Lopez on behalf of the American College of OB/GYN's, District nine, the sponsors of AB 1830 folic acid fortification of corn masa flour and wet corn masa products.

I am a maternal fetal medicine fellow and practicing OB/GYN at a tertiary referral center where we serve women from the Central Valley of California up to the Oregon border. Many of our patients live in rural areas with limited access to healthcare and many identify as members of the Latino community.

These patients often drive over 3 hours for an ultrasound appointment or to see a specialist such as myself. Unfortunately, many of the consults we receive are for patients whose babies are diagnosed with a neural tube defect such as Spina Bifida.

To help decrease the incidence of neural tube defects, the FDA mandated flour to be fortified with folic acid in 1998. However, Masa, a major staple of Latino and Hispanic diets, was omitted from the mandate without justification. This mandate resulted in a 35% decrease in the occurrence of neural tube defects.

However, Hispanics still have a three and a half times higher incidence than the average American.

Imagine telling someone who looks like you and could easily be your family member or someone you grew up with that their baby has a neural tube defect that their baby might not walk or ever control when they go to the bathroom that their baby might need a shunt to help drain fluid from the brain, which carries a complication rate of up to 40%.

Even if they're a candidate and can afford in utero surgery, the path ahead is not easy. And unfortunately, these babies have many of the same complications. You see the realization in your patient's eyes as they contemplate the impossible decision of what their next steps will be.

How do they care for the kids they already have and a new special needs child? Do they terminate the pregnancy? How can they make this impossible decision, all the while knowing that this was preventable? How do I tell them why someone from our community has a higher risk for this life altering diagnosis?

In the US, half of all pregnancies are unplanned, and the key to neural tube defect prevention is having enough folic acid in your diet. For most people, they aren't taking a prenatal vitamin or taking a folic acid supplement because the pregnancy is not planned.

By fortifying corn moss to flower, we can help decrease the risk of neural tube defects and improve perinatal nutrition in this population. We can show that we value and prioritize equitable preventative healthcare. For these reasons, ACOG is pleased to support and sponsor AB 1830 and ask for your aye vote.

Thank you very much for your presentation. Any other witnesses in support, please step forward. Name, affiliation and position on the measure only. Please. Welcome.

Thank you. Good afternoon Members. I have allergies and my head is full of cotton. I'm Roxanne Gould, representing the American Nurses Association. Maybe I should go see one of those nurses about this. But we're in strong support of the bill.

Yes, ma'am.

Hello. Isabella Argueta with the Health Officers Association Of California in Support. Thanks.

Thanks for joining us. Hi there.

Good afternoon. Chair and Members, Karen Amagon. On behalf of A Voice For Choice Advocacy, we want to thank the Assembly Member and his staff for working with us and removing our opposition to less amendment stance. Thank you.

Thank you. Thanks for joining us.

Kelly Brooks, on behalf of the County Health Executives Association and the Los Angeles County Board of Supervisors here in support.

Thank you, ma'am. Next please.

Good afternoon. Kelly MacMillan. On behalf of March of Dimes, a proud co sponsor, and the Children's Specialty Care Coalition in support.

Thank you. Hello.

Chair and Members. Kathy Mossberg with the First Five Association in strong support.

Thank you. Any other witnesses in support? How about witnesses in opposition? Any other opposition? Any opposition? Witness, lead or otherwise. Seeing none. Colleagues? No questions. Doctor Arambula, this is your lucky day. Would you like to close?

Thank you for the opportunity to present when a quorum is present. I respectfully ask for an aye vote.

As soon as we get a quorum, we'll take a motion and we will do just that. Thank you. Next item is item number nine. AB 3059. Doctor Weber, human milk. Please proceed when ready.

Good afternoon. Thank you, Chair Roth and Members. I'm here to present AB 3059, which will improve health outcomes for premature infants. I would like to thank the committee staff for their work on this bill. This bill will require that commercial health plans include coverage for medically necessary pasteurized donor human milk, which is commonly referred to as donor milk.

If the donor milk is sourced from a milk bank with an existing tissue bank license, the bill waives the requirement for hospitals to acquire the same license to provide donor milk to infants in neonatal intensive care units, or NICUs. The American Academy of Pediatrics recommends that, when a mother's own milk is not available, that donor milk be provided to very low birth weight infants.

These are very small infants that weigh 3.3 pounds or less at birth. Donor milk is used in NICUs to support the health and survival of very low birth weight infants and has been shown to reduce the incidence of a devastating bowel disease known as necrotizing enterocolitis, or NEC. The incidence of NEC is around 60% higher for Hispanic and Black infants when compared to white infants.

Black and Hispanic mothers have lower rates of providing milk to their babies in the NICU due to a variety of factors, including having to return to work, sibling care, lack of transportation, less lactation support, or receiving less care in less resource NICUs. By passing AB 3059, we're hoping to close health disparities beginning at birth.

Donor milk is a covered benefit under Medi-Cal, but existing law does not clearly define it as a covered benefit under commercial health plans. AB 3059 would ensure parity and require that all commercial health plans provide coverage for medically necessary donor milk. AB 3059 would also address a challenge to establishing a donor milk program.

About 12% of NICUs in California do not use donor milk, and one of the main barriers to establishing a donor milk program is the requirement that hospitals obtain a tissue bank license in order to store and distribute this milk. With me to testify in support of the bill today is Dr. Lisa Stellwagen, Medical Director of the UC Health Milk Bank, and Nicola Juri, a Board Member of the NEC Society. Thank you.

Thank you, Doctor. Please proceed. Identify yourselves for the record first.

My name is Dr. Lisa Stellwagen. And good afternoon, Chair Roth and Members, I am a pediatrician and the Medical Director of the UC Health Milk Bank. On behalf of the University of California, I'm here as a proud sponsor to express our support for AB 3059. The University of California Health Milk Bank provides safe, pasteurized human milk donated by breastfeeding parents to support NICUs and families statewide. Our milk bank opened in 2020 and addresses shortages in donor milk for sick or small newborns, ensuring life saving medical nutrition in line with the American Academy of Pediatrics' recommendations.

Human milk can be life saving for the smallest premature infants, reducing the risk of necrotizing enterocolitis, also known as NEC, a life threatening and catastrophic bowel condition, as you will be hearing. NEC is expensive in every sense of the word to all involved, the child, the family, the healthcare workers, the hospital, insurance companies, and society.

Through our work, we've identified several barriers that prevent critically ill infants from accessing donor milk, as you've heard from Dr. Weber. We're very grateful to her for authoring this bill to address barriers in access and to help improve survival of babies in need. I'm happy to answer any technical questions and respectfully ask for your aye vote.

Thank you, Doctor. Next please.

Chair and Members of the Committee, my name is Nicola Juri. I'm a doctorate educated physician assistant and also a mother. And today, as both, I urge you to support AB 3059 to provide medically fragile infants with the life saving protection they need from human milk. My son, Ronan, pictured here, was born at 28 weeks gestation weighing just one pound 2oz. He was immediately taken to the NICU and began fighting for his life.

I focused all my efforts into anything I could do to help him, which at the time was pumping breast milk. After suffering life threatening pregnancy complications myself, my body unfortunately produced little to none. Feeding and growing is a huge challenge as a micro preemie's underdeveloped GI system is extremely fragile.

I was fortunate enough to be at a NICU that had access to donor milk, which Ronan got as soon as he was able. Clinically, I know the importance of human milk. I was thankful for this crucial but limited resource. Eventually he was transitioned to formula.

We faced typical ups and downs of the NICU, and despite progress, after seven weeks into our journey, Ronan took a turn. He was diagnosed with necrotizing enterocolitis, or NEC, N E C, a devastating intestinal inflammation. He had two surgeries with some of the best surgeons in the field to attempt to save his life, but sadly developed a fully necrotic bowel leading to sepsis. On December 20, 2020, Ronan took his last breath in my arms. NEC comes on fast and aggressively.

I went from dreaming of the day I would bring Ronan home to planning his funeral. The single greatest predictor against NEC is mother's milk, and when not available, donor breast milk is the next best option. Studies have shown that this can decrease the risk of NEC by as much as 50%.

After Ronan's death, I connected with the NEC Society, a nonprofit founded by another mother who lost a child from this devastating disease, and focused on building a world without it. This is how I parent my son. I have read numerous research articles published about this disease.

I have lived through the devastation, and donor breast milk makes a difference. All babies in the NICU need access to breast milk, regardless of location or socioeconomic status, and mother's milk is not always an option like in my case. AB 3059 will protect families from saying goodbye to their babies. I beg you to make sure that all families in California have access to this vitally important resource and that you join me in taking a step toward building a world without this horrendous disease.

We are so sorry. Thank you for joining us. Other witnesses in support, please. Name, affiliation, and position on the measure, please.

Thank you, Mr. Chair and Members. David Gonzalez on behalf of the California Life Sciences in strong support. Thank you.

Next, please.

Margaret Gladstein, Capitol Advocacy, on behalf of Prolacta Bioscience. We'd like to thank the author, the committee staff, and the sponsors for working with us to remove our opposition. We're now gladly in support.

Thank you. Next, please.

Kelly Brooks on behalf of the California Association of Public Hospitals and Health Systems and the Santa Clara County Board of Supervisors here in support.

Thank you. Yes, sir.

Ryan Spencer on behalf of the American College of OBGYNs District IX in support.

Thank you.

Brandon Marchy with the California Medical Association in support.

Thanks.

Kelly MacMillan on behalf of Children's Specialty Care Coalition in support.

Thank you.

Vanessa Gonzalez with the California Hospital Association in support.

Thank you, ma'am. Any other witnesses in support? Any other witnesses? Any witnesses in opposition, lead or otherwise? Seeing none, I'll bring the matter back to the desk. Colleagues, any questions, comments, or concerns? Seeing none. Doctor, you may close.

Well, thank you once again to the committee. I would like to thank both of my witnesses who came here to testify. Thank you so much for telling your story. The reality is that when we're talking about very low birth weight infants, it's not uncommon that the mother is unable to actually lactate because we're talking about babies that have been born very, very early. And oftentimes in emergent situations, and so you don't have the hormones that actually bring on labor, which also allow you to lactate.

And so many, most of these babies, require donor milk. And so in order to decrease the chances that they develop NEC and have to go through surgeries, whether they are able to survive or not, then we need to ensure that they have access to this very preventable form of treatment. And with that, I respectfully ask for an aye vote on AB 3059. Thank you.

Thank you, Doctor, for your presentation. As soon as we secure a quorum, we'll take a motion. Do just that. Thank you for joining us, both of you. Okay, let's turn to item number 22. AB 3260. Assemblymember Pellerin healthcare coverage reviews and grievances. Thank you for joining us. Please proceed when ready.

Thank you, Chair and Senators, I would like to accept the Committee's amendments and sincerely thank the consultant for all of her hard work on this Bill.

Far too often, Californians don't receive the care they need in a timely and appropriate manner, and health plans and insurers do not consistently decide or provide proper notice of their decisions concerning claims.

This leads consumers to bear the financial costs of prescribed care while waiting for a response from their health plan or to forego treatment altogether because they cannot afford to pay for their care out of pocket. This Bill addresses two problems.

First, the untimely resolution of claims and grievances by health plans and insurers and second, a lack of transparency in due process when consumers file regulatory complaints. To address the first concern, this Bill will harmonize state law with federal law regarding the timeline for responding to claims for coverage and how claims for urgent conditions are treated.

The Bill also adds an important protection for those with degenerative conditions such as MS, prioritizing treatment that can minimize the loss of function instead of only those treatments which can restore the patient to full function. This ensures that these patients receive the care they need, despite the fact that they will likely never return to full care.

Full health care delayed is care denied. Therefore, when health plans don't respond to requests for care in a timely manner, this Bill provides that an internal grievance will automatically be initiated on a consumer's behalf. The Bill then clarifies the timeline and notification requirements for grievances, again bringing state law into accordance with federal law.

If a health plan also fails to respond to a grievance within the required timelines, that grievance will automatically resolve in favor of the consumer, meaning they can get care with the assurance that it will be covered. This provision follows the lead of 12 other states, ranging from Arkansas to Georgia to New York, which have equivalent provisions.

This does not apply in the case of incomplete grievance requests or where a request is for experimental treatment where more research may be needed. Last year, DMHC found that our state's largest health plan had failed to resolve tens of thousands of grievances within the required time frame.

This Bill provides a strong incentive for these disputes to be resolved in a timely manner, reducing the likelihood that patient conditions worsen and subsequently require more intensive and costly treatment while they are stuck in limbo waiting for a health plan response.

To address the second concern of the lack of transparency in due process and regulatory complaints, this Bill requires that plans or insurers offer copies of all communications with DMHC to the enrollee or insured and promptly provide those records if the enrollee or insured wants them.

AB 3260 will improve transparency by allowing the consumer to know what information has been submitted to the plan should they so desire. Unfortunately, the current reality around complaints disadvantages consumers who see or hear little while their complaint is being reviewed. Health plans and insurers, on the other hand, enjoy frequent and regular communication with regulators.

While health plans fail to follow the law, consumers suffer the consequences. These costs fall particularly hard on underserved communities where patients cannot afford to pay care out of pocket while they wait for health plans to respond to their claims or resolve their grievances.

Taxpayers in our counties also bear a cost because many of these same patients will seek care from public services. In the meantime, AB 3260 has enjoyed bipartisan support because it will improve processes for all medical surgical issues.

I am especially eager to see the improvements this measure will make for those seeking treatment for behavioral health and substance use disorders, as these are among the areas where patients struggle most to get timely and appropriate care.

With me to testify in support of AB 3260 is Doctor Corrine McIntosh and Lauren Finke is the Senior Director of policy for the Kennedy Forum. Benjamin Eichert from the National Union of Healthcare Workers is also here for any technical questions.

Welcome. Thank you for joining us. Please identify yourselves for the record before you speak. I'll let you decide who moves first. And remember, we have about six minutes for the side.

Good afternoon, Chair and Committee Members. I'm Dr. Corrine McIntosh Sako. I am a dual-licensed mental health professional. I'm licensed as both a marriage and family therapist and as a psychologist.

I have over 20 years of experience helping people with a range of presenting issues from situational stressors to severe mental health concerns, and I've worked in a variety of settings, including schools, community mental health centers, group homes, and intensive outpatient treatment programs. I currently provide direct clinical services to California residents in my outpatient practice.

There have been times in which my professional training and expertise lead me to determine that a client I am serving may need a higher level of care than my outpatient practice can provide.

In some cases, once or twice weekly outpatient therapy does not provide the care needed to manage severe mental health symptoms, and when this happens, transitioning to that higher level of care is urgent and medically necessary.

When someone is meeting criteria for this escalation of treatment, they are often debilitated by their mental health symptoms such as mood instability, isolation, tearfulness, sleep disturbance, hopelessness, loss of interest, panic attacks, intense fear, and suicidal ideation.

Their functioning becomes moderately to significantly impaired due to their mental health symptoms, and they experience a deterioration in their performance of responsibilities at home, school, and or work due to the significant emotional distress someone is experiencing at the time. A recommendation for a higher level of care is made.

It's only made worse when their health plan fails to authorize the referral for a higher level of care or worse, fails to respond to that referral at all. I have witnessed many clients languish or experienced an exacerbation of their already heightened emotional distress due to attempting to navigate their health plan's referral system, only to learn that their health plan has not processed the referral, or, worse, has denied the referral for care.

AB 3260 would alleviate the undue hardship for consumers by requiring health plans to initiate a grievance on a consumer's behalf when they fail to respond to claims within the time period and in the manner required by the law.

AB 3260 would also require health plans and disability insurers to automatically resolve grievances in favor of the consumer if they do not respond within the legally required time frame, 72 hours for urgent cases and 30 days for non urgent cases.

The automatic initiation of agreements would be life changing for many individuals as currently this responsibility falls on them and many don't have the energy or the mental capacity required to navigate this administrative and bureaucratic process, especially at a time when they're debilitated by their mental health symptoms. Ultimately, AB 3260 in practice translates to California residents as receiving the level of care they need and they deserve. Thank you.

Thank you. Next, please. Yes, ma'am.

Thank you. Chair and Members, I'm Lauren Finke, Senior Director of Policy at the Kennedy Forum. We're proud co-sponsors of AB 32. California has robust consumer protections for mental health and addiction care, both in SB 8505's groundbreaking parity laws and in SB 2201's timely access protections.

While these laws are clear and robust, their protective strength is dependent on plan compliance and regulator enforcement. AB 3260 strengthens protections for patients facing delays or denials in care ensuring health plans adhere to state laws and that regulators and I them as we've heard from my colleague today, commercially insured patients often face delays or denials when seeking mental health and addiction care.

Health plans regularly fail to approve care within legal timelines or unjustly deny coverage. Although patients can seek recourse, that process is slow, opaque, and often results in delayed or denied treatment. The typical process involves a patient or provider requesting authorization from the health plan.

If denied, patients can file an internal grievance with their plan, and if that fails, they can issue a complaint with regulators. When health plans do not comply with legal timelines and notification requirements, patients get stuck in limbo waiting for responses and resolutions.

Last year, in a settlement with our state's largest health plan, the DMHC found that in just a few months, thousands of grievances were unresolved within legally mandated timeframes, impacting timely access to behavioral health services. These practices must stop. AB 3260 automates this resolution process for unresolved claims and grievances when health plans exceed the legal time frames.

It also improves transparency by providing clear time frames for responses during the grievance process itself. AB 3260 offers efficient and fair consumer protections to address rampant health plan violations, which were cited at length in last October. Select Committee on mental health and addiction hearing I respectfully ask for your aye vote.

Thank you for joining us. Any other witnesses in support? Name, affiliation and position on the measure only, please.

David Gonzalez, on behalf of the California Life Sciences in support. Thanks, sir. Next, please.

Craig Pulser on behalf of Equality California in support.

Thank you.

Charlie Donlin with Stone advocacy, on behalf of the California Orthopedic Association and support.

Thank you. Next, please.

Jennifer Robles with Health Access California in support.

Next. Thank you.

Megan Loper, on behalf of the California Hospital Association in support.

Thank you, ma'am.

Sandra Poole with Western Center on Law and Poverty in support. Thank you.

Kelly Brooks, on behalf of the California Association of Public Hospitals and Health Systems and on behalf of the Santa Clara County Board of Supervision, supervisor is here in strong support.

Thank you.

Tyler Rindy, on behalf of the California Psychological Association in support. Thank you.

Dylan Elliott. On behalf of the California State Association of Psychiatrists, pleased to be co sponsors, as well as on behalf of the California Academy of Child and Adolescent Psychiatry and support. Thank you, sir. Next, please.

Lang Lei, on behalf of Asian Americans Advancing Justice, Southern California in support.

Hello. Kelly McMillan, on behalf of the California Associations of Marriage and Family Therapists, thank you.

Hi. Julie Nielsen. On behalf of the National Union of Healthcare Workers, proud sponsor in support. Thank you.

Ramon Costeblanc, on behalf of the California Alliance for Retired Americans, in support.

Thank you, sir. Next, please.

Grace Harrison with the Steinberg Institute in support. Thanks.

Vanessa Hina, on behalf of the California Academy of Family Physicians and the California. Path and Ethnic Health Network, here in support.

Thank you, ma'am. Yes, ma'am.

Jennifer Snyder, on behalf of the Physicians Association of California, in support.

Thank you. Okay, any other witnesses in support? Let's turn to witnesses in opposition. Please step forward. Lead opposition. Witnesses, feel free to join us at the, in the well at the table.

Identify yourselves for the record and flip a coin as to who goes first.

Good afternoon, Mr. Chair and Members. Jed Hampton with California Association of Health plans here regrettably in opposition to AB 3260. First and foremost, I'd like to thank the author and her staff for engaging with us initially on the Bill. I also want to thank the Committee staff for working with us, engaging with us on the Bill as well.

I will say at this point we are still reviewing the amendments. In the Committee analysis that were indicated, there is a substantial amount to go over.

So we are taking our time to ensure that just to get a better sense of where our Member plans are on the amendments, I will say it does look like some of our concerns with these amendments have been addressed.

I would also say that there are some outstanding concerns that we'd like to work with the author's office on specifically related to some of the communication provisions in the Bill between health plans and their enrollees.

So again, should the Bill move forward today, we would like to work with the author's office and the sponsors a little bit more, just to clarify that. But again, appreciate the amendments. We're still reviewing them and hope to follow up with the author and the sponsor soon.

But as for the Bill in print today, we are respectfully opposed to AB 3260. Thank you.

Well, thank you for taking a look and thank you for continuing to work on those with the author. We appreciate that. Yes, ma'am.

Good afternoon, Katie Andrew with Local Health Plans of California. Like my colleague here, we are still combing through all of the amendments, but as the Bill is now in print, are going to remain opposed. But look forward to working with the author and the sponsors and trying to get this Bill into a really good place.

So thank you very much to the Committee staff for the amendments. We appreciate it. Thank you.

Staff's the best. Thank you for working. Thank you for working through the amendments. There are a few. And for continuing to work with the author to make this a better measure. So thank you. Yes sir.

Mr. Chair and Members John Winger, on behalf of America's Health Insurance Plans, would just echo the comments of Cap.

Thank you. Yes, ma'am.

Chloe Shin, on behalf of the Association of California Life and Health Insurance Companies in opposition. Thank you.

Thank you. Any other opposition witnesses? Seeing none. I guess there's nobody to bring it back to on the dais except me. So it's your lucky day, Assemblymember. You may close. I will listen intently.

Thank you so much. And thank you again to your Committee staff. They were phenomenal and I want to thank my staff as well. Rhiannon did incredible work on this Bill and with that, at the appropriate time, I ask for your aye vote.

As soon as we get a quorum, we'll take a motion and we will do just that. Thank you all for participating. Appreciate the testimony. Assemblymember Wilson, I see. With your permission, we'll take item number 12 AB 2300 first medical devices DEHP. Proceed when ready, ma'am.

Well, good afternoon, chair, and soon to be at some point, Senators. I would like to begin by accepting the Committee amendments and thanking the Chair and the Committee staff for their work on this Bill. I really appreciate the conversation you and I had. It was very thoughtful and helped get us to a good place.

I'm pleased to present AB 2300, a Bill that prohibits the manufacturer's sale or distribution of intravenous solution containers and to be made with intentionally added DEHP. DEHP belongs to a family of hormonally active industrial chemical called and I always mess it up phthalates.

I think that's how it says, which are used to make plates plastic, soft and pliable, and can be found in a myriad of products ranging from garden hoses to shower curtains to vinyl flooring and building materials, particularly those made from PVC plastics.

Now, DEHP impacts the thyroid and immune system research indicates that DEHP promotes drug resistance and inhibits the effectiveness of breast cancer drugs, interferes with the ability of chemotherapies to fight breast cancer, and that patients with higher levels of DEHP in their system have had high rates of relapse and mortality.

Now, DEHP is commonly used to impart flexibility to IV bags and IV tubing. Some IV bags and tubing can contain up to 40% of DEHP by weight. DEHP has been shown to leach out of IV bags and tubing and into the medication and other fluids being infused into the bloodstream of patients.

Now, the good news is, is that safer alternatives exist and are already being issued. Sorry. Being used in FDA-approved DEHP-free IV bags. Now, for example, some manufacturers are already exclusively manufacturing DEHP-free IV bags, and other manufacturers also offer a large portfolio of FDA-approved non-DEHP IV bags.

So this Bill would currently ban IV solutions containers with intentionally added DEHP beginning 2030 and IV tubing by 2035. The Committee amendments allow for flexibility to address concerns about possible supply chain shortages and administrative holdups, specifically as it relates to the FDA approval process, which is completely outside of a company or a manufacturer's control.

I would like to thank all of the stakeholders for the robust conversations we've had since this bill introduction. Now with me today to testify and support is Dr. Claudia Lynn Lopez, who is a member of ACOG, and Katrina Dunn with California Black Health Network.

Welcome. Please proceed. Identify yourselves for the record first, please.

Good afternoon. My name is Katrina Dunn and I represent California Black Health Network. We are one of the bill's sponsors of AB 2300 along with Breast Cancer Profession Partners and American College of OB-GYN District Nine. I'd like to first thank the author and staff as well as Committee Chair, and the staff were working with us.

The presence of DEHP and IV bags and tubing poses a serious public health concern as well as a health equity threat, particularly for black women. Black women already face higher exposure to toxic chemicals due to environmental, occupational and consumer product factors, exacerbating health disparities.

Emerging scientific evidence indicates that certain chemical exposures, including DEHP, increase the risk of breast cancer in black women. Despite having a lower incidence of breast cancer, black women experience higher mortality rates from the disease.

DEHP and IV bags and tubing worsens this situation, particularly for those with triple-negative breast cancer, a more aggressive and challenging to treat subtype of cancer that disproportionately affects black women at three times the rate of other racial ethnic groups, highlighting the urgency to eliminate DEHP from IV bags and tubing to mitigate this disparity and improve health outcomes for all Californians.

Opposition is led by Baxter International, the largest supplier of the toxic DEHP containing IV bags and tubing, and they have been seeking delays in implementing the ban on DEHP.

It is worth noting that other manufacturers of IV bags and tubing are not requesting delays and are prepared to meet the demand for FDA-approved DEHP-free IV bags in California.

As a registered nurse with over 26 years of experience, I have witnessed firsthand the impact of toxic chemical exposures on our patients, particularly those from vulnerable communities and rural hospitals. Using DEHP-free medical devices is not just a matter of safety, it's a matter of health equity.

By continuing to use DHP-containing IV bags, we are exacerbating existing health disparities and putting our patients at unnecessary risk. Transitioning to safer alternatives now is crucial for protecting the health and lives of all patients, especially those who are already at a higher risk.

We respectfully ask for an aye vote and oppose any unnecessary delays in its implementation. Ensuring the timely phase-out of DEHP will protect vulnerable populations from potentially life-threatening exposure and improve health across all of California.

Thank you Dr. Next Dr.

Thank you Mr. Chair and Members, Dr. Claudia Lopez, on behalf of the American College of OB-GYNs District Nine, to testify in support of AB 2300, the Toxic Medical Free Devices Act. ACOG is a proud co-sponsor of this Bill.

As a maternal-fetal medicine fellow and practicing OB-GYN, I applaud this common-sense legislation which would phase out the use of DEHP in IV bags and tubing in California. DEHP is a toxic chemical known to the State of California to cause cancer and birth defects.

Especially concerning are the negative impacts it can have on the developing fetus. According to the CDC, exposure during pregnancy may lead to preterm birth, delayed mental health development, and altered timing of puberty in the child. Studies out of Harvard have demonstrated that patients with higher levels of DEHP have increased rates of miscarriage and gestational diabetes.

DEHP has no place in iv bags and tubing, especially as multiple medical facilities, including Loma Linda, City of Hope, and Kaiser Permanente, have already phased out this harmful additive. In 2002, the FDA issued a public health notification urging healthcare providers to reduce the exposure of vulnerable populations to medical devices containing DEHP.

However, the FDA did not ban its use in medical devices or require them to label whether their devices contain DEHP. Given the well-established health concerns associated with exposure to this toxic chemical. I urge you to support this common-sense health-protective legislation and ask for your aye vote. Thank you.

Thank you for joining us, both of you. Any other witnesses in support of this measure? Name, affiliation and position on the measure only, please. Thank you for joining us. Yes, ma'am.

Hi, Natalie Nax on behalf of Breast Cancer Prevention Partners, proud co-sponsor of the bill in support. I've also been asked to register support on behalf of Clean Water Action.

Thank you. Next please.

Whitney Francis with the Western Center on Law and Poverty in support.

Thank you, ma'am. Next please.

Land Lei from Asian Americans Advancing Justice Southern California in strong support.

Thank you. Next please.

Jennifer Robles with Health Access California in support.

Thank you. Next please.

Good afternoon. Karen Emighon on behalf of a Voice for Choice Advocacy in support. Thank you.

Julie Nielsen. On behalf of the National Union of Healthcare Workers in support.

Thank you. Next please.

Reed Addis on behalf of B. Braun Medical and Fresenius Kabi in support.

Thank you. Any other witnesses in support? Let's turn to witnesses in opposition. Lead witnesses, please. Well, you can speak from wherever you'd like.

I'll be quick, Mr. Chairman. John Winge on behalf of the Advanced Medical Technology Association, Advamed. We're the National Trade Association for the Medical Device Industry. I'd like to thank the author, staff, and the sponsors for the long conversations that we've had over this process.

Also want to appreciate the work of the chair and the Committee staff on the amendments. We do plan on removing opposition today.

Thank you. Thanks for coming. Yes sir.

Thank you Chairman. David Gonzalez on behalf of the California Life Sciences, I want to sincerely thank the author for working with the industry as well as the Committee for their Good work on this issue. It's complicated, but I think we come to a position where we can go neutral. So thank you. Thank you, sir.

Next, please.

Hi, Claire Conlonon behalf of Biocom California, thank you to the author and the Chair. We are also removing our opposition and moving to neutral.

Thank you. Any other witnesses one way or the other, please step forward.

Meg Snyder, on behalf of the Vinyl Institute with an opposed, unless amended position. Thank you.

Thank you, ma'am. Any other opposition witnesses? Okay, seeing none, bring the matter back to the dais. I have a colleague here. Colleague, any comments, questions, concerns? Okay, Assemblymember your lucky day. You get to close.

My lucky day. I almost got everybody to neutral. Thank you. You know, this really, this Bill is near and dear to my heart, and it's a small step towards helping to reduce the risk of contact with DEHP in some of our most vulnerable populations, including those with breast cancer. So I respectfully ask when it's appropriate, your aye vote.

We will do that. And I certainly want to commend you on your hard work on this measure and for working with stakeholders to achieve an objective. I think that's evident by the folks that are withdrawing opposition, yet the Bill retains its objective, which is to make sure that patients are safe.

So you did a great job. Nice presentation. Thank you for joining us. When we get a quorum, we'll take a motion, we'll take a vote, and we'll do just that. Thank you. You have one more measure, item number 13. AB 2319 California. Dignity and pregnancy and childbirth. No rush. Please proceed when you're ready, though.

Thank you. Alrighty. Good afternoon again. I would like to begin by accepting the Committee amendments to modify the enforcement provisions and thank the chair and Committee staff for working with my office and the sponsors on this bill.

I'm pleased to present AB 2319 which aims to reduce the alarming and disproportionate maternal mortality rate of black women and other pregnant persons of color by ensuring successful implementation of SB 464 by Mitchell and the California Dignity and Pregnancy and Childbirth of 2019 Act.

A recent study by the California Department of Public Health, also known as, found that women of color. In particular, black women die of pregnancy related complications at much higher rates than white women. In California, this disparity exists across all income levels.

Now, to address this, the California State Legislature passed the act in 2019, which requires hospitals, alternative birth centers, and primary care clinics, which are the facilities covered under the act, to conduct evidence based implicit bias training for all health professionals who provide care during a person's pregnancy, childbirth and immediate postpartum period.

In August 2021, the Department of Justice, also known as DOJ, launched an investigation to ascertain compliance with the act. While some facilities went above and beyond the requirements of the act, there is still more work to be done to ensure full compliance.

DOJ's investigation revealed that there is a need for an enforcement mechanism, public transparency of compliance data, firm compliance deadlines, and additional specific specificity and clarity so that facilities are better equipped to know which providers need to be trained. And AB 20319 accomplished this. I am a mother and a grandmother.

I have sisters, aunts, nieces, and friends that look just like me as a black woman. These statistics hit way too close to home. They acknowledge the sober reality of being a pregnant woman of color in this state and highlights the need to correct the course we're on now.

With me today to testify and support is Tiffany Matthews with the Attorney General's Office and Kim Chiaji. Say it again, Kivus. Sorry. A professional and community doula with black women for Wellness Action project to speak more on the importance of AB 20319 and to answer any questions that you may have.

Welcome. Thank you for joining us. Please identify yourselves for the record. When you begin to speak. I'll let you choose which. Who goes first. Yes, ma'am. Looks like it's you.

I'll jump in. Thank you. Hi. Tiffany Brokaw. My last name recently changed, but anyway, congratulations. Thank you. Good afternoon. Chair and Members Tiffany Brokaw, deputy Attorney General and legislative advocate at the California Department of Justice.

And I'm here today on behalf of Attorney General Rob Bonta, who is one of the proud co sponsors of this bill, along with Black Women for Wellness, action project, Reproductive Freedom for All, Western center on Law and Poverty, the California Nurse Midwives Association, and Black Women's Collective.

We'd like to thank the author, Assembly Member Wilson, and Doctor Weber for their leadership on this and the rest of the California Legislative Black Caucus for making this bill a priority, and the woman's caucus as well.

So the United States has the highest maternal mortality rate in the developed world, and in California, people of color, particularly black women, continue to die. At three to four times the rate of white women.

AB 2319 aims to reduce the alarming and disproportionate maternal mortality rate by ensuring successful implementation of the California Dignity in Pregnancy and Childbirth act, which was authored by then Senator Holly Mitchell in 2019.

So the act requires healthcare facilities to conduct evidence based implicit bias trainings for all health professionals who provide care during a patient's pregnancy, childbirth and immediate postpartum period. So it's one thing for a lot to get past, but it's another to make sure that it's implemented.

So, in August of 2021, DOJ launched an investigation to ascertain compliance with the act.

And once DOJ began its investigation, whereby they sent letters to all covered facilities to see what efforts were being made to comply with the act based on information that was provided to them by responding facilities, they found that about 17% of facilities had begun to complying with the act and not one employee had been fully trained.

And by the end of the investigation, about 81% of providers had been fully trained. So the whole goal of this is to just close that gap and make sure that 100% of the providers covered in the act are being trained. Because the goal here is to reduce bias in our healthcare system.

So to better equip health facilities to comply with the act and administer these required anti bias trainings, AB 2319 will provide clarity on which facilities are mandated to administer these trainings and which providers need to be trained. It will establish firm deadlines by which trainings must be completed to better guide compliance.

It will also confer enforcement powers upon the DOJ, and it will authorize the DOJ to post compliance data online so that the public can see which facilities did or did not administer these trainings. And for these reasons, we respectfully ask for an aye vote.

Thank you. Next, please.

Greetings, Senator Roth and esteemed Health Committee Members. My name is Kairis Chiaggi. I'm a veteran doula of 25 years of non stop practice, which kind of makes me a unicorn in this field.

I train doulas in the community, and I'm a founder of Children of the Sun Doula Project, a nonprofit dedicated to increasing the community based birth support workforce. I've seen lots of changes in 25 years of birth work. I've seen the modernization of medical facilities. I've seen the medications offered in medical management of labor and birth change.

I've even seen the quality of the food served in the hospital cafeterias improve. The one thing that hasn't changed is the impact of bias on medically responsive care.

Because I have served so many of the families representing the incredibly diverse population in this region, I have had a front row seat and the differences between care of BIPOC families and white presenting families when bias is unrecognized and unchecked are demoralizing. Let me share a few brief stories.

There was a birth with a young mom and dad having their first baby. And they were attending an OB who had quite some time in the field. And he made it very clear that he preferred to be at a different birth.

So much so that when the second birth was progressing more quickly than the one that he was attending, he left in the middle of the birth with his resident's hand inside of the mom, holding incision that he had created to rush her through delivering the baby and not finish suturing. That's one story.

Another couple having their second baby. Professional, middle class people very excited on this opportunity to have a baby. In one of their regular scans during their care, it was discovered that mom's body might be opening a little early for this baby.

This happens often, and there is a regular common procedure that happens to help mom's body stay closed so baby can stay inside. Somehow during this procedure, there was a catastrophic error, and only halfway through the pregnancy, her water bag was ruptured.

She was brought back to her room, left in the hospital room all night by herself, with only her husband, no monitoring, no care, leaking fluid, not even knowing if her baby was still alive. The next morning, they are on the phone with me and the nurse that comes in.

The first thing she says is, we don't do terminations of pregnancy here, and basically said, go home. It took a lot of advocacy to get some care. The care finally happened, but at this point, there was an infection that occurred from the procedure, and two days later, their baby was born and passed away.

The last story, a mom married having a history of some miscarriages, which in her own research, she discovered were preventable. Had there been proactive care? When the pregnancy that she was experiencing got to the second trimester, the baby passed away.

She reached out for care that made sense for her body to her providers, checking multiple providers, multiple facilities. She reached out to support of a birthday professional, and I went with her to these appointments where multiple times people came in not even having read her chart. Hey, what are you here for today?

Where she had to say repeatedly, my baby died. It took five months, five months of carrying her deceased baby inside of her body to finally get care that could resolve what they call a missed miscarriage. So that she could move on with her physical health and begin the process of grieving her baby.

And even at that point of care, all I did was go to the car to drive her home because her husband was home with the other children. And in the course of that, they gave her some sort of antibiotic where she had a poor reaction to it.

When I called and asked some questions just about how she was doing, the nurse snapped at me. So I came back in to wait. They tried to send me out again, and I refused because I said the last time I left, she crashed. Not going to do that. I'm going to wait here.

We got her home and she's okay. But all of these things are not. Not because there was a person who was uncompliant with their care, not because they were undeserving, not because, you know, any of the things that somebody might say, well, this was inevitable. They weren't. They were preventable. So that's the testimony I'm offering.

And I'm tremendously grateful to Assemblymember Wilson for presenting this Bill and offering the opportunity to speak on an issue that I'm so passionate about.

And I hope you lean heavily into the idea of accepting, supporting, and ultimately passing this Bill, because no matter what else happens in a child's life, their first ace shouldn't be the day they were born. AB 20319 is one way to protect them from it. Thank you.

Thank you for joining us today and for providing your testimony. You do have a great author, by the way. Any other witnesses in support, name, affiliation and position on the measure, please?

Good afternoon, Chair Members. Sandra Poole, Western Center on Law and Poverty, proud co sponsor and support.

Craig Pulser, for, on behalf of Equality California, in support.

Nicole Wortleman, on behalf of The Children's Partnership, in support.

Hello. Genesis Gonzalez. On behalf of Lieutenant Governor Eleni Kunalakis, in support. Thank you.

Martin Radosevich, on behalf of Reproductive Freedom for all California and the California Nurse Midwives Association, proud co sponsors. Thank you.

Thank you.

Good afternoon, Chair Members. Jonathan Munoz, on behalf of First Live California and First Live LA in strong support, and we thank the author for her leadership on this.

Thank you. Next, please.

Jennifer Robles with Health Access California and support.

Thank you.

Donna Woods with the California Coalition of the National Council of Negro Women. I speak on behalf of more than 4000 women in support of AB 20319.

Thank you for joining us. Next, please.

Katrina Dunn, California Black Health Network, in support.

Thank you.

Kelly Brooks, on behalf of the Santa Clara County Board of Supervisors here in support. Thank you.

Nora Lin with Children Now in support.

Lan Lee on behalf of Asian Americans Advancing Justice Southern California in strong support.

Thank you, ma'am. Next, please.

Beth Malinowski, the SCU California and support.

Thank you.

Kelly Macmillan, on behalf of the California Commission on the Status of Women and Girls and March of Dimes in support.

Thank you. Sir.

Dylan Elliott on behalf of the California State Association of Psychiatrists and the San Francisco Board of Supervisors, both in support. Thank you.

Thank you. Next.

George Prampthu on behalf of ACLU California Action in support. Thank you.

Vanessa Kahina, on behalf of the California Pan Ethnic Health Network here in support.

Thank you.

Kathy Mossberg with the First Five Association in support along with Essential Access Health and AIDS Project, Los Angeles. Thank you.

Thank you. Thanks for coming. Any other witnesses in support? Let's turn to witnesses in opposition first. Lead witnesses in opposition. If any or any others, sir, join us at the table.

Please identify yourself for the record. Proceed when ready.

Try it. How about now?

Perfect.

Chair Members, my name is Greg Burt and I am representing the California Family Council as the Vice President, here to voice our opposition to AB 20319. Our concerns relate to the transgender implicit bias training this bill requires, which hasn't really been brought up.

This bill fundamentally misconstrues the concept of implicit bias and imposes damaging consequences on medical professionals for adhering to biological truths. It is not implicit bias to believe that only females can give birth. This is a biological fact consistently observed and confirmed by science. This bill penalizes medical professionals for recognizing such fundamental truths.

It undermines the integrity of the medical practice and risks patient care by forcing professionals to deny biological realities. Furthermore, AB 20319 uses political pressure and even shame to compel medical staff to give up their scientific and personal religious beliefs about male and female bodies.

Sadly, this reminds me of the techniques used by the Red Guard during the Cultural Revolution in communist China, where its citizens were forced to go through re education to get rid of the four olds, as they called them, old ideas, old culture, old customs, and old habits.

And lastly, recognizing motherhood as a biologically based upholds the dignity of women. Motherhood is a unique aspect of female biology, and acknowledging this fact respects and celebrates the role of women in society. Denying the biological basis of motherhood diminishes the special contributions of women and erodes the foundational understanding of family and community.

And for these reasons, we urge you to oppose AB 20319. Thank you so much.