Assembly Standing Committee on Health

Good afternoon and welcome to the Assembly Health Committee hearing today on April 22nd. Before we begin, I want to make sure everyone understands our Committee rules to ensure we maintain order and run a fair and efficient hearing with the goal of hearing as much from the public within the limits of our time.

We seek to protect the rights of all who participate in the legislative process so that we can have effective deliberation on the critical issues facing California.

Rules of Conduct by Members of the public include no engaging in conduct in conduct that disrupts, disturbs or otherwise impedes the orderly conduct of this hearing Engaging in personal attacks of Members of this Committee, authors, staff or other witnesses talking or loud noises from the audience.

Please be aware that violations of these rules may subject you to removal or other enforcement processes. If you are providing witness testimony at this hearing, all witnesses will be testifying in person. Main support and opposition will be allowed two main witnesses for a maximum of two minutes each.

As a reminder, primary witnesses and support must be those accompanying the author or who otherwise have registered a support opposition position with the Committee and the primary witnesses in opposition must have their opposition registered with the Committee. All other support in opposition can be stated at the standing mic.

When called upon to simply state your name, affiliation and position. Additional testimony will also be in person and limited to name, position and organization. If you represent one. All testimony comments are limited to the Bill at hand.

Additional Housekeeping Issues New Members Today we will have the speaker has appointed Assembly Member Joe Patterson to fill the Republican vacancy on the Committee. Welcome to Assembly Member Patterson when he arrives. Additionally, the speaker has appointed Assemblymember Chris Rogers to substitute for Assemblymember Arambula for today's hearing. Welcome to Assembly Member Rogers.

I would also like to note that AB 1429 has been pulled from today's agenda by the Authority. The following bills are proposed for consent for today's hearing.

Any Member of the Committee may remove a Bill from consent item number 12 AB424DAVIES with a motion of do pass to Appropriations Item number 14 AB463 Michelle Rodriguez with a motion of do pass as amended to Appropriations Item 19 A.B. 676Jeff Gonzalez, Motion of Due Pass to Appropriations Item 22 A.B. A. B.

870 Hadwick with a Motion of Due Pass Item Number 23 A.B. 894 Carrillo with a Motion of do pass as amended to Appropriations Item number 26 AB960 Garcia with a motion of do pass as amended to appropriations. Item 31. AB 1288 Addis do pass to appropriations Item 35 AB 1419 Addis do pass as amended to Appropriations.

In addition, we will have a special order of business today and we will commence with that special order of business to hear bills related to utilization management processes. Utilization management processes are tools used by health plans to evaluate and manage the use of healthcare services. Utilization review can occur prospectively, retrospectively, or concurrently.

A plan can approve, modify, delay, or deny a request in whole or in part based on its medical necessity. Currently, evidence is limited on the extent that health plans use utilization management and the overall impact on the performance of the healthcare system, patient access to appropriate care, and the health and financial interests of the General public.

Despite this, there is clear frustration from both patients and providers regarding utilization management practices. This is also clear that legislative determination to impose these processes for Californians with a number of bills introducing this session and introduce this session in both the Assembly and Senate on this topic.

However, there is a divide on how best to approach such improvements. Some bills aim to address issues at the systemic level by speeding up process times, reducing the overall volume of services that require prior authorization, or extending authorization periods.

Others aim to tackle problems at a more individual level by removing or altering utilization management processes for specific services or conditions. While there is a clear need and desire for progress on improving the utilization management experience, the Legislature will need to consider what the best approach is for all Californians.

Altering structural processes, perhaps, or removing barriers for priority services and conditions might be another approach. The first Bill up today with special order AB669 by Assemblymember Haney will help us do that.

Assemblymember Haney is not here right now, so we will move on to our special order of business with item number two, AB384 by Damon Connolly, which covers health care coverage, mental health and substance use disorders, and inpatient admissions. Thank you, Assemblymember Connolly. Go ahead, whenever you're ready.

Good afternoon, Chair and Members. I am pleased to present AB 384, the Mental Health Protection Act, which would prohibit the use of prior authorizations for patients when they are admitted to an inpatient facility for a mental health or substance use emergency. It also prohibits requiring prior authorizations for the medical care they receive from a physician while enrolled in an inpatient facility for these issues.

AB 384 is narrowly focused on some of the most consequential medical emergencies, situations where an individual's mental health deterioration, drug addiction, or both are so severe that they must be admitted to a 24 hour care facility like a hospital. In these emergencies, the consequences of even the slightest delay in treatment can be severe.

There is widespread agreement amongst physicians and medical professionals that prior authorizations can often create delays in a patient receiving care. If a doctor has to justify to an insurance provider why their decision for a patient's care is, quote, medically necessary, they are diverting attention away from that very patient, oftentimes to submit paperwork or explain decisions to insurance employees with no medical expertise.

According to the American Medical Association, 94% of doctors reported delays providing necessary care for patients due to prior authorizations. Several states have already enacted legislation to reform prior authorizations in certain emergency situations. Last year, notably, Illinois passed the Health, excuse me, Health Care Protection Act, which made them the first state in the nation to ban prior authorization for inpatient adult and children's mental health care.

AB 384 was inspired by the successful effort and simply seeks to ensure that in California there are no unnecessary barriers to patients receiving medically necessary care during the most dire mental health and substance use emergencies. Briefly, I would like to take a moment to address some of the concerns that have been raised about AB 384.

For one, the assertion that prohibiting prior authorizations in limited emergency situations would somehow open the door to fraud and abuse I would submit is, at best, a stretch. Simply put, prior authorization is a mechanism to control costs. It is not a fraud prevention tool.

Fraud is illegal, and in the event there are facilities or physicians who have behaved illegally, there are local and state oversight authorities, like the California DOJ, who are tasked with investigating and prosecuting such crimes. There is no denying that fraud and patient abuse perpetrated by unscrupulous providers is a serious issue in California.

If oversight at the local and state level is not adequately addressing this criminal behavior, that is certainly an issue the Legislature needs to address. But I would respectfully argue that allowing insurance companies to override medical decisions made by doctors during mental health and substance abuse emergencies is not a tool that prevents this behavior.

The second relates to the issue of cost. I would respectfully disagree with the notion that, by eliminating prior authorizations in mental health and substance use emergencies, AB 384 would somehow increase health insurance costs for all California taxpayers.

It is actually these specific situations, particularly with behavioral health cases, where we are seeing waste and increased costs because of prior authorizations. According to the California Hospital Association, insurance company delays and denials contribute to at least $3.25 billion in avoidable costs every year by forcing hospitals to provide 1 million days of additional unnecessary inpatient care and 7.5 million hours of preventable emergency department care.

As you will hear from our sponsors, prior authorizations often lead to patients languishing longer without care while physicians process prior authorizations or try to appeal denials. 86% of physicians also reported that prior authorizations resulted in increased use of healthcare resources, leading to waste rather than cost savings.

In many cases, healthcare facilities need to hire staff exclusively to process prior authorizations, with physicians reporting that they complete 45 prior authorizations per physician per week. Even when prior authorizations lead to a denial of care, physicians successfully overturn that denial by huge margins, with some studies finding 82% of denials overturned on appeal.

These are the real costs being paid by Californians, and I believe AB 384 will actually help to alleviate a small part of this burden. I'll conclude by thanking Chair Bonta and her staff for their work on this bill. I'm actively working on addressing the comments raised in the Committee analysis to align definitions in the bill with LPS eligible facilities, as well as clarifying the role of concurrent and retrospective review of services.

I continue to be open to working with the opposition and would invite their collaboration so that we can achieve common ground on this important bill. Now I'll turn it over to the sponsor and co-sponsor of AB 384. With me in support, I have Paul Yoder on behalf of the California State Association of Psychiatrists and Dr. Le Ondra Clark Harvey representing the California Behavioral Health Association and the California Access Coalition.

Thank you. May I proceed?

We are going to establish a quorum, which is sometimes hard fought in this Committee. Secretary, please call the roll.

[Roll Call]

We have quorum. Thank you so much. Please proceed. You'll have two minutes.

Thank you. The California Behavioral Health Association and the California Access Coalition represent mental health and substance use disorder agencies, companies, and advocates that impact millions of Californians every year. I'm here today as a proud co-sponsor of AB 384, the Mental Health Protection Act.

This bill, as you've heard about, is about restoring common sense and dignity to how we treat people in the middle of a mental health crisis. Every day across California, people walk into emergency rooms. Parents, teenagers, first responders, community members, your constituents. All of them are looking for help and many are in psychiatric distress.

Their doctors know exactly what needs to happen. Admit them, stabilize them, begin treatment, and discharge them with a robust step down program and plan. But instead of being met with a path to recovery, they hit a wall, often due to prior authorization.

Right now, insurers can second guess a physician's judgment, leading to delayed admissions for hours, even days, while paperwork is reviewed or a call is waited to be returned. And during that delay, a person experiencing a psychiatric emergency might be left untreated because an insurer didn't approve the care in time.

Now, we've seen cases where patients on Medi-Cal had to wait hours, sometimes overnight, just to move to a psychiatric bed. This isn't just inefficient, it's dangerous. Preventable, excuse me, administrative burden is not a justifiable excuse for delaying care. These aren't just anecdotes or one off situations or stories.

A June 2024 survey of physician members of the American Medical Association showed that 93% of physicians reported that prior authorizations had a negative impact on patient clinical outcomes, delayed access to necessary care. And another 78% of physicians also reported that prior authorizations these requirements frequently resulted in patients abandoning recommended course of treatment.

And if we don't trust the AMA Association's numbers, the CHBRP report, California Health Benefit Review Program that this Committee depends on, conducted a study in 2023. As referenced in the analysis, their findings suggested that though prior authorization is hoped to be used to reduce and control fraud, the evidence to support this claim is scant.

I ask you to wrap up your comments.

Yes. What is clear is that no other part of our health care system would tolerate this kind of delay when someone is in crisis. We don't wait three days to approve care for someone having a stroke or a heart attack, and mental health emergencies deserve the same urgency, the same respect, and the same level of care. So on behalf of countless families and providers who felt the frustration of delayed care, we urge your support. Thank you for your time.

Thank you.

Madam Chair and Members, Paul Yoder on behalf of the California State Association of Psychiatrists. Briefly, we are still experiencing a mental health crisis in California. Approximately one third of all inpatient hospitalizations are behavioral health related. In addition, the state has experienced a 40% spike in hospitalizations for young people with mental health emergencies.

When prior authorization is used during these crisis situations, doctors have to justify their decisions regarding a patient's care by communicating clinical information with an insurer. So many places in state code, so many other places in state code, it would be ridiculous for that to be the case. And we are talking about just emergency situations.

Lengthy administrative processes force doctors to divert significant amounts of time and focus away from patient care. To wrap up, in mental health emergencies, the consequences of delayed treatment are severe, particularly during inpatient mental health emergencies and hospitalizations.

We've mentioned the survey. One thing we haven't mentioned yet about the survey, same survey. Nearly one in four physicians reported that prior authorizations led to serious adverse events for patients in their care. Proud to be a co-sponsor and urge your aye vote. Thank you.

Thank you so much. Are there any other witnesses in support? Please come forward. State your name, organization, and position only.

Dennis Loper for the United Hospital Association in support.

Leah Barros on behalf of California Hospital Association in support.

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

Madison Whittemore on behalf of Steinberg Institute in support.

Allison Barnett on behalf of Sutter Health in support.

Cher Gonzalez on behalf of the Hemophilia Council of California in support.

Elle Chen on behalf of Drug Policy Alliance in support.

Liz Helms on behalf of the California Chronic Care Coalition in support.

Stephanie Jimenez on behalf of Providence Saint Joseph Health in support.

Carli Stelzer on behalf of the California Behavioral Health Association and the California Access Coalition. Proud co-sponsors.

Sherry Daley with the California Consortium of Addiction Programs and Professionals in support.

Trent Murphy with the California Association of Alcohol and Drug Program Executives in support. Thank you.

I'm Fred Noteware representing Stanford Healthcare in support. Thank you.

Obinna O Oleribe, Center for Family Health Initiative, in support.

Thank you. Are there any primary witnesses in opposition? Please come forward. Thank you. You'll each have two minutes.

Thank you, Madam Chair. Good afternoon, Chair and Members. My name is Matt Akin with the Association of California Life and Health Insurance Companies, regrettably with an opposed position on Assembly Bill 384. First and foremost, we would like to thank the author and staff for meeting with us, allowing us to discuss the bill and voice our concerns.

While we appreciate the intent of the bill and we share the author's concerns about people having health emergencies receiving timely care, we are extremely concerned about the implications of including... Wow. Residential treatment facilities in the bill's definition of inpatient settings. Residential treatment centers fundamentally differ from acute care hospitals and other inpatient facilities.

While they operate as 24 hour centers, they are not locked units and they do not provide constant medical treatment. This distinction is crucial, as it raises significant concerns regarding potential waste, fraud, and abuse within these facilities. In fact, there has been an increasing trend of legislative efforts aimed at regulating these facilities due to ongoing issues of misconduct, inadequate oversight, and exploitative processes. Finally, we find it troubling that the bill lacks clarity regarding whether concurrent or retrospective review rendered is permissible.

The ambiguity could lead to additional complications in ensuring appropriate healthcare delivery and safeguarding against unnecessary costs. For these reasons, we are opposed to AB 384. We look forward to future conversations with the author and staff as the bill moves through the process, if it does so today. Thank you.

Thank you. You'll have two minutes.

Thank you, Chair and Members. My name is Olga Shilo, and I'm here on behalf of the California Association of Health Plans, which represents 441 public and private organizations that collectively provide health care coverage to over 28 million Californians and are dedicated to ensuring access to high quality, affordable health care.

I'd like to align my remarks with those of my colleague from ACLHIC and share our perspective on this bill. We appreciate the goal of expanding timely access to behavioral health care for individuals suffering from mental health emergencies. However, we are concerned about the implications of removing necessary safeguards within the system without improving the quality of care.

Eliminating such steps removes an important layer of clinical review, which could lead to patients receiving substandard or unnecessary care. Health plans are required to have fraud prevention function, and without proper guardrails, there's a higher likelihood of inconsistent care, inadequate treatment plans, and the lack of accountability. If this bill moves forward, we are committed to continuing the dialogue and working with the author. However, at this time time, we must respectfully remain opposed. Thank you for your consideration, and I urgent a no vote.

Thank you. Are there any other witnesses in opposition? Please come forward. State your name, affiliation, and position.

Kelli L'Heureux with Resilient Advocacy on behalf of the California Chamber of Commerce in opposition. Thank you.

Seeing no other witnesses in opposition, I will bring it back to the Committee for any questions or comments. Moved by Aguiar-Curry. Seconded by Schiavo. Any other questions, comments? No. With that, Assembly Member, you may close.

Thank you again for your consideration. Respectfully ask for an aye vote today, and we will continue to work with both the Committee and opposition on a couple of the issues I think we all have raised about the scope. So thank you.

I appreciate that, Assembly Member. I know that you have worked in the space for quite a bit and very much appreciate your moving forward with this bill. And I know that you will continue to address some of the concerns, particularly around the definition around the acute care hospital. So with that, please call the roll.

[Roll Call]

That Bill is out. Assembly Member, thank you. We are going to move now to item number three. AB510 Addis

Well, thank you, Madam Chair. And I want to say thank you to the staff and advocates that are here today. I'm here to present AB510, the Patient Act, which will bring a greater degree of fairness to the prior authorization appeals process, and I do accept the Committee amendments.

Prior authorization is a health plan requirement that provides approval from a health plan before a medication or service can be provided to the patient. While health plans argue that prior authorization programs keep costs lower, physicians and other providers often find the current prior authorization process is expensive, time consuming and creates worse outcomes.

In essence, the system is simply not working for regular people.

Added to this already bad situation is the fact that when physicians try to appeal a prior authorization denial or modification, current law does not require that health plans provide the appealing physician with a peer from the same or similar specialty to discuss the basis for denial or modification.

And in these situations, instead of seeing patients, the treating physician must use more of their time to educate their health plan peer on basic information regarding underlying conditions as well as the appropriateness and medical necessity of their recommended care.

A 2024 survey by the American Medical Association found that physicians spend an average of 13 hours per week on paperwork rather than treating patients. And at a time when normal Californians are struggling to get doctor's appointments, we just can't afford to further deplete their ability to provide care by requiring overly burdensome requirements.

So AB510 is a very simple solution. It requires that when a treating provider appeals a prior authorization decision that the plan must provide a peer of the same or similar specialty upon request of the treating provider. And joining me today to testify and support is Dr.

Thank you, you'll each have two minutes.

Bianca Roberts, Urgent Care Department Chair at Big Horn Family Practice, and Kimberly Diaz, a patient representing the Crohn's and Colitis Foundation.

Good afternoon, Madam Chair, the Committee. My name is Dr. J. Bianca Roberts. I'm a family physician. I've been practicing for 15 years and today I'm proud to be speaking about AB 510 in support of it. And I want to thank Assembly Member Addis for her work on this Bill.

It's very important Bill in the in the Committee as well. Thank you. As a family physician, I'm very familiar with the prior authorization process and ultimately I just want my patients to get the care that they need in a timely manner.

I'd like to share with you about one of my patients who has diabetes and we've tried and felt so many different medications and regimens. And unfortunately, the authorization for what has been successful for her is periodically revoked.

And then when that happens, my staff and I, we have to go through the process of submitting a new prior authorization. Same medication, same patient, same treatment. And it takes time and resources.

And then I go through an appeals process where I have to reach out and connect with a health plan provider who often is not familiar and doesn't have the expertise for managing ambulatory diabetes.

I've been connected with an ICU RN before and then neurologist, and oftentimes I have to take the time, additional time, to explain the new standards of care for managing these common conditions for a family physician. In the meantime, my patient is having a deterioration in her health status.

I can recall one instance where this same patient was hospitalized for complications of hyperglycemia, which is really expensive for the patient and for the health plan and can be avoided with a quick process or simpler process.

And in the process, it's also extremely stressful for the patient and myself and is one of the things that's contributing to the shortage of primary care physicians. So again, I'm asking for your support in AB510.

And while I'm fighting for the care of my patients and keeping them out of the hospital and going through the prior authorization process, my ask really is that when I do talk to a true peer, a peer that can provide us, provide me with the information of why my treatment recommendations were denied and in a quick, a timely manner.

Appreciate your time and support. Thank you.

Thank you so much. You'll have two minutes as well.

Thank you for having me. Madam Chair and Members, my name is Kimberly Diaz. I am an IBD patient, here to speak on behalf of the Crohn's and Colitis Foundation in support of AB510. Living with inflammatory bowel disease means navigating a complicated, often unpredictable illness. My treatment plan has involved everything from advanced medications to discussing surgeries.

Every decision has required careful collaboration with my gastroenterologist, who understands the full complexity of my condition. There was a time when my Doctor recommended a specific treatment, and I remember feeling anxious, not just about my health, but about whether the insurance company would approve it. Under the current system, even if I am denied, an appeal is needed.

There's no guarantee it will be reviewed by a GI specialist. That uncertainty is frightening because any delay in treatment can lead to worsening symptoms, more intense flare ups, and in some cases, a trip to the ER, which I've done before.

AB510 is about fixing that broken process it ensures that when treatment is denied and appealed, the case is reviewed by a specialist who actually understands the condition, someone who can evaluate the decision fairly and knowledgeably. For patients like me, this Bill could mean the difference between staying stable and ending up in crisis. Time is of the essence.

On behalf of more than 3 million Americans with IBD, I respectfully ask for your aye vote on AB 510.

Thank you. If there are others in support, please come forward to state your name, affiliation and position on the Bill.

Dennis Sloke, for the United Hospital Association in support.

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

Good afternoon, Madam Chair and members. Connie Delgado, on behalf of the District Hospital Leadership Forum. In support.

Christine Smith, Health Access California in support.

Madison Whittemore, on behalf of Steinberg Institute in Support.

Hi, I'm Dr. John Valli. I am from the ARP Sacramento State Response Group , and we are in support.

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

Angela Hill, on behalf of the California Medical Association, a proud cosponsor. Thank you.

Tim Madden, representing the California Chapter of the American College of Emergency Physicians, the California chapter of the American College of Cardiology, the California Rheumatology Alliance and the California Society of Plastic Surgeons, all in support.

Molly Maula with Edelstein, Gilbert Robeson and Smith, on behalf of Planned Parenthood affiliates of California in support.

Cheers Spector, on behalf of the California Orthopedic Association. In support.

Ryan Spencer, representing the American College of OBGYN's District 9, the California Society of Pathologists, the California Radiological Society, the California Podiatric Medical Association and the Crohn's and Colitis Foundation, all in support. Thank you.

Cher Gonzalez, on behalf of the Association of Northern California Oncologists and the Medical Oncology Association of Southern California in support.

Thank you. Liz Helms, California Chronic Care Coalition. In strong support.

Oscar Gallardo, on behalf of the California Physical Therapy Association in support.

Mark Farouk, on behalf of the California Hospital Association in support.

Fred Noteworth, representing Stanford Healthcare in support.

Nisette Short, on behalf of Adventist Health, Loma Linda University Health, St. Agnes Medical Center and the Alliance of Catholic Health Care in support.

Paul Yoder, California State Association of Psychiatrists and the California Academy of Child and Adolescent Psychiatry in support. Thank you.

Thank you. Are there any to testify in opposition to the Bill? Please come forward as primary witnesses. Thanks. You'll each have two minutes. Go ahead.

Great. Thank you, Chair and members. Nick Louizos, on behalf of the California Association of Health Plans. We actually have an opposed unless amended position on the Bill. And we do share the goal of ensuring timely access to necessary services for patients. However, we do believe that the current language in AB510 does create challenges and unintended consequences.

Our primary concerns with the Bill and print revolves around a few issues. The specialty matching requirement in the Bill is problematic. There are simply not enough licensed physicians or professionals to comply with the provisions of this Bill.

The timelines in the Bill, we believe, are unrealistic and unworkable, which will compromise the quality of the reviews that our medical officers have to do. And the automatic approval mandate will result in unintended consequences. While it's vitally important that we maintain appropriate checks and balances in healthcare, it is equally important to embrace solutions.

And that's why we have offered, you know, a series of amendments to make this Bill better from our perspective. To address our concerns. We urge the adoption of the following amendments. And you will see some themes in this list, you know, throughout, throughout the special order of business.

But we, we do ask that, you know, the requesting providers be required to submit all appeals electronically. It is essential for providers to embrace electronic authorization of care to ensure more efficient and transparent systems for the patients that they serve. Payers, impacted payers meeting our health plans will have to comply with electronic prior authorization requirements in 2027.

That's a federal rule for federal programs. We think state policy should align and there be some shared responsibility in that respect. We also believe that the provider, the requesting provider be required that all necessary clinical information actually be included in the appeal to make an appropriate determination.

We think the specialty matching requirement in the Bill should be limited to cases where the requested services are outside the standard of care. So we're talking about complex cases, not, you know, more routine, if you will, types of services.

And we have a whole host of, you know, other suggestions that we think would improve the Bill, including specifying that if a plan makes a good faith effort to schedule a peer to peer review with the requesting provider, that they're not automatically out of compliance in cases when the requesting provider is not available or can't be available.

So those are some amendments that we're suggesting for this Bill. We hope to work with the author and the sponsors to try to improve it and move forward. Thank you.

Go ahead.

Good afternoon. Bill Barcelona with America's Physician Groups. Also respectfully in opposition, unless amended on many of the same points as the California Association of Health Plans, we represent 200 capitated, delegated physician organizations within California who are required by their contracts with health plans to perform these UM functions.

We share the same concerns as the health plans in this regard. We understand that there are problems that exist in the system and we acknowledge them.

However, our groups are measured actively on a daily, weekly, monthly and quarterly basis to report on all of their UM activities up to the health plans and then ultimately to the regulators like Department of Managed Healthcare.

We think that transparency around this performance would be helpful to help resolve this situation and we urge further discussion with the sponsors and the author. Thank you.

Thank you. Are there others in opposition? Please come forward. State your name, affiliation and position.

Hi everyone. Kelly Larue with Resilient Advocacy opposed unless amended for the California Chamber of Commerce and appreciate the Committee's thoughtful consideration of these group of bills as a whole and the Committee comments. Thank you.

Stephanie Watkins, on behalf of the Association of California Life and Health Insurance Companies. Also opposed unless amended. Thank you.

With that, I'll bring it back to the Committee for any questions or comments. Just because he's our. Oh, sorry, you know what, you know what? Moved by Krell, seconded by Rogers. Appreciate it with that. Assembly Member.

I think because we do have several of the bills in the special order of business addressing some of the concerns, I would love for you to be able to comment on the timeliness and the timelines that you've presented and what the options are for people to the testimony offered by your family practice physician there around why it's so crucial to be able to have the timelines as you've indicated in this legislation.

I really appreciate the question, Madam Chair. I think we often talk about systems and we talk about challenges, but when we're talking about systems, we're actually talking about real people.

When we're talking about health care, we're actually talking about what can happen in real people's lives that they may either end up making worse, more severe, or a condition that they may then end up having to live with forever or something that can actually cause them to die.

Tightening up these timelines is critically important because it's going to make a difference in real people's lives, in their health care outcomes, but in some cases whether they actually survive. And so we feel like this is a reasonable approach to move forward. We appreciate the Committee for working with us to get some amendments.

We are always willing to continue to work with opposition.

I just want to acknowledge the testimony offered by by the proponents of the Bill. I think the story that you laid out of having to go through a process of explaining the treatment or intervention approach to people who didn't have a common knowledge in the specialty or practice that you were offering I think is incredibly compelling.

And for those reasons, I am going to in addition to just having a Bill that supports us in focusing on patient care is why I'm certainly supporting this Bill. And with that, we have a motion in a second. Would you like to close?

Assembly Member I just I appreciate the conversation and respectfully ask for your aye vote.

Thank you. Secretary, please call the roll.

Roll Call

That Bill is on call for now. Thank you. Thank you. We'll be moving on to item number five. AB539 Schiavo.

Please go ahead. Assemblymember.

Thank you, Madam Chair and Members, I am happy to present AB539, the timely care Act. First, I want to thank the Committee and staff for their work on this measure, and I will be accepting the Committee amendments.

And, you know, this bill, the Timely Care Act is really about putting patients where they belong, at the center of care. No one battling a chronic illness should have to fight their insurance company just to keep getting the treatment that's already been prescribed and approved.

But right now, that's the reality of prior authorization for far too many people. That's why doctors and healthcare providers across the state are sounding the alarm. The current system of prior authorizations is not just inefficient, it's harmful. It's so burdensome that some patients give up on treatment altogether. That's not just a bureaucratic issue. It's a health crisis.

Take, for example, what we are hearing from radiation oncologists. They're seeing critical medications, ones that help ease the pain and side effects of cancer treatment being delayed or denied.

Imagine going through this grueling process of cancer treatment, something I saw my dad suffer through three times, and finally getting the prescription that you need to address the pain, only to have it delayed or worse, even denied when the insurer says it's no longer medically necessary. We can and must do better.

And this bill will eliminate the unnecessary red tape and. And help ensure that patients get that care that they need when they need it by extending the duration of an approved prior authorization to one year or the duration of the physician's prescribed treatment.

This will ease the burden on physicians and help patients stay on track with the treatment that they need. It's a common sense change that will have a real human impact. Here with me to testify and support is Dr. Angelica Martin, a cardiothoracic surgeon who will share her personal experience and the difficulty with prior authorization approvals.

And also Kimberly Diaz on behalf of the Crohn's and Colitis Foundation. Thank you. You'll each have two minutes.

Good afternoon, Madam Chair and Committee Members. My name is Dr. Angelica Martin, and I am a cardiothoracic surgery resident at UC Davis Health. However, I'm here testifying as a private citizen and a Member of SSBMS. And my views are not intended to represent the position of the University of California.

My title and UC Davis affiliation are for identification purposes only. I'm here today to ask for a vote of support of AB539 as cardiothoracic surgery. We are a surgical subspecialty that requires prior authorization to be seen.

These patients that need us are often either coughing up blood, are found to have a suspicious mass on chest X ray, or having trouble breathing or eating. Time is of the essence to get them diagnosed and treated if they are to survive and maintain their quality of life.

As prior authorization currently stands, it is causing delay in treatment for our patients and allowing their cancers to progress. This is what happened with one of our patients in the past year. She was told she had spots in her lungs and needed to see a cardiothoracic surgeon.

She had trouble establishing care within the standard 60 to 90 days, and by the time she was going to be seen by us, she needed to go through the prior authorization process again and her cancer continued to spread. By the time we saw her, surgery was not an option.

Concerningly, this delay in care trajectory is seen commonly among those from underserved communities as they try to navigate the complexity involved with prior authorization. I've had multiple patients in the same shoes as the story I just shared. As cardiothoracic surgeons, we have the skills to save people like this woman through surgery if caught early.

Instead, we are seeing delays in prior authorization and bureaucracy allowing cancer to spread. I am humbly asking for support in support of AB539. Thank you.

Thank you. You'll have two minutes.

Madam Chair and Members, again, I'm Kimberly Diaz. I'm here to speak on behalf of the Crohn's and Colitis Foundation in support of another important measure, AB539. Ulcerative Colitis, which is what I have, is a lifelong condition. It doesn't go away. There's no cure. It takes constant management, frequent monitoring, long term treatment strategies.

For me, that's meant finding the right medication regimens, biologics, immunosuppressants, therapies that my gastroenterologist and I work hard to tailor to my specific needs. Once we found a treatment that actually worked, I thought I could finally breathe a little easier.

But that relief is often interrupted, not because the medication stops working, but because of how the insurance system works. Even after being approved for a medication, I've had to go through prior authorization again and again, sometimes every 60 or 90 days, just to stay on the exact same treatment that we've identified as working.

It's exhausting each time there's anxiety. Will it get approved in time? Will I have to pause treatment? What if a delay causes a flare up? That kind of uncertainty isn't just stressful. It's dangerous for someone with IBD when time is of the essence. I've had flare ups that landed me in the emergency room.

And it's not always about the disease getting worse. It's about access being disrupted. AB539 would fix this. It would extend prior authorization approvals to one full year. Something that just makes sense for people with chronic conditions like mine.

It would save time, reduce paperwork and give patients and doctors the ability to focus on care, not jumping through bureaucratic hoops. Excuse me. This bill is a simple but meaningful reform. On behalf of myself, the Crohn's and Colitis foundation and patients like me across California, I have urge your aye vote. Thank you. Thank you.

Any others in support, please come forward.

Kevin Guzman with the California Medical Association proud co sponsors of the bill.

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

Good afternoon Chair and Members. Kim Stone, Stone Advocacy on behalf of the California Orthopedic Association in support.

Christine Smith, Health Access California in support.

Sumaya Nahar with the Children's Specialty Care Coalition in support.

Tim Madden representing the California chapter at the American College of Cardiology, the California Rheumatology Alliance and the California Society of Plastic Surgeons in support.

Ryan Spencer representing the California Podiatric Medical Association also co sponsor the measure. The Crohn's and Colitis foundation and the California Radiological Society all in support. Thank you.

Molly Mallow representing Planned Parenthood Affiliates of California in support.

Cher Gonzalez representing my clients the American Diabetes Association, the Hemophilia Council of California, The Association of Northern California Oncologists and The Medical Oncology Association of Southern California, all in support.

Good afternoon. Jorge Cruz with the California Access Coalition in support.

Good afternoon. Liz Helms, California Chronic Care Coalition in strong support. We are also co sponsor of this bill.

On behalf of the California Physical Therapy Association. In support.

Thank you. We'll move forward with witnesses in opposition. Please come forward.

Thank you. Chair and Members. Nick Louiseos, those California Association of Health Plans. We have an opposed unless amended position on AB539 as drafted. We. We believe the bill will lead to unintended consequences and hinder our Members ability and the physicians that we work with to ensure that enrollees receive the highest value care.

Some of the issues that we see with the bill is that it'll lead to a detrimental impact on patient care, invitation to potential fraud, waste and abuse, an increase in healthcare costs due to duplicative and lower value care being administered.

But you know, in the spirit of embracing solutions, you know we've come forward with amendments on many of the bills that are under the special order of business today for this particular bill, you know, we do believe there are changes that can make it something that we can move forward with.

Again, I just reiterate, electronic submissions of these requests are very important. We think that providers should be required that to submit authorization requests electronically. Our plans are going to be required to do this in 2027 for federal programs, and we think that will speed up the efficiency and transparency for the patients that our contractor provider serves.

It'll also expedite turnaround times. The plans would like to receive clinically complete requests. So in other words, require that authorization subject to the proposed timelines, include all necessary information necessary to make an appropriate determination. We'd like to limit the validity period to 6 months instead of a year. We think that's more appropriate.

And it should be confined to specific treatments or drugs, like for chronic conditions as well. If we go with a longer validity period, it should be narrowly tailored to specific longer term or chronic conditions. The Bill right now is very undetailed in that Department, although we know there are amendments in the analysis.

And so we're still reviewing those. We should exempt certain treatments and drugs. So along the, along the same lines, and there should be some rules about when the expiration of the timeline is realized, you know, what happens to the authorization requests, et cetera.

And so I think I'll leave it at that because I know our physician medical group colleague has some points to make as well. But we do want to be a part of the conversation. Would like to continue the conversation with the sponsors and the author as well. Thank you.

Thank you. Please go ahead.

Chair and Members, thank you. Bill Barcelona with America's Physician Groups also on an opposed and less amended position.

Our 200 California physician groups who have physicians managing physicians oppose this Bill in its current form because the language is overbroad and it decreases the flexibility of the physicians in our groups who are managing their patients care to set the appropriate timelines for these authorizations. And we feel that that constrains their medical judgment.

So it's an interesting conundrum that we have here. Thank you.

Thank you. Any others in opposition, please come forward. You all should take an aisle seat.

Kelly Larue with Resilient Advocacy on behalf of the California Chamber of Commerce, looking forward to working with the author in an opposing, less amended.

Thank you. Stephanie Watkins on behalf of the Association of California Life and Health Insurance Company, also opposed unless amended.

Thank you. I'll bring it back to the Committee for any questions. Assembly Member Patterson.

Great. Thank You I came in here thinking I was going to really oppose this bill because I had some concerns. But it sounds like actually the opposition is coming to the table to see if maybe it can be narrowed because my concerns were it was it is pretty broad.

I mean, I think there are differences between, you know, your witness had mentioned in terms of a lifelong disease, right, where you're going to need treatment all the time. And then also maybe you have a condition at this point in your life where maybe actually, for example, like a substance use disorder where you're getting. You.

Know, one type of service and then maybe it switches to like naltrexone instead later on to help that individual, maybe through a different doctor too, by the way.

So I think, you know, probably, like I said, I came in a little bit more down on the Bill, but actually after listening and then the opposition seems like they're going to come to the table and hopefully you'll work with them.

And so, because today I'll lay off, just hoping maybe narrow it a little bit because it does seem very broad, by the way, what you mentioned regarding the cancer treatment and things like that. I mean, I can think of a lot of good reasons why this should happen, why this should exist.

And that was a great example as well. And so I want to get there, but I do think it's just overly broad right now. So. Thanks.

Would you like to make comment on that? Assemblymember?

Yeah. Thank you. And I appreciate you always having an open mind when you come to Committee. And you know, I actually think that the amendments, and we were happy to work with the Committee staff on the amendments, really do narrow it.

And so they, you know, the amendments say that it's either a year or it's the duration of the physician's prescribed treatment. So the physician really has control over the duration.

If the duration, like, you know, the example you gave for addiction treatment, if that treatment is eight months, then it can be an eight month prescribed treatment and then they can check in again and see how it's going and give an additional, you know, determination at that time.

But I, you know, I think at the end of the day the question is, are we going to trust doctors and physicians to decide what the treatment is and how long that should be, or are we going to allow insurance companies to kind of get in the middle of that and disrupt and have opportunities to deny it when it's already been determined that this is the treatment that patients need and this is the appropriate treatment and they can determine the duration for that too?

And you know, I think it goes without saying, obviously that chronic diseases should not have to go through a 60 or 90 day renewal to be able to get the treatment that they know that they need.

But you know, if there's some reason why that patient, you know, they're, they're trying maybe new medications, which we've heard about today, sometimes it takes a process to get to the right place.

Then that physician could put that, that timeline in that treatment and make sure that they have that time to check in and then kind of reauthorize or make adjustments or whatever it may be. So, so, you know, I think, I think these changes appreciate the thoughtfulness and collaboration of the Committee.

Happy of course, to talk to the opposition. I don't think they've brought us any amendments directly to our office at this time, but happy to review them and discuss them. And, but I, you know, at the end of the day, I think I trust doctors to decide what patients need.

And you know, if there's waste, fraud and abuse, then there are other laws that go after that. But this is really just making sure that people have timely care and access to the care and medication that they need when they need it.

Thank you. Well, I appreciate that. And I, you know, I'm on board with where you wanted to go with that. You know, last year I supported basically a gold card, so I'm in. No, so I've definitely supported legislation maybe even more broad than this in the past, but I am aware of situations in which people will.

And why I think prior authorization sometimes is necessary is as terrible as it can be in some cases is because people might get treatment from one Doctor and then eventually go somewhere else, for example. Right. And so some level of review is necessary at some point in that process.

And so if somebody has, let's say, you know, a chronic condition where they're under the treatment of a Doctor for a very long time, but then maybe they go somewhere else. Right. And get treatment under a different Doctor and their treatment is different. Does that one still exist, for example?

I just think there is, there is a point where there, where the plans which are actually might be paying multiple providers. There is a time where maybe there a check should happen, I guess is what I'm saying.

So, you know, I just appreciate your consideration of that as you work through the process and thanks for always being open to working on it.

Thank you. I did have a follow up question to Assemblymember Patterson. My understanding is that the prior authorization is specific to the provider and the patient. So is there an Opportunity to essentially rollover the prior authorization beyond the existing provider.

No, that's not the intent of the bill. And we can look at whether or not that's unclear for some reason, but we can certainly clarify it if it is. Mr. Patrick.

And that's kind of what I was saying is, yeah, you might have authorization with that provider for that treatment. Right. And it's for X amount of time.

But if you have another provider somewhere else and you also get authorization or you go through them, you're going to go through the plan, you're going to rebill it through the plan for a different type of treatment, maybe for the same condition.

I mean, that sounds like fraud though, right?

Hey, I would agree with you, but that's why we have prior authorization in place around that.

Right? I mean, we're not going to solve fraud in this bill. But I think, you know, it's illegal. Medical fraud is illegal, you know, as was stated, I think by one of the prior authors. And it will continue to be illegal. And so there's, there's laws and processes that are appropriate for addressing that.

If that's the case, I'll ask the.

Opposition to help provide some clarity to the.

Yeah, I don't know. You want to take this one? What the Knox Keen act says about broad waste and AB.

Yeah, Knox Keen Act. I'm a former Deputy Director at DMHC and I ran the licensing division. The Knox Keen act requires all licensed health plans in California to file a comprehensive anti fraud plan. So they're required to do it by contract. Any of our groups that are delegated down have to abide by that as well.

You have to provide annual reports back to the Department. But to answer Assemblymember Patterson's question about specific examples, more importantly, a lot of our physician groups in California deal with senior patients in Medicare. Open authorizations for a specific drug prior to a hospital inpatient admission sometimes need to be curtailed. People come out of the hospital.

There is a problem when seniors come out and they need medication reconciliation. Sometimes they have active open prescriptions for two competing drugs. They end up taking both because they have open prescriptions and then they overdose and then they end up back in the hospital within two weeks of being discharged. And that's what we call an avoidable readmission.

That's a patient safety issue. It's a life threatening issue. That's one of the reasons why we have these requirements in the system.

I think it would be fair to say that there's a way to be able to be more specific about that. Particular use case in the requirements that we might outline. And I also think that I know that this author is willing to work with the opposition moving forward.

And I think the particular point around making sure that the use case related to chronic conditions is something to be explored. And I would essentially say that the example that you just offered falls under that General category as well.

So I'm sure that the author will continue to work with you as this Bill moves forward out of this Committee, should it. Should it be able to do so? And with that, would you like to close? Michiel?

Thank you, Madam Chair. You know, happy to work with opposition on any clarifying questions that they have. But at the end of the day, you know, we are really trying to make sure that care that should be received and care that's really saving lives and protecting people's health needs to continue and not be interrupted by needless reauthorization.

So respectfully request an Aye vote. Thank you.

We've had a. We need a motion. Thank you, Mr. Rogers. Seconded by Patel. Thanks. With that, Secretary, please call the roll.

The motion is do pass as amended to appropriations. [Roll Call]

That bill is on call. Thank you. We're going to move on now to item number one, AB669, presented by a very patient Assembly Member. Assembly Member Matt Haney.

Thank you so much, Madam Chair and Members. I want to start by thanking you and your staff for your work on this Bill and accept the Committee amendments. California families pay hundreds and sometimes thousands of dollars every month for health insurance, expecting the coverage to be there when they need it.

But when insurance companies are exploiting a loophole, using corporate review panels to justify cutting off life-saving addiction treatment in order to maximize profits, even when medical professionals say continued care is necessary, they're using corporate review panels to rubber-stamp denials, even when doctors say treatment is still necessary.

This means families who pay every month for insurance are left without care when they need it the most. Major health insurers reportedly collect billions of dollars collectively in profit in 2023, largely by controlling medical expenses and limiting payouts for care. Research shows that longer treatment stays lead to better recovery outcomes.

Yet insurers frequently cut off coverage after just a few days. More than 40% of opioid overdose deaths occur within two weeks of early treatment discharge, highlighting the deadly consequences of premature insurance denials. Other states have already taken action. New York, New Jersey, Massachusetts, and Delaware all have laws preventing insurers from cutting off addiction treatment too soon.

These policies have increased treatment retention rates, reduced overdose deaths, and kept patients in care long enough to recover. California, however, has failed to act, allowing insurers to keep profiting at the expense of patients. The case of Ryan Matlock is a devastating example. At just 23 years old, Ryan sought addiction treatment.

His insurer cut off coverage after three days, and less than a week later, he died—died from a fentanyl overdose. AB669 closes that loophole by stopping insurance companies from cutting off addiction treatment early, based on their own insurer-appointed reviewers' recommendations, and ensures up to 28 days of uninterrupted addiction treatment for addiction patients.

By removing these barriers, AB669 will increase treatment retention rates, reduce emergency room visits and hospitalizations, and align California with best practices from other states that have successfully strengthened insurance protections for addiction treatment. We've had productive conversations with the opposition and are looking forward to reviewing any proposed amendments.

Here with me today in support of the Bill is Christine Matlock, a mother who, as I said, recently lost her son Ryan, and Dr. David Can, on behalf of the California Society of Addiction Medicine. Additionally, Louisa Davis, a board member from the Addiction Treatment Advocacy Coalition, is here to provide any answers.

Thank you. You'll have two minutes.

Good afternoon, my name is Dr. David. Good afternoon, Chair Bonta Members of the Committee. My name is Dr. David Kan, and I'm a practicing addiction psychiatrist. I speak on behalf of the California Society of Addiction Medicine, where I've served as past President. CCM represents the voice for evidence-based treatment.

Every day, I witness the devastating impacts of substance use disorders on individuals and their families, and I'm here to strongly advocate for AB 669. Insurance companies routinely use prior authorization not to enhance patient care, but to deny and limit critical addiction treatment.

As a psychiatrist, I've seen far too many patients whose lives are put at risk because their insurers prematurely ended coverage for medically necessary treatment. As the Assembly Member mentioned, research shows that longer treatment is associated with better outcomes.

And unfortunately, 40% of opioid overdose deaths result as come as a result of premature treatment ending, and people die within two weeks of leaving treatment. AB669 addresses the urgent issue by removing barriers, such as prior authorizations for medications. Medications alone reduce fatal opioid overdose risk by 60 to 80%.

This Bill aligns California with other states who have enacted similar legislation, with improvements in reducing overdose fatalities. The prior authorization process for FDA-approved medications represents a barrier to access. While I may be willing to spend 30 to 60 minutes on the telephone for my patients, not every physician is willing to do so.

Furthermore, medication prior authorizations are approved the vast majority almost 98% of the time, suggesting that there are ultimately barriers to care. Opposed to this Bill argue that removing prior authorization reduces accountability. However, the actual lack of accountability lies in a system that prioritizes cost cutting over patient saving patient lives.

I urge you to support AB669 and I respectfully ask for your aye vote.

Thank you. Please go ahead.

My name is Christine Matlock. My son, Ryan Michael Matlock, was born July 8, 1997, and tragically passed away on March 23, 2021, from a fentanyl overdose at the age of 23.

As much as I wish I could tell you about his kind heart and his infectious laugh, today I'm here to talk about how my insurance company failed him and our family during his time of recovery from addiction. Ryan came to me one night and said, "Mom, I need help. I can't do this anymore."

This time, he specifically asked for help with fentanyl addiction. We had tried rehab three times before, always at the same facility recommended by my insurance company, and still, Ryan endured two overdoses. We worked with the insurance company for three and a half weeks, finding a specialized facility.

This time, Ryan frankly stated that he needed help from people who understood exactly what he was going through. The previous facility kept trying to treat Ryan for heroin, not fentanyl—which requires an entirely different approach.

Group sessions were canceled regularly, and classes about finding work, finding houses, paying bills, and dealing with the court system did not apply to Ryan. As he left, he said, "I'm going to make it this time, Mom. I'm tired of living like this."

Ryan was approved for seven days of detox, and yet, after three days, the insurance company said his vitals were good and he could go home. His doctor, counselor, and psychiatrist all recommended the 90 days of care. We appealed, but without speaking to Ryan, they denied the care he needed.

Ryan was told he could do it on his own through an outpatient program. After three days, Ryan was working towards his dream of joining the fire academy. But the insurance company ignored the experts and relied simply on their statistics. They said he could control his addiction if he really wanted to.

He called me, saying, "Mom, I'm not strong enough yet. I need help." And the next morning, he was released. Just 48 hours later, he overdosed and died. Four years later, I still miss him every day. Our lives will never be the same. Ryan asked for help.

He deserved help but was denied, based on a generic chart. In his memory, I will continue to fight for bills like AB669, so no other family has to face the tragedy that we live with every day. Thank you.

Thank you. And at this time, I ask that the Committee take a moment of silence to recognize Ryan Michael Matlock.

Thank you. We're going to move forward with any others in support of this bill.

Dennis Loper for the United Hospital Association in support.

Mark Farouk on behalf of the California Hospital Association in support

Jorge Cruz on behalf of the California Behavioral Health Association, proud co-sponsor in support

Elle Chen on behalf of Drug Policy Alliance in support

Christine Smith, Health Access California in support

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

Louisa Davis with Addiction Treatment Coalition in support.

Sherry Daley with the California Consortium of Addiction Programs and Professionals, proud sponsors in support

Ellen Sergusian on behalf of myself and Glendale Luxury Rehab in support.

Good afternoon. Silvia Solis Shaw here on behalf of the California State Association of Psychiatrists in strong support. Thank you.

Mari Lopez, California Nurses Association in support.

Thank you. We will now hear from primary witnesses in opposition.

Madam Chair, Members. Steffanie Watkins on behalf of the Association of California Life and Health Insurance Companies. First and foremost, I'd like to thank the author and his staff for their willingness to meet with us last week and discuss our concerns.

We'd also like to acknowledge the person story I think many of us in this room have been touched by substance abuse and the opioid crisis, and so our hearts go out to the families that have all been touched by that.

As well as for the most recent-- We're also thankful for the most recent amendments that were taken to narrow the bill to in-network services.

Regrettably, while we appreciate the open dialogue, we main concerned about many of the specific provisions in the bill. As drafted, AB 669 would prohibit concurrent and retrospective review of all inpatient/outpatient substance use disorder treatment services for the first 28 days when determined to be medically necessary by the treating physician.

Additionally, and even more concerning, the bill would restrict plans and insurers from employing prior authorization or any other prospective utilization management requirements on outpatient drugs related to the treatment of substance use disorder.

Again, while we share the author's goal of ensuring individuals suffering from substance use disorder receive critically important medically necessary addiction treatment services, we believe this bill goes too far. Specifically, AB 669 emphasizes on limiting authorization for care is deeply concerning.

If passed, it can result in a system where individuals are placed in higher level patient and residential care treatment settings for longer than necessary. This approach contradicts the principle of providing care in the most integrated and least restrictive environment.

Furthermore, other than restricting the bill to in-network services, this bill does not address or contemplate the issues of provider quality, including those potential for patients to be subjected to non-evidence-based treatments.

This is particularly troubling given the vulnerability of this population and the general need for oversight in an area of healthcare where licensure and oversight standards are often less stringent.

Unfortunately, rather than addressing those concerns, AB 669 would make it nearly impossible for health plans and insurers to permit patients from falling victim to the unscrupulous practices of some substance use rehabilitation-related facilities that are putting patients at risk and driving up the cost of care.

Thank you. Can you wrap up your comments?

For those reasons, we remain concerned with the bill, but look forward to working with the author and the sponsor if the bill moves forward today. Thank you.

Thank you. You'll have two minutes.

Thank you Chair and Members. My name is Olga Shilo and I'm here on behalf of the California Association of Health Plans, which represents 41 public and private organizations that collectively provide health care coverage to over 28 million Californians and are dedicated to ensuring access to high quality, affordable health care.

I'd like to align my remarks with those of my colleague from ACLHIC and share our perspective on this bill. We sincerely appreciate the intent behind AB 669 and recognize the effort that went into the recent amendments narrowing the bill scope to in-network health services. Unfortunately, these changes don't address our overarching concerns with the bill.

We understand and share the goal of ensuring timely access to necessary health care services for patients, including for substance substance use disorder treatment. However, we are concerned about the implications of removing accountability within the system without improving the quality of care.

Utilization management, including both concurrent and retrospective review, plays a critical role in maintaining the integrity and effectiveness of our healthcare system. It ensures medical necessity, upholds provider accountability, protects against fraud, waste and abuse, and safeguards against unnecessary costs. Most importantly, it ensures that the patient receives the right care at the right time.

While it is incredibly important to maintain appropriate checks and balances in health care, we are also continuously working to improve the authorization of care processes. If this bill moves forward, we are committed to continuing the dialogue and working with the author. However, at this time, we must respectfully remain opposed. Thank you.

Any others in opposition?

Kelli L’Heureux with Resilient Advocacy on behalf of the California Chamber of Commerce in opposition. Thank you.

Thank you. I'll bring it back to the committee for any comments or questions. Assemblymember Haney, I would like to just give you an opportunity to address the opposition's concerns about the nature of the setting for SUD treatment and how that impacts the review.

Sure, and I do again in the-- We will continue the conversation on all of those issues. And because of the amendments that were taken, we are only talking about in-network providers. So these are vetted through an extensive credentialing process by the health plan. We looked it up on the Anthem's website, for example.

They choose doctors and health hospitals for their plans, ensuring high quality care. There is extensive vetting that that happens. These are folks who've already been approved by the health plans themselves. And we're talking about 28 days here. This is a situation in which a person has said, I need help.

This is the type of help that I need. I'm seeking it. And a physician is agreeing and saying you need help. This is the type of help that you need. That's the way these decisions should be made. And we're only asking for it for 28 days which is the clinically proven, research-determined length of time.

That is the minimum that folks should be able to access without disruption. And that would have made the difference in Ryan's life. It would have made the difference in so many folks' life to at least have that opportunity to get stabilized for that 28 days by an in-network provider already determined by the health plan.

And a physician agrees that somebody needs help. I think that's something that can help a lot of people. We know we have opioid epidemic, a crisis in our state. These are folks who want help and they're paying health insurance.

They should be able to get at least 28 days without having somebody in the-- in Ryan's case who didn't even speak to him, who didn't even talk to him in what he needed and instead made that decision separate from him.

Clearly we should be able to expect that people have at least 28 days of treatment without disruption in an in-network provider that's already been vetted by a health plan. This should be some-- This is a no brainer. This is the bare minimum that everybody should be able to access if they need help.

Thank you. And I want to thank the opposition for bringing forward your concerns. I especially want to thank Ms. Matlock for coming forward and using the incredible loss of your son to be able to educate us on the impacts of the decisions that we make here in our policy. With that, Assemblymember, would you like to close?

Thank you again and I really want to thank you for being here. Thank you for having the courage to be here and share your story and Ryan's story and to be able to make sure that what happened to him does not happen to anyone else. And that everybody who seeks treatment, who needs treatment, is able to receive it. And we with that, respectfully ask for your aye vote.

Thank you. We need a motion and a second. Moved by Rogers. Seconded by Schiavo. Secretary, please call the roll.

The motion is do pass as amended to Appropriations. [Roll call]

That measure is on call for now. Thank you. We'll move on now to item number four. AB512 Harabedian.

Thank you Madam Chair. Thank you Members of the Committee and thank you Madam Chair and staff for all of your work on this Bill. We will be accepting your amendments. And AB512 might be one of the simpler bills that it is in front of you today.

It is about prior authorizations and I know Madam Chair has explained to the audience and to the Committee Members exactly what that is and why it is so important. AB512 would simply speed up all prior authorization determinations for urgent requests to 24 hours, one day. And not urgent requests would be made in 48 hours or two days.

Currently urgent requests can take up to 72 hours and non urgent requests can take up to five business days. Obviously I don't need to get into the details as to why that is important and sometimes life altering.

If you have a injury on a Friday and five business days could mean that you are waiting well into the next week to actually get care. 93% of doctors who have been surveyed have said that they experience on a regular basis delays in getting access to care for their patients.

Nearly 13 hours a week is spent by doctors actually filling out prior authorization paperwork. There's a lot of issues that we need to fix. This Bill really is just speeding up the timelines, making sure that we don't have life altering delays and making sure that people within our system are getting the care that they need.

Here to testify on behalf of the Bill is Angelica Martin who is a cardiothoracic surgery residential at UC Davis and Liz Helms who's the Director of the Chronic Care Coalition. And I respectfully ask your aye vote.

You'll have two minutes. Go ahead.

Thank you. My name is Liz Helms and I'm President and CEO of the California Chronic Care Coalition. Thank you for the opportunity to speak in strong support of 512. The 4 C's is a unique alliance of more than 30 leading consumer health organizations, including physicians and provider groups representing Californians living with chronic conditions.

We advise and promote the collaborative work of policymakers, industry leaders and patient centered stakeholders emphasizing access to affordable, quality health care. Every day our coalition hears from Californians living with chronic and serious conditions patients who rely on timely access to care to manage their health and prevent complications.

Unfortunately, too many of these patients face harmful delays due to the prior authorization process that we've worked on for way too many years. Under current law, health plans can take up to five business days to decide on current law for standard requests and up to 72 hours for urgent care.

For someone struggling with pain, facing a flare up, or needing rapid intervention, these delays are not just frustrating, they can be life altering. AB512 takes a critical step forward by reducing these timelines to 48 hours for standard requests and 24 hours for urgent wounds.

This reform means patients will spend less time waiting in limbo and more time getting the care they need to stay healthy and out of the hospital. It also means that physicians who know their patients best can act quickly without being hampered by unnecessary administrative burdens.

We know that delayed care can worsen health care outcomes, increase stress, and even lead to higher costs when patients conditions deteriorate. By streamlining the prior authorization process, AB512 will help ensure that no one's health is jeopardized in red tape.

On behalf of the millions of Californians living with chronic illnesses, I urge your aye vote on AB512 and thank you for this opportunity.

Thank you. You'll have two minutes.

Good afternoon, Madam Chair and Committee Members. My name is Dr. Angelica Martin. I'm a cardiothoracic surgery resident at UC Davis Health. However, I'm here testifying as a private citizen and a member of SSVMS. My views are not intended to represent the position of the University of California. My title and UC Davis affiliation are for identification purposes only.

As a heart and lung surgeon, my work includes cutting out cancer from people's lungs or chest cavity. I am here today to ask for a vote of support for AB512 and for your help in improving our patients lives.

Specifically, I want to emphasize the harm that delays of 72 hours can have in the treatment of our cancer patients. For example, for patients with stage 4 cancer, surgery is no longer an option and we must then refer them to our oncology colleagues for chemotherapy, immunotherapy or radiotherapy. Treatment with these modalities must sometimes be immediately started.

Whether this is because the tumor is so big that it's compressing structures and making it difficult for the patient to breathe or the patient's nutrition has declined so much that they need nutritional support, a delay of 72 hours is unacceptable and leads to patient suffering.

All of our patients deserve the opportunity for timely care that can save their lives. Shorter turnaround times for prior authorization can drastically improve the patient's outcomes. I am humbly asking for your support and a vote of support on AB512. Thank you.

Thank you. Are there any others in support? Please come forward to state your name, affiliation and position on the Bill.

Kevin Guzman, with the California Medical Association, proud sponsors of the Bill.

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

Mark Farouk, on behalf of the California Hospital Association. In support.

Jorge Cruz, on behalf of the California Behavioral Health Association and support.

Mari Lopez with the California Nurses Association. In support.

Dr. John Valli, volunteer with ARRP, in support.

Fred Noteware with Stanford Healthcare, in support.

Tim Madden, representing the California Chapter of the American College of Cardiology, the California Rheumatology Alliance and the California Society of Plastic Surgeons, all in support.

Ryan Spencer at the California Podiatric Medical Association. In support.

Molly Maula, representing Planned Parenthood Affiliates of California in support.

Cher Gonzalez, representing my clients, the American Diabetes Association, the Hemophilia Council of California, the Association of Northern California Oncologists, and the Medical Oncology Association of Southern California, all in support.

Oscar Gallardo, on behalf of the California Physical Therapy Association and support.

Good afternoon, Madam Chair and Members. Connie Delgado, on behalf of the District Hospital Leadership Forum and support.

Nicette Short, on behalf of Adventist Health, Loma Linda University Health, the Alliance of Catholic Health Care, and St. Agnes Medical Center, in support.

Good afternoon. Sylvia Solis Shaw here on behalf of the California Academy of Child and Adolescent Psychiatry as well as the California State Association of Psychiatrists, in support. Thanks.

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

Thank you. We'll move forward now with opposition. Primary witnesses. You'll each have two minutes.

Thank you Chair and Members. Nick Louizos with the California Association of Health Plans. Again, we have an opposed unless amended position on this. In the spirit of embracing solutions, we wanted to come forward with the Committee and suggest some alternatives to the proposal before you. We do understand and share the goal of ensuring timely access to medically necessary services.

We believe, however, the proposed timelines in this Bill in and of themselves will negatively impact the system and lead to the exact opposite goal that the Bill is trying to achieve. Just broadly speaking, authorization for care is a tool that promotes safe, high quality and affordable care.

The process is a standard practice among public and commercial health programs, including MediCal, Medicare, CalPERS, and commercial markets. Indeed, over 85% of medical services and 75% of pharmacy services do not require authorization for care at all. But it is there to ensure the right care at the right time for the right people.

As drafted, AB512, we believe, will lead to unintended consequences, including increased administrative burdens on doctors, potential for increased denial rates, and increased cost of health care. While it's vitally important that we maintain appropriate checks and balances in the healthcare system, it's also equally important to be a part of the solution.

That's why we're proposing the following alternatives to the Bill. Again, electronic submissions. We think providers should be required to submit authorization requests electronically. This will greatly streamline and speed up the review process. Electronic prior authorization technology is 71% faster than processing manual prior authorization requests. Clinically complete requests are necessary.

The Bill should require authorization requests include all necessary clinical information to make the appropriate determination. We think pharmacies should be excluded expressly from the Bill because they have their own specific rules in place in current statute and a delayed implementation date to allow providers to comply with electronic submissions requirements.

Health Plans want to be a constructive part of the solution, which is why we've offered these alternative suggestions and we look forward to continuing our conversation with the sponsors and the author. Thank you.

Good afternoon. Chair and Members. Bill Barcelona, America's Physician Groups, also an opposed unless amended position. California's capitated delegated medical groups stand in the middle of this process.

We have physicians managing physicians. Conflating all prior authorization requests down from five days to what is currently the standard for urgent makes all prior authorization requests urgent in the minds and in the activities of our physicians who are doing this review process and they are doing approximately 1800 of these reviews a day for a medium-sized medical group.

We're concerned that this is going to create patient safety issues in the long run. It is going to compromise physician judgment, physician oversight from the referring physicians and we see a number of modifications that occur on a daily basis because of bad referrals, lack of understanding by one physician of the total care needs of the patient in a complex case management situation.

That's why our groups exist to manage and quarterback these care decisions. Thank you.

Others with opposition, please come forward.

Kelly Lheureux with Resilient Advocacy on behalf of the California Chamber of Commerce with an opposed unless amended. Thank you.

Steffanie Watkins on behalf of the Association of California Life and Health Insurance also opposed unless amended. Thank you.

I'll bring it back to the Committee now for any questions or comments. Assemblymember Patel.

Assemblymember Harabedian, thank you for bringing this Bill forward. I do have a personal tragedy in my own life regarding prior authorization delays. So I understand your impetus for bringing this Bill forward and it's really heartfelt. If you are open to adding co-authors, I would love to to be added as a co-author.

In that vein also, I hope and I know that you will continue to work with opposition to make sure that we get this right because it's also oh-so critical that we get it right.

Would be honored to have you as a co-author and yes, you have my commitment to do that.

And when the time is right, I'd like to make a motion to approve.

We will consider that time now. Any seconds? Seconded by Gonzalez. Assemblymember, would you like to close?

Thank you, Madam Chair. Thank you for the testimony on both sides. Respectfully ask for an aye vote. Thank you.

Thank you. We have a motion and a second and we'll move forward. Secretary, please call the roll.

[ROLL CALL]

That measure is on call. Thank you. We'll move forward with item number six, AB 574 Mark Gonzalez. Please go ahead whenever you're ready, Assemblymember.

Thank you, Madam Chair. Thank you, Members. I'm here to present AB 574. Just like my colleague before me, in much need of prior authorization. This is sort of that next step to that which will allow patients to access up to 12 medically necessary physical therapy sessions, excuse me, without prior authorization for a new episode of care.

AB 574 ensures that patients can get critical early treatment without unnecessary barriers, helping them recover faster and avoid worsening health conditions. Prior authorization requirements currently create delays that make it harder for patients to access the care they urgently need, often prolonging pain and dependence on medications like painkillers.

Health plans and insurers frequently require doctors to submit detailed paperwork on and on and on to prove that the need for physical therapy. And this process varies widely depending on the insurer.

A survey by the American Physical Therapy Association found that over 75% of physical therapists reported that prior authorization decisions took three, just three or more days. When patients are left waiting in pain, these delays are harmful, particularly for patients suffering from chronic conditions who may experience worsened outcomes while they wait for approvals.

I know firsthand how frustrating and exhausting these delays can be. As my mother's primary caregiver, I've been the one making the call, scheduling appointments and navigating complicated approval processes. Members, three years ago, my mother suffered a stroke.

It was a whole process in the way that I was able to navigate that and we had to deal with the post care of it and dealing with it. We had to wait for the mail.

When the mail arrived, you had to open the mail and see what sort of forms were in there, what documentation was needed, and then to go see a doctor, then to go see the physical therapist, then to tell you, well, this was just a visit where you have to come back in two more visits and then, and then we'll tell you what more you can do.

By that point you got there second visit, took time off of work, came back and it was just hurdle after hurdle just to sort of even get her the treatment that she needed. And that time is especially crucial after a stroke to be able to be fully rehabilitated.

And so AB 574 will also ensure that patients are informed about potential out-of-pocket costs before starting treatment if coverage is denied and require clear consent and disclosure if the provider is out of network.

This bill does not apply to Medi-Cal Managed Care Plans and defines a new episode of care as treatment for a new or recurring condition for which the patient has not received treatment within the past 90 days and is not currently undergoing active treatment.

With me this afternoon are Dr. Oscar Gallardo, a physician therapist with the Los Angeles County Department of Health Services, and Dr. Katie Burch with the California Physical Therapists Association.

Moved by Chen, seconded by Rogers.

Hello, Madam Chair and Committee Members. I am Katie Burch, doctor of physical therapy and Chair of the California Physical Therapy Association's Payment Policy Committee, representing over 10,000 members. We are seeing trends of arbitrary limits placed on patients access to care, which include healthcare review decisions done via computer algorithms that do not take into account trained healthcare professionals' assessment of patients' needs.

A review of 1.2 million cases from the nation's largest physical therapy provider found the standard number of visits authorized was 3.8 when done via a computer program, but over 10 visits when reviews were conducted by a healthcare professional.

Just this year, United Healthcare has implemented a prior authorization policy that interrupts physical therapy at six visits to request records to review medical necessity for continued care. This occurs regardless of the patient's conditions, what a referring physician requests and ignores the plan of care developed between the physical therapist and physician.

We have benchmark data that supports that 12 or more visits per episode of physical therapy care for many diagnoses is often needed.

The opposition to this bill believes it is necessary for the insurers and health plans to be involved early in the care process, implying a physician and/or doctor of physical therapy are unable to make determination of patients needs. The truth is that patients should not have care denied or delayed because of non-evidence based policies.

This bill would not limit an insurer's ability to perform retrospective utilization review. This bill instead allows care to be delivered without unnecessary delays. Public studies show that costs can be as much as 75% higher when access to physical therapy is delayed.

I already see an alarming trend of delayed ability to schedule initial physical therapy care due to a shortage of providers as well as an alarming increase in time spent by providers performing paperwork due to prior authorization.

Having access for up to 12 visits does not mean every patient gets 12 visits, but we know that this number will meet 90% of patients needs. I urge you to support AB 574 and we thank Assemblymember Gonzalez for sponsoring this bill.

Thank you. Please go ahead.

Hello Madam Chair and Committee Members. My name is Oscar Gallardo, doctor of physical therapy and I serve as a Board Member of the California Physical Therapy Association.

In my 22-year clinical career, I've observed how the current prior authorization process leads not just to delays in patients beginning critical physical therapy services after a life changing neurological condition, but also causes reduced access to services that patients already pay for as part of their health plan.

I work with individuals recovering from serious neurological conditions at the Los Angeles County Department of Health Services and these conditions such as stroke, traumatic brain injury and spinal cord injury, to name a few. Immediate and continuous access to rehabilitation services is vital to maximizing recovery for these individuals.

However, this ready access to care is not with patients currently experienced under the current prior authorization process.

Instead, patients frequently experience not only delayed start of care but also unnecessary disruptions to the continuity of care because a typical authorization of just a few PT visits requires that patients stop therapy after completing a few therapy sessions, sometimes wait weeks for a new authorization before they can continue their plan of care.

For many patients, this cycle repeats itself several times during a plan of care which results in a yo-yo effect so to speak, where patients make some progress but then lose function while they wait for new authorization.

Once they return to therapy, sometimes weeks later, it's usually at a lower functional status than they were before, and the new sessions must be used to help them return to their prior state rather than advance their recovery. This system is not just inefficient, but it delays neurological recovery and potentially results in greater medical costs.

AB 574 will not result in unfettered access to care, as opponents of this bill claim without evidence. Rather, AB 574 will increase access up to the initial 12 visits of a plan of care and reduce unnecessary delays to recovery.

Californians deserve to have access to the services that they pay for as part of their health plan and that are medically necessary within all established clinical standards and research. I urge your support for AB 574 and thank Assemblymember Gonzalez for sponsoring this bill. Thank you.

Thank you. Any others in support, please come forward. Primary witnesses in opposition, please come forward.

Madam Chairmember Stephanie Watkins on behalf of the Association of California Life and Health Insurance Companies, I would like to acknowledge that we've had many previous conversations and productive conversations with the sponsors over the last couple years.

Unfortunately, we are opposed to the bill before you today which would exempt certain providers from seeking prior authorization for physical therapy services. Prior authorization serves as a critical function within the healthcare system, as many of you guys have heard today. I won't belabor that point, but it does serve a critical role within our infrastructure.

Regrettably, AB574 would undermine that process by allowing physical therapy providers to provide their patients with up to 12 visits without any oversight or review by the patient's health plan or primary care physician.

In essence, this policy change would grant unfettered access to the particular services, restricting the health plan insurer's ability to determine if the treatment visits are medically necessary or follow the standard clinical care guidelines. Without this assessment, we are concerned that patients may receive unnecessary or inappropriate treatment or therapies that are not tailored to their specific needs.

We believe this bill will unnecessarily increase administrative costs, decrease affordability, and potentially lead to unneeded or unnecessary care delivery for our Members. For these reasons, we are opposed to this bill if it does move forward today. We do look forward to continuing those conversations that we've had previously and thank the Committee for the Time.

Thank you, Chair Members. My name is Olga Shiloh and I'm here on behalf of the California Association of Health Plans that collectively provide healthcare coverage to over 28 million Californians and are dedicated to ensuring access to high quality, affordable healthcare.

I would like to align my remarks with those of my colleague from ACLI and share our perspective on this bill. While we recognize the value and value the important role physical therapy plays in patient recovery and well being, we have significant concerns about the unintended consequences of removing key oversight mechanisms.

Authorization of care is a fundamental tool to ensure that patients receive safe, high quality and affordable care. This process facilitates adherence to evidence based medical guidelines, protecting individuals from unnecessary procedures, excessive costs and potentially harmful treatments. This process is not about denying care. It is about ensuring the right care at the right time from the right provider.

I would like to reiterate reiterate that while it is incredibly important to maintain appropriate checks and balances in health care, we are continuously working to improve the authorization for care processes. If this bill moves forward, we are committed to continuing the dialogue and working with the author. However, this time we must respectfully remain opposed.

Thank you for your consideration.

Thank you Are there any others in opposition to the bill, please come forward. Seeing none, I will bring it back to Committee. Assembly Member Patel.

Thank you for bringing this interesting bill forward. Again, another prior authorization challenge. I wanted to ask a specific question around an individual's own health insurance policy. If you have an HMO or a group plan like that, you do get a referral from a physician. But if you have a PPO, you would self refer.

And in this case, you would need no physician's check on your condition before self referring to physical therapy. Am I understanding this correctly? Yes, that would be correct. Okay, so then with that in mind, I do want to raise a concern. It is unfortunately a scenario based on my own personal situation. My daughter is a student athlete.

She suffered an injury. If we were self referring, we would have gone straight to physical therapy and we probably would have done that for 12 weeks because sports injuries often just need physical therapy.

She actually had a fractured olecranon bone and if we had gone to physical therapy without going to a physician first, she would have done physical therapy and then returned to her sport on a broken bone.

And I do have concerns around this and want to make sure that in the PPO situation there is still a physician taking a look and making a decision. But I am willing to listen to your response. Further, to see how I surprised myself. Let me say this. In my concern that I'm raising today.

I'd like to address that question. So once the patient completes their initial evaluation, there does need to be a signed plan of care. So we must forward the plan of care to the physician for signature and for review of our evaluation and any additional treatment. So, you know, I think the concern.

About, you know, there being ongoing treatment without oversight is not quite accurate given the fact that there has to be a follow up with a physician on. That kind of care following an evaluation.

And that evaluation happens in the first day.

First day, correct.

Okay, yeah. Okay.

Just, just to add the, the humanistic point of view on this one. First of all, I think that when you're going through some sort of an issue, I'll talk about my own only case because it's about my own.

When you sit here and you talk about, okay, well we've got authorization for this and that folks don't understand what a PPO and an HMO are. They just don't. And the reality is that, well, what does that mean? I understand that, but with my mother's medic. Medicaid at the time, excuse me, didn't necessarily understand.

Well, what did that Mean, you get this piece of paper, you take it to them. We've evaluated you. We knew she had a stroke. We were there. We saw it, we got the medicine. Then the next steps were, well, now you got to go take it somewhere. Who's going to take you?

They're going to evaluate you, and you're going to leave and then come back again. That was considered two prior authorizations. Then we had to wait another week. Time is of the essence.

I mean, it's much faster to hire somebody at the gym as a personal trainer for physical therapy than it is to get an actual authorization for insurance you pay for. So I think your points are well taken and valid.

But there is pieces to this that we have thought about that creates an arena where the patient can also be seen and then be able to go back out safely. And that's what's key to that.

Thank you. So just to clarify, say, in my daughter's situation, she showed up to a physical therapist, and you were able to determine that she may have something beyond just muscular injury or a tendon injury where you were delivering physical therapy, Would you know to send.

Would you be authorized to send her for an X-ray, or would you refer her back to her physician for that care?

So we would normally refer him back. And I think also I just want to emphasize, you know, we are at a doctoring level of care now, and so we do get extensive training and screening for injuries or other diseases that might be out of our scope of practice.

And I think also in my, like, I've been a PT for over 20 years. Even when I do have a referral, I'll catch things and refer back. So, you know, just that, realistically, that's what's going on.

Thank you. I'm willing to support today, and I hope that you continue to work with the opposition to make sure we cover any of these gray zones and so that patients do get the appropriate amount of care at the right time.

And I appreciate the question because I think that those have been coming up time and time again, like, well, what is the structure? What is the roadmap to that success? Thank you.

Thank you. Seeing no other questions or comments, is there a motion?

I think you already did that.

Motion made. Assemblymember. You may close.

Thank you, Madam Chair. Thank you to Members. AB574 is our promise that healing in California begins with compassion and not paperwork. Movement is one of the biggest factors in a person's life, and we cannot afford to block that progress by removing needless delays. We turn barriers into bridges.

We transform waiting rooms into recovery rooms and pain into progress. Unintended consequences to this bill and if it doesn't get passed, is that more people will continue not to recover. I've told people that government is supposed to be the problem solver, not the problem. And that's what we're doing today.

We're standing together for every patient in need, ensuring care comes swiftly and hope for patient reigns. I respectfully ask for your Aye vote.

Thank you, Assembly Member. With that, Secretary, please call the roll.

The motion is due. Pass to appropriations. [Roll Call]

That measure is on call. Thank you, Assemblymember, and as we transition, we are now closing out the special order of business. We heard six bills related to utilization review and utilization management. I'll just make some comments prior to Assemblymember Davies coming up, including authors, please come down to the hearing room should you choose to have your Bill heard.

I want to thank the Members who brought these bills forward and for all the stakeholders who came to share their testimony and perspectives. There is clear momentum and a call for the Legislature to make progress this year to improve utilization management processes.

What I heard was a very clear mandate from this set of bills, that the Legislature is wanting to make sure that we are minimizing disruption of access to care, that we're recentering patient care, that we're ensuring that we have timeliness of review, and that we have timeliness of access to care, that we ensure that we are prioritizing continuity of care and making sure that the review that happens is done in such a way that it is conducted by those who are matched with medical knowledge and expertise to do so.

And finally, that treatment and medication prescription is driven by the needs of the patient and the treatment indicated by the provider.

We also heard from those in the health plans that there could be unintended consequences to ensure that the highest value of care is something that is primal to all of us, and that we must make sure that we are focusing on not driving up healthcare costs, as we implement these systems.

I heard a move and a desire to move towards solutions that would help us all. A desire to make sure that we are introducing and focusing on authorization requests being done through electronic submissions.

I would like to note that we have two deadlines in 2026, around the data exchange and the federal rule requiring interoperability, to be able to support that, and the need to be able to consider—clinically complete requests that are done in a way that are complete enough for the prior authorization, that is made to be complete and whole.

And I certainly heard the considerations and concerns around proposed timelines. At the end of the day, however, we have been able to put forward, as on this Assembly, package of bills that will improve the processes and increase access to care for as many Californians as possible.

And I look forward to continuing to work with the authors, providers, consumer advocates, and the plans to fine tune any of these pieces of legislation, push that package forward, across the finish line this year.

With that, that concludes our special order of business, and we will move on now to Item Number—Item number 13, AB 425, by Davies.

Moved by Chen, seconded by Patterson.

Good afternoon Honorable Chair and Committee Members. I want to start out by happily accepting the Committee amendments and thank staff for all their hard work so far this year. According to the California Health Care Foundation, roughly 9% of Californians age 12 and up are considered to have a substance use disorder.

Across California, we have many great programs and facilities where patients can get treatment for substance use. But like other programs or services, the standards need to be occasionally updated.

AB425 would require the Department of Healthcare Services to adopt the American Society of Addiction Medicine, also known as asam, or Equal Treatment Criteria for Certified Outpatient Alcohol and other drug programs. With so many people needing some form of substance use treatments, it's important to implement treatment criteria that is backed by evidence and has been tested over time.

30 other states have already begun implementing ASAM standards across their different treatment programs and facilities. However, we shouldn't have two different standards for criteria and instead adopt ASAM for certified programs. We need to continue to improve the services we provide to California patients.

We have a long road ahead trying to solve substance abuse, but I'm committed to helping innovate our state and make progress towards better treatment for our patients. Committee Members, thank you for your time today. I respectfully ask for an Aye vote.

For witnesses in support. You'll have two minutes. No witnesses. No witnesses in support. Any others in support? Who would like to testify?

Nicole Wordelman on behalf of the Orange County Board of Supervisors and support.

Sylvia Solisha on behalf of the California State Association of Psychiatrists in support. Thank you.

Rocky Road City Council on behalf of the City of Simi Valley in support.

Thank you. Any primary witnesses in opposition? Any #metoos in opposition? Seeing none. I'll bring it back to the Committee for comment. I want to thank Assemblymember Davies for bringing this bill forward.

I appreciate your intent to ensure an appropriate minimum standard for certified alcohol and drug programs, and I encourage you to continue working with DHCS should this bill move forward to develop a clearer picture for how the recently established certification standard align with, with or differ from ASM. With that we have a motion and a second.

Secretary, would you like to close?

Thank you. Secretary, would you please call the roll?

Just respectfully ask for an aye vote. Thank you.

The motion is do pass as amended to appropriations.[Roll Call]

That is on call. Thank you. Thank you.

We're going to move on now to item number 15, AB543. Mark Gonzalez.

Please go ahead.

Thank you. Madam Chair and Members, I'm pleased to present AB543 which will ensure that people experiencing homelessness can access immediate life saving medical services through street medicine providers without unnecessary delays or administrative barriers.

California faces a homeless crisis at an unprecedented scale, with over 187,000 individuals counted as homeless in January of 2024 that we know of at an all time high and two thirds living unsheltered. Although California represents only 12% of the nation's population, we account for nearly 25% of the country's homelessness.

Studies show that people experiencing homelessness have much higher rates of chronic diseases like diabetes, heart disease and HIV AIDS, and are twice as likely to have disabilities compared to the General population. On average, people experiencing homelessness die 12 years sooner than housed individuals.

AB543 ensures that medical members, Medi Cal members, excuse me, experiencing homelessness can access medically necessary services directly from street medicine providers even if they are not formally assigned to those providers through their managed care network.

While over 70% of people experiencing homelessness are enrolled in Medi Cal, fewer than 10% are able to access care from their assigned primary care provider, compared to 82% of the General population. Without AB543, patients are often forced to wait weeks or months for critically needed care, leading to worsened health outcomes, preventable hospitalizations and tragically preventable deaths.

Street medicine providers, despite being licensed and often contacted with Medi Cal managed care plans, are currently blocked from ordering essential services like X-rays, wound care supplies, specialty referrals and medications simply because they are not patients assigned PCP.

These results are increased suffering for patients and higher emergency room utilization, longer hospital stays and overall greater health care costs.

AB 543 addresses these issues by implementing three essential reforms establishing presumptive eligibility for people experiencing homelessness, allowing medical providers to immediately enroll and treat patients two Removes the network barrier so that the street medicine providers can directly order medically necessary services and 3 creating a homeless identifier within Medi Cal and public assistance systems to improve care coordination access to those critical services.

Without these reforms, individuals living unsheltered are left to make impossible choices, risking their health to protect their belongings or wage waiting for weeks as bureaucratic processes delay that much needed care.

Street medicine is a proven evidence based model that increases access to primary care, improved management of chronic diseases, reduces emergency room visits and hospital stays, and improves housing outcomes, all of which are better for the unhoused person and the taxpayer.

With me this afternoon are two extraordinary witnesses, Brett Feldman, the Director and co founder of USC Street Medicine, and Tony Menacho of the Executive Director of Sacramento Street Medicine. Take it away.

All right, thank you Assemblymember Gonzalez, Madam Chair and the rest of the Committee. My name is Brett Feldman. I'm the Director of street medicine for University of Southern California as well as the Vice Chair of the International Street Medicine Institute.

And for almost 20 years I've been going to the people, visiting our neighbors, experiencing unsheltered homelessness on the streets, under the bridges, in the woods and places I'd never imagined people would be, armed with my backpack and a pickup truck, seeing people in their environment where they prefer to be seen.

Over the past few years we've street medicine has grown tremendously throughout the state. With the help of the Legislature, DHCS and many others. We're now almost 70 programs statewide in 35 different counties. We can even be reimbursed for the care that we provide now. So AB 543 is not about reimbursement, but is an access to care Bill.

And the problem we're trying to solve is that when people experiencing homelessness get Medi Cal and 80% have Medi Cal, they get assigned to a managed care plan who assigns them to a primary care provider. That primary care provider acts as a gatekeeper for medically necessary services.

The problem is over 90% are not able to make it to that primary care provider. So they're also not able to get their medically necessary services when we see them on the street. Even though I'm licensed with the managed care plans and licensed to order those things, I'm not able to.

This can seemingly have see seem very simple or even silly at times. Like, for example, a patient. I cannot order a back X-ray for a gentleman who needs it to return to work as an electrician and resolve his own home, his own homelessness, and others really severe consequences.

Like yesterday, I had to move a patient into a skilled nursing facility after having a massive stroke because I couldn't order the cardiac testing that he needed. So AB543 is a very simple bill.

It allows the medically necessary services that the state has already paid for, that managed care plans are already contracted for, and that street medicine is already licensed for to actually get to our neighbors who need it the most.

Thank you. You'll have two minutes.

Good afternoon, Madam Chair and Members of the Committee. My name is Anthony Menacho, Family Medicine, PA, and Executive Director of Sacramento Street Medicine. I'm here to speak in support of AB543. As someone who practices medicine both on the street and in the clinic, I feel I'm uniquely positioned to give a testimony on both sides of this issue.

In my six years of experience in the clinic, I find that my unsheltered, unhoused patients rarely make it to the initial visit, let alone consistent follow up. And it's because I was unable to do this at the level of the clinic that I went out to the streets and provided this care.

The issue, as Brett mentioned, is that these patients have to go back to their assigned PCP to get essential orders such as an X-ray, a CT scan, or a referral to specialty care, all delaying the care that these folks need for months, sometimes years.

For the folks that we see on the streets, whether it's a patient with congestive heart failure, not receiving the proper consultation from a cardiologist, a massive Hernia that we just saw last week, not getting the surgical intervention simply because we couldn't place the referral to a general surgeon or the patient who smokes and requires routine diagnostic imaging for screening of lung cancer.

Not getting it because we can't place that order on the street, Patient health outcomes are worsened simply because we as street medicine providers cannot place those orders despite the patient being right there in front of us.

The street medicine bill, AB543, addresses this issue by allowing street medicine providers to place those orders without the barrier of bringing that patient back to a brick and mortar clinic and rather placing the order then and there.

This allows street medicine the opportunity to provide the care and consistent follow up where these patients actually will be seen and can be seen where street medicine providers are directly where they stay. And so, with that in mind, I strongly urge you all to support AB543.

Thank you. Any others in support, please come forward.

Good afternoon. Kristy Wiese with Capital Advocacy and support on behalf of the California Hospital Association.

Thank you.

Rona Li on behalf of SCAN Group, a senior serving healthcare organization also in support of this Bill.

Good afternoon Madam Chair. Malik Bynum with the County Behavioral Health. Directors Association and support.

Madison Whittemore on behalf of Steinberg Institute, Smart Justice California, Encourage California all in support.

Indu Subaiya on behalf of Healthcare in Action, a street medicine organization, and support.

Nicette Short on behalf of Adventist Health and support.