1. CCLA 2012 Annual Conference San Diego
Michael J. Arnold, Lobbyist
Kristian E. Foy, Legal Counsel
CCLA
Sacramento, CA

2. So leap for joy, be blithe and gay; Or weep, my friend, with sorrow
So leap for joy, be blithe and gay; Or weep, my friend, with sorrow. What California is today The rest will be tomorrow!

4. Which Governor Vetoed Most Bills?
Brown vetoed a lower percentage of bills in 2012 (12%) than in 2011 (14%), but in both years his veto rates were higher than during his first two terms as Governor (4.4% average over 8 years).
Brown’s veto percentage in 2012 (12%) is below the average percentage since 1967 (13%).
Deukmejian and Schwarzenegger still hold the record for the most bills vetoed in a year, 436 (1990) and 414 (2008) respectively.
The Governor has 30-days to act on bills passed by the Legislature during the last 10 days before adjournment; before that date, the Governor has 12-days to act. This year, 77% (767) of bills acted on were in the 30-day period.
In 1982, Brown vetoed just 30 bills of the 1,674 he considered, setting the record for the lowest number of vetoes.
The five years with the fewest chaptered bills have all been since 2007.

5. Infrastructure for Tracking Legislation
Box in bill room
Bill tracking system
Daily committee hearing calendars
Legislative status reports
Box in Bill Room

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

7. Key 2012 Legislation AB 761 Hernández, Roger D Optometrists.
Text Version: Chaptered: 9/28/2012
Position: Watch
Status: 9/28/ Chaptered by the Secretary of State, Chapter Number 714, Statutes of 2012
This bill would expand the category of persons who may perform clinical laboratory tests or examinations that are classified as waived to include licensed optometrists, and would provide that a laboratory director may include a licensed optometrist serving as the director of a laboratory which only performs specified clinical laboratory testing, for purposes of waived examinations.

8. Key 2012 Legislation AB 969 (Atkins)
Medi-Cal: clinical laboratory and laboratory services.
Text Version: Chaptered: 9/29/2012 Position: Watch
Status: 9/29/ Chaptered by the Secretary of State, Chapter Number 738, Statutes of 2012
This bill would prohibit consideration of the donation of, or the granting of discounts for, clinical laboratory tests or examinations or laboratory services to a federally qualified health center, as defined, for the purpose of serving its uninsured patients, as a basis for the reduction of Medi-Cal payments below that reimbursement rate.

9. Key 2012 Legislation AB 2253 (Pan)
Clinical laboratory test results: electronic conveyance.
Text Version: Chaptered: 9/28/2012 Position: Support if Amended
Status: 9/28/ Chaptered by the Secretary of State, Chapter Number 698, Statutes of 2012
Existing law authorizes the results of a clinical laboratory test performed at the request of a health care professional to be conveyed to the patient in electronic form if requested by the patient and if deemed most appropriate by the health care professional, except that existing law prohibits the conveyance by Internet posting or other electronic means of test results relating to HIV antibodies, the presence of hepatitis antigens, and the abuse of drugs, and specified test results that reveal a malignancy. This bill would revise these provisions.

10. Key 2012 Legislation SB 289 (Hernandez)
Clinical laboratory techniques: training and instruction.
Text Version: Chaptered: 9/17/2012 Position: Watch
Status: 9/17/ Chaptered by the Secretary of State, Chapter Number 352, Statutes of 2012
Existing law provides for the licensure and regulation of clinical laboratories and various clinical laboratory health care professionals by the State Department of Public Health. Existing law authorizes the department to approve schools seeking to provide instruction in clinical laboratory techniques, as specified. This bill would authorize the department to approve specified institutions seeking to provide clinical laboratory scientist programs for instruction in clinical laboratory techniques, as specified, including, among others, a California licensed clinical laboratory and an accredited college or university in the United States.

11. Key 2012 Legislation SB 1481 (Negrete-McLeod)
Clinical laboratories: community pharmacies.
Text Version: Chaptered: 9/30/2012 Position: Oppose
Status: 9/30/ Chaptered by the Secretary of State, Chapter Number 874, Statutes of 2012
Existing law authorizes a pharmacist to perform skin puncture in the course of performing clinical laboratory tests classified as waived. This bill would eliminate the laboratory director requirement with respect to certain tests classified as waived that are approved by the federal Food and Drug Administration for sale to the public without a prescription in the form of an over-the-counter test kit and are performed by a pharmacist at a community pharmacy upon customer request, provided that the pharmacy obtains a CLIA certificate of waiver and a registration from the CDPH and complies with all other requirements governing clinical laboratories.

12. Battle Over Proposed Medi-Cal Cuts during 2011
Hard cap of no more than 6 prescriptions per month—Defeated.
Hard cap of no more than 10 physician/clinic visits per year—Defeated.
Soft cap of no more than 7 physician/clinic visits per year—Adopted.
Co-pay requirements of $5 per physician/clinic visit—Adopted, Clinical Lab Visits Excluded.
10% Cut in provider payments—Adopted. Retroactive to June 1, Still in courts.

13. Medi-Cal Cut--Caps--Co-pays
Lab services EXEMPT from 2011 caps on the number of visits AND from patient co-pays!!!
10% provider payment reduction applies
Reduction RETROACTIVE to June 1, 2011!!!
DHCS now implementing reduction plus “claw back” for “over payment” during retro period!

14. Big News in 2011: False Claims Act Cases Settled for $$$
Seacliff Diagnostics medical Group; Physicians Immunodiagnostics Lab; Whitefield Medical Lab; Stanford Hospital and Clinics; Westcliff; LabCorp; and Quest
Total payments to settle: $300 MILLION!!!
The State took notice! Thus: AB 1494!

15. Battle Over Proposed Medi-Cal Cuts for 2012
Governor included a “Value Based Purchasing Plan” in his Budget—Likely in response to the False Claims Act Settlements
His plan would have given DHCS authority to “adjust” Medi-Cal rates
Defeated in the Legislature—We Opposed!
AB 1494 amended at last minute. One day before the vote

16. Key Lab Provisions of AB 1494
10% cut in lab reimbursement—retroactive to July 1, (In addition to % cut!)
Requires DHCS to produce a new rate development methodology-with stakeholders
10% cut to stop when new rate methodology is approved by CMS
Exempts labs from “lowest charge” regulation 50501(a) for one year.

17. Excerpt from AB 1494, Chapter 28, Statutes of 2012
Excerpt from AB 1494, Chapter 28, Statutes of Rate methodology for clinical lab services reimbursement

18. DHCS Working On New Rate Methodology
Information on website:
Stakeholder meetings--Summary
New date for data submission: Jan. 31, 2013

19. DHCS Working On New Rate Methodology
Review of proposed DHCS data elements and format
Reimbursement rates for clinical laboratory services that are comparable to payment amounts received from other payers

20. DHCS Working On New Rate Methodology
Data to be for the previous calendar year. Must specify providers’ lowest amounts that other payers are paying, including other state Medicaid programs and private insurance, minus discounts and rebates.   These data may be used to determine the reimbursement rates by procedure code based on an average of the lowest amount other payers are paying for similar clinical laboratory or laboratory services, excluding significant deviations of cost or volume factors and with consideration to geographical areas.  

21. CA Medicaid Program Medi‑Cal annual budget: over $40 billion!
Medi‑Cal provides healthcare coverage to 7.7 million beneficiaries.
Medi‑Cal covers 19.7 percent of Californians and 23.9 percent of insured Californians. 1 in 5 Californians are covered by Medi-Cal.
Medi‑Cal funds about 46 percent of all births in California.
California covers a relatively greater share of its population than other large states (13.2 percent in Texas and 17.9 percent in Ohio) or the national average of 15.7 percent.
With implementation of the Affordable Care Act (ACA), there will be an additional 2 million Medi-Cal beneficiaries.
We are closely watching implementation of the ACA through the CA Health Benefit Exchange…

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

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

24. Civil heath care fraud case Source: U.S. Department of Justice
Year
Number of new False Claims Act cases
Settlements and judgments
2001
211
$1,382,103,654
2002
215
$1,035,703,184
2003
241
$1,849,130,909
2004
301
$510,926,589
2005
304
$1,118,149,977
2006
236
$2,293,008,497
2007
225
$1,545,875,480
2008
291
$1,125,514,293
2009
312
$1,632,681,398
2010
424
$2,550,488,650
2011
454
$2,445,830,743

25. November Election Senate Results: D=28; R=12
Assembly Results: D=54; R=26
Proposition 30 PASSED. $7 billion new revenue. Sales tax increase: .25% for 4 years. Income tax increase on joint filers above $500,000 (single $250,000) for 7 years—effective for the 2012 year!

26. Outlook for 2013?
????
The new Legislative Session starts December 3, 2012.
Get to know your new Legislators! Invite them to your lab for a visit.