Assembly Bill 3087 seeks to establish a nine-person commission tasked with imposing set prices for specific services and procedures provided by hospitals and other healthcare providers in California. Medi-Cal, Medicare, and other Federal health programs would be exempt from the provisions of the bill. The proposed language of AB 3087 is available here.
The bill calls for establishment of the “California Health Care Cost, Quality, and Equity Commission” that would be a State agency independent of any other agency or department. The nine-member commission and the staff would not include persons “employed by, a consultant to, a member of the board of directors of, affiliated with, or otherwise a representative of, a carrier or other insurer, an agent or broker, a pharmaceutical manufacturer, a health care provider, a health care facility, or a health clinic while serving on the commission or on the staff of the commission.” Also prohibited from membership in the commission would be a “health care provider unless he or she does not receive compensation for rendering services as a health care provider and does not have an ownership interest in a professional health care practice.” The commission would have an advisory committee “composed of a diverse set of health care stakeholders” serving one-year terms.
The commission would be required to use Medicare rates as the base rates from which to set pricing. Pricing would be determined as a percentage of Medicare rates and could not be less than 100 percent of Medicare rates for healthcare providers. The commission would establish base rates for services not reimbursed by Medicare or Medicare Advantage, and for services infrequently reimbursed by Medicare and Medicare Advantage, including, at a minimum, pediatrics, obstetrics, and gynecology. A provider wanting to charge higher prices for services or procedures would need to seek special permission from the commission. The commission may stop using Medicare rates as the base rates if it determines “that the Medicare reimbursement system has substantially changed and no longer serves the interests of Californians,” at which point “the commission may make recommendations to the Governor and the Legislature to ensure that the commission continues to fulfill its purpose.”
The commission would be required to establish an appeals process for healthcare providers whereby the commission would consider adjustments to base amounts paid to healthcare providers. A provider filing an appeal would be required to “certify that it has a good faith basis for pursuing the appeal” and must identify the specific factors on which the appeal is based – which must meet certain enumerated criteria. A final determination by the commission would be subject to judicial review.
As part of the stated plan for achieving reduction in healthcare costs, the commission would be tasked with setting a “global cap for total healthcare expenditures based on gross state product.” The commission would then identify why spending exceeds the cap and order corrective actions in order to bring spending below the cap. The commission would be required to report annually to the Legislature and the Governor.
