Supplemental Legislative Update

Supplemental Legislative Update

This past Friday was the deadline for fiscal committees to hear and pass all bills to their respective Floors.  In last week’s edition, we did not report on the Appropriations Committees because information was fluid.   Therefore, we are issuing a spate report on the status of bills heard in the fiscal committees last week.  Both committees heard new measures, as well as their Suspense Calendars—measures they had heard before and held in committee due to the cost of implementation.  The committees take a second look at those suspense measures and decide which ones to advance.  Those are vote only measures.  The following is a synopsis of last week’s fiscal committees.

 

Assembly Appropriations Committee—Regular Calendar

AB 51 (Yamada): This bill would authorize employers to pay employee wages by means of payroll cards that meet certain specified conditions. 

AB 51 remains on the Suspense File; therefore, the measure is a two-year bill.

AB 378 (Solorio): This bill would regulate the dispensing of compounded medications in the workers' compensation system, including the establishment of a fee schedule and maximum fees for compounded drugs dispensed directly by physicians. Specifically, this bill would provide that for a pharmacy service, drug or other product that is not covered by a Medi-Cal payment system, the maximum reasonable fee shall be 83% of the average wholesale price (AWP) of the lowest priced product of equivalent therapeutic effect.  In addition, the bill would provide that, until the Administrative Director (AD) of the Division of Workers' Compensation (DWC) adopts a fee schedule for compounded drug products, the maximum reasonable fee for a compounded drug product shall be the sum of the appropriate fees for services provided by the Medi-Cal payment system, plus the sum of the amounts allowed for the ingredients, as follows:  a) If an ingredient is available in bulk from three or more suppliers listed in national pricing compendiums, the unit price shall be the lesser of 150% of the unit price of the lowest cost alternatives, or the unit price listed in the Medi-Cal database.

b)   If an ingredient is not available from three or more suppliers, but is listed in the Medi-Cal database, the unit price shall be the lesser of the Medi-Cal price or 120% of the documented costs paid by the pharmacy that compounds the drug product.c)   If an ingredient is not available from three or more suppliers, and is not listed in the Medi-Cal database, the unit price shall be the lesser of 83% of the AWP or the documented costs paid by the pharmacy that compounds the drug product.  Lastly, the measure would provide that no fee shall be allowed for any ingredient that is not identified by a valid National Drug Code, number of units, unit price, and, if applicable, documented paid cost.

AB 378 passed the committee with a vote of 17-0.

AB 999 (Yamada): This bill would modify the long-term care (LTC) insurance rate development process and requires additional disclosures for consumers. Specifically, this bill would: 1) Require every LTC insurer to post a specimen of each individual or group policy form it sells on its internet website; 2) Limit the approval of rate increases on policies issued before 2002 to no more than once every five years; 3) Limit the approval of rate increases on policies issued after 2002 to no more than once every 10 years; 4) Provide that, notwithstanding any provision of law, the Insurance Commissioner may approve rate filings if an insurer demonstrates that the rates are necessary to protect the financial condition of the insurer, including avoidance of further reductions in capital and surplus.

AB 999 passed the committee with a vote of 11-6.

AB 1024 (Hueso): This bill, as recently amended, would authorize insurance agents and brokers to sell low-cost auto insurance through an Internet Web site, and require the California Automobile Assigned Risk Plan (CAARP) to establish or contract with an entity to operate a Web site to provide the public with a) referral to a list of certified agents or brokers with an office in the same geographic area as the consumer who may be contacted to purchase a low-cost automobile insurance policy; or, b) assignment to a randomly selected certified agent or broker in the same geographic area as the consumer who can be accessed online to process and accept an application to purchase a low-cost automobile insurance policy.

AB 1024 was placed on the Suspense File, but advanced on Friday.  The measure now goes to the Assembly Floor. 

AB 1369 (Gatto): This bill would allow the Franchise Tax Board to deny a deduction for expenses, including costs of goods sold or derived from criminal profiteering activity or illegal profits against insured property and insurers.  This bill would expand the definition of illegal activities subject to the disallowance of claimed expenses or the cost of goods sold.

AB 1369 passed the committee with a vote of 17-0. 

 

The Assembly Appropriations Committee heard the following Suspense Calendar measures:

AB 10 (Alejo): This bill would increase the state's minimum wage from its current rate of $8.00 per hour to $8.50 per hour, as of January 1, 2012 and provide for the automatic adjustment of the minimum wage each year by the percentage of inflation as measured by the California Consumer Price Index (CPI), beginning January 1, 2013.

AB 10 was previously held on the Suspense File and was held in committee on Friday.  AB 10 is therefore a two-year bill. 

AB 52 (Feuer): This bill would require health care service plans (health plans) licensed by the Department of Managed Health Care (DMHC) and health insurers (collectively carriers) certificated by the California Department of Insurance (CDI) (collectively regulators), effective January 1, 2012, to apply for prior approval of proposed rate increases, under specified conditions, and impose on regulators specific rate review criteria, timelines, and hearing requirements.

AB 52 was initially placed on the Suspense File, but the bill advanced Friday with a vote of 9-7. 

AB 59 (Swanson): This bill would amend the California Family Rights Act (CFRA) by expanding permissible family and medical leave to cover care for an independent adult child, sibling, grandparent, grandchild, domestic partner, or parent-in-law with a serious health condition.

AB 59 was previously held on the Suspense File and was held in committee on Friday.  AB 59 is therefore a two-year bill. 

AB 72 (Eng): This bill would require group health plan contracts and group health insurance policies, including health policies provided to public employees, to provide require coverage of services provided by acupuncturists.

AB 72 was previously held on the Suspense File.  The second hearing was postponed by the author; therefore, AB 72 is a two-year bill.

AB 137 (Portantino): This bill would require health insurance plans to cover mammography upon a provider's referral.  It also requires both health care service plans and health insurance plans to notify subscribers and policyholders regarding recommended timelines for an individual to undergo tests for the screening or diagnosis of breast cancer.

AB 137 was previously held on the Suspense File.  The second hearing was postponed by the author; therefore, AB 137 is a two-year bill.

AB 154 (Beall): This bill would require health plans and health insurers to provide coverage for mental health and substance abuse treatment at parity with other medical conditions.

AB 154 was previously held on the Suspense File.  The second hearing was postponed by the author; therefore, AB 154 is a two-year bill.

AB 185 (Hernandez): This bill would require policies in the individual and group health insurance markets to provide coverage for maternity services. This bill would create a mandate on insurers and not health plans, as maternity benefits are already mandated for health plans. This bill would require maternity services to include prenatal care, ambulatory care, care for pregnancy complications, neonatal care, inpatient hospital maternity care, and postpartum care.

AB 185 was previously held on the Suspense File.  The second hearing was postponed by the author; therefore, AB 185 is a two-year bill.

AB 273 (Valadeo): This bill would require the Department of Finance to review state agencies' determinations, estimates and other findings related to costs and economic impacts of proposed regulations.

AB 273 was initially held on the Suspense File and was held in committee on Friday.  AB 273 is therefore a two-year bill.

AB 335 (Solorio): This bill would require the Administrative Director (AD) of the Division of Workers' Compensation (DWC) to adopt new notices and rules governing notices that are provided to employees in the workers' compensation system.  Specifically, this bill would expand the subjects that benefit notices shall include by adding notice of supplemental job displacement benefits, rights concerning selection of a personal treating physician, requests for comprehensive medical evaluation, and offers of regular, modified, or alternative work.

In addition, the bill would require the AD to prepare, and make readily available, including on the DWC website, a booklet written in plain language that describes the overall workers' compensation claims system, including the rights and obligations of employees and employers at every stage of a claim when a notice is required.

AB 335 was initially held on the Suspense File, but passed the committee on Friday with a vote of 17-0.  The bill will now go to the Assembly Floor. 

AB 375 (Skinner): This bill would establish several workers' compensation presumptions for direct patient care workers at acute care hospitals statewide.

AB 375 was initially held on the Suspense File, but passed the committee Friday with a vote of 12-5.  The bill will now go to the Assembly Floor. 

AB 400 (Ma): This bill would create the Healthy Families, Healthy Workplaces Act of 2011 which would require employers to provide paid sick days for an employee who works for seven or more days in a calendar year. 

AB 400 was initially held on the Suspense File and was held in committee on Friday.  The measure is therefore a two-year bill. 

AB 535 (Morrell): This bill would require state agencies that promulgate regulations to review and report on those regulations five years after adoption.

AB 535 was initially held on the Suspense File and was held in committee on Friday.  The measure is therefore a two-year bill. 

AB 541 (Morrell): This bill would direct the California Small Business Board to focus for the next two years on, among other items, the impact of licensing and permitting regulations on small business startups. The board is required to report its findings and recommendations to the governor, the Small Business Advocate, and the Legislature in July 2012, July 2013 and December 2013.  

AB 541 was initially held on the Suspense File and was held in committee on Friday.  The measure is therefore a two-year bill. 

AB 569 (Berryhill): This bill would create the Business Master License Center within the State and Consumer Services Agency.  The BMLC would essentially serve as a one-stop system for all business licenses within the state.

AB 569 was initially held on the Suspense File and was held in committee on Friday.  The measure is therefore a two-year bill. 

AB 624 (J. Perez): This bill would extend from January 1, 2012, until January 1, 2017, the effective date on laws that allow insurance companies, corporations, and other taxpayers to receive a tax credit equal to 20% of the amount of the qualified investment made during the taxable year into a community development financial institution that is certified by the California Organized Investment Network (COIN) of the Department of Insurance.  This bill would also require the Insurance Commissioner (IC) to create and appoint a COIN Advisory Board with the duty to advise on the best methods to increase the level of insurance industry capital in safe and sound investments while providing fair returns to investors and social benefits to underserved communities.  The Advisory Board would consist of the IC or his or her designee, an executive in the insurance investment community, a licensed attorney practicing insurance law, a member of the State Assembly, a member of the State Senate, a member from a consumer advocacy group, an affordable housing practitioner, a local economic development practitioner, and a representative of a financial institution or a community development financial institution.

AB 624 was initially held on the Suspense File, but passed the committee Friday with a vote of 17-0.  The bill will now go to the Assembly Floor. 

AB 714 (Atkins): This bill would establish notification requirements of individuals who are enrolled or cease to be enrolled in state health care programs, and begins "pre-enrollment" activities on behalf of these individuals for health care coverage through the California Health Benefits Exchange.

AB 714 was initially held on the Suspense File, but passed the committee Friday with a vote of 12-5.  The bill will now go to the Assembly Floor. 

AB 736 (Calderon): This bill would add a health insurance broker designation to California’s insurance licensing statute.  Specifically, the bill will create an Accident & Health Broker-Agent license to parallel the Property and Casualty Broker-Agent license.

AB 736 was initially held on the Suspense file and was held in the committee again on Friday.  AB 736 is therefore a two-year bill. 

AB 792 (Bonilla):This bill would establish notification requirements for individuals who are experiencing certain life transitions such as divorce, loss of employment, or loss of health insurance, and begins "pre-enrollment" activities on behalf of these individuals for health care coverage through the California Health Benefits Exchange.

AB 792 was initially held on the Suspense File, but passed the committee Friday with a vote of 11-6. 

AB 975 (Ma): This bill would require professional employment organizations (PEOs) to register with the Employment Development Department (EDD) and require the director of EDD to prescribe rules for PEOs to report quarterly wages and unemployment contributions for its employees.  


AB 975 was initially held on the Suspense File, but passed the committee Friday with a vote of 12-5. 

AB 1037 (V.M. Perez):  This bill would alter the state's regulatory structure, increase the threshold for business activities under the definition of "small business" for rulemaking purposes, and require agencies to reassess regulations five years after adoption.

AB 1037 was initially held on the Suspense file and was held in the committee again on Friday.  AB 1037 is therefore a two-year bill. 

 

Senate Appropriations Committee—Regular Calendar

SB 51 (Alquist): This bill would require health care service plans and insurers to meet federal annual and lifetime limits, medical loss ratio, and annual rebate payment requirements in accordance with federal law and guidance. The bill would also specify a timeframe in which rebate payments would be made.

SB 51 was placed on the Suspense File on Monday, but advanced out of the committee on Thursday. The measure now goes to the Senate Floor.

SB 127 (Emmerson): This bill would require the Administrative Director (AD) of the Division of Workers' Compensation, in order to keep the official medical fee schedule (OMFS) for physician services appropriately updated, to the annually to adopt the Current Procedural Terminology (CPT) codes, descriptors, and modifiers published by the American Medical Association.  This bill would require new procedures added by this update shall be coded By Report (BR) until the AD, through public hearings, adopts and revises, the OMFS for physician services.

SB 127 was placed on the Suspense File on Monday, but advanced out of the committee on Thursday. The measure now goes to the Senate Floor.

SB 615 (Calderon): This bill would require, on and after January 1, 2013, solicitors and solicitor firms, and principal persons engaged in the supervision of solicitation for health care service plan contracts to complete specified training. The bill would require the Insurance Commissioner's curriculum board to make recommendations to the commissioner to instruct accident and health agents about the requirements imposed by the federal Affordable Care Act.

SB 615 was placed on the Suspense File on Monday, but advanced out of the committee on Thursday. The measure now goes to the Senate Floor.

SB 708 (Corbett): This bill would enact the Debt Settlement Consumer Protection Act to provide for the licensure and regulation of debt settlement providers, cap the fee allowed at 20% of the amount of debt saved, and require numerous disclosures from the provider to the consumer before entering into an agreement for debt settlement services.  The Act would be enforced by the Commissioner of Corporations and the Attorney General.

SB 708 was placed on the Suspense File on Monday, but advanced out of the committee on Thursday. The measure now goes to the Senate Floor.

SB 810 (Leno): This bill would create the California Healthcare System (CHS), a single-payer health care system, administered by the California Healthcare Agency (CHA), to provide health insurance coverage to all California residents.  SB 810 would provide that the CHS and CHA would become operative when the California Secretary of Health and Human Services determines that sufficient revenues are available to implement the bill's provisions, or the Secretary obtains a specified federal waiver, whichever is later.

SB 810 was scheduled to be heard in the committee on May 23rd; however, the hearing was cancelled at the author’s request. 

SB 923 (De Leon): This bill would require the Administrative Director (AD) of the Division of Workers' Compensation, by July 1, 2012, to adopt an Official Medical Fee Schedule (OMFS) for physician services based on the resource-based relative value scale (RBRVS).  This bill would require the AD, on or after January 1, 2013, and no less frequently than biennially, to revise the OMFS.  This bill would delete obsolete provisions relating to the adoption of a medical fee schedule for inpatient facility fees for burn cases.

SB 923 was placed on the Suspense File on Monday, but advanced out of the committee on Thursday. The measure now goes to the Senate Floor.

 

Other Suspense measures heard by the Senate Appropriations Committee on Thursday include:

SB 155 (Evans): This bill would require all health insurance policies to provide coverage for maternity services, as defined, commencing January 1, 2012.

SB 155 was previously placed on the Suspense file, but advanced this past Thursday.  The measure now goes to the Senate Floor.

SB 457 (Calderon): This bill would require the Workers' Compensation Appeals Board (board) to determine, on the basis of liens filed, reimbursement for benefits paid or services provided by a health care service plan, a group disability policy, a hospital service contract, or a self-insured employee welfare benefit plan, notwithstanding the  Official Medical Fee Schedule (OFMS), when an award is made for reimbursement for self-procured medical costs for the effects of an injury or illness arising out of and in the course of employment.  This bill would state that its provisions are not to be deemed as modifying in any way the rights of any health care provider to file and prosecute a lien.

SB 457 was previously placed on the Suspense file, but advanced this past Thursday.  The measure now goes to the Senate Floor.

SB 459 (Corbett): This bill would: (1) prohibit any person or employer from engaging in willful misclassification of an employee as an independent contractor and would provide for civil penalties; (2) require employers to provide to independent contractors a form developed by the Employment Development Department, as specified; (3) require employers to maintain for at least two years the records of all independent contractors hired by the employer, as specified; (4) provide that a person who knowingly advises another person for money or other valuable consideration to treat a worker as an independent contractor to avoid employee status for the worker shall be jointly and severally liable with the employer if the worker is not found to be an independent contractor; exempt from this provision are a person who provides advice to his/her employer and attorneys authorized to practice law in California or another United States jurisdiction who provides legal advice in the course of the practice of law; and (5) make other changes relating to liability, records inspection and access.

SB 459 was previously placed on the Suspense file, but advanced this past Thursday.  The measure now goes to the Senate Floor.

SB 826 (Leno): This bill would require the Administrative Director (AD) of the Division of Workers' Compensation (division) to assess an administrative penalty against a claims administrator for a violation of data reporting requirements.  This bill would require the AD to promulgate a schedule of penalties providing for an assessment of no more than $5,000 against a claims administrator in any single year, calculated by violation type and excluding threshold rates of violations.  This bill would require the AD to publish an annual report disclosing the compliance rates of claims administrators and would authorize the AD to publish the identity of claims administrators for this purpose.

SB 826 was previously placed on the Suspense file, but advanced this past Thursday.  The measure now goes to the Senate Floor.