CMA Capitol Insight: Ring Out the Old – And Then Ring it Back in Again

January 06, 2014
Area(s) of Interest: Advocacy Licensing & Regulatory Issues MICRA 

CMA Capitol Insight is a biweekly column by veteran journalist Greg Lucas, reporting on the inner workings of the state Legislature.

Ring Out the Old – And Then Ring it Back in Again

As 2013 ended, the biggest political issue was health care. Nationally, anyway. That’s unlikely to change, at least for the first quarter of 2014. There’s also no evidence suggesting the focus will change from obtaining coverage to the quality of that coverage once it’s obtained. The latter sort of discussion is far more likely to occur after the Affordable Care Act’s (ACA) open enrollment period ends March 31. For now, the attention will be on the reliability of websites, the number of new policies purchased and, perhaps secondarily, stresses or strains from expanded Medicaid eligibility. In California, interest in the ACA will be even less because – so far – the snafus experienced by the federal government and other states aren’t happening here. There’s a brisk pace of sign-ups and surprisingly smooth processing of applications – particularly relative to other states. As the year advances, two health care related ballot measures will also start crowding the political radar screen of Californians. One has already qualified. It would give the state Insurance Commissioner more authority to regulate health insurance rate increases, a powerful and high profile role – particularly in the changed landscape created by the Affordable Care Act. The other initiative, whose supporters are still collecting signatures to place it on the ballot, is already familiar. Masked in the guise of expanding treatment and increasing punishment for substance-abusing medical practitioners, the trial-lawyer backed proposal eliminates the $250,000 cap on non-economic damages under 1975’s Medical Injury Compensation Reform Act (MICRA) and allows instead nearly $1.1 million in such damages. All of which makes it difficult to generate interest in the impact of a 10 percent reduction in Medi-Cal reimbursement rates – applied retroactively to recoup past “overpayments” – even when the number of Medi-Cal patients is climbing.

But Not Impossible

The recently announced Assembly Democrat “Blueprint for a Responsible Budget” says its goal is “ensuring stability” and “expanding opportunity.” As part of that goal, the blueprint says it wants to “improve access to health care.” On Page 20 of the graphically pleasing, white-lettering-on-a-royal-blue-background PowerPoint describing the blueprint, it says rather blandly: “Medi-Cal reimbursement rate cuts during the Great Recession may limit the access to health care that the Affordable Care Act is intended to improve.” (Not to shred Capitol Insight’s tattered veneer of objectivity but “may limit access?” Really? Yay think?) On the following PowerPoint page, Assembly Democrats appear to answer their own question in the affirmative, proposing to “phase in Medi-Cal rate increases to restore reimbursement rates to ensure adequate health providers for the expanded Medi-Cal population.” That’s good news, but the blueprint doesn’t say how much is “adequate,” how soon those practitioner payments will start becoming more “adequate,” or how long of a phase-in until full “adequateness” is achieved. Democrats wave off such detail-oriented questions about the blueprint by saying it’s merely a blueprint and, therefore, longer on objectives and negotiating posture than specifics. Apparently budget blueprints are different than the blueprints used in a home remodel, where detail and cost breakdowns are both the expectation and the norm. A cynical reading would go something like this: Assembly Speaker John Pérez, who presented the blueprint to the media way back in December 2013, is a candidate for controller in 2014. While Pérez is sincere in his concern about access to health care and the challenges of an expanding Medi-Cal population, that “concern” might not translate into an actual increase in reimbursement rates either by the Legislature or, ultimately, by the governor.

As a Matter of Fact

This Friday, January 10, Governor Jerry Brown presents his proposed spending plan for the fiscal year that begins July 1. Last June, Gov. Brown signed a $145 billion spending plan for the current fiscal year. This one will likely be roughly the same or slightly larger, with a reserve of several billion to cushion against an unforeseen economic calamity and cover the costs of new spending that might arise from negotiations over a final budget package in May and June. What the Democratic governor’s budget plan will also contain – at least as of Friday, January 3 – is almost $710 million in estimated savings from July 1 through June 30, 2015, by lowering Medi-Cal physician reimbursement rates by 10 percent. The state, which splits Medi-Cal costs roughly in half with the federal government, gets $350 million of that savings. The budget also includes retroactive payments of $300 million. The 10 percent reduction was initially signed into law by Brown in March 2011, but court challenges, led by the California Medical Association, delayed full implementation of the reduction until June 2013. And so the state is now seeking $472 million over the next two years to cover the time the cut would otherwise have been in effect. Doctors, clinics and pharmacists are among the last to feel the hit, with the reduction taking effect on January 9. Dentists and ambulances have been receiving 10 percent smaller checks since Labor Day. Last summer, the Department of Health Care Services approved several exemptions to the ongoing 10 percent reimbursement reduction including some rural nursing faculties and expensive drugs to treat serious conditions like multiple sclerosis and hemophilia. Without the exemptions, the $700 million in savings from cutting the reimbursement rate would have been nearly $850 million.

New World Order

Not exactly, but it’s a new year and that means new laws are taking effect. In fact, the Legislature has returned and is trying to create even more new laws for 2014. The Democratic governor and the Democratic Legislature created around 800 of them last year, the majority taking effect January 1 and going largely unfelt by most Californians. Because California has nearly 23 million drivers, new laws with the most impact are often those affecting driving. For example, starting this year, teenagers under the age of 18 may not text while driving – even if using “hands free” devices. Cities and counties can’t ticket a driver who parks for the specified time allowed in a space at which the parking meter or pay kiosk is broken. Low-emission and zero-emission vehicles with one driver can use carpool lanes until 2019. Fans of museums can show their love by buying a special $50 “Snoopy” license plate. Starting September 16 – an odd effective date – it’s a $35 fine if a driver passes a bicyclist going the same direction on the roadway “at a distance of less than 3 feet between any part of the motor vehicle and any part of the bicycle or its operator.” It will be interesting to see the enforcement statistics on each.

One of the Best

It was January 6, 1903, when George Pardee was sworn in as California’s 21st governor. He was a Republican in the Teddy Roosevelt mold, eager to preserve California’s resources and insist businesses operate more humanely. Pardee was also a doctor – the only one to serve as California’s governor. After he and his wife and four daughters moved into the Governor’s Mansion, he kept his black bag at the ready on an entryway table should a house call be required, which it was a number of times during his four years in office. Soon after becoming governor, he quickly put an end to an outbreak of bubonic plague in San Francisco’s Chinatown that his GOP predecessor, Henry Gage, had denied existed – despite proof to the contrary by scientists from what’s now the National Institute of Health. Pardee’s greatest challenge came in the aftermath of the April 18, 1906, earthquake in San Francisco. Without fanfare, he moved with his staff from Sacramento to Oakland and coordinated relief efforts from there. In his inaugural address 111 years ago, Pardee said this to lawmakers:

“The session is too short for effective work if any portion of it is frittered away through inattention to business or is dissipated in needless contentions. There should be no political strifes. We have each and all been elected by the people; we are all their servants, and faithful attention to their affairs not senseless rivalries is what they expect at our hands. They will not commend us if we engage in personal bickerings or neglect the public business while trying to thwart one another and gain a supposed political advantage for any party or any person. The familiar saying, that he serves his party best who serves his country best, is applicable at this time; and it is in that spirit, I trust, we shall act.”


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