BILL ANALYSIS Ó
SB 435
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Date of Hearing: August 19, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 435
(Pan) - As Amended July 7, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires the Secretary of the California Health and
Human Services Agency (CHHSA) to convene a working group of
public payers, private health insurance carriers, third-party
purchasers, health care providers, and health care consumer
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representatives to identify appropriate payment methods to align
incentives in support of patient-centered medical homes (PCMHs).
It also states intent to exempt from state antitrust laws, and
to provide immunity from federal antitrust laws pursuant to the
State Action Doctrine for, any activities undertaken pursuant to
this bill that otherwise might be constrained by those laws.
FISCAL EFFECT:
1)Costs of $20,000 to CHHSA to convene a workgroup.
2)This bill includes intent to exempt from applicable antitrust
laws, but does not do so. Specifically, it does not include a
process by which the state can manage the requirements of
immunity from federal antitrust laws under the State Action
Doctrine. This liability poses GF risk. The California
Department of Justice notes that in light of recent Supreme
Court case law, it is likely that the antitrust immunity
provisions contained in this bill would not comply with the
State Action Doctrine. DOJ indicates enactment of this bill
will expose the state to liability and damages for
collaborations formed under the statute. DOJ costs as a
result of these liabilities are impossible to predict but
potentially significant.
COMMENTS:
1)Purpose. According to the author, the state should support
care that is patient-centered, cost-efficient, continuous,
focused on prevention, and built on sound, evidence-based
medicine rather than episodic, illness-oriented care. The
author believes the outcome of this bill will be the best PCMH
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model for California. The bill is sponsored by the California
Academy of Family Physicians.
2)PCMH. According to the federal Agency for Healthcare Research
and Quality, a PCMH delivery model improves health by
transforming the way primary care is organized and delivered.
It includes five features: comprehensive care, patient
orientation, coordinated care, improved primary care
accessibility, and a commitment to quality and safety. It is
designed to improve quality of care through team-based
coordination, and to empower the patient to be a partner in
their own care.
3)Anti-trust concerns. In July 2013, the Commonwealth Fund
published an issue brief titled, "State Strategies to Avoid
Antitrust Concerns in Multipayer PCMH Initiatives." According
to this issue brief, convening multiple payers distributes the
costs associated with creating a PCMH and results in greater
alignment around payment, reporting, and infrastructure
investments. However, it also notes states that promote
collaboration among payers to reach agreement on common or
aligned payments for their PCMH initiatives risk antitrust
liability for their participating payers. The cooperation and
collaboration to set prices and payments among a group of
otherwise competitive payers would be seen as illegal
restraint of trade under the Sherman Act, a federal antitrust
law. Immunity from federal antitrust laws is available under
the "state action doctrine" if the policy in place meets
specific criteria: that the state has a clear policy that
justifies the anticompetitive behavior, and that the state has
committed to active supervision of anticompetitive activities.
Some states with PCMH initiatives have passed legislation
that explicitly addresses antitrust concerns.
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4)Prior Legislation.
a) ACR 152 (Pan), Resolution Chapter 143, Statutes of 2014,
states the Legislature supports and encourages the
development and expansion of a California health care
delivery system that identifies PCMHs and is based upon
certain principles of coordination of patient care.
b) AB 1208 (Pan) of 2013 was similar to SB 393 from 2012.
AB 1208 was later amended on the Senate Floor to address a
different subject matter.
c) SB 393 (Ed Hernandez) established a definition for a
PCMH based upon specified standards. SB 393 was vetoed by
the Governor. In his veto message, the Governor stated
that he commended the author for trying to improve the
delivery of health care by encouraging the greater use of
"patient-centered medical homes" but because the concept is
still evolving, he thought more work was needed before the
definition was codified.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081
SB 435
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