BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    SB 1365  


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          Date of Hearing:  August 3, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          SB 1365  
          (Hernandez) - As Amended June 16, 2016


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          Urgency:  No  State Mandated Local Program:  YesReimbursable:   
          No


          SUMMARY:


          This bill requires a general acute care hospital to provide a  
          specified notice to each patient scheduled for a service in a  
          hospital-based outpatient clinic, when that service is available  
          in another location that is not hospital-based.  


          FISCAL EFFECT:


          Any costs to the California Department of Public Health to  
          enforce this requirement are minor and absorbable (Licensing and  








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          Certification Fund). 


          COMMENTS:


          1)Purpose.  According to the author, this disclosure bill is  
            intended to notify patients when a hospital is scheduling them  
            to receive services in a hospital-based outpatient setting  
            that is more costly than other outpatient settings.  The  
            author notes hospitals often charge a hospital facility fee  
            even when its clinics are simply providing primary care  
            services that could easily be performed in a physician's  
            office.  The author also explains this has two significant  
            consequences:  higher out-of-pocket costs for consumers, and  
            higher health insurance premiums, as a result of patients  
            unwittingly, and unnecessarily, receiving care in more  
            expensive settings.  This bill is sponsored by the California  
            Teamsters Public Affairs Council (Teamsters) and supported by  
            Health Access California, health insurance plans, and other  
            labor groups. It has no opposition. 



          2)Background. Medicare, which sets precedent in health care  
            payment that are commonly adopted throughout the insurance  
            industry, pays for hospital outpatient department (HOPD)  
            services at a rate that includes a hospital facility fee.  The  
            rates are generally higher than the rate paid to physician not  
            affiliated with a hospital facility.  Last year, the  
            Government Accountability Office (GAO) reported Medicare  
            expenditures for HOPD services have grown rapidly. This has  
            raised questions about the extent to which this growth in  
            spending can be attributed to services that were previously  
            performed in physician offices shifting to HOPDs.



            CDPH licenses and regulates health facilities, including  








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            general acute care hospitals.





          Analysis Prepared by:Lisa Murawski / APPR. / (916)  
          319-2081