BILL ANALYSIS Ó
SB 1365
Page 1
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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|Policy |Health |Vote:|18 - 0 |
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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
SB 1365
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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
SB 1365
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general acute care hospitals.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081