CCLA 2011Annual Conference Lab Regulation and Compliance – Influencing the State

1. CCLA 2011Annual ConferenceLab Regulation and Compliance – Influencing the State Michael J. Arnold, Lobbyist Kristian E. Foy, Legal Counsel Sacramento, CA

2. And we used to think the lab business was bad! • The Treasury Dept. has issued a new dollar bill to reflect the state of economics in the lab industry:

5. Components of an effective state advocacy program: • On site advocacy in the state capitol. • District based communications program. • Candidate support mechanism. (e.g. PAC)

6. CCLA LAB-PAC • Contributions Needed!!! • Current Balance: $22,037 • Other similar Associations spend 10 times that amount! • Corporate contributions are permitted • Any “person” (includes a corporation) may contribute up to $6,500 per calendar year • Please make a note to contribute

7. Infrastructure for Tracking Legislation • Box in Bill Room • Bill Tracking System • Daily Committee Hearing Calendars • Legislative Status Report

8. Legislative Status Report • Periodic listing of all bills being followed • Shows bill, author, summary, location, hearing date, etc. • Available to any CCLA member, anytime

9. Key Issues for 2011 • State Budget – Protecting the Medi-Cal Program, etc. • Legislative Proposals – e.g. AB 969 re Medi-Cal billing and the “lowest price requirement” • Regulatory Proposals – e.g. personnel regulations by Lab Field Services • Monitoring court cases – e.g. False Claims Act Case, Medi-Cal Reimbursement Case • Implementation of Obama Care—Health Benefit Exchange Created and now operational.

10. CA 2011-2012 Budget Deficit: $26 Billion! • New Governor, Jerry Brown 2.0, proposed $12 B in Cuts, $12 B in new revenues, and $2 B in borrowing and other adjustments. • New revenues required election to extend the tax increases of 2009 for another 5 years. Republicans said “No.” • Budget trailer bill, AB 97: cut Medi-Cal provider payments 10%; imposed patient co-pays; capped patient visits.

11. Battle Over Proposed Medi-Cal Cuts for 2011 • Hard cap of no more than 6 prescriptions per month—Defeated. (Key here is that prior proposals have attempted to place monthly cap on Lab tests!) • Hard cap of no more than 10 physician/clinic visits per year—Defeated. • Soft cap of no more than 7 physician/clinic visits per year—Adopted. Clinical Lab Visits Excluded. • Co-pay requirements of $5 per physician/clinic visit—Adopted. Clinical Lab Visits Excluded. • 10% Cut in provider payments—Adopted.

12. Medi-Cal Cuts--Caps--Co-Pays • 10% Cut in provider payments—Working to stop this at the CMS level!!! • “Soft cap” of no more than 7 visits to M.D. or clinic per year—M.D. can certify need for more. No cap on lab visits. • Patient co-pays: $50 for ER visit; $100/day for first 2 days in hospital; $3 per generic Rx; $5 per name brand Rx; $5 per M.D. visit. No co-pay for lab visits.

13. Medi-Cal Cut--Caps--Co-pays • Lab services EXEMPT from caps on the number of visits AND from patient co-pays!!! • 10% provider payment reduction applies • Payment reduction must be approved by CMS • If approved, reduction may be made RETROACTIVE to June 1, 2011!!! • CCLA is working to convince CMS to say NO!

14. SB 97 – Medi-Cal Cuts • 10% provider payment cut takes effect when federal approval is obtained, retroactively to June 1, 2011, or “on such other date or dates as may be applicable.” • Thus, if CMS approves the cut, DHCS will decide when the cut takes effect—possibly back to June 1st.

15. Continued Effort to Stop Provider Cuts • Participation in Alliance for Patient Care (APC). Statewide association of over 60 provider groups. A subset of these groups filed lawsuits which stopped the last cut. • Working through APC and independently to convince CMS to reject these cuts—adverse impact on patient access. • Considering participation in new lawsuit.

16. UPDATE: CMS Approves the 10% Provider Payment Cut • Federal Officials Approve State's Plan To Slash Medi-Cal Payments • On October 27, 2011 CMS approved California's plan to cut Medi-Cal provider payments by 10%. • The cuts are retroactive to June 1, 2011.

17. CA Medicaid Program • Medi‑Cal has an annual budget of $41.6 billion total funds ($13.0 billion General Fund, $24.1 billion federal funds, and $4.5 billion other funds). Federal share will go down this year! • Medi‑Cal provides healthcare coverage to 7.7 million beneficiaries. • Medi‑Cal covers 19.7 percent of Californians and 23.9 percent of insured Californians. 1 in 5 Californians are covered by Medi-Cal. • Medi‑Cal funds about 46 percent of all births in California. • California covers a relatively greater share of its population than other large states (13.2 percent in Texas and 17.9 percent in Ohio) or the national average of 15.7 percent.

18. The Medi-Cal Program • Three ways to save money: • Cut Benefits • Cut Eligibility • Cut Provider Reimbursement

19. Key 2011 Legislation • AB 969 – Sponsor: CA Primary Care Assn (FQHCs). Seeking exemption from Medi-Cal “lowest price regulation.” CCLA amendments accepted. Appropriations Committee stopped bill. Issue will be back next year! • AB 186 – Sponsor: Health Officers Assn (HOAC). Permits DPH to modify list of communicable diseases without issuing new regulatory package. DPH must give labs 6 month notice before penalty. • AB 395 – Sponsor: March of Dimes. Adds Severe Combined Immunodeficiency (SCID) to list of newborn screening testing. • See Legislative Status Report for all bills followed

20. Assembly Member Toni Atkins Re: AB 969 – Request for Amendments Dear Assembly Member Atkins: We write on behalf of the California Clinical Laboratory Association (CCLA) to request amendments to AB 969. Your measure dealing with clinical laboratory services is currently drafted in a way that will create more problems than are solved. The amendments we propose will narrow AB 969 to allow a specific exemption for federally qualified health centers (FQHC), without creating confusion by adding new concept definitions and ambiguous language to existing law. Specifically, our language will exempt donations of, discounts for, clinical laboratory services provided to FQHCs from consideration as a basis for reducing Medi-Cal reimbursement rates for the laboratories which provide such donations or discounts to FQHCs. This language will provide a “safe harbor” for laboratories which offer a discounted rate for the laboratory services they provide to FQHCs. We strongly believe that our language will improve your bill without creating the unintended consequences which the current language would otherwise create. Thank you for your consideration of our proposed amendments. We have attached the amendments for your review. Sincerely, Michael J. Arnold Kristian E. Foy Legislative Advocate Legal Counsel

21. State Level Lab Issues • Reimbursement from Public Programs • Frequency Limits • Staffing/personnel requirements and standards • Licensure regulations and fees • Moratorium on new lab provider numbers for Medi-Cal • Contracting for lab services • Operational issues - e.g. autoverification, use of personnel • Anti-mark up/direct billing legislation • Direct access testing for any test sold OTC—other tests? • Safe needle mandate • Phlebotomy certification • Specimen lock box mandates • Cap on number of tests which may be provided to patients • Medicaid “Lowest Charge” regulation • Etc., etc., etc….

22. Sponsoring Legislation – Behind the Scenes Efforts • Draft Legislation-Work with Legislative Counsel • Meet with State Agencies & others e.g. CDPH • Secure Author • Draft Background support statements • Brief author’s staff • Meet with Committee Consultants • “Work” policy committee • Etc, etc….

23. Big News in 2011: False Claims Act Cases Settled for $$$ • Seacliff Diagnostics medical Group: ? • Physicians Immunodiagnostics Lab: ? • Whitefield Medical Lab: ? • Stanford Hospital and Clinics: $2.55 Million • Westcliff: $5 Million • LabCorp: $49.5 Million • Quest: $241 Million • Chris Riedel: $70 Million from Quest alone

24. Medi-Cal Lowest Price Reg • Ca Administrative Code Section 51501(a): “…no provider shall charge (Medi-Cal) for any service…more than would have been charged for the same service…to other purchasers of comparable services…under comparable circumstances.” • CA False Claims Act: Section 12650 of the Government Code

25. CA Health Benefit Exchange • 5 Member Board • Implementation of the federal Affordable Care Act (ACA) • People who can’t afford to purchase coverage will obtain coverage through Medi-Cal or the Exchange – with government subsidies • Patients covered by the Exchange: 2 to 6 Million!!! Number depends upon what happens in the small employer market. • CCLA must ensure that complete coverage for lab testing is included in the benefit package, etc.

26. AMA CPT Code Process • Big changes for 2012 and beyond. • Covered during billing workshop. • Stay tuned to the CCLA for additional updates and information. • Key changes for MAAAs • Billing with unlisted code!!!???

27. Multianalyte Assays with Algorithmic Analyses • Multianalyte Assays with Algorithmic Analyses (MAAAs) are procedures that utilize multiple results derived from molecular pathology assays, as well as fluorescent in situ hybridization and other non-nucleic acid based assays. The individual component procedures are not reported separately. MAAAs are then used in algorithmic analyses to derive a single result, reported typically as a numeric score or probability. MAAAs are typically unique to a single vendor. • When a specific MAAA procedure is not listed below or in Appendix “X”, the procedure must be reported using the Category I MAAA unlisted code (814XX).

28. This Won’t Hurt a Bit!