California Health Care Community Condemns AB 3087
On April 24, 2018, the Assembly Committee on Health voted to advance Assembly Bill 3087 (Kalra), a harmful government intrusion into the health care market that would decimate California’s health care system, limit access to health care providers, create state-sanctioned rationing and increase out-of-pocket costs for patients.
“Today is a dangerous step backward for patient access to health care in California,” said California Medical Association (CMA) President Theodore M. Mazer, M.D. “This poorly-conceived legislation would do nothing to reduce health care costs; instead it would destabilize California’s health care system, resulting in less access to care and services and more costs shifted to patients.”
“This bill would only speed us toward intensifying consolidation of the health care industry, turning care into a one-size-fits-all assembly-line commodity, said California Dental Association President Natasha Lee, DDS. “I am deeply concerned about its potential to disrupt care for millions of Californians, as well as limit the number of health care providers willing to practice in the state.”
According to an initial estimate by the California Hospital Association (CHA), the bill would cause an estimated 175,000 hospital workers alone to lose their jobs, and force many hospitals and medical practices to close. AB 3087 would also push physicians, dentists and other clinicians into early retirement or to other states that have more viable working conditions.
“AB 3087 is a big, bad bill for the health of Californians,” said CHA President and CEO Carmela Coyle. “All this bill does is to say what price people are going to pay for a service, it does nothing to address the underlying costs of care. AB 3087 would result in 60 percent of hospitals operating in the red, causing hundreds of thousands of health care workers to lose their jobs. Access to health care services for all Californians would be at risk if AB 3087 is enacted.”
A recent survey of 359 California physicians conducted by CMA found:
- 92 percent opposed AB 3087 (6 percent undecided, 2 percent in support).
- 57 percent believed AB 3087 would force them to leave California and practice elsewhere.
- 39 percent believed AB 3087 would force them into early retirement.
- Only 5.5 percent believed AB 3087 would have little to no effect on their medical practice.
- Of the 82 percent of respondents who currently serve Medi-Cal patients, 64 percent believed AB 3087 would force them to decrease the number of Medi-Cal patients they serve.
The top five concerns from the survey respondents included:
- Ineffective policy since physicians are a small percentage of health care costs (62 percent).
- Untested government-mandated price cap (61 percent).
- Exacerbates California’s physician shortage (58 percent).
- Forces physicians into early retirement, out of state or out of business (59 percent).
- Reduces patient access to care (54 percent).
The California Medical Association represents the state’s physicians with more than 43,000 members in all modes of practice and specialties. CMA is dedicated to the health of all patients in California. For more information, please visit
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CMA survey finds rampant health plan payment abuses
Despite a California law passed in 2000 to address widespread payment abuses by health care service plans, many payors continue to flout the law. A recent survey by the California Medical Association (CMA) confirms that health plans regularly engage in unfair payment practices, with two-thirds of physician practices reporting routine payment abuses in violation of state law.
The Department of Managed Health Care (DMHC) has been slow to address provider complaints and has taken few enforcement actions against health plans that unlawfully underpay providers. When DMHC has acted, the penalty amounts have been small in relation to the economic injury to consumers and providers. Because of this, some health care service plans make economic decisions to violate the law, knowing that any penalty amount that may be imposed will be outweighed by the extra revenue the health plans will generate by, for example, underpaying medical care.
Last month, CMA, along with its county medical societies and several specialty societies, surveyed physicians to obtain feedback on the health plans that are routinely engaging in unfair payment patterns, the types of violations and the results of physician efforts to resolve the issues both through internal plan processes as well as through DMHC. In a period of nine days, 741 physician practices representing thousands of physicians responded to the survey.
Key survey results include:
- Two-thirds of physician practice respondents report routine problems with plans engaging in various unfair payment patterns, defined as a practice, policy or procedure that results in repeated delays in the adjudication and correct reimbursement of provider claims, as outlined in 28 C.C.R. §1300.71.
- More than half of practices report that health plans attempt to rescind or modify authorizations after the physician renders the service in good faith.
- Sixty-two percent report that Anthem Blue Cross is the most problematic when it comes to unfair payment practices; Blue Shield of California was second most problematic (52 percent).
- The health plan provider dispute resolution processes are largely ineffective, with 32 percent of practices indicating disputes are resolved only half of the time, and 29 percent indicating disputes are rarely resolved through the plans’ internal processes.
- Though most practices do utilize the health plans’ internal processes to attempt to resolve issues, 63 percent report that plans routinely fail to respond to their appeals within 45 business days of receipt, as required by California law. Anthem Blue Cross is identified as the most problematic (66 percent), with Blue Shield the second most problematic (61 percent).
- When health plans do respond to physician appeals, 74 percent of practices state the health plan responses do not include a clear explanation for the plans’ determination.
These survey results confirm that health plans overwhelmingly continue to engage in unfair payment practices, despite the legislation that passed 18 years ago attempting to stop these abuses. It further demonstrates that, although plans are required to maintain fast, fair and cost-effective provider dispute processes, their processes are largely ineffective.
To view the full survey results,
To address this issue, CMA is sponsoring AB 2674 (Aguiar-Curry), which would require DMHC to investigate provider complaints that a health care service plan has underpaid or failed to pay the provider in violation of the Knox-Keene Act. If DMHC finds that a health plan has unlawfully underpaid a provider, AB 2674 would require the penalty amount to, at a minimum, equal the amount of the underpayment plus interest. Furthermore, AB 2674 would protect the health care delivery system by ensuring providers are made whole when health care service plans violate the law. The bill would also deter future violations of the law, thereby saving providers and the state vital resources that should be invested in patient care.
CMA can help you get paid
Physicians are reminded that members have access to CMA’s practice management experts for free one-on-one help with contracting, billing and payment problems. Need assistance? Contact CMA's reimbursement helpline, at (888) 401-5911 or