The 2018 decision by the California Supreme Court, the Dynamex decision, changed the test on the classification of an individual as an independent contractor vs an employee. There has traditionally been a multifactor test on whether someone is an independent contractor largely resting on the ability to control the work and independence as a professional. The Dynamex decision replaces that standard with a three-factor test with a presumption that an individual is an employee. Physician groups may classify non shareholder/ partner physicians as independent contractors. This decision could impair the ability to do so and could put the entity at risk to a challenge that the individual should be reclassified.
The three factor test under Dynamex is (1) that the worker is free from control and direction of the hiring entity; (2) the worker performs work outside the usual course of the hiring entity's business; and (3) the worker is customarily engaged in an independently established trade, occupation or business. Pathologists and other physicians who contract with hospitals or pathology groups would meet # 1 and #3 but would fail the second factor since they would perform medical services which would be in the "usual course of business" of the hiring entity.
AB 5 (Gonzalez) is the vehicle to codify the decision and create whatever occupational exemptions will be created. AB 5 includes an exemption for licensed physicians and has been signed by the Governor and is declaratory of existing law. We expect that there will be more activity next year since many occupations were not satisfied with the final bill. There is a multi-factor test to create a "business to business" exception but some of the factors could be problematic.
CSP Supported Bill to Allow MLTs to Use Training Towards CLS License
SB 334 (Pan) would expedite the ability of an MLT to obtain licensure as a CLS through the creation of an "MLT-to CLS Career Pathway". It would provide authority and discretion to Laboratory Field Services to allow some elements of MLT training to satisfy the educational requirements to become a CLS. This would allow an MLT to utilize their 6-month clinical training program to satisfy a portion of the one-year post-baccalaureate clinical training program required to become a CLS.
This change will help alleviate the impediment to some MLTs facing the prospect of returning to a one-year training program. The reduction in cost and time will be helpful to assure greater opportunities for MLTs to transition to CLS licensure. SB 334 has been signed by the Governor and takes effect on 1/1/20.
CSP Efforts to Eliminate Medi-Cal Provider Rate Cut
The CSP has continued to push both the Assembly and Senate Budget Sub-committees to request elimination of the 10% Medi-Cal Provider rate cut that has been in place since 2011. The cut began in the midst of the recession that caused a $25B shortfall in the State Budget. Some providers have now been exempted from the cut but relief to the physician community has been very narrow targeting only a handful of physician office visit codes and some pediatric services.
The elimination was included in the Assembly version of the budget was not included in the final budget prepared by the Joint Budget Conference Committee that was signed by the Governor. We will continue to push to eliminate the cut in the budget process next year. Last week the Assembly Budget Sub-Committee adopted a provision to eliminate the 10% Medi-Cal cut and that issue now will go to the Joint Conference Committee that will adopt a final version of the state budget to send to the Governor.
We also supported a provision that eliminates that Medi-Cal pay no more than 80% of Medicare for laboratory services. Since Medi-Cal adjusted their rates previously based upon review of private payer rates it is no longer fair to additionally reduce rates based upon the 80% of Medicare methodology. In addition, the pending PAMA implementation could further impact the applicable Medicare rate. That provision was included in the Senate version of the budget but was not part of the Joint Budget Conference Committee and hence was not included in the Budget signed by the Governor. A Senate bill was amended just prior to the Legislature's adjournment that would include the elimination of the 80% cap. It has already passed the Assembly and could be moved early next year.
Looking for a Pathologist to Serve on the Clinical Laboratory Technology Advisory Committee
The Clinical Laboratory Technology Advisory Committee has served in an advisory capacity to the Laboratory Field Services for decades. It is comprised of a number of clinical laboratory professionals including two spots reserved for pathologists. The CLTAC meets 3 to 4 times per year typically by video/ audio conference so that CLTAC members are not required to travel to meeting location unless they choose to do so.
The CLTAC is a valuable interface with LFS and focuses on emerging lab regulatory and licensing issues. There is a currently a vacancy for a pathologist member and we would encourage anyone who has an interest in being nominated to email the CSP Executive Director at