August 1, 2017


State Budget Provisions for Medi-Cal Supplemental Payments

The Governor signed the 2017-18 state budget that included language for use of the Prop 56 tax increases on a pack of cigarettes by $2 and dedicate a large portion of those funds to increasing reimbursement rates for physician and dentists. The new tax revenues should provide about $1 billion in new Medi-Cal funds. Though the initiative clearly stated that these funds could not be used to "supplant" existing Medi-Cal spending the Governor surprised most observers by taking those funds and backfilling other Medi-Cal expenses and providing no increases in Medi-Ca rates. The claim was that the restriction on use only applied to existing Medi-Cal expenses and those dollars could be used for other purposes in this and future budget years.
The final amounts of $325 M for doctors, $140M for dentists, and $55M for family planning services was much less then what both the Assembly and Senate had recommended.  It is conditioned upon federal approval and does allow for larger amounts in the fiscal year 2018-19 if state finances are solid. The physician community had pushed for across the board supplemental payments for all categories of physician services based upon current Medi-Cal caseload and any increases in caseload.
The DHCS released their proposal for use of the funds and they chose to only apply increases to a very limited set of codes that reflect new and established office/outpatient visits and new patient visits that include psychiatric evaluations. There are no other increases to other physician services or supplemental payments. These adjustments will be applied to both Fee for Service and Medi-Cal Managed Care.

It is very disappointing but consistent with the Administration's desire to only increase rates where access is an issue. Even these limited increases must be approved by CMS and likely will not occur until later this year and if approved be retroactive to July 1, 2017. We will continue to push for subsequent adjustment to be applied more broadly and include pathology services. 

New Out of Network Billing Law Took Effect on 7/1/17

AB 72 the new law on out of network billing will take effect for any services on or after 7/1/17. It does apply to policies renewed or issued on or after that date but if a provider is out of network it does set the rate of reimbursement by the plan. The interim payment amount for an out of network physician is now the greater of 125% of Medicare or the average contracted rate of the plan. The law does contain an Independent Dispute Resolution Process (IDRP) whereby a physician/group could appeal for a higher level of payment above the interim payment amount. Both the Department of Managed Health Care and the Department of Insurance will be establishing IDRPs which either a physician or plan could use with participation being mandatory and binding on the parties. The specifics of the IDRP process are not yet available. The IDRP will include a cost for use, allows providers to bundle claims and the decision can be appealed to a Court.
AB 72 does not apply to;
  • Medi-Cal
  • Medicare or Medicare Advantage Plans
  • ERISA plans
  • Out of State Health Plans
AB 72 does contain a mandatory assignment of benefits meaning that the out of network payment goes to the physician and not the patient.  Out of network providers can only bill the patient for applicable co-insurance and deductibles and must refund any overpayment. The plan will inform the provider of those amounts when the interim payment is provided. The current state law on plan requirements for timely processing of claims also apply to out of network claims. The bill does include some provisions to address the network adequacy requirements for plans that we believe contribute in large part to the out of network billing issue.   Plans will begin to report average contracted rates and also the incidence or volume of out of network billing in hospital settings. We encourage members to contact the CSP with any issues or problems they encounter.  
The CSP is participating in stakeholder discussions with both the Department of Managed Health Care (DMHC) and the Department of Insurance on the collection of average contracted rate information from health plans and insurers. We have emphasized the nuances of modifiers used in pathology billing such as Professional, Technical, and Global. 

Bill to Fix Work Comp Issue for
Physicians as "Owners" Clears Senate

SB 189 (Bradford) is the CSP supported bill to fix a provision in law passed last year that made many pathologist owners in groups employees, thus subject to mandatory Work Comp coverage, unless they had at least a 15% ownership interest in the group. SB 189 would exempt from that ownership threshold if;
  • The individual is an owner of a professional corporation,
  • Is a practitioner rendering professional services
  • He or she executes a waiver indicating they are insured under a health plan
  • It remains effective until a notice of withdrawal is filed
SB 189 has passed the Senate and the Assembly Insurance Committee. If signed by the Governor, which is expected, it will take effect in 2018 and we will inform you of the precise date.

CSP Opposes Bill to Require Students
Taking Clinical Hours Become Employees

AB 387 would require that students in training to become allied health care practitioners while obtaining clinical hours for their certificates to be deemed employees of the clinical site and be paid at least minimum wage. The bill is sponsored by SEIU and UHW to address what they claim to be a hardship for students who are not paid as employees while they complete their clinical training hours. This would apply for example to a CLS or MLT who needs to obtain clinical hours for their certificate or licensure. We believe it would jeopardize the availability of slots at these clinical training sites at many hospitals based upon these new costs and benefits by classifying these students as employees. In addition, many accrediting organizations for allied health practitioners specifically prohibit the hospital or clinical site from employing these individuals in order to maintain their control over the teaching program.
AB 387 did pass out of the Assembly Labor and Employment Committee on a party line vote in April. The CSP worked with a broad coalition of organizations including hospitals, community colleges and state universities, as well as the organizations representing PTs and OTs. AB 387 did get to the Assembly floor but was never taken up for a vote. It is now a two year bill and cannot be heard again until 2018.

CSP Endorsements for CAP Elections

The CSP Board met with a number of candidates for CAP offices in the upcoming elections. The CAP indicated that Ballots will be provided to CAP members on August 8th. The CSP Board endorses the following candidates;
President- Elect - Patrick Godbey, MD FCAP
Candidates for CAP Board of Governors

Timothy Craig Allen, MD FCAP
Jonathan Myles, MD FCAP

CSP 70th Annual Meeting
Registration Now Open

November 28 - December 2, 2017
Hyatt Regency San Francisco
5 Embarcadero Center, San Francisco, CA 94111

Registration is now open for California Society of Pathologist's platinum anniversary of our 70th Annual Meeting! Join distinguished speakers from across the country and participate in this outstanding educational program along with fellow pathologists.

The CME sessions feature an array of current topics in pathology including: 

Short Courses
Gastroesophageal Biopsies  - Rhonda Yantiss, MD 
Cytologic and Histologic Evaluation Salivary Gland Tumors  - William Faquin, MD, PhD 
Soft Tissue Tumors  - Christopher Fletcher, MD and Jason Hornick, MD, PhD
Non-small Cell Lung Cancer (NSCLC) - Kevin Leslie, MD and Lynette Sholl, MD
Dermatopathology - Scott Binder, MD; and Kerri Rieger, MD, PhD
Special Lecture
Cancer Immunotherapy :  How did we get here and where are we going? 
Lynette Sholl, MD
Saturday Case Seminar
Diagnostic Problems in Surgical Pathology 
Moderator: Donna Hansel, MD, PhD
Presentations from Scott Binder, MD; Jason Hornick, MD, PhD; Kevin Leslie, MD; Andres Roma, MD; Lynette Sholl, MD; and Qihui (Jim) Zhai, MD
Courses will provide opportunities to receive Continuing Medical Education (CME) credits and short courses will provide Self-Assessment Module credit (SAMs). 


California Society of Pathologists
One Capitol Mall Suite 800
Sacramento, CA 95814 
Tel : 916-446-6001
Fax :  916-444-7462