CALIFORNIA

Overview

California continues to be a national leader in healthcare price and transparency initiatives. For the 2017 legislative term, Assembly member Wood introduced legislation (AB 595) that would require insurance companies to receive approval from the Department of Managed Health Care before they can merge or acquire other health plans. In addition, Senator Monning introduced legislation (SB 538) that would prohibit providers and health plans from including certain anticompetitive terms, such as gag clauses and payment rate setting for nonparticipating hospital affiliates, in their contracts. Finally, Senator Hernandez introduced a pharmaceutical price transparency bill (SB 17) which would require public and private purchasers of health care and health care coverage be given advance notice of price increases for the costs of prescription drugs.

In past legislative terms, California legislation sought to provide additional processes and structures to improve healthcare price transparency and, in effect, lower costs. In September 2016, Governor Brown signed a bill that requires health insurers to notify their policyholders when regulators think their price hikes are too high (SB 908), and a bill that protects patients from out-of-network provider “surprise bills” (AB 72). Other proposed legislation sought to reduce healthcare costs by requiring insurance carriers to provide a minimum value of 60%; and by clarifying family and individual family member cost sharing.

Overall, California remains an active participant in the initiative to reduce healthcare costs and improve price transparency. California’s legislation and regulation aligns with similarly active and progressive states by focusing on pharmaceutical costs and stakeholder transparency measures.

The State Database

The Source tracks state activities impacting healthcare price and competition in both legislation and litigation in a searchable database to help stakeholders at the state level understand their legal and regulatory environment as they make efforts to improve access, quality, and efficiency, and reduce costs in healthcare. We currently cover bills from the 2017-2018 legislative term and key statutes from each state. Search the database for specific bills, statutes or cases by using keyword, key issue category, and/or jurisdiction.

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Additional Resources

LEGISLATIVE CALENDAR

California’s most recent legislative session convened from 1/3/2018 – 7/6/2018 and reconvenes from 8/6/2018 – 8/31/2018. Bills from 2017 were carried over to 2018 for the 2017-2018 legislative term. The Governor has until 9/30/2018 to sign or veto any bills passed by the California legislature.

FY 2018 BUDGET

California’s fiscal year runs from July 1 through June 30. After its introduction, the legislature has until June 15 to pass the budget. To view California’s Department of Health and Human Services FY 2018 Budget, visit page 23.

ANTITRUST ENFORCEMENT

  • California was one of 16 states to file an amicus brief supporting the FTC’s winning position in the Ninth Circuit appeal of St. Luke’s Health Care Sys. v. FTC, No. 14-35173 (March 7, 2014), decided February 10, 2015. The States’ brief stated that the acceleration of health care costs due to the growth of large health care provider systems had become a matter of grave concern for the states.

KEY RESOURCES