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The California legislation concluded the 2024 legislative session when it adjourned on August 21, 2024. Overall, the legislature introduced a variety of health care bills spanning a list of hot-topic issues from Medi-Cal eligibility to health care worker minimum wage increases.

Below we recap noteworthy bills from the 2024 legislative session impacting California’s health care market that were not enacted (to learn what bills were enacted please see Recapping the 2024 California Legislative Session: Artificial Intelligence, Debt, and More). The bills covered are arranged by issue relating to Pharmaceuticals, Health Care System Reforms, Health Care Markets, and Health Care Costs.

Pharmaceuticals

SB-966 | This bill would have required pharmacy benefit managers (PBMs) to obtain a licensure from the California State Board of Pharmacy to operate as a PBM on or before April 1, 2027. Additional requirements as part of the licensure would have included an annual report detailing the fees received and a description of how their fees are calculated. SB-966 outlines specific duties PBMs would be required to fulfill as well as prohibited income methods that if broken would result in civil penalties. Furthermore, the bill emphasized cost transparency by requiring health care plans and/or policies comply with cost-sharing calculations for each drug exclusively based on the negotiated rate for that drug to ensure the best possible rates. Similarly, the bill prohibited “spread pricing practices” whereby PBMs charge increased rates for drugs than what they charge pharmacies and then keep the difference with state penalties for violation.  This bill passed the state Legislature, but was vetoed by Governor Newsom on September 28, with the Governor stating that his administration is already taking steps to bring down the cost of health care through other programs.  State Senator Scott Wiener, author of the legislation, called the veto, “a massive fail” and has already introduced similar legislation for the upcoming session.

AB-2180 | This bill sought to provide financial assistance to patients by reducing their overall out-of-pocket costs for prescriptions by requiring application of prescription discounts, vouchers, and/or repayments to deductibles and copayments. Currently, drug manufacturers are not required to apply discounts for covered generic versions and/or over-the-counter products sharing alike active ingredients resulting in higher prices for prescriptions.

Health Care System Reform

Delivery Reform

AB-1975 | This bill sought to address chronic health conditions and disparities by encompassing nutritional support as an intervention to promote health outcomes and equity. The bill would have required Medi-Cal to cover 12-week, or longer based on need, culturally appropriate healthy food and nutrition programs in cases where a physician or health plan determine they are medically necessary based on certain medical conditions. Medical conditions eligible and accompanying nutritional interventions would have been defined by the Department of Health Care Services.  This bill also passed the Legislature, but was ultimately vetoed by the Governor.  In his veto message, the Governor stated that the “bill would result in significant and ongoing General Fund costs for the Medi-Cal program that are not included in the budget,” but that the Governor encouraged “the Legislature to explore this policy next year as a part of the annual budget process.”

AB-1977 | This bill aims to reduce barriers for behavioral health care for those diagnosed with a developmental disorder or autism by prohibiting health insurance plans from requiring annual reevaluations and/or diagnoses in order to maintain their coverage.  This is another bill that passed the Legislature, but was vetoed by the Governor.

Rural Hospital Assistance

AB-2342 | This bill seeks to provide additional financial support to small rural island hospitals that are over 10 miles from California mainland by allowing for an annual supplemental payment from the California Department of Health Care. The amount paid would be based on median amounts paid for corresponding Medi-Cal services and would be subject to federal approval, federal available funding, as well as state budget appropriations for the remainder owed for the non-federal share.  This bill was intended to specifically help Catalina Island Health, which is a geographically isolated hospital, but because it is located in Los Angeles County, is not eligible for some state funding offered to rural facilities.

Medicaid & Waiver Reforms

AB-2956 | In an effort to provide uninterrupted care to Medi-Cal recipients, AB-2956 would have required the State Department of Health Care Services to seek federal approval to allow adults over the age of 19 to be stay on Medi-Cal for an entire year following approval (the Medi-Cal program is partially governed and funded by federal Medicaid program provisions).  Redetermination of eligibility would require the state to use all available methods to contact the covered individual prior to stopping coverage. Redetermination eligibility must be based on existing data as long as it is appropriate and sufficient. Additionally, the bill would have allowed for a three-month grace period if paperwork fails to be submitted promptly. The bill sought to have at least 50% of renewals to occur automatically.

AB-3156 | This bill sought to ease the process of obtaining care and reimbursement payments for Medi-Cal patients and Medi-Cal accepting physicians by reducing billing paperwork requirements and the need for joining additional plan networks. The bill encouraged educational resources for patients to better comprehend the process of billing across Medi-Cal and secondary health coverage plans.  This is another bill that passed the Legislature, but was vetoed by the Governor.

AJR-11 | In an effort to retain Social Security and Medicare, AJR-11 would have opposed attempts to privatize and/or cut Medicare by asking members of Congress to vote against such modifications and the President to protect them by vetoing any cuts.

Single Payer or Multi-Payer

AB-2200 | This bill would have provided provide comprehensive universal single-payer health care coverage and a health care cost control system for all residents of the state. For more information, see Most Recent Attempt at Establishing Universal Single-Payer Healthcare in California Fails Again

Health Care Markets

Competition & Consolidation

AB-2637 | This bill sought to ease the process of loans obtained for quality improvement of non-profit health facilities by removing the requirement of the facility to discharge the financing within 24 months of the date of the loan. The bill provided increased flexibility and reduced loan restrictions for non-profit health care facilities.  In his message vetoing the bill, the Governor stated that “[e]xtending the timeline for the recoupment of CHFFA loans would be better discussed as a part of the annual budget process.”

AB-3129 | This legislation would have added restrictions around how private equity groups and hedge funds could participate in the ownership and management of California healthcare facilities. The bill’s lead sponsor, Assemblymember Jim Wood, had introduced similar legislation in previous sessions, but is retiring, so it is uncertain if similar legislation will get introduced in the future.  For more information, see Governor Newsom Vetoes AB-3129 Bill Which Would Have Increased Oversight of Healthcare Transactions Involving Private Equity and Hedge Funds

Rate Regulation

AB-2303 | This bill allowed for higher Medi-Cal payments to qualified and rural health care facilities from a per-visit rate to a modified payment rate format. The bill required the state to gain a waiver for per-visit rates via federal and would allow for higher wages for workers and manage increased health care costs.

Health Care Costs

Benefit Design

SB-953 | This bill would have added coverage of menstrual products under Medi-Cal for low-income individuals and would have authorized the California Department of Health Care Services to use any and all available federal funding to implement this coverage.

AB-2110 | This bill would have expanded which type of providers can be reimbursed through Medi-Cal for completing trauma screenings to include community-based organizations, health agencies, and doulas.

AB-2250 | This bill aimed to make physician-conducted screenings for social determinants of health a standard practice of health care by ensuring doctors have access to interventions to support such issues. Screenings would have been conducted using state required protocols with interventions in the form of support staff (i.e., social workers and peer support specialists) made available to the doctors performing the screenings. Physicians completing screenings would have been reimbursed through Medi-Cal with state agencies being responsible for program guidance and rules.  Another bill that passed the Legislature to be vetoed by the Governor.

Payment Reform

AB-2428 | This bill would have ensured reimbursement payments to Medi-Cal providers under managed care plans to be in an amount equal to or greater than the amount providers under the Medi-Cal fee-for-service system receive. This includes back payments owed to managed care plan providers dating to July 2019 without requiring the state to recalculate the amount it pays for managed care plans.  Another bill that fell to the Governor’s veto.

Cost Containment & Prior Authorization

AB-2169 | This bill sought to remove barriers for Medi-Cal patients who require treatment or prescription adjustments. Specifically, the bill allowed doctors to adjust a patient’s medication based on specific needs without obtaining prior approval. Furthermore, the bill would have prohibited insurance plans from ending coverage for prescription drugs they had previously covered. However, individuals covered under Medi-Cal managed care plans would not have been included.

AB-3260 | This bill aimed to enhance transparency by requiring insurance plans to make timely decisions of urgent medical requests within 72 hours and nonurgent requests within 30 days. If timelines were surpassed, the bill allowed for patient grievances to be filed with automatic resolutions in their favor. Furthermore, the bill prohibited private correspondences between insurers and review boards during disputes to further enhance transparency. Overall, the bill sought to provide patients with just and timely access to medically necessary care via insurer accountability.

Miscellaneous

AB-2043 | This bill would have required Medi-Cal managed care plans to provide nonemergency medical transportation through contracted public paratransit services in an effort to be reimbursed for trips provided in the event of seeking nonemergency medical care.

AB-1783 | This bill intended to end the use of California state taxpayer money to fund health care for undocumented immigrants by removing the funding from the state budget.

What's Next

California convened its 2025-2026 Legislative Session on December 2, 2024. Stay tuned to the Source's California Legislative Beat for the latest information about the Legislature's movements.

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