Overview
The state of California is a national leader in healthcare price and competition initiatives and continues to make strides in healthcare system reform. In price transparency, California’s repeated efforts to establish an all-payer claims database came to fruition with the passage of AB 1810 in 2018, after a long road of legislative efforts spanning over ten years. With a one-time $60 million appropriation to California’s Office of Statewide Health Planning and Development (“OSHPD”), AB 1810 mandates the creation of Health Care Cost Transparency Database by July 2023. California also has robust legislative protections against surprise and balance billing, prohibiting out-of-network provider “surprise bills” for both emergency and non-emergency services.
California also leads the nation on the drug price transparency front with SB 17, a landmark law that requires drug companies to give advanced notice of prescription drug price increases to public and private purchasers of health care and health care coverage. Despite legal challenges to the law, it is seen as a meaningful step to negotiate the political and legal boundaries of state action to rein in drug prices.
In healthcare market competition, the state is active in antitrust enforcement of provider anticompetitive practices, most notably in the historic action against Sutter Health, in which the California attorney general sued the Northern California hospital giant for leveraging its dominant market power to demand all-or-nothing, anti-tiering and anti-steering, and gag clauses in its contracts with insurers. As an extension from the case, the legislature continues to seek increased merger review authority of health care entities as well as legislative prohibition of anticompetitive terms in provider contracts, most recently with the introduction of SB 977 in the 2020 session.
Overall, California remains an active participant in the initiative to reduce healthcare costs and improve price transparency. The state legislature has also explored healthcare market initiatives including a single payer system (SB 562) as well as state public option (AB 2472). California’s legislation and regulation aligns with similarly active and progressive states by focusing on pharmaceutical costs and stakeholder transparency measures. For more information and the latest updates, follow the California Legislative Beat on The Source Blog.
See below for an overview of existing California state mandates. Click on citation tab for detailed information of specific statutes (click link to download statute text).
State Action
Latest Legislative Session: 12/5/2022 - 9/8/2023 (2023-2024 term). *Current session bill updates are ongoing. Check back weekly for updates.
AB 0991 – California
Introduced: 2019 Status: Enacted
The board may refuse to issue any registration or license, or may suspend or revoke the registration or license of any associate or licensed professional clinical counselor, if the applicant, licensee, or registrant has been …
AB 1011 – California
Introduced: 2021 Status: Inactive / Dead
Health care coverage: substance use disorders. Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care …
AB 1014 – California
Introduced: 2019 Status: Inactive / Dead
The Governor VETOED this bill. Health facilities: notices – This bill would require a hospital that provides emergency medical services to provide notice, as specified, at least 180 days before a planned reduction or elimination …
AB 1020 – California
Introduced: 2021 Status: Enacted
Health care debt and fair billing. Existing law requires a hospital to maintain an understandable written policy regarding discount payments for financially qualified patients and an understandable written charity care policy. Existing law requires that …
AB 1022 – California
Introduced: 2023 Status: In Process
Medi-Cal: Program of All-Inclusive Care for the Elderly. Existing federal law establishes the Program of All-Inclusive Care for the Elderly (PACE), which provides specified services for older individuals at a PACE center so that they …
AB 103 – California
Introduced: 2019 Status: Enacted
Until January 1, 2022, this bill would instead establish the Healthy California for All Commission for purposes of developing a plan that includes options for advancing progress toward achieving a health care delivery system in …
AB 1076 – California
Introduced: 2023 Status: Enacted
Contracts in restraint of trade: noncompete agreements. This bill would codify existing case law by specifying that the statutory provision voiding noncompete contracts is to be broadly construed to void the application of any noncompete …
AB 1544 – California
Introduced: 2019 Status: Enacted
Community Paramedicine or Triage to Alternate Destination Act – This bill would establish within the act until January 1, 2030, the Community Paramedicine or Triage to Alternate Destination Act of 2019. The bill would authorize …
AB 2118 – California
Introduced: 2020 Status: Enacted
Health care service plans and health insurers: reporting requirements. Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of …
AB 2863 – California
Introduced: 2018 Status: Enacted
HEALTH CARE COVERAGE – PRESCRIPTIONS: This bill would limit the amount a health care service plan, health insurer, or pharmacy benefit manager may require an enrollee or insured to pay at the point of sale …
Federal Trade Commission and State of Idaho v. St. Luke’s Health System, Ltd and Saltzer Medical Group, P.A. – California, Connecticut, Delaware, Idaho, Illinois, Iowa, Kentucky, Maine, Maryland, Mississippi, Montana, Nevada, New Mexico, Oregon, Pennsylvania, Tennessee, Washington
District Court: District of Idaho Status: Decided
In March 2013, the FTC and the Idaho Attorney General filed a joint complaint challenging the merger betweenSt. Luke’s Health System, Idaho’s largest health system, …
In re: Suboxone Antitrust Litigation (State of Wisconsin, et al. v. Indivior Inc, et al.) – Alabama, Alaska, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Utah, Virginia, Washington, West Virginia, Wisconsin
District Court: E.D. Pennsylvania Status: Pending
In September 2016, 35 state attorneys general and the District of Columbia brought a multi-district case against pharmaceutical manufacturer Indivior, MonoSol RX et al., alleging …
In Re: Generic Pharmaceuticals Pricing Antitrust Litigation – Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin
District Court: Eastern District of Pennsylvania Status: Pending
Plaintiffs are attorney generals from 48 states, Puerto Rico, and the District of Columbia, as well as classes of private plaintiffs that filed an antitrust …
PhRMA v. David – California
District Court: Eastern District of California Status: Decided
PhRMA challenged California’s drug price transparency law SB 17 alleging that the law is unconstitutional because it violates the Commerce Clause, the First Amendment, and …
Federal Trade Commission v. Allergan and Watson Laboratories, Inc. et al. – California
District Court: Northern District of California Status: Decided
On January 23, 2017, the FTC refiled a complaint against Watson Laboratories and its former parent company, Allergan, for entering a pay-for-delay settlement with EndoPharmaceuticals to block a generic version of …
Additional Resources
STATE BUDGET
California operates on an annual budget cycle. The fiscal year runs from July 1 through June 30. The Governor submits a proposed budget in January and the legislature adopts a budget in June.
REGULATION & 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
- California State Legislature
- California Office of the Attorney General
- California Department of Health Care Services
- California Department of Insurance
- California Department of Finance