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January 30, 2015   



Insurance Commissioner Regs on Network Adequacy    


Insurance Commissioner Dave Jones issued an emergency regulation package to attempt to create higher standards for insurer physician networks for PPOs and indemnity insurance plans. Traditional HMOs and health plans are regarded by the DMHC.


The Commissioner issued them on an emergency basis indicating that there were serious deficiencies with existing networks and the accuracy of network information being provided to insurers or patients. 


The CSP submitted comments generally in support of many of the provisions but with concerns over one specific provision. The regulations require insurers to provide greater detail about the availability of primary care and specialist physicians, assure prompt access to referral services, and require submission of more detailed provider participation information to the Commissioner.


One objection related to a new requirement that would require a health facility to disclose to an insured patient prior to receiving non-emergency services in the hospital setting any hospital based physicians who were likely to provide services and were out of network along with an estimate of costs. That would apply to a pathologist who is out of network in the hospital setting and is similar to bills introduced in the Senate in the past but failed passage. The CSP argued that this requirement would be difficult meet due to the vagaries of what services might be required and the risk of misinforming the patient. We suggested that a better mechanism to protect patients from out of network charges was to require insurers who contract with a hospital to also contract with hospital based physicians.


The comment period on the regulations closed on January 26th and we expect that there may be some revisions prior to implementation.




Senate Committee to Hold Informational Hearing on Medi-Cal Provider Enrollment Moratoriums


The Senate Health Committee will hold a hearing on the impact and continued existence of Medi-Cal Provider Enrollment moratoriums for several provider types including clinical laboratories. A bill last year attempted to reform the current restrictions on clinical labs that have prohibited some new labs doing genetic testing from being able to enroll in the program.


The CSP has been able to convince DHCS to include a number of pathology related exemptions to the moratorium but still has concerns with some aspects. Of particular concern is the prohibition on any lab that enrolls after 2001 from being able to add new types of testing to their provider billing capability. For example, if a lab enrolled in 2003 and did not perform cytology procedures at the time of enrollment they would never be able to add those services and bill the Medi-Cal program.


The CSP will testify at the informational hearing and urge that the moratorium be altered to address the issue described above and other concerns. We expect that legislation will be introduced this year as a result of this hearing.




Status of New Medi-Cal Clinical Lab Fee Schedule


We have previously informed you of the last minute budget reform in 2012 that called for DHCS to collect payment data from clinical labs and create a new rate methodology. It required a 10% rate reduction in 2012 while DHCS engaged stakeholders, like the CSP, on developing a data collection model that required labs to report their five largest payers payment data for some 380 procedures and the lowest payment amounts. The stakeholder discussions extended intermittently over several years and were productive in narrowing the data submission, i.e. only global payments, lab had to receive at least $100,00 per year in Medi-Cal payments etc.


There had been no response from DHCS on the status of the new rate methodology after labs submitted data in 2013 that represented payments received in 2011. In early December 2014 stakeholders were invited to attend a meeting where the new methodology was unveiled. The CSP and other members of the lab community were dismayed that DHCS announced a number of surprises. First they indicated that after they compute the weighted average of the lowest payments for each procedure they intend to reduce those payment levels by an additional 10% and make that 10% reduction retroactive to 2012. All the stakeholders had assumed that the 10% reduction implemented in 2012 would go away once the new rates were established and certainly not that an additional 10% would be taken. Secondly in the computation of the weighted average lowest payment amount they excluded any lab submitted payments that exceeded 80% of the Medicare payment amount. They claimed those payments were "outliers" since Medi-Cal policy does not allow them to pay more that 80% of Medicare. We argued that those amounts have to be included to determine the average lowest payment amounts.


DHCS needs to collect this data from labs again since what they have is payment data from 2011. They seem committed to moving forward and the laboratory community has met with Senate and Assembly Budget staff and the Governor's office to attempt to the serious flaws. This could result in payment reductions of 25 to 35% over current Medi-Cal rates and would likely impact beneficiary access to laboratory services. This fight will continue in the budget deliberations that unfold this spring. We will keep you informed of developments.




Save the Date
California Society of Pathologists
68th Annual Conference


The 68th Annual Conference
of the California Society of Pathologists is scheduled for December 1-5, 2015 at the Hyatt Regency in San Francisco.
We will notify you when registration is open.



California Society of Pathologists
One Capitol Mall Suite 320
Sacramento, CA 95814 
Tel : 916-446-6001
Fax :  916-444-7462

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