California bill would leave state setting prices for hospital stays covered by commercial payers: 9 things to know

California's new proposal to curb healthcare costs would allow the state to set prices for various medical services covered by commercial payers, according to a Los Angeles Times report.

Here are nine things to know about the proposal.

1. The proposal, Assembly Bill 3087, will be revealed April 9.

2. The bill would create an independent commission that would set prices for hospital stays, physician's visits and most other medical services covered by commercial payers, according to the report. Prices would be based off Medicare rates.

3. The proposal would include commercial health plans offered by employers as well as those sold in the individual ACA marketplace, reports the Los Angeles Times. However, the publication notes it would not affect public health programs, including Medicare and Medicaid.

4. The bill does include an appeals process. This means healthcare providers may contest a commission decision "if they can prove it would cause financial hardship," the report states.

5. Additionally, according to the report, the commission would have to monitor and set a future goal for California healthcare spending via "global budgeting."

6. California's proposal is influenced by Maryland's all-payer program, according to the report. Maryland launched its program in 2014. Under the program, hospitals receive a fixed payment for services and private and government insurers must pay the same prices.

7. Proponents of California's measure, which include labor unions and consumer groups, say the bill is designed to reduce rising consumer healthcare costs. Californians with insurance through their employer saw their premiums rise more than 240 percent from 2002-16, according to numbers from the California Health Care Foundation cited in the report.

8. Assemblyman Ash Kalra, D-San Jose, who is carrying the proposal, told the Los Angeles Times: "Access must be coupled with affordability. Just having access to healthcare by itself doesn't mean you're going to get the healthcare you need."

9. But opponents expressed concerns about access to care. They said capping prices could be a barrier to access through physicians leaving California and hospitals scaling back services, according to the report.

"This dangerously flawed legislation would result in government-sanctioned rationing of care and higher out-of-pocket costs for patients," Theodore Mazer, MD, a San Diego ear, nose and throat specialist and president of the California Medical Association, said in a statement to the Los Angeles Times. "It would also likely cause an exodus of practicing physicians, which would exacerbate our physician shortage and make California unattractive to new physician recruits."

Read the full report here.

Emily Rappleye contributed to this report. 


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