The controversial push to limit anti-competitive practices such as integration in California’s health sector cleared a major hurdle with parliamentary approval last week.Despite consistent disagreements over the provisions of the bill, Congress was finally passed Act of Parliament 2080 With 45-19 votes. You need to clear the Senate.
Aimed to fight High medical costs In connection with industry integration, the bill will include anti-competitive terms in contracts between health insurance and healthcare providers or institutions issued, amended or renewed after January 1, 2023. It is forbidden to do that. This includes limiting health insurance by providing incentives to encourage subscribers to use higher quality, lower cost providers.
AB 2080 also allows the Department of Health Care (DMHC) or the California Insurance Department (CDI) to refer medical planning contracts to the Attorney General and consider new contracts that include anti-competitive terms. increase. The bill allows the Attorney General to agree, conditionally agree, or veto these agreements and conduct at least one hearing before making a written decision on a major transaction. I want to do it.
The bill also requires a health plan intended to gain or gain control of an entity in order to seek prior approval from the DMHC director, where the DMHC director is responsible for a particular category of healthcare system or healthcare provider.
The bill requires contractors to obtain written consent from the Attorney General before executing any contract or transaction worth more than $ 15 million.
“Because the merger will rebuild the medical system on which we all depend, these commercial transactions will be subject to appropriate public oversight and opinions on cost, quality, equity and access impacts. “We need to say,” said Anthony Wright, Executive Director of Health. Visit California, the organization that sponsors AB2080.
Wright explained that the merger could hinder competition in the healthcare market and thus raise consumer prices. He added that medical costs have risen faster than inflation in recent years.
“California health care costs have nothing to do with the cost of delivery, quality of care, or outcomes, rather than the relative size and market power that providers can charge as much as possible,” Wright said. I am. .. “AB2080 is needed to take into account the best interests of consumers and the health of the healthcare market before AG approves a commercial merger.”
Opposition argument Focusing on a bill that gives the Attorney General the sole authority to consider cases of anti-competitive practices Aloud by Representative of the California Hospital Association (CHA) and Asm. Chad Maze (I – San Bernardino) when the bill was heard by the Commission in April.
Bill sponsor Asm. Jim Wood (D-Santa Rosa) spoke on behalf of AB 2080 on the Congress floor, stating that efforts to adjust the difference between his supporters and opponents were unsuccessful. He said the opposition did not provide a replacement for their dissatisfaction with the review process outlined in the bill.
“Opposition raised concerns about the Attorney General’s review process, and I amended the bill to try to address those concerns,” Wood said. “They don’t like it. But they don’t provide feedback. In fact, they didn’t even provide a fix on how the review process could be improved.”
Opponents also argue that the bill imposes unreasonable restrictions on contract practices that threaten access and increase consumer costs.
“The Attorney General’s office and the US Department of Justice already have drastic authority over the healthcare market under existing law,” reads a statement from CHA. “AB2080 adds a layer of overlapping reviews to everyday partnerships that often aim to increase or maintain access to care.”
Wood responded to these claims while on the Congress floor.
“The claim that this bill restricts access (I’ve heard from some of you) is just afraid,” Wood said. “Look at my record. I’ve spent my entire career finding ways to increase access to healthcare in California.”
Following the remarks on the floor, Wood tweeted:
I can’t believe what my colleague is listening to # AB2080.. They say the bill could lead to the closure of the hospital. are you kidding? !! My entire legislative life was to increase access and reduce costs. It’s a horror-based lobbying, not a fact.
— Jim Wood 🇺🇦🇺🇦🇺🇦 (@ JimWoodAD2) May 26, 2022
A recent example of the practice covered by AB 2080 is last fall. settlement He demanded that Sutter Health pay a $ 575 million fine for anti-competitive integration practices in the northern part of the state.
“What happened at Sutter Health will almost double the cost of health care in Northern California than in Southern California,” Wood said. “Do we need to do that in more and more places before we wake up and look at our system to prevent such things?”
2021 report The California Healthcare Foundation reports that similar integrated practices are beginning to emerge in the southern part of the state. The report states that this is primarily due to the actions of Cedars Sinai and Providence, which claim to be increasingly integrating the healthcare market in Southern California through acquisitions and mergers.
