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California Health Care Legislation Signed Into Law By Governor Newsom

Monday, October 11, 2021

October 10th was the last day for Governor Newsom to sign or veto laws that were passed by the legislature this year. 2021 was a busy year for California legislators, who put forth hundreds of health-related bills in the wake of the COVID-19 pandemic. Unsurprisingly, not all of the bills became law (although some of them may be revisited next year). Below is a summary of a few of the new health care laws that were signed into law by Governor Newsom, covering a wide range of health care providers.      

Pharmacy

SB 362 Prohibits Community Pharmacy “Quotas”

SB 362 was approved by the Governor on September 27, 2021. Effective January 1, 2022, community pharmacies will be prohibited from establishing performance quotas. For purposes of the new law, a “quota” is a fixed number or formula related to the duties for which a pharmacist or pharmacy technician license is required, against which the chain community pharmacy or its agent measures or evaluates the number of times either an individual pharmacist or pharmacy technician performs tasks or provides services while on duty. A “quota” includes a fixed number or formula related to any of the following:

A “quota” does not mean any of the following:

  • A measurement of the revenue earned by a particular licensed chain community pharmacy not calculated in relation to, or measured by, the tasks performed, or services provided by, individual pharmacists or pharmacy technicians;

  • Any evaluation or measurement of the competence, performance, or quality of care provided to patients of a pharmacist or pharmacy technician if the evaluation does not use quotas; or

  • Any performance metric required by state or federal regulators that does not use quotas.

A chain community pharmacy is also prohibited from communicating the existence of quotas to pharmacists or pharmacy technicians who are its employees or with whom it contracts, through employees, contractors, or third parties.

The new law does not prohibit a chain community pharmacy from establishing policies and procedures that assist in assessing the competency and performance of a pharmacist or pharmacy technician in providing care to patients if the measurements used are not, or do not include, quotas.

AB 1064 Authorizes Pharmacists to Initiate and Administer Certain Vaccines

AB 1064 was signed by Governor Newsom on October 8, 2021 and authorizes a pharmacist to independently initiate and administer any vaccine that has been approved or authorized by the FDA and received a federal Advisory Committee on Immunization Practices individual vaccine recommendation published by the CDC for persons 3 years of age and older.

SB 409 Authorizes Pharmacists to Perform Certain CLIA Waived Tests

Governor Newsom signed SB 409 on October 6, 2021 which authorizes pharmacists and pharmacies to perform, in accordance with specified requirements and conditions, any aspect of an FDA-approved or authorized test that is classified as waived under CLIA if the test is used to detect or screen for the below illnesses, conditions, or diseases:

  • SARS-CoV-2 or other respiratory illness, condition or disease;

  • Mononucleosis;

  • Sexually transmitted infection;

  • Strep throat;

  • Anemia;

  • Cardiovascular health;

  • Conjunctivitis;

  • Urinary tract infection;

  • Liver and kidney function or infection;

  • Thyroid function;

  • Substance use disorder;

  • Diabetes; and

  • Other conditions as specified by regulation.

The pharmacy and pharmacist-in-charge will be required to maintain policies and procedures and other documents related to quality, safety, and testing and comply with mandatory reporting requirements.

Hospitals

AB 1020 Creates New Health Care Debt and Fair Billing Rules for Hospitals

AB 1020 was signed by the Governor on October 4, 2021, which will impose new limitations on hospital debt collections and raise the income level for hospital charity care eligibility as further discussed below. According to the bill’s author, this law is necessary to avoid further economic fallout from the COVID-19 pandemic.

Under the new law, the definition of “high medical costs” is revised to include a patient who has a family income that does not exceed 400 percent of the federal poverty level. This is an increase from the current law’s definition, which is 350 percent of the federal poverty level. Patients with high medical costs are by law eligible to apply for participation under a hospital’s charity care or discount payment policy.

AB 1020 also requires that hospitals display charity care and discount payment notices regarding the hospital’s policy for financially qualified and self-pay patients on the hospital’s internet website. However, hospitals will be required to give patients financial assistance in accordance with the policy published on the California Department of Public Health (CDPH)/Department of Health Care Access and Information website.

Additionally, hospitals will be required to wait 180 days (an increase from the 150 days under current law) before reporting to consumer credit agencies or filing collection actions for nonpayment and must do all of the following prior to selling patient debt to a debt buyer:

  • Determine that the patient is ineligible for financial assistance or confirm that the patient has not responded to any attempts to bill or offer financial assistance for 180 days;

  • Include contractual language in the sales agreement in which the debt buyer agrees to return, and the hospital agrees to accept, any account in which the balance has been determined to be incorrect due to the availability of a third-party payer, including a health plan or government health coverage program, or the patient is eligible for charity care or financial assistance;

  • Require debt buyers to not charge interest or fees on patient debt; and

  • Confirm that the debt buyer is licensed by the Department of Financial Protection and Innovation.

Additionally, before assigning a bill to collections or selling patient debt to a debt buyer, hospitals will be required to send the patient a notice containing the following information:

  • The date or dates of service of the bill that is being assigned to collections or sold;

  • The name of the entity the bill is being assigned or sold to;

  • A statement informing the patient how to obtain an itemized hospital bill from the hospital;

  • The name and type of health coverage plan for the patient on record with the hospital at the time of services, or a statement that the hospital does not have that information;

  • An application for the hospital’s charity care and financial assistance; and

  • The date or dates the patient was originally sent a notice about applying for financial assistance, the date or dates the patient was sent a financial assistance application, and, if applicable, the date a decision on the application was made.

At the same time, debt collectors collecting consumer hospital debt will be required to first send a notice to the debtor that contains the name and address of the hospital, information on how to obtain an itemized hospital bill and a statement that the debt collector will wait at least 180 days from the initial bill for hospital services causing the debt before reporting adverse information to a credit reporting agency or filing a lawsuit against the debtor. AB 1020 also imposes new requirements on debt collectors in terms of what must be alleged in a complaint in action to collect general acute care hospital debt, which among other things must include copies of the application for hospital assistance that was provided to the debtor by the hospital and the notice that was provided to the debtor by the hospital about applying for financial assistance (which may take the form of a redacted or sample hospital bill).

Finally, AB 1020 creates a new civil penalty regime and shifts responsibility for enforcement of the law to the Department of Health Care Access effective January 1, 2024. Prior to this date, CDPH will be responsible for enforcement of the requirements, which will go into effect January 1, 2022.

AB 532 Adds Charity Care and Discount Policy Notice Requirements

The Governor approved AB 532 on October 4, 2021, which will require hospitals to provide their patient charity care and discount policy notices to patients at the time of service if the patient is conscious and able to receive written notice and no later than the discharge process/when the patient leaves the facility. The new law also requires that the patient notices be revised to include:

  • The internet address for the Health Consumer Alliance;

  • An explanation that there are organizations that will help the patient understand the billing and payment process as well as information regarding Covered California and Medi-Cal presumptive eligibility (if the hospital participates in the presumptive eligibility program); and

  • An internet address for the hospital’s list of shoppable services under 45 C.F.R. 180.60.

AB 532 also clarifies that the patient notice must be posted in observation units.

AB 451 Creates New Psychiatric Unit/Facility Emergency Service Requirements

AB 451 was approved by Governor Newsom on October 1, 2021.  Psychiatric facilities that are county-owned and operated and those with 16 or fewer beds are exempt from the new law, which will require psychiatric hospital units, psychiatric health facilities, and acute psychiatric hospitals (regardless of whether the facility operates an ED) to accept the transfer of a person with an emergency psychiatric medical condition from a licensed health care facility with an emergency department and provide emergency services to that person if all of the following requirements are met:

  • The treating physician at the sending facility has determined that the patient is medically stable and appropriate for treatment in a psychiatric setting and has included that determination in the patient’s medical record;

  • The facility has an available bed; and

  • The facility has appropriate facilities and qualified personnel available to provide the services or care.

Skilled Nursing Facilities

SB 650 Creates New Ownership Transparency Requirements for Skilled Nursing Facilities

Governor Newsom approved SB 650 on October 4, 2021. Effective December 31, 2023, organizations that operate, conduct, own, manage, or maintain a skilled nursing facility or facilities will be required to prepare and file an annual consolidated financial report with the Office of Statewide Planning. The report must be reviewed by a certified public accountant in accordance with GAAP principles on an accrual basis. The report, among other things, must include a combined financial statement that includes all entities reported in the consolidated financial report, unless the organization is prohibited from including a combined financial statement in a consolidated financial report pursuant to a state or federal law or regulation or a national accounting standard. In such cases, the organization must disclose to the Office of Statewide Planning the applicable state or federal law or regulation or national accounting standard that prohibits the inclusion of a combined financial statement.

Hospice

AB 1280 Imposes New Limitations on Hospice Referrals

SB 1280  was approved by the Governor on October 4, 2021. The new law prohibits hospice providers (and their employees and agents) from paying referral sources for the referral of patients. It will also prohibit hospice salespeople, recruiters, agents, and employees who receive compensation or other remuneration for hospice referrals or admissions from consulting with a patient/patient’s representative or a patient’s family regarding hospice services, hospice election, or informed consent to a patient, patient’s family, or patient’s representative. Instead, specified persons including a registered nurse or medical social worker must complete the election of hospice, informed consent, completed signatures, and counsel on the election of hospice with a patient, patient’s family, or patient’s representative. Finally, hospices will be required to provide verbal and written notice of the patient’s rights and responsibilities to the patient or the patient’s representative in a language and manner the person understands before providing care.

SB 353 Extends Hospice Laws and Will Require Online Data Reporting

The Governor signed SB 353 on October 4, 2021, extending the ability for hospice licensees under the act to provide any of the authorized interdisciplinary hospice services, including palliative care, to a patient who has a serious illness until January 1, 2027.

Existing law requires a licensee, on or before January 1, 2019, January 1, 2020, and January 1, 2021, to provide the department with designated information for the period of time the licensee provided palliative care. AB 353 will extend this requirement to each April 30, beginning April 30, 2022, until April 30, 2025. However, the reporting will be through the department’s online reporting portal, as specified, rather than on a form prescribed by the department.

SB 664 Creates Moratorium on New Hospice Licenses

On October 4, 2021, Governor Newsom signed SB 664, which temporarily halts the issuance of new hospice licenses. The CDPH will be prohibited from issuing new hospice licenses on and after January 1, 2022, and until 365 days from the date that the California State Auditor publishes a report on hospice licensure. CDPH may grant an exception to the moratorium imposed by this article upon making a written finding that an applicant for a new license has shown a demonstrable need for hospice services in the area where the applicant proposes to operate based on the concentration of all existing hospice services in that area. CDPH would not be prohibited from renewing existing licenses.

Substance Abuse and Mental Health Services

SB 434 Prohibits Fraudulent Marketing of Substance Use Disorder Treatment Services

Governor Newsom approved SB 434 on October 1, 2021, which prohibits an operator of a licensed alcoholism or drug abuse recovery or treatment facility, a certified alcohol or other drug program, and a licensed mental health rehabilitation center, psychiatric health facility, or social rehabilitation facility, from engaging in various acts, including making  false or misleading statements about the entity’s products, goods, services, or geographical locations. SB 434 also prohibits a picture, description, staff information, or the location of an entity from being included on an internet website along with false contact information that surreptitiously directs the reader to a business that does not have a contract with the entity. The department responsible for the facility’s licensure or certification of the facility or program will be authorized to investigate allegations of a violation of these provisions and, upon finding a violation, to impose the civil sanctions and other penalties available pursuant to existing law.

SB 541 Requires Disclosure of Licensing and Certification Information

Governor Newsom signed SB 541 on October 8, 2021, which requires a facility licensed or program certified by the Department of Health Care Services (DHCS) to provide substance use disorder treatment services to disclose its license or certification number and the date that the license or certification is scheduled to expire.

These disclosures must be made:

  • To any person who inquires about the facility’s license in writing, verbally, electronically, or by any other method of communication between the person and the facility;

  • On the internet website of the facility with a link to the DHCS website; and

  • In any print, audio, or electronic advertising or marketing of the facility.

©1994-2021 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume XI, Number 284

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