A California bill that would have let physicians sue health plans if doctors felt rates were unfair is going nowhere this year.
Assembly Bill 1600 was pulled from the floor Sept. 14, the last day of the state's legislative session. Supporters say they had enough votes to pass the bill. Others quietly say the bill would have never made it out of the Assembly and would have faced a certain veto if it had.
The bill will be held over until January, when the California Legislature begins the second year of its two-year cycle.
"We want to pass this bill with everyone's understanding," says Jack Lewin, M.D., CEO of the California Medical Association, the chief supporters of the bill. "To me, this extension of three months is the best possible thing that could happen.
"Our opponents had created enough division among doctors" that physicians across the state were confused about the bill, Lewin says. "Our friends and colleagues had some concerns about the new version. We didn't have time to address them."
Health plans aren't claiming victory just yet, but they will oppose the bill if it remains in its current form, says Bobby Pena, spokesperson for the California Association of Health Plans. "We didn't create division among physicians," Pena says. "The CMA doesn't represent the physician organizations with which we do most of our contracting."
Most health plans contract with medical groups.
The California Association of Physician Organizations, which represents medical groups, opposes the bill. Physician organizations could be named as defendants in the suits, says Don Crane, CAPO president. "That's really the fatal flaw in that bill."
Initially, AB1600 would have given physicians an exemption from antitrust laws, known as creating a state action exemption.
Daniel Zingale, head of the state's managed care department, called that version of the bill "bad public policy," and health plans and business groups vehemently opposed the bill. So did Gov. Gray Davis, whose press office said he planned to veto AB1600.
After sailing through the Assembly on its initial pass, AB1600 was amended in the Senate three weeks before the end of the session. The bill went from antitrust exemption to private right of action, allowing physicians (and patients) to sue health plans for not paying what doctors deemed were actuarially sound capitation rates. That the term "actuarially sound" was never defined became a problem.
Davis' press office continued to tell reporters that despite the changes, the governor had "grave concerns" and hadn't seen anything that would change his previous thoughts, meaning a promised veto.
The assembly's health committee will hold hearings during the break to discuss the bill. CMA officials hope the next three months will give them time to lobby the governor and change his mind.
Overall, Lewin says, this legislative session is not what CMA officials had hoped it would be. But he remains convinced AB1600 and other tabled bills will pass. "Our big-ticket items are still on the table," Lewin says.