For more than a century, SFMS and the California Medical Association (CMA) have
been dedicated to promoting the science and art of medicine, the care and well-being
of patients, the protection of the public health, and the betterment of the medical
profession. Here are some of our most noteworthy accomplishments of the past year,
none of which would have been possible without the involvement and support of our
From day one, SFMS/CMA battled against cuts in the California state budget that
would dramatically cut health and human services, including egregious reductions
to the already broken Medi-Cal program. Just days after taking office, Governor
Jerry Brown issued his 2011-2012 budget proposal, including major cuts to health
care and a 10 percent Medi-Cal reimbursement rate cut to physicians and health plans.
In response, CMA organized the Alliance for Patient Care, a coalition of patients,
physicians, and health plans, and was able to ensure that a number of items were
kept safe in the final budget, including:
CMA continued to fight against cuts to Medi-Cal, protecting health care for the
most vulnerable Californians. CMA believes any such cuts are illegal, partly because
they violate federal access-to-care standards. States are required by law to set
provider payment rates at a level that ensures Medi-Cal patients have the same access
to physicians and other health care providers as the general insured public. CMA
headed up this effort on two fronts in 2011.
U.S. Supreme Court
The U.S. Supreme Court heard oral arguments in several Medi-Cal cases filed by
CMA that could have huge implications for more than 10 million Medi-Cal patients,
and for the physicians who treat them. In 2008, CMA and a coalition of providers
filed several lawsuits and intervened in Independent Living Center of Southern
California, et al. v. Shewry, obtaining a preliminary injunction that requires
the state to pay the Medi-Cal rates in effect prior to the 10 percent reduction
for physicians. As a result of CMA’s lawsuits, the state was enjoined from
implementing its 10 percent physician rate reduction in 2011, saving physicians
approximately $170 million in cuts.
Also in 2011, the Supreme Court heard arguments while reviewing the court decisions
that blocked the state of California from cutting Medi-Cal physician payments. At
issue is whether patients, physicians and providers have the right to file suit
against the state to enforce federal Medicaid law. The Supreme Court is expected
to issue its opinion in 2012.
Centers for Medicare & Medicaid Services
Despite the major advocacy campaign launched by CMA and the Alliance for Patient
Care, the Centers for Medicare & Medicaid Services (CMS) approved the state’s
new request to slash Medi-Cal payment rates by 10 percent. CMA and six other groups
filed a lawsuit, California Medical Association, et al., v. Toby Douglas, et
al., against the California Department of Health Care Services (DHCS) and the
U.S. Department of Health and Human Services (HHS). On February 2, 2012, U.S. District
Court Judge Christina Snyder issued an injunction enjoining the State of California
from implementing a 10 percent cut to the Medi-Cal reimbursement rate. This is a
huge win for California physicians and for the patients they treat.
During 2011, CMA leaders met with every member of the California Congressional
delegation and with CMS Administrator Donald Berwick, M.D., on multiple occasions
to stop the devastating SGR payment cuts in order to maintain physician access for
California’s seniors and military families. CMA will continue to work with
the American Medical Association (AMA), state medical associations and national
medical specialty societies in a united campaign to achieve a permanent SGR repeal.
Medicare Fee Schedule Rule
As a result of CMA lobbying, CMS made several adjustments to the proposed 2012
Medicare Fee Schedule, including updating it so an even larger percentage (3 percent)
of payments are adjusted for geographic differences in practice costs, which benefits
California physicians. CMS also dropped a proposal that would have reduced payments
to California physicians by $150 million.
Institute of Medicine
Due to CMA’s successful lobbying, the Institute of Medicine issued recommendations
to Congress calling for the Medicare geographic payment localities to be updated
and for the Medicare geographic practice cost formula to be accurately adjusted
for the higher physician practice costs in California and higher-risk California
In 2011, CMA worked to have Medicare legislation introduced to allow seniors
to privately contract with physicians and to repeal the Independent Payment Advisory
Board that is mandated to make cuts to the Medicare program. CMA also helped secure
reauthorization and funding of the Children’s Hospital Graduate Medical Education
CMA continued its strong advocacy work to implement federal health reform, working
closely with CMS and HHS. CMA urged physician involvement in the creation of nonprofit
physician-led health insurance plans, called CO-OPs (Consumer Operated and Oriented
Plans), and also encouraged HHS to explore ways the federal government could sponsor
reinsurance to CO-OPs, emphasizing that they must be able to pay physicians actuarially sound
rates. In addition, CMA commented and advocated for physicians on dozens of state
and federal regulations, including federal reform implementation.
Most significantly, CMA, working with AMA, won tough new regulations mandating
that health plans dedicate 85 percent of their revenue to patient care rather than
overhead and profit. In other areas, CMA worked with CMS to promote and fund alternative
health care delivery and payment models that are physician-led and patient-centered.
CMA also worked to create pilot proposals for medical groups and independent physicians
in solo/small practices to bring additional resources to California physicians,
which will help them better care for their patients in the era of health care reform.
Additionally, in the hugely complicated area of health information technology,
including e-prescribing, CMA advocated on behalf of physicians to ensure they were
not unfairly penalized. CMA strongly urged CMS to add additional reporting periods,
synchronize with the electronic health record (EHR) incentive program and create
additional exemption categories. After CMA asked to delay implementation of Stage
2 of EHR Meaningful Use until 2014, HHS announced its intention to do so in November
For at least the last three legislative sessions, CMA has successfully stopped
bills that attempted to erode California’s ban on the corporate practice of
medicine. In 2011, AB 1360 was the latest attempt to give hospitals the power to
directly employ physicians, which would have opened the door for a hospital’s
corporate bottom line to trump patients’ best interests. With the help of
community clinics and others, AB 1360 was stopped – with the original bill
sponsor even changing its position on the bill.
CMA also successfully averted a number of legislative attempts to expand the
scope of practice of allied health professionals. Early in the year, CMA partnered
in filing a lawsuit to block the implementation of new standards to certify optometrists
to treat glaucoma. CMA also continued to litigate its lawsuit against the state
that seeks to stop it from illegally expanding the scope of practice of nurse anesthetists.
On a similar note, CMA also helped put on hold regulations limiting physical
therapists’ employment. Due to CMA lobbying, the state Department of Consumer
Affairs asked the Physical Therapy Board of California to halt its planned enforcement
of a proposed new regulation that would prohibit physical therapists from working
directly for a medical, podiatric or chiropractic corporation.
CMA successfully stood in defense of California’s successful Medical Injury
Compensation Reform Act (MICRA) before the 5th Appellate District Court
in Fresno, which upheld its constitutionality. CMA filed a “friend of the
court” brief and also participated in oral arguments, telling the court that
the broader goal of MICRA—to ensure access to care—is just as relevant
today as it was in 1975. In a similar case, the California Supreme Court ruled in
Howell v. Hamilton Meats that a plaintiff’s medical expenses, to
be recoverable as damages, must be both “paid or incurred” and reasonable.
CMA filed a brief in this case, and the court’s ruling was largely in line
with CMA’s position.
As tireless advocates for stronger restrictions on the tobacco industry for decades,
SFMS/CMA saw success in its brief supporting a San Francisco ordinance that bans
the sale of tobacco products in retail stores with pharmacies. CMA also petitioned
the California Supreme Court to review an appellate court decision concerning the
boundaries of the state’s authority to borrow from special funds. The petition
argues that the state has unlawfully misappropriated physician fees from the Medical
Board of California, earmarked for processing physician licensing applications and
CMA also continued its aggressive stance to ensure payors follow the laws that
ensure fair and reasonable payment. In three separate lawsuits filed in federal
courts, CMA and others challenged the use of Ingenix by Aetna, Cigna and Blue Cross
to underpay physicians for providing out-of-network services to their enrollees.
These lawsuits generally allege that the plans knowingly used a database that is
flawed and systematically understates usual, customary and reasonable rates.
In what is becoming more and more common with each election, this Legislature
was nearly one third newly-elected members. CMA tackled the huge task of getting
to know new legislators and educating them on complex issues, including the budget
issues mentioned above. To provide some real-world context to the health care debate,
CMA invited health care policy staffers from the state Assembly and Senate to experience
what it takes to deliver health care in the 21st century with a tour of a local
After an extensive advocacy effort, Governor Brown signed a number of bills into
law that will greatly improve public health in California, as well as defeating
bills to thwart California’s ban on the corporate practice of medicine and
to insert vague and unnecessary language into physician notifications.
Important victories include bills that allow individuals to purchase sterile
syringes at pharmacies without a prescription; require health insurance policies
to provide coverage for maternity services; prohibit minors from using tanning beds
without parental consent; allow minors to get the HPV vaccine without parental consent;
and prohibit the sale, manufacture or distribution of products containing BPA, if
the product is intended for a child 3 years or under.
CMA’s regulatory advocacy team also had a busy year, as noted above, leading
to the Office of Administrative Law rejecting regulations that would have legitimized “discount
health plan” referral services, which CMA vigorously opposed.