AB 2353

AB2353:v97#DOCUMENT

Bill Start

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Assembly Bill

No. 2353

An act to amend Sections 127660 and 127662 add and repeal Chapter 7.3 (commencing with 127668) to Part 2 of Division 107 of the Health and Safety Code, relating to health care.

LEGISLATIVE COUNSEL'S DIGEST

AB 2353, as amended, Pacheco. Health Mandates Review Program.

Existing law requests the University of California to establish the California Health Benefit Review Program (CHBRP) to assess legislation proposing to mandate a health care benefit or service or repeal a mandated benefit or service and to prepare a written analysis. Existing law authorizes an appropriate policy or fiscal committee chairperson, the Speaker of the Assembly, or the President pro Tempore of the Senate to request that written analysis. Under existing law, a written analysis is requested to be provided to the Legislature not later than 60 days after a request for analysis is made. Existing law establishes the Health Care Benefits Fund, funded by an annual fee on health care service plans and health insurers, to support the University of California and CHBRP.

This bill would request the University of California to establish the Health Mandates Review Program to assess legislation proposing to mandate new or additional services or activities for a designated provider, beginning no later than January 1, 2028. The bill would require the appropriate policy or fiscal committee within the legislation’s house of origin to request the program to assess legislation if the legislation is expected to affect the operations of a majority of the state’s hospitals, or a majority of hospitals within a recognized class of hospitals, by requiring specified actions. The bill would request the Health Mandates Review Program to provide a written analysis of the legislation, as specified, and would request that the analysis include information on specified impacts. The bill would request that the program publish an annual summary of legislation it analyzed and that it convene a workgroup of members with relevant expertise in hospital finance or operations to advise on the development and implementation of the program.

This bill would establish the Health Care Mandates Fund in the State Treasury to support the University of California and its work in implementing the Health Mandates Review Program, including providing bill analyses. The bill would require the Department of Health Care Access and Information to annually transfer an unspecified amount from the California Health Data and Planning Fund to the Health Care Mandates Fund starting in the 2027–28 fiscal year.

This bill would require the Department of Health Care Access and Information to seek to partner with the University of California to develop a plan to establish the Center for Health Provider Policy Impact to assess and evaluate the impact of state and federal policies on hospitals. The bill would require the center to evaluate anticipated and actual impacts of proposed policies on health care delivery, access, workforce, and system sustainability and would require the center to create reports, at least annually, as specified. The bill would authorize the Legislature to request that the center review specific legislation or issues. The bill would establish the Health Provider Impact Fund. The bill would require the department to assess a fee for each hospital for the costs required to fund the above-described activities, as specified, thus imposing a tax. The bill would repeal these provisions on January 1, 2033.

Digest Key

Vote: MAJORITY2/3 Appropriation: NO Fiscal Committee: YES Local Program: NO

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

Chapter 7.3 (commencing with Section 127668) is added to Part 2 of Division 107 of the Health and Safety Code, to read:

CHAPTER 7.3. Center for Health Provider Policy Impact127668. (a) The Department of Health Care Access and Information shall seek to partner with the University of California to develop a plan, no later than January 1, 2028, to establish the Center for Health Provider Policy Impact to assess and evaluate the impact of state and federal policies on hospitals.(b) The center shall evaluate the anticipated and actual impacts of proposed policies on health care delivery, access, workforce, and system sustainability.(c) The center shall, at least annually, and no later than June 1 each year for analyses of proposed legislation, publish reports that do, but are not limited to, all of the following: (1) Review and analyze proposed legislation, regulations, and other policy actions affecting hospitals and health care providers.(2) Assess the impacts of those policies on public health outcomes, health care access, delivery, workforce, and system sustainability. (3) Analyze disparities in policy impacts across regions, including rural and underserved areas.(4) Identify emerging trends and policy issues likely to affect access to care, quality of care, and system sustainability.(d) The Legislature may request that the center review specific legislation or issues. (e) The center shall post all requested, initiated, and completed analyses on its internet website and submit all reports to the appropriate policy and fiscal committees of the Legislature and to appropriate state departments and agencies. The reports required by subdivision (c) shall be submitted in compliance with Section 9795 of the Government Code. (f) In order to effectively support the University of California and its work in implementing this chapter, there is hereby established in the State Treasury the Health Provider Impact Fund. The university’s work in providing the bill analyses shall be supported from the fund.(g) Each hospital shall be assessed an annual fee in an amount determined by the Department of Health Care Access and Information through regulation and shall be limited to the amount necessary to fund the actual and necessary expenses of the university and its work in implementing this chapter. The total annual assessment shall not exceed three million dollars ($3,000,000). (h) The Department of Health Care Access and Information shall assess each hospital respectively, for the costs required to fund the activities pursuant to subdivision (c).(1) Hospitals shall be notified of the assessment on or before June 15 of each year. (2) The assessed fee shall be paid on an annual basis no later than August 1 of each year. The Department of Health Care Access and Information shall forward the assessed fees to the Controller for deposit in the Health Provider Impact Fund immediately following their receipt.(i) For the purposes of this section, “hospital” includes the following entities:(1) A general acute care hospital, as defined in subdivision (a) of Section 1250.(2) An acute psychiatric hospital, as defined in subdivision (b) of Section 1250.(3) A special hospital, as defined in subdivision (f) of Section 1250.127669. This chapter shall remain in effect only until January 1, 2033, and as of that date is repealed.

SECTION 1.

(a)The Legislature finds and declares all of the following:

(1)There is an increasing number of proposals that mandate health care providers to provide specific services or activities.

(2)Some of these health care services or activities could potentially result in better health outcomes that would be in the public interest.

(3)Mandated health care services and activities contribute to the cost and lack of affordability of health care for patients, providers, payers, and purchasers.

(b)It is the intent of the Legislature that this act do all of the following:

(1)Ensure that all residents of this state have reasonable access to affordable, high-quality, and equitable health care.

(2)Facilitate the provision of high-quality, cost-effective, and equitable health care services by providing current, credible data and information to the Governor and the Legislature for the purpose of evaluating proposed legislation.

(3)Identify an independent, nonpartisan body with the requisite capabilities to estimate the cost to Californians of legislative proposals that mandate new services or activities for hospitals.

(4)Ensure that the independent, nonpartisan body publish a written analysis of the estimated costs of legislative proposals that significantly affect the public health, the delivery and administration of hospital services, the cost of health care services, health care affordability, and the financial stability of hospitals.

(c)Therefore, it is the intent of the Legislature that the Health Mandates Review Program conduct a systematic review of proposed mandated or mandatorily offered services and activities that affect hospitals before enactment of the legislation. This review will assist the Governor and the Legislature to determine if mandating a particular service or activity is in the public interest.

SEC. 2.Section 127660 of the Health and Safety Code is amended to read:

127660.

(a)The Legislature hereby requests the University of California to establish the California Health Benefit Review Program to assess legislation proposing to mandate a benefit or service and legislation proposing to repeal a mandated benefit or service, and to prepare a written analysis with relevant data on the following:

(1)Public health impacts, including, but not limited to, all of the following:

(A)The impact on the health of the community, including the reduction of communicable disease and the benefits of prevention such as those provided by childhood immunizations and prenatal care.

(B)The impact on the health of the community, including diseases and conditions where disparities in outcomes associated with the social determinants of health as well as gender, race, sexual orientation, or gender identity are established in peer-reviewed scientific and medical literature.

(C)The extent to which the benefit or service reduces premature death and the economic loss associated with disease.

(2)Medical impacts, including, but not limited to, all of the following:

(A)The extent to which the benefit or service is generally recognized by the medical community as being effective in the screening, diagnosis, or treatment of a condition or disease, as demonstrated by a review of scientific and peer-reviewed medical literature.

(B)The extent to which the benefit or service is generally available and utilized by treating physicians.

(C)The contribution of the benefit or service to the health status of the population, including the results of any research demonstrating the efficacy of the benefit or service compared to alternatives, including not providing the benefit or service.

(D)The extent to which mandating or repealing the benefits or services would not diminish or eliminate access to currently available health care benefits or services.

(3)Financial impacts, including, but not limited to, all of the following:

(A)The extent to which the coverage or repeal of coverage will increase or decrease the benefit or cost of the benefit or service.

(B)The extent to which the coverage or repeal of coverage will increase the utilization of the benefit or service, or will be a substitute for, or affect the cost of, alternative benefits or services.

(C)The extent to which the coverage or repeal of coverage will increase or decrease the administrative expenses of health care service plans and health insurers and the premium and expenses of subscribers, enrollees, and policyholders.

(D)The impact of this coverage or repeal of coverage on the total cost of health care.

(E)The impact of this coverage or repeal of coverage on anticipated costs or savings estimated upon implementation for one subsequent calendar year, or, if applicable, two subsequent calendar years through a long-range estimate.

(F)The potential cost or savings to the private sector, including the impact on small employers as defined in paragraph (1) of subdivision (l) of Section 1357, the Public Employees’ Retirement System, other retirement systems funded by the state or by a local government, individuals purchasing individual health insurance, and publicly funded state health insurance programs, including the Medi-Cal program.

(G)The extent to which costs resulting from lack of coverage or repeal of coverage are or would be shifted to other payers, including both public and private entities.

(H)The extent to which mandating or repealing the proposed benefit or service would not diminish or eliminate access to currently available health care benefits or services.

(I)The extent to which the benefit or service is generally utilized by a significant portion of the population.

(J)The extent to which health care coverage for the benefit or service is already generally available.

(K)The level of public demand for health care coverage for the benefit or service, including the level of interest of collective bargaining agents in negotiating privately for inclusion of this coverage in group contracts, and the extent to which the mandated benefit or service is covered by self-funded employer groups.

(L)In assessing and preparing a written analysis of the financial impact of legislation proposing to mandate a benefit or service and legislation proposing to repeal a mandated benefit or service pursuant to this paragraph, the Legislature requests the University of California to use a certified actuary or other person with relevant knowledge and expertise to determine the financial impact.

(4)The impact on essential health benefits, as defined in Section 1367.005 of this code and Section 10112.27 of the Insurance Code, and the impact on the California Health Benefit Exchange.

(b)The Legislature further requests that the California Health Benefit Review Program assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics.

(c)The Legislature requests that the University of California provide every analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days, or in a manner and pursuant to a timeline agreed to by the Legislature and the California Health Benefit Review Program, after receiving a request made pursuant to Section 127661. In addition, the Legislature requests that the university post every analysis on the internet and make every analysis available to the public upon request.

(d)(1)The Legislature further requests that the University of California establish the Health Mandates Review Program to assess legislation proposing to mandate new or additional services or activities for hospitals beginning no later than January 1, 2028.

(2)The appropriate policy or fiscal committee within the legislation’s house of origin shall request that the Health Mandates Review Program assess legislation if the legislation is expected to affect the operations of a majority of the state’s hospitals, or a majority of hospitals within a recognized class of hospitals, by requiring hospitals to hire new staff or otherwise increase workforce costs, purchase or lease new equipment, make physical alterations to their facilities, or provide additional discounted or charitable care.

(3)After receiving a request made pursuant to this subdivision, the Legislature requests that the Health Mandates Review Program provide a written analysis of the legislation to the appropriate policy and fiscal committees of the Legislature not later than 72 hours before the legislation is to be heard in the relevant fiscal committee of the house of origin, or in a manner and pursuant to a timeline agreed to by the Legislature and the Health Mandates Review Program.

(4)The Legislature requests that the written analysis provided pursuant to paragraph (3) include analysis of all of the following impacts:

(A)To the extent applicable and feasible within the timeframe for the request, hospital care delivery impacts, including all of the following:

(i)The extent to which the proposed mandated service or activity is generally recognized as effective in the screening, diagnosis, treatment, or prevention of a condition or disease, as demonstrated by a review of scientific and peer-reviewed literature.

(ii)The extent to which the proposed mandated service or activity is generally currently utilized by hospitals.

(iii)The results of research demonstrating the efficacy of the proposed mandated service or activity compared to alternatives, including not providing the service or activity.

(B)To the extent applicable and feasible within the timeframe for the request, public health impacts, including both of the following:

(i)The impact of the mandated service or activity on the health of patients and the community, including the reduction and prevention of disease and disparities in health outcomes, premature death, and economic loss associated with disease.

(ii)The results of any research demonstrating the efficacy of the activity or service compared to alternatives, including not providing the activity or service.

(C)Financial impacts, including all of the following:

(i)The extent to which the mandate will affect the cost of providing and administering hospital services or affect the cost of providing uncompensated care.

(ii)The extent to which the proposed mandated service or activity may affect access to currently available health care services or affect the financial stability of hospitals.

(iii)The extent to which the mandate will increase or decrease the utilization of hospital services or will be a substitute for, or affect the cost of, services at other sites of care.

(iv)Impacts on the cost of health care for patients, purchasers, and payers, including commercial payers, the Medi-Cal program, and the federal Medicare Program.

(v)The total effect on the cost of health care services resulting from the proposed mandated service or activity compared to the total cost of health care in California.

(5)To the extent feasible and applicable, the Legislature requests that the written analysis provided pursuant to paragraph (3) separately identify impacts for different recognized classes of hospitals and for the major payer categories of the Medi-Cal program, the federal Medicare Program, and commercial payers.

(6)To prepare the written analysis provided pursuant to paragraph (3), the Health Mandates Review Program may make and execute contracts and interagency agreements consistent with its duties under this chapter.

(7)There shall not be an independent review board process by the state for full data access to all claims payer database and hospital discharge data.

(8)On or before December 31 of each year, and no sooner than following the completion of an analysis pursuant to paragraph (3), the Legislature requests that the University of California’s Health Mandates Review Program publish a summary of legislation analyzed by the Health Mandates Review Program enacted in the same year that mandates new or additional services or activities, as well as their impacts on cost if a written analysis was conducted.

(9)The Legislature requests the Health Mandates Review Program to convene a workgroup of members with relevant expertise in hospital finance or operations to advise on the development and implementation of the program.

(e)As used in this section:

(1)“Hospital” means a health facility described in subdivision (a) or (b) of Section 1250.

(2)“Legislation proposing to mandate a benefit or service” means a proposed statute that requires a health care service plan or a health insurer, or both, to do any of the following:

(A)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.

(B)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.

(C)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.

(3)“Legislation proposing to mandate new or additional services or activities” means a proposed statute that requires hospitals to offer or provide specific services or perform specific activities that have not previously been required. This includes changes to existing requirements that are expected to increase the cost of providing existing services or performing existing activities.

(4)“Legislation proposing to repeal a mandated benefit or service” means a proposed statute that would repeal an existing requirement that a health care service plan or a health insurer, or both, do any of the following:

(A)Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.

(B)Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.

(C)Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.

SEC. 3.Section 127662 of the Health and Safety Code is amended to read:

127662.

(a)In order to effectively support the University of California and its work in implementing the California Health Benefit Review Program, there is hereby established in the State Treasury, the Health Care Benefits Fund. The university’s work in providing the bill analyses pursuant to subdivisions (a) to (c), inclusive, of Section 127660 shall be supported from this fund.

(b)For the 2026–27 to 2032–33 fiscal years, inclusive, each health care service plan, except a specialized health care service plan, and each health insurer offering health insurance, as defined in Section 106 of the Insurance Code, shall be assessed an annual fee in an amount determined through regulation. The amount of the fee shall be determined by the Department of Managed Health Care and the Department of Insurance in consultation with the university and shall be limited to the amount necessary to fund the actual and necessary expenses of the university and its work in implementing this chapter. The total annual assessment on health care service plans and health insurers shall not exceed three million two hundred thousand dollars ($3,200,000).

(c)The Department of Managed Health Care and the Department of Insurance, in coordination with the university, shall assess the health care service plans and health insurers, respectively, for the costs required to fund the university’s activities pursuant to subdivision (b).

(1)Health care service plans shall be notified of the assessment on or before June 15 of each year with the annual assessment notice issued pursuant to Section 1356. The assessment pursuant to this section is separate and independent of the assessments in Section 1356.

(2)Health insurers shall be noticed of the assessment in accordance with the notice for the annual assessment or quarterly premium tax revenues.

(3)The assessed fees required pursuant to subdivision (b) shall be paid on an annual basis no later than August 1 of each year. The Department of Managed Health Care and the Department of Insurance shall forward the assessed fees to the Controller for deposit in the Health Care Benefits Fund immediately following their receipt.

(4)“Health insurance,” as used in this subdivision, does not include Medicare supplement, vision-only, dental-only, or CHAMPUS supplement insurance, or hospital indemnity, accident-only, or specified disease insurance that does not pay benefits on a fixed benefit, cash payment only basis.

(d)(1)In order to effectively support the University of California and its work in implementing the Health Mandates Review Program, there is hereby established in the State Treasury the Health Care Mandates Fund. The University of California’s work in providing bill analyses pursuant to subdivision (d) of Section 127660 shall be supported from this fund.

(2)Notwithstanding any other law, starting in the 2027–28 fiscal year, and no later than August 1 of each year, the Department of Health Care Access and Information shall transfer ____ dollars ($____) from the California Health Data and Planning Fund, created pursuant to subdivision (g) of Section 127280, to the Health Care Mandates Fund.