California bill to mandate PPE reimbursement for providers stalls in second chamber

Senator Josh Newman’s bill to make personal protective equipment (PPE) more accessible to health care workers was left pending “for future consideration” by California Assembly Health Committee Chair Jim Wood after its hearing on Thursday. Newman is sponsoring SB 242 in response to challenges faced by small and medium providers during the COVID-19 pandemic, during which the need for PPE increased while its cost skyrocketed.



Newman introduced his bill to the committee:

“During the current pandemic, physician practices across the state have struggled to stay open. Nearly half of physician practices surveyed by the American Medical Association said that spending on PPE increased 50% or more during the pandemic. While PPE costs increased, patient volume and revenue decreased.”

The bill — marked as an “urgency bill” on the committee’s agenda — would require health plans to reimburse providers for PPE during public health crises. Due to an amendment from the committee, the bill now only applies to future public health crises.

Newman cited a survey from the Physicians Foundation showing 8% of physician practices across the country had to close due to economic hardship brought by the current pandemic. He added that the closure of smaller practices disproportionately impacts rural and underserved communities.

“These closures and staff reductions, which disproportionately impacted small and medium sized medical practices, took place even as insurers enjoyed steady revenue and historic net profits — in some cases more than double the profits from the previous year.”

Dr. Ariane Terlet, representing the California Dental Association, testified in support of the bill. The owner of a 17-employee practice, Terlet said the average monthly number of patients her practice sees has decreased by nearly 200 since the beginning of the pandemic, considerably limiting its ability to pay for needed PPE.

“The cost of PPE has gone up exponentially since the start of the pandemic. For example, a box of gloves that we use on a daily basis used to cost twelve dollars a box. It went from twelve dollars to sixty dollars a box due to increased costs, disruptions in the supply chain, and increased levels of required PPE. And while the costs have gone down significantly, they’re still two-to-three times the price that we paid originally.”

Dr. Eric Hansen, the owner of an independent family medicine practice, also testified in support of the bill on behalf of Choice Medical Society. He said he never received the large supply of PPE he ordered at the onset of the pandemic.

“Early on, I had supplies available for surgical procedures that we may have, or [for] an ill patient that comes in, but now every patient has to be treated as if we’re doing a surgical case…in order to protect my staff, to protect other patients, and the like.

In primary care, I have to see sick people. It’s not like you can just say, ‘If you’ve had anything for two weeks, we won’t see you.’ I’m seeing well visits [and] I’m seeing sick visits. So we have to protect ourselves with every visit.”

California health plans are less thrilled about Newman’s bill. Nick Louizos, vice president of legislative affairs at the California Association of Health Plans (CAHP), explained his organization’s “oppose unless amended” position during the hearing. He raised concerns about the “very broad mandate” that would require health plans to provide PPE reimbursement.

Despite these concerns, Louizos said CAHP is willing to reach an agreement on the bill through amendments that would address the mandated reimbursement.

“We do oppose mandatory reimbursements to pay providers for undefined business expenses. Having said that, the health and well-being of our members is our highest priority, and in the spirit of compromise, we have offered amendments to the author that would narrow SB 242 in a way that would make it more reasonable and effective as well as less costly to the health care system.”

Louizos said health plans are encouraged by the amendments implemented by the committee (limiting the bill to only apply to PPE and future public health crises), but is waiting to see the final language of the bill before changing their position. “Things are definitely moving in the right direction,” he said.