Proposal for the State to Set Doctor and Hospital Prices Hits Snag

May 19, 2018
By Brett Johnson

Introduced by Assemblymember Ash Kalra (D-San Jose), Assembly Bill 3087 would create a California commission to set commercial rates for health plans, providers, and hospitals in an attempt to curtail health care costs. The bill would also authorize this commission to take “corrective action” if global healthcare spending growth targets are not met.

The bill has been intended as a response to the failure of Senate Bill 562 (Lara), which would have established a single payer healthcare financing system in California, to gain passage. Chair of the Assembly Health Committee, Assemblymember Jim Wood, has also introduced two bills, AB 2502 and AB 2517, which, respectively, would establish an all-payer claims database and an advisory committee for California. Proponents of these two bills have argued that they would serve as a logical and necessary precursor to a bill like AB 3087.

After getting through the Assembly Health Committee with numerous courtesy aye votes, AB 3087 appears to have stalled in the Assembly Appropriations Committee. The bill was set to be heard on May 16, but the hearing was cancelled at the request of Assemblymember Kalra. Nothing further has been scheduled for the bill, indicating it is likely dead for this legislative session.

The intense opposition to the bill has been led by the California Hospital Association (CHA), the California Medical Association (CMA), and the California Chamber of Commerce. In working with these stakeholders in opposition, CLSA also submitted its own oppose letter on the bill. CLSA has considered the bill as a blunt instrument for an incredibly complex issue and consequently likely to result in substantial unintended consequences, many of which could impact patient care in California for many years to come.

CLSA will continue monitoring to the bill and working with our partner stakeholders to determine our approach to these issues going forward. Any CLSA members who would like to provide input or would like further information on any of the legislation discussed herein are asked to reach out to Oliver Rocroi, CLSA’s Senior Director, State Government Affairs ( or Brett Johnson, CLSA’s Senior Director, Policy & Regulatory Affairs (