This past week Governor Gavin Newsom signed AB-919 (Petrie-Norris) which promises to crack down on financial conflicts-of-interest among rehab operators by limiting how they offer housing and transportation as inducements to treatment. It will require that laboratories that test blood or urine for drugs, or outpatient treatment programs that offer housing to clients, have separate housing contracts specifically stating that payment for housing is the patient’s responsibility and rent should not be indirectly billed to health insurance. The practice has become common in the industry. It also empowers the CA Department of Health Care Services (DHCS) to provide enforcement with seven new positions, costing $1.2 million the first year and $1.1 million after that.

The Governor also signed AB-290 (Wood) which attempts to prevent third party payer tactics designed to steer patients into more expensive insurance plans for dialysis and substance use disorder treatment. Basically, it reduces the financial incentive to lure people to California by promising “free” insurance coverage.

SB-445 (Portantino) was vetoed by Governor Newsom with this message:  “To the Members of the California State Senate: I am returning Senate Bill 445 without my signature. SB 445 would require the Department of Health Care Services (DHCS) to establish youth substance use disorder treatment quality standards including certification requirements for programs and professionals, and convene a workgroup to advise the Department on quality standards. Although I support the author’s intent to strengthen substance use disorder treatment services for youth, implementation of this bill requires significant General Fund spending that should be considered through the annual budget process. I encourage the author and stakeholders to engage with DHCS’s recently-formed Behavioral Health Stakeholder Advisory Committee to address concerns regarding youth substance use disorder treatment services. Sincerely, Gavin Newsom”

AB-920 (Petrie-Norris) was also vetoed: “To the Members of the California State Assembly: I am returning Assembly Bill 920 without my signature. This bill would eliminate an existing voluntary outpatient certification program. Beginning January 1, 2021, it would attempt to require an outpatient substance use disorder (SUD) recovery or treatment services facility which is not licensed under existing law, to obtain licensure from the Department of Health Care Services (DHCS) to provide SUD services. The bill attempts to do this by replacing references to program certification in existing Health and Safety Code references to program licensure. I am supportive of the Legislature’s intent to license all SUD recovery and treatment services. However, developing a new licensing schema is a significant undertaking, and would require a significant departure from the bill as enrolled. This bill would need to be revised to provide adequate statutory authority for DHCS to effectively monitor and ensure compliance with outpatient licensure requirements. In addition, establishing the associated administrative oversight is not without significant cost. After reviewing this bill, it is clear that a substantial amount of work is still needed to develop a program that my administration can implement. As such, I recommend the Legislature and sponsors of this bill work closely with DHCS on a more robust proposal for my consideration. Costs for implementation of such a bill would need to be considered in the budget process. Sincerely, Gavin Newsom”