AP/San Jose Mercury News Examines Outpatient Surgery Centers’ Lobbying Efforts

The AP/San Jose Mercury News on Monday examined outpatient surgery centers' lobbying efforts against recently enacted workers' compensation reform laws that tie their rates for procedures on patients with job-related injuries to a fee schedule. Although there are exceptions, the laws call for outpatient surgery procedures to be reimbursed at 120% of what Medicare pays for the same type of procedures (Lawrence, AP/San Jose Mercury News, 10/27). Last month, Gov. Gray Davis (D) signed into law the reforms (AB 227 and SB 228), which also include a fee schedule for prescription drugs; limit chiropractic and physical therapy visits; implement reviews that use national standards to determine the proper amount of care for certain injuries; and increase penalties for employer fraud from $50,000 to $150,000 (California Healthline, 10/29). Outpatient surgery centers have given almost $1.23 million in campaign contributions and spent an additional $2.29 million on lobbying efforts over the past three years. Arthur Casey, the incoming president of the California Ambulatory Surgery Association, said, "Basically that money was spent in vain." However, Casey said that there were "a few providers out there who took advantage of the fact that there was not a fee schedule and created legitimate concern about the charges that those facilities were charging." He added, "It was a significant problem. There were some that were charging anywhere between eight and 20 times the amount that an average surgery center would charge." Casey said that about 50% of the state's 300 to 450 outpatient surgery centers treat injured workers. Sen. Richard Alarcon (D-Van Nuys), who helped create the reform legislation, said that the reimbursement rate might have to be adjusted, but he added that "there are ample providers who can provide the services with the margin of profit we have enabled them." Insurance Commissioner John Garamendi (D) said that outpatient surgery centers will most likely "try to weaken the schedules" when the Legislature reconvenes for a special session next month, the AP/Mercury News reports. However, he added that he will try to "overcome those efforts to undo what was done" (AP/San Jose Mercury News, 10/27).