CMA_AnnualReport_Web_2015

1California Medical Association • 2014 Annual Report

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California Medical Association 2014 Annual Report

2 California Medical Association • 2014 Annual Report

For more photos, visit flickr.com/californiamedicalassociation.

2014 Legislative Leadership Day


The Coming Year, and Beyond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 A message from CMA President Luther F . Cobb, M .D ., FACS

One United Voice for Medicine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 A message from CMA Chief Executive Officer Dustin Corcoran

Fighting for Physicians . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Achieving Victory: No on 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

CMA’s Got You Covered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Board of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Member-Only Discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Get Involved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

How Can We Be of Service? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

County Medical Societies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Table ofContents


Although 2014 will long be

remembered as the year

that all modes of practice

and specialties of the

House of Medicine came

together in a group effort to

defeat Proposition 46, it is

imperative that we maintain

the momentum we have

gained as we confront the

issues of the coming year and beyond.

Following such a historic year, I would like to take a

moment to reflect on what we have accomplished and

what we can look forward to over the next 12 months.

I have, for over three decades, been a firm believer in

the institution of organized medicine and the good that

we can accomplish with unified action. As the President

of the Humboldt-Del Norte Medical Society and Chair of

the Council on Legislation, and in my time as Vice Speaker

and Speaker of the House of Delegates, I have seen you

all accomplish remarkable feats together. Whether it has

been determining our stance on the sweeping changes of

health system reform; combating unwarranted extensions

of allied health professionals’ scope of practice; fighting for

access to care; working to ensure the practice of medicine

is dedicated to patient welfare rather than the insurance

bottom line; redefining Medicare geographic payments,

and on and on; we have been able to get all this done

because we work together for the benefit of all.

Our political power was evidenced last November

when we handed the trial attorneys’ Proposition 46

an unprecedented two-for-one electoral defeat, in

conjunction with an unparalleled coalition across all party

and advocacy lines. We distributed over 3 million lab coat

cards, hundreds of thousands of patient brochures, posters

and yard signs all over the state, mostly because of the

ground game we mobilized.

Such a victory would never have been possible if not for

the dedication we all had to one another and to the future

of the practice of medicine.

It is indeed a great honor to follow in the footsteps of

Richard Thorp, M.D., who as last year’s president led

an incomparable team effort to victory, not only with

Proposition 46, but also the other battles and challenges

we faced.

So what does that mean for the year ahead?

Already, the California Medical Association (CMA) has been

involved in a public launch to increase the tobacco tax in

California. We currently stand 47th in the nation in that

regard. A broad coalition of public health advocates will be

working all across the state. This action may end up being

a legislative effort, or perhaps a ballot initiative, but we will

be pressing forward this year.

We know that as millions of citizens are signing up for

health insurance coverage, it is more important than ever

to ensure that they have real access to quality medical care,

not just a card promising care without the infrastructure to

deliver. To that end, CMA has been working with partners

to educate physicians and patients about their choices.

Many other issues are sure to arrive in the coming year;

they always do. As a group, united, we can accomplish

great things, as we have already proven.

I look forward to working with you all in the exciting new

year.

The Coming Year,and Beyond

Luther F. Cobb, M.D., FACS

President

California Medical Association



2014 House of Delegates


Dustin Corcoran CEO Dustin Corcoran is Chief Executive Officer for the California Medical Association (CMA), a non-profit professional organization of over 40,000 physicians dedicated to protecting public health and promoting the science and art of medicine. As CEO, Mr. Corcoran has the responsibility for the overall supervision, direction and control of the business and staff of CMA. Mr. Corcoran also serves as the chairman of Patients and Providers to Protect Access and Contain Health Costs, the campaign committee opposing the anti-MICRA ballot initiative, as well as Californians Allied for Patient Protection

(CAPP), a broad-based coalition of health care providers, hospitals, community clinics and labor interests dedicated to the defense of MICRA.

Mr. Corcoran has advocated tirelessly for California physicians and the patients that they serve since 1998. He started at CMA as the membership coordinator for the association's political action committee. Within a year, Mr. Corcoran moved to CMA's Center for Government Relations where he worked under the guidance of the legendary Steve Thompson as a staff lobbyist. When Mr. Thompson passed away in 2004, Dustin succeeded him as Vice President of Government Relations where he managed CMA’s overall legislative program, representing physicians’ interests before the State Legislature and the Governor. In 2009, Mr. Corcoran was promoted to Senior Vice-President, where he oversaw the day-to-day operations of CMA, as well as the Center for Government Relations and ultimately became CEO in February of 2010.

Dustin’s career has been marked by years of leadership and service

In 2005, Mr. Corcoran was named “Most Effective Lobbyist Under 40” by AroundtheCapitol.com.

Since 2009, Mr. Corcoran has been listed annually on Capitol Weekly’s top 100 power brokers in California – most recently, in 2014, listed at number 14.

In 2012, Mr. Corcoran’s work as CMA’s chief executive officer was recognized when he was named to the Sacramento Business Journal’s “40 Under 40” list of top business and civic leaders.

Mr. Corcoran serves on the Board of Directors for the Neuropathy Action Foundation, Physicians Advocacy Institute, the Institute for Medical Quality, and the California Medical Association Foundation.

Dustin lives in Sacramento with his wife Glenda who serves on the Board of Governors of the State Bar of California and their children, daughter Dylan and son Fletcher.

One United Voicefor Medicine

As 2015 is well underway,

it’s clear that this is going

to be another pivotal

year in health care. At

the California Medical

Association (CMA), our

advocates are already in

the limelight, fighting on

behalf of over 40,000

members on issues facing

California physicians. Our efforts this year come on the

heels of what was one of the greatest demonstrations of

unity our organization has ever experienced.

In 2014, CMA led an unprecedented effort to defeat

Proposition 46. When the trial lawyers pursued this

ill-conceived measure that would have obliterated the

strongest tort reform law in the nation, the Medical Injury

Compensation Reform Act (MICRA), CMA rose to the

challenge. The dedicated staff at CMA came together in

an incredible feat and distributed over 3 million pieces of

literature, posters, placards and sign-up forms for your

offices, your patients and your neighbors. Physicians not

only spoke to their friends and families, but spoke out

at community events and political gatherings across the

state. Together, we amassed one of the largest and most

diverse coalitions to defeat a ballot measure in California

history. On Election Day, when the trial lawyers lost 33

percent to 67 percent, it was clear that CMA physicians

were a force to be reckoned with. In fact, we did not lose

a single county in California.

Our political success did not stop there, however. For the

first time, a CMA member was elected to the California

State Senate. Then Assemblymember Richard Pan, M.D.,

beat his trial lawyer opponent to bring a strong physician

voice to the Senate chambers. CMA also worked tirelessly

to support candidates who share our vision for the future

of medicine both here in California and in Washington,

D.C., including Congressmen Ami Bera and Raul Ruiz,

both physicians.

The work we did in 2014 stretched far beyond the ballot.

Working with coalition partners and other advocacy

organizations, CMA continued to be a leader in the

regulatory, legal and legislative arenas.

Your membership and support of organized medicine

is how we continue to do this important work. CMA is

only able to be at the forefront of important public health

discussions around vaccination policy and tobacco use

because you choose to belong to CMA.

It was because of you that we were able to defeat

Prop. 46. It was because of you that we were able to

stop numerous legislative attempts to expand scope of

practice for allied professionals in their tracks last year. It

was because of you that we stand together as one united

voice, looking ahead.

I cannot thank you enough for the dedication and

fortitude you demonstrated in 2014. As we look ahead to

2015 and years beyond, I’m certain that the same levels

of commitment will enable physicians to succeed in

these turbulent times.

Dustin Corcoran

CEO



In order to serve our more than 40,000 members, the California

Medical Association (CMA) spends every day fighting for California

physicians and their patients in a variety of advocacy areas. In

2014, we experienced one of our biggest fights – and victories –

the battle to save the Medical Injury Compensation Reform Act

(MICRA) and defeat Proposition 46 (see “Achieving Victory”).

CMA also fought long and hard on the federal level, ultimately

achieving a victory worth billions to California physicians.

During one of the most dysfunctional Congressional sessions

in history, CMA successfully advocated for passage of a fix to

the Medicare California geographic practice cost index (GPCI),

providing substantial payment increases to California physicians

and improving access to care for all Californians.

Starting in 2017, the GPCI fix will update Medicare payments

in 14 California counties by up to 14 percent per year. It also

establishes a payment floor for California’s rural physicians to

ensure payments in those areas will not go down, even during

another recession. No other state, specialty or national medical

organization has been able to achieve such substantial Medicare

payment increases and protections for their physician members

in recent years.

In addition, for the first time in a decade, Congress and organized

medicine developed and moved a bipartisan, bicameral bill that

would have eliminated the Medicare sustainable growth rate

(SGR) and instituted an alternative payment system. Although

Congress ultimately could not agree on a funding source before

the deadline, instead adopting the 17th short-term patch in

a decade, we have never been so close to achieving reform.

Hopefully, in 2015 we will finally be able to completely eliminate

the SGR. CMA will continue advocating for Medicare payment

reform to ensure physician practices have the appropriate

resources to ensure access to quality care. >>

Fighting forPhysicians


CMA also worked with the American Medical Association

(AMA) to reduce Medicare payment penalties for the new

value modifier payment program, which starts tracking

in 2015. CMA (with the invaluable help of the California

Congressional delegation) also successfully convinced

the Centers for Medicare and Medicaid Services (CMS)

to reverse their mandate on California to retroactively

recoup a 10 percent Medi-Cal reimbursement rate cut

from 2011, retaining $218 million in payments.

CMA in the State CapitolOn the state level, Medi-Cal reimbursement rates

continued to be a hot topic in 2014. Over the last several

years, CMA has led the effort to stop the implementation

of Governor Jerry Brown’s 10 percent cut to Medi-Cal

reimbursement rates, arguing that this reduction would

threaten the ability of physicians to continue to treat

Medi-Cal beneficiaries and create significant gaps in

access to care for patients that rely on the program. CMA

worked throughout the year to collect providers’ stories

that demonstrate Medi-Cal network inadequacy and

hindered access to continuous, quality care for Medi-Cal

patients.

While participating in a number of DHCS workgroups,

CMA made it clear that increasing Medi-Cal payment

rates is a prerequisite to implementing incentive

payment reforms. Additionally, CMA called for the state

to conduct an independent, third-party assessment on

reimbursement rates, stating that such an assessment is

a critical component in determining both the baseline

rates and the level of incentive payments required.

Grassroots effortsDuring CMA’s Legislative Leadership Conference and the

Ethnic Medical Organization Section/ Network of Ethnic

Physician Organizations Ethnic Physicians Leadership

Day, more than 400 physicians, medical students and

CMA Alliance members descended on Sacramento

to lobby a package of CMA-sponsored bills aimed at

increasing access to health care throughout the state.

Attendees discussed many of CMA’s major legislative

issues, including:

Support for budget talks to restore the 10 percent

Medi-Cal reimbursement rate cut.

Support for AB 2400, which would have required

greater transparency in physician contracts by allowing

physicians to opt-in to each network or product, instead

of being forced to participate in “all products,” a complaint

stemming from Covered California provider contracting

(see “CMA’s Got You Covered”).

Opposition to a dangerous scope-of-practice bill, SB

492, which would have allowed optometrists to diagnose

and treat any disease with an ocular manifestation.

Opposition to AB 2533, which would have imposed unfair

contracting conditions on physicians and exacerbated

the state’s current network adequacy concerns.

Support for SB 1000, which would have placed a health

warning label on sugary drinks.

SB 1000, which came out of the 2013 “My CMA Idea”

contest, was a priority bill for CMA last year. The bill

would have placed a simple warning on the front of all

beverage containers with added sweeteners that have

75 or more calories per 12 ounces. Backed by a large

coalition and carried by state Senator Bill Monning, SB

1000 was approved by the state Senate, but stalled in the

Assembly Health Committee.

FIGHTING FOR PHYSICIANS


Workforce issuesCMA continues to prioritize improving our state’s physician workforce by increasing the number of residency slots for

medical school graduates and by pushing the state to make an initial investment in its future medical workforce.

Following unprecedented grassroots advocacy by the physician and medical student community, the Legislature

approved a 2014 - 2015 state budget that includes $7 million for primary care residency slots. With $3 million applied

to expand the Song-Brown program to all primary care specialties (family medicine, internal medicine, obstetrics-gyne-

cology and pediatrics), the additional $4 million will fund the expansion of some residency programs. The budget also

requires priority be given to programs that have graduates of California-based medical schools.

In the courtsCMA’s Center for Legal Affairs advocated on behalf of

California physicians in the courts throughout 2014,

including several cases that will have long-lasting impacts

on the practice of medicine in California.

Fitzgibbons v. IHHI - CMA filed an amicus brief that argued

hospitals must be held liable for the actions of their CEOs

in order to establish a system of accountability. The case

involved a physician who was awarded emotional distress

and punitive damages for a campaign of egregious

intimidation and harassment against him by the hospital’s

CEO.

Armstrong v. Exceptional Child - CMA, along with AMA

and other physician organizations, filed an amicus brief

before the U.S. Supreme Court in this case to determine

whether Medicaid providers have a cause of action to

challenge a state’s compliance with Medicaid laws in

setting reimbursement rates. CMA’s involvement is critical

to uphold and protect precedential Ninth Circuit decisions

and to extend the law recognized in those cases to the

entire country.

Prescription Drug Monitoring Program Privacy

CMA and AMA filed amicus briefs in two cases that raise the

important issue of the privacy of patient data in prescription

drug monitoring programs (PDMP). CMA’s briefs in Lewis

v. Medical Board of California (California Supreme Court)

and Oregon Prescription Drug Monitoring Program v.

DEA (U.S. Court of Appeals, Ninth Circuit) underscore

the importance of confidentiality of medical information

as an indispensable component of quality medical care

and argue that there must be clear guidelines on the use

and disclosure of such data by government agencies to

assure patients of confidentiality of their protected health

information.

Association of California Life & Health Insurance

Companies v. California Department of Insurance (CDI)

- CMA filed an amicus brief supporting CDI in a case over

the implementation of AB 2470, a 2010 CMA-sponsored

bill. The law addresses the widespread problems caused

by retroactive rescissions and post-claims underwriting

that were prevalent in the health insurance industry. CMA’s

brief provided the court with background on the harmful

rescission practices that led to AB 2470, and argued that

CDI’s regulatory rules were necessary and reasonable to

fully realize the patient protections established by the law.

Children’s Hospital v. Blue Cross of California – CMA,

along with other physician organizations, urged the

California Supreme Court to review a Court of Appeal

decision dealing with the calculation of the reasonable

market value of medical services. Although the Court

denied review, CMA continues working to identify ways

to minimize the negative impact of the decision in the

courts, the Legislature and before the Department of

Managed Health Care (DMHC).

The Center for Legal Affairs also provided legal

information on a variety of issues in 2014, receiving 654

total calls from physician members in 33 counties. CMA

attorneys continue to update and publish legal resources,

including the California Physician’s Legal Handbook and

CMA’s online health law library, and give presentations

throughout the state on relevant topics facing California

physicians.


2014 No on Prop 46 Campaign


On November 4, the voters of California

spoke loudly and definitively, sending

the trial lawyers’ Proposition 46 to defeat

by a vote of 67 percent to 33 percent. It

was the only ballot measure defeated in

every county, as well. The message was

clear – Californians simply don’t want to

increase health care costs and reduce

health access so trial attorneys can file

more lawsuits.

An increase in MICRA’s cap on

non-economic damages has been

rejected in California again and again: 10

times in court, five times in the Legislature

and now overwhelmingly by voters. But

this time, CMA membership as a whole

was energized to fight the fight together,

as one unified voice of medicine,

representing the patients we so deeply

care about and the care that we have

committed to provide them.

Despite the trial attorney proponents’

attempt to sweeten the deal by adding

provisions that polled well – physician

drug testing and mandatory checking

of California’s PDMP – voters said NO

on Election Day. As people throughout

the state heard from physicians and No

on 46 coalition members about the real

intentions of the measure’s proponents,

there was resounding opposition.

Achieving VictoryNo on 46

2014 No on Prop 46 Campaign

No on Prop 46No on Prop 46

Yes on Prop 46

RESULTS BY COUNTY


The campaignThe entire CMA team dove into the MICRA campaign

whole-heartedly. As soon as ballot language was filed, CMA

created a brochure to inform California voters about how

the measure would affect their access to care by causing

community health centers and physician offices across the

state to close.

CMA also sent a large contingent of physicians and over

100 medical students to the California Democratic Party

Convention to educate party delegates about the real

intentions of the trial lawyer sponsors of the measure.

Roaming the halls, lining the backs of caucus rooms

and speaking to delegates in their white lab coats, CMA’s

representatives spoke with delegates about the effects any

changes to MICRA would have on California’s health care

system.

Physician and medical student volunteers engaged

hundreds of people in conversation about the importance

of MICRA – leaving a truly lasting impression. And, during the

huge general session, medical students greeted hundreds

of delegates with information regarding the trial lawyers’

ballot measure “sweetener” ploy. In the end, these efforts

resulted in the California Democratic Party rejecting lawyers’

attempts to gain an endorsement, instead voting to remain

neutral. And, due to efforts by CMA and the entire coalition,

the anti-MICRA measure gained the opposition of many

county Democratic parties, including the Los Angeles

County Democratic Party – the largest in the state.

To further reach leaders around the state, a contingent of

physicians and staff also attended the California Republican

Party Convention, speaking to delegates about the critical

importance of continuing to support MICRA, and earning

their “No on 46” endorsement.

As soon as the ballot measure was officially dubbed

Proposition 46, the campaign swung into high gear.

For hours every day, CMA fulfilled orders for campaign

materials, ultimately sending out nearly 3 million lab coat

cards, 300,000 brochures and over 1,000 office kits (plus

buttons, stickers, posters and more) to physicians’ offices

and hospitals around the state. Physician leaders (especially

then CMA President Richard Thorp, M.D.) and staff traveled

around the state to speak to nearly 200 hospitals, specialty

societies and community groups across the state.

Since its inception, MICRA has

been habitually attacked in the

courts with cases attempting to

undermine its broad scope and

constitutionality. In 2014, CMA’s

legal team remained vigilant,

defending MICRA in various cases

that threatened to circumvent

its protections and to diminish

its benefits to health care in

California.

WINN V. PIONEER MEDICAL GROUP - CMA, along with AMA, filed

a brief with the California Supreme Court

in an important case that draws the line

between medical malpractice and elder

abuse claims . CMA’s brief argued that the

plaintiff’s elder abuse claims were a veiled

attempt to reclassify acts of professional

negligence in order to circumvent MICRA .

CHAN V. CURRAN, M.D. - CMA

and AMA filed an amicus brief supporting

the constitutionality of MICRA’s non-

economic damages cap and rejecting

the plaintiff’s claims that MICRA violates

the constitutional right to a jury trial, due

process and equal protection . CMA’s brief

argued that to strike down MICRA would

contravene decades of California law,

directly violate Supreme Court precedent

and contradict the Legislature’s stated

purpose in enacting the limitation on non-

economic damages .

HUGHES V. PHAM - Nearly two

years after filing a brief (together with

AMA) to support the constitutionality of

MICRA’s cap on non-economic damages,

the Court of Appeal issued its unpublished

ON THE MICRALEGAL FRONT

ACHIEVING VICTORY


True team effortOne of the secret weapons of the campaign effort, the

size and diversity of the No on 46 coalition, grew every

day. The breadth of the coalition – which included labor,

business, local government, health providers, community

clinics, Planned Parenthood, ACLU, NAACP, taxpayers,

teachers, firefighters and more – underscored the depth

of problems with the measure, and its far-reaching

impacts beyond the health care system.

In addition to the groups on the ground talking to voters

about the deception and trickery behind Prop. 46, every

major editorial board in California opposed the initiative.

The Los Angeles Times said, the measure’s methods “are

too flawed to be enacted into law.” The San Francisco

Chronicle said the measure “overreached in a decidedly

cynical way.” The Orange County Register, UT San Diego,

San Jose Mercury News, Monterey County Herald,

Sacramento Bee and dozens of other newspapers

echoed these sentiments.

The efforts of CMA and county medical

associations across the state were

a tremendous showing of

what organized medicine

can do for the future of

health care, the quality

of medicine and the

dedication to patients

everywhere. Working

together to spread

the truth about

Prop. 46, building

coalitions across

communities and

standing strong as one

united voice is what helped

carry us to victory. This was

one of the most contentious and

high-stakes ballot fights in California

history and California’s physicians rose to the

occasion.

decision upholding that constitutionality .

The court’s opinion is consistent with the

position advocated by CMA in its brief,

which noted that MICRA was enacted to

reduce the cost of medical malpractice

litigation and assure the continued

availability of medical care throughout the

state .

RASHIDI V. MOSER, M.D. - CMA

and other organizations filed an amicus

brief in the California Supreme Court

urging the common sense application of

MICRA for the purpose of reducing the

costs of health care litigation . The case

questioned whether MICRA’s cap on

non-economic damages limits damages

awarded by a court only, or whether it

limits all recovery in a case, including

settlement . The Supreme Court filed an

opinion in December 2014 addressing the

narrow legal issue presented, without

questioning the scope of MICRA or its

constitutionality .

FLORES V. PRESBYTERIAN INTERCOMMUNITY HOSPITAL - CMA, together

with other amici, filed a brief

with the California Supreme Court

urging reversal of an appellate court

opinion that threatens to erode the

long-standing definition of “professional

negligence” in MICRA . CMA argued that

the Court of Appeal’s decision was wrong

in failing to apply MICRA’s statutory

definition of professional negligence to

include negligence that occurs while a

health care provider is providing services

within the scope of licensure .

ON THE MICRALEGAL FRONT

CMA MEMBERSHIP TOPS 40,000

For the fourth year in a row, CMA has seen a

notable membership increase . In 2014, total

CMA membership grew 3 percent to 40,664

(including physicians, medical students,

residents and retired physicians),

representing all modes of practice

from across the state .


$10 MILLION REASONS to be a CMA memberCMA’s Center for Economic

Services (CES) has now recouped

$10 million from payors on behalf

of CMA member physicians.

These monies, recovered over

the last five years, represent

actual physician reimbursements

that would have likely gone

unpaid without the intervention

of the CES team. CES provides

CMA members with one-on-one

practice management assistance

for billing, contracting and

reimbursement issues that may

arise.

CMA’s GotYou Covered

Even before Covered California officially began providing coverage on January

1, 2014, CMA jumped into action to help its members better prepare to

navigate the turbulent waters of the Affordable Care Act (ACA). With lingering

confusion over exchange plan contracting, CMA urged physicians to check

their participation status with exchange plan networks. After hearing from our

members that the Covered California cross-plan directory was plagued with

inaccuracies, CMA created a quick and easy tool for practices to look up their

exchange participation status with each plan. Additionally, CMA published

a series of practice tip sheets, “Surviving Covered California,” that included

answers to commonly asked questions. CMA staff also conducted almost 50

live seminars on the exchange to help physicians survive the implementation

of Covered California.

Also recognizing the confusion surrounding the ACA’s “grace period” provision,

CMA published an FAQ sheet dedicated entirely to helping physicians make

sense of the issue, as well as a patient FAQ that practices can use to answer

the most common patient questions about Covered California. CMA also

successfully advocated with DMHC to secure important physician protections

during the second and third months of the exchange grace period.

To further understand the depth of confusion surrounding the exchange, CMA

surveyed physicians about their contracting experience with Covered California

plans. The survey, which resulted in an unprecedented response from over

2,300 physicians in less than two days, showed that health plan contracting

practices, such as all-products clauses, vague and confusing contractual

language and silent amendments, were the primary contributors to the current

state of network confusion for providers. CMA then used this information to

inform further legislative and regulatory advocacy efforts throughout the year,

including AB 2400 (see “Fighting for Physicians”).

Partially as a result of CMA advocacy in this matter, DMHC conducted a

“non-routine audit” of Anthem Blue Cross and Blue Shield of California to

investigate the accuracy of the plans’ provider directories, during which DMHC

ultimately determined that both plans’ provider directories were misleading

and violated state law.



2014 WHC Leadership Academy


On Election Day 2014, CMA was proud to congratulate

a number of CALPAC-supported candidates, including

Sacramento pediatrician and then Assemblyman Richard

Pan, M .D ., who won a hotly contested state Senate seat .

Although his opponent, a trial lawyer himself, had spent

more than 30 years as a career politician, CMA built a

strong coalition of labor and business allies to put together

a full-fledged campaign that helped Dr . Pan to victory .

CMA emerged from the election with a perfect score on

the six independent expenditure campaigns for endorsed

candidates . In total, the 15 CMA-endorsed candidates for

state Senate all won their election . In the state Assembly,

65 out of our 70 endorsed candidates triumphed . For more

information on CALPAC and how to support physician-

friendly candidates, see “Get Involved .”

WIN FOR PHYSICIAN-FRIENDLY CANDIDATES

Education and advocacyOn behalf of its physician members, CMA waded into the depths

of additional health care regulations and changes, producing

resource guides and informational articles throughout the year,

as well as advocating for important changes. One major area of

education included registering and reviewing data for the Physician

Payments Sunshine Act, as well as advocating for changes to the

dispute resolution process.

Resources and advocacy were provided around the myriad

Medicare incentive and penalty programs (including meaningful

use and electronic health records), implementation of new claim

and prior authorization forms, recent changes to the Medi-Cal

program, the transition to ICD-10, and workers’ compensation

reform.

In 2014, CMA continued its advocacy efforts around the

Coordinated Care Initiative. As a result of these efforts, DHCS

released new continuity of care rules that require plans to do

more to preserve the physician/patient relationship. In addition,

CMA pushed for information from the state specifically geared

toward physicians to help them treat and maintain relationships

with their dual-eligible patients. As a result, the state released a

valuable Physician Toolkit that discusses billing, continuity of care

and care coordination.

In June, CMA’s Council on Scientific and Clinical Affairs produced

an educational paper, Prescribing Opioids: Care Amid Controversy.

The paper summarizes the findings of a panel of physician experts

and presents an up-to-date, clinically relevant overview of opioid

prescribing practices. CMA also worked to ensure that the Medical

Board’s 2014 update of their Guidelines for Prescribing Controlled

Substances for Pain were consistent with the CSA paper.

The 2014 Western Health Care Leadership Academy also

provided valuable education and insights for California

physicians, who heard from a diverse panel of industry experts

on the changing dynamics of the health care marketplace

and how to contain health care costs through innovation and

integration. Keynote speaker, former Secretary of State Hillary

Rodham Clinton (live via satellite), urged physicians to work

together to help advance meaningful health care delivery and

payment reform. Attendees also had the chance to hear from

Covered California Executive Director Peter Lee, who told

attendees that he recognizes that the ACA rollout was bumpy,

but that he looked forward to working with physicians during

this a new era of health care.

Supporting public healthIn 2014, California experienced several public health

incidents – all of which CMA strived to keep its members

informed about. With rates of pertussis more than doubled,

the emergence of enterovirus D68 and the Disneyland

measles outbreak, CMA produced important news bulletins

with information about relevant symptoms and treatments.

During its House of Delegates in December 2014, CMA’s

members emphasized their commitment to dealing with

the health hazards of tobacco, passing five tobacco-related

resolutions. At the same time, CMA dedicated itself to an

unprecedented coalition of health care groups (dubbed

“Save Lives California”) seeking to increase the tobacco tax by

$2-per-pack by the end of 2016 to save lives and to defray the

cost of diseases caused by smoking.

CMA’S GOT YOU COVERED


Officers Luther F. Cobb, M.D., FACS (President); Steven E. Larson, M.D., MPH, FACP (President-Elect); Theodore M. Mazer, M.D.

(Speaker, House of Delegates); Lee T. Snook, M.D. (Vice-Speaker, House of Delegates); David Aizuss, M.D. (Board

Chair); Robert E. Wailes, M.D. (Board Vice-Chair); and Richard E. Thorp, M.D., FACP (Immediate Past President).

TrusteesJerry Abraham, M.D.; Virgil M. Airola, M.D.; Mark Ard (Student); Barbara J. Arnold, M.D.; Patricia L. Austin, M.D.; Richard

S. Baker, M.D.; Robert A. Bitonte, M.D.; Peter N. Bretan, M.D.; Douglas P. Brosnan, M.D.; Victor C. Ching, M.D.; Jack

Chou, M.D.; James C. Cotter, M.D.; Thomas M. Dailey, M.D.; Sergio R. Flores, M.D.; C. Freeman, M.D.; Anupam Gupta,

M.D.; Catherine A. Gutfreund, M.D.; Ruth Haskins, M.D.; Donaldo Hernandez, M.D.; Vito D. Imbasciani, M.D.; Ralph

Kingsford, M.D.; Mark H. Kogan, M.D.; Howard R. Krauss, M.D.; Robert G. Pugach, M.D.; Michele E. Raney, M.D.; Albert

Ray, M.D.; Peter S. Richman, M.D.; Lytton W. Smith, M.D.; Simpson K. So, M.D.; Tanya W. Spirtos, M.D.; James J. Strebig,

M.D.; Ronald C. Thurston, M.D.; and Shannon Udovic-Constant, M.D.

The CMA Board of Trustees is made up of CMA’s seven elected officers, elected trustees from CMA’s 11 districts, as

well as elected trustees representing various councils, sections and mode of practice forums.

Board ofTrustees


The California Medical Association and California

Medical Association Foundation would like to thank

the following corporate partners who, as members

of the Corporate Leadership Council (CLC), support

our endeavors and enable us to continue to

provide educational programs for members of the

association and our communities.

Platinum Level Members

Novo Nordisk

The Doctors Company

NORCAL Mutual

PhRMA

Genentech

AstraZeneca

AbbVie

Gold Level Members

Allergan

Boston Scientific Corporation

MIEC

Union Bank

Silver Level Members

Pfizer, Inc.

Lilly USA

Bronze Level Member

Purdue Pharma L.P.

UnitedHealthcare

PartnersCMA members are able to receive more than the

investment of their dues by accessing the following

member-only discounts and services:

Financial Services

- Personal and professional banking services – Union Bank

Personal and Professional Insurance

- Medical, workers’ compensation, life, disability, long-

term care insurance products – Mercer Health &

Benefit Insurance Services

- Home and auto insurance – Mercury Insurance

Professional Development Resources

- CME tracking/credentialing – Institute for Medical

Quality

- ICD-10 educational programs – AAPC, Inc.

Practice Management Resources

- Secure messaging phone app – DocbookMD

- Waste management – EnviroMerica

- Physician practice website – Mayaco Design and

Marketing

- HIPAA Compliance Online Toolkit – PrivaPlan

- Secure Rx prescription pads – Rx Security

- Office supplies and more – Staples Advantage

- Educationally based lab accreditation program – COLA

Others

- Magazine subscriptions – Buymags.com

- Car rental discounts – Hertz & Avis

For more details, visit

www.cmanet.org/benefits.

Member-Only Discounts


House of Delegates

Physician members set the policies that guide CMA.

Submitting resolutions to the House of Delegates (HOD) is

the most direct way for members to get involved. As CMA’s

legislative body, the House meets once a year to establish

policies on key issues that affect the practice of medicine,

from physician reimbursement to quality standards to

critical matters of public health. Each year, over 700

delegates representing all specialties, modes of practice and

geographic regions of the state debate and take action on

nearly 100 resolutions, each authored by members like you.

The House functions very much like state and federal

legislative bodies. Prior to debating resolutions, each is

discussed and debated in one of six reference committees.

All member physicians (not just delegates) are welcome to

attend the annual meeting and testify on any of that year’s

resolutions. Resolutions are available for review prior to the

meeting on www .cmanet .org, where members may also

post written testimony. The 2015 House of Delegates will

take place October 16-18 in Anaheim.

Policies adopted at HOD determine the organization’s

priorities for the year, guiding CMA’s legal, legislative and

economic advocacy. Because California is often at the

forefront of new health care trends, the policy set every

year at HOD plays a direct and substantial role in shaping

the future of medicine, not just in California, but across the

nation. Examples include policy to fight the AIDS epidemic

on many fronts (providing care, disease prevention, public

education and legislation), as well as policies to promote

cancer research, fight the war against tobacco and promote

physician diversity.

Councils, Committees, Sections

and Forums

CMA depends on its members’ expertise to make smart

policy choices. If you’re an expert in medical ethics,

workers’ compensation, professional licensure or other

topics related to the practice of medicine, you could serve

on one of CMA’s standing councils and committees. CMA

members can also get involved with their sections or

forums (determined by your membership type), serving as

officers, trustees or HOD delegates.

Community Health Education

The CMA Foundation acts as a bridge linking physicians to

their communities. The Foundation’s Physicians for Healthy

Communities Initiative trains “physician champions” to

promote healthy eating and active living, directly impacting

the long-term health of their communities. Through the

CMA Foundation, all physicians can become key players in

the effort to improve California’s public health.

Legislative Key Contacts

Personal contact with elected representatives makes a big

difference – sometimes all the difference – in how votes are

cast in Sacramento and Washington, D.C. By becoming a

legislative key contact, you will advocate on behalf of your

profession and patients to elected officials on the state

and federal level. This is an important part of lawmakers’

educational process, ensuring their votes are guided in the

right direction on critical bills from the experts serving on

the front lines of health care.

CALPAC

CMA’s Political Action Committee (CALPAC) helps

physicians get involved in the state legislature and in

Congress, where public policy decisions are made.

CALPAC supports hundreds of candidates and legislators

who understand and embrace our philosophy and vision

of the future of health care. Please join your colleagues in

supporting CALPAC and help strengthen our political voice.

Visit www.calpac.org for more details.

CMA, the voice of California physicians, relies on the involvement of members to communicate the physician

vision of medical care to the public, to lawmakers and to the regulators who determine how medicine is prac-

ticed. Learn about all CMA’s programs and member opportunities by calling our member service center at (800)

786-4CMA (4262).

Get Involved


The financial statements on the following pages, audited by independent certified public accountants Gilbert Associates, Inc.,

present the consolidated financial position of the California Medical Association as of December 31, 2013. (The 2014 audited

financial statement will be available in late 2015 and will be published in next year’s annual report.)

FinancialStatements

Independent Auditors’ Report

We have audited the accompanying consolidated financial

statements of California Medical Association, Inc. and

Affiliates (the Association), which comprise the consolidated

statements of financial position as of December 31, 2013

and 2012, and the related consolidated statements of

activities and cash flows for the years then ended, and the

related notes to the consolidated financial statements.

Management is responsible for the preparation and fair

presentation of these consolidated financial statements

in accordance with accounting principles generally

accepted in the United States of America; this includes

the design, implementation, and maintenance of internal

control relevant to the preparation and fair presentation of

consolidated financial statements that are free from material

misstatement, whether due to fraud or error.

Our responsibility is to express an opinion on these

consolidated financial statements based on our audits. We

did not audit the financial statements of California Medical

Association Foundation, an affiliate, which statements reflect

total assets of $2,600,584 and $3,385,442 as of December

31, 2013 and 2012, respectively, and total revenues of

$1,141,622 and $2,507,177, respectively, for the years then

ended. Those statements were audited by other auditors

whose report has been furnished to us, and our opinion,

insofar as it relates to the amounts included for California

Medical Association Foundation, is based solely on the

report of the other auditors. We conducted our audits in

accordance with auditing standards generally accepted

in the United States of America. Those standards require

that we plan and perform the audits to obtain reasonable

assurance about whether the consolidated financial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit

evidence about the amounts and disclosures in the

consolidated financial statements. The procedures selected

depend on the auditor’s judgment, including the assessment

of the risks of material misstatement of the consolidated

financial statements, whether due to fraud or error. In

making those risk assessments, the auditor considers

internal control relevant to the entity’s preparation and fair

presentation of the consolidated financial statements in

order to design audit procedures that are appropriate in

the circumstances, but not for the purpose of expressing

an opinion on the effectiveness of the entity’s internal

control. Accordingly, we express no such opinion. An audit

also includes evaluating the appropriateness of accounting

policies used and the reasonableness of significant

accounting estimates made by management, as well as

evaluating the overall presentation of the consolidated

financial statements.

We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our audit

opinion. In our opinion, based on our audits and the report

of other auditors, the consolidated financial statements

referred to above present fairly, in all material respects, the

financial position of California Medical Association, Inc.

and Affiliates as of December 31, 2013 and 2012, and the

changes in their net assets and their cash flows for the years


ASSETS 12/31/13 12/31/12

CURRENT ASSETS:

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . .$3,889,491 . . . . . . . . . . . . . . . . . . $4,334,831

Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . .846,992 . . . . . . . . . . . . . . . . . . . . 864,000

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,078,175 . . . . . . . . . . . . . . . . . . . . .590,015

Interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273 . . . . . . . . . . . . . . . . . . . . . . 18,442

Prepaid expenses and other current assets . . . . . . . . . 442,272 . . . . . . . . . . . . . . . . . . . . . 415,312

Total current assets . . . . . . . . . . . . . . . . . $6,257,203 . . . . . . . . . . . . . . . . . $6,222,600

NON-CURRENT ASSETS:

Long-term investments . . . . . . . . . . . . . . . . . . . . . . . 26,554,857 . . . . . . . . . . . . . . . . . . 24,577,739

Investment in Health Property Associates . . . . . . . . . .1,406,407 . . . . . . . . . . . . . . . . . . . 1,401,866

Pension plan asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,346,539

Property and equipment, net . . . . . . . . . . . . . . . . . . . 8,250,532 . . . . . . . . . . . . . . . . . . . 8,584,788

Total non-current assets . . . . . . . . . . . . $37,558,335 . . . . . . . . . . . . . . . . . $34,564,393

TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $43,815,538 . . . . . . . . . . . . . . . . $ 40,786,993

LIABILITIES AND NET ASSETS

CURRENT LIABILITIES:

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $973,260 . . . . . . . . . . . . . . . . . . $ 1,091,391

Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687,094 . . . . . . . . . . . . . . . . . . . . .643,578

Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,846,840 . . . . . . . . . . . . . . . . . . . 5,652,189

Margin loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,980,000 . . . . . . . . . . . . . . . . . . .2,650,000

Current portion of loan payable . . . . . . . . . . . . . . . . . . . 142,889 . . . . . . . . . . . . . . . . . . . . . 134,186

Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . 22,219 . . . . . . . . . . . . . . . . . . . . . .22,945

Deferred compensation . . . . . . . . . . . . . . . . . . . . . . . . . 339,574 . . . . . . . . . . . . . . . . . . . . . 371,156

Total current liabilities . . . . . . . . . . . . . . $14,991,876 . . . . . . . . . . . . . . . . $10,565,445

NON-CURRENT LIABILITIES:

Loan payable, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3,965,818 . . . . . . . . . . . . . . . . . . . 4,108,707

Accrued pension liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,580,517

Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . 3,965,818 . . . . . . . . . . . . . . . . . . . 5,689,224

Total liabilities . . . . . . . . . . . . . . . . . . . . . $18,957,694 . . . . . . . . . . . . . . . . . $16,254,669

NET ASSETS:

Unrestricted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,672,258 . . . . . . . . . . . . . . . . . . 21,683,007

Temporarily restricted . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,476,430 . . . . . . . . . . . . . . . . . . . .2,140,161

Permanently restricted . . . . . . . . . . . . . . . . . . . . . . . . . . . 709,156 . . . . . . . . . . . . . . . . . . . . . 709,156

Total net assets . . . . . . . . . . . . . . . . . . . . $24,857,844 . . . . . . . . . . . . . . . . . $24,532,324

TOTAL LIABILITIES AND NET ASSET . . . . . . . . . . $43,815,538 . . . . . . . . . . . . . . . . . $40,786,993

Consolidated Statements of Financial Position

then ended in accordance with

accounting principles generally

accepted in the United States of

America.

Our audits were conducted

for the purpose of forming an

opinion on the consolidated

financial statements taken

as a whole. Supplemental

schedules in the full report

are presented for the purpose

of additional analysis and

are not a required part of

the consolidated financial

statements. Such information

is the responsibility of

management and was derived

from and relates directly to the

underlying accounting and

other records used to prepare


statements. The information

has been subjected to the

auditing procedures applied in

the audits of the consolidated

financial statements and certain

additional procedures, including

comparing and reconciling

such information directly to

the underlying accounting

and other records used to

prepare the consolidated

financial statements or to


statements themselves, and

other additional procedures

in accordance with auditing

standards generally accepted

in the United States of

America. In our opinion, the

information is fairly stated in

all material respects in relation

to the consolidated financial

statements as a whole.

/s/ Gilbert Associates, Inc.

September 9, 2014


UNRESTRICTED NET ASSETS: 1/1/13 – 12/31/13 1/1/12 – 12/31/12

REVENUES:

Membership dues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 11,230,691 . . . . . . . . . . . . . . . . . $ 10,863,813

Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,019,986 . . . . . . . . . . . . . . . . . . . .2,960,789

IMQ revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2,300,738 . . . . . . . . . . . . . . . . . . . . 1,845,747

Program revenue and contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2,137,737 . . . . . . . . . . . . . . . . . . . . 2,609,192

Income from Health Property Associates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340,947 . . . . . . . . . . . . . . . . . . . . . . 335,132

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .551,693 . . . . . . . . . . . . . . . . . . . . . .518,666

Net assets released from restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,504,000 . . . . . . . . . . . . . . . . . . . . 1,555,059

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$23,085,792 . . . . . . . . . . . . . . . . . $20,688,398

EXPENSES:

Member services:

CMA program expenses:

MICRA, Political Education, and Physicians’ Issues Committee . . . . . . . . . . . . 6,057,850 . . . . . . . . . . . . . . . . . . . . . .917,090

Government relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,082,753 . . . . . . . . . . . . . . . . . . . . 1,658,421

Public and member relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,736,739 . . . . . . . . . . . . . . . . . . . . 1,278,359

Legal affairs and economic services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,648,535 . . . . . . . . . . . . . . . . . . . . 1,541,999

Policy and analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,512,672 . . . . . . . . . . . . . . . . . . . . 1,595,481

Component medical society services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .834,351 . . . . . . . . . . . . . . . . . . . . . .479,349

CMAF grants and program expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,277,527 . . . . . . . . . . . . . . . . . . . . 1,950,827

IMQ program expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .749,126 . . . . . . . . . . . . . . . . . . . . . . 695,117

Total member services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,899,553 . . . . . . . . . . . . . . . . . . $10,116,643

Supporting services:

CMA supporting expenses:

Operational support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,099,795 . . . . . . . . . . . . . . . . . . . . 3,534,787

Physician governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,303,762 . . . . . . . . . . . . . . . . . . . . 1,670,720

Finance and administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,124,714 . . . . . . . . . . . . . . . . . . . . 1,049,727

Executive management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 980,538 . . . . . . . . . . . . . . . . . . . . .1,723,341

Affiliate administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,301,044 . . . . . . . . . . . . . . . . . . . .2,040,858

Total supporting services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$9,809,853 . . . . . . . . . . . . . . . . . . $10,019,433

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$25,709,406 . . . . . . . . . . . . . . . . . $20,136,076

INCOME (LOSS) FROM OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ($2,623,614) . . . . . . . . . . . . . . . . . . . . $552,322

Pension-related changes other than net periodic benefit cost . . . . . . . . . . . . . .3,317,813 . . . . . . . . . . . . . . . . . . . . . .572,373

CALPAC contribution revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,232,285 . . . . . . . . . . . . . . . . . . . . 1,245,724

CALPAC contribution expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(937,233) . . . . . . . . . . . . . . . . . . . (1,105,340)

CHANGE IN UNRESTRICTED NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $989,251 . . . . . . . . . . . . . . . . . . $1,265,079

TEMPORARILY RESTRICTED NET ASSETS:

Grants and contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,726,301 . . . . . . . . . . . . . . . . . . . . 1,280,108

Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113,968 . . . . . . . . . . . . . . . . . . . . . . 110,051

Net assets released from restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,504,000) . . . . . . . . . . . . . . . . . . . (1,555,059)

CHANGE IN TEMPORARILY RESTRICTED NET ASSETS . . . . . . . . . . . . . . . . . . . . ($663,731) . . . . . . . . . . . . . . . . . . .($164,900)

CHANGE IN NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325,520 . . . . . . . . . . . . . . . . . . . . .1,100,179

NET ASSETS, Beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,532,324 . . . . . . . . . . . . . . . . . . . 23,432,145

NET ASSETS, End of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$24,857,844 . . . . . . . . . . . . . . . . . .$24,532,324

Consolidated Statements of Activities

FINANCIAL STATEMENTS


CASH FLOWS FROM OPERATING ACTIVITIES: 1/1/13 – 12/31/13 1/1/12 – 12/31/12

Change in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $325,520 . . . . . . . . . . . . . . . . . . . $1,100,179

Reconciliation to net cash used by operating activities:

Net gain on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,427,306) . . . . . . . . . . . . . . . . . . . (2,507,614)

Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 766,864 . . . . . . . . . . . . . . . . . . . . . .795,397

Loss on disposal of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,787 . . . . . . . . . . . . . . . . . . . . . . .26,841

Income from Health Property Associates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (340,947) . . . . . . . . . . . . . . . . . . . . . (335,132)

Changes in:

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (488,160) . . . . . . . . . . . . . . . . . . . . . . 107,370

Interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,169 . . . . . . . . . . . . . . . . . . . . . . . . 7,780

Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26,960) . . . . . . . . . . . . . . . . . . . . .(145,854)

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (118,131) . . . . . . . . . . . . . . . . . . . . . .154,639

Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43,516 . . . . . . . . . . . . . . . . . . . . . (150,812)

Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194,651 . . . . . . . . . . . . . . . . . . . . . 294,542

Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (726) . . . . . . . . . . . . . . . . . . . . . . . . (681)

Deferred compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(31,582) . . . . . . . . . . . . . . . . . . . . . . . (8,791)

Pension plan asset/liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,927,056) . . . . . . . . . . . . . . . . . . . . . (102,511)

Net cash used by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . ($6,008,361) . . . . . . . . . . . . . . . . . . .($764,647)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,494,482) . . . . . . . . . . . . . . . . . . . .(7,425,412)

Proceeds from sales of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,961,678 . . . . . . . . . . . . . . . . . . . . .6,524,117

Proceeds from Health Property Associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336,406 . . . . . . . . . . . . . . . . . . . . . 330,000

Purchases of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (436,395) . . . . . . . . . . . . . . . . . . . (1,155,446)

Net cash provided (used) by investing activities . . . . . . . . . . . . . . . . . $1,367,207 . . . . . . . . . . . . . . . . . ($1,726,741)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from margin account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,080,000 . . . . . . . . . . . . . . . . . . . 4,050,000

Payments on margin account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(4,750,000) . . . . . . . . . . . . . . . . . . (2,950,000)

Principal payments on loan payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (134,186) . . . . . . . . . . . . . . . . . . . . . (126,014)

Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . $4,195,814 . . . . . . . . . . . . . . . . . . . . $973,986

CHANGE IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(445,340) . . . . . . . . . . . . . . . . . . .(1,517,402)

CASH AND CASH EQUIVALENTS, Beginning of year . . . . . . . . . . . . . . . . . . . . . . .4,334,831 . . . . . . . . . . . . . . . . . . . .5,852,233

CASH AND CASH EQUIVALENTS, End of year . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,889,491 . . . . . . . . . . . . . . . . . . $4,334,831

SUPPLEMENTAL CASH FLOW INFORMATION

Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $306,946 . . . . . . . . . . . . . . . . . . . . .$292,153

Taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,000 . . . . . . . . . . . . . . . . . . . . . . $11,400

Consolidated Statements of Cash Flows


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CMA Center for Economic Services

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[email protected] • 916/551-2061

In this issue:

Aetna to require additional accreditation require-

ments in order to be paid for certain surgical

pathology services

1

Update on two Anthem Blue Cross issues pending

with the Department of Managed Health Care 1

Meet Your CMA Center for Economic Services

Advocate: Mark Lane 2

CMA Advocacy at Work 2

Urgent survey response requested 3

Aetna erroneously terminates providers from

California network

3

Document, Document, Document 3

United Healthcare announces extension of HIPAA

5010 enforcement

4

What’s a COHS?

4

Save the Date

4

Act now to avoid the 2013 e-prescribing pen-

alty

5

Payor Updates

5

Health plan provider newsletters 5

May 2012

Medical-Legal Library

(Formerly CMA On-Call)

In this publication, you will find references to

“medical-legal” documents. The California

Medical Association’s (CMA) online medical-legal

library contains over 4,500 pages of medical-

legal, regulatory, and reimbursement information.

Medical-legal documents are free to members

and can be found in CMA’s online resource

library, http://www.cmanet.org/resource-library.

Nonmembers can purchase medical-legal docu-

ments for $2 per page.

CMA resourcesWhen you see this icon, that means

there are additional resources avail-

able free to California Medical Asso-

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To access any of these resources, visit

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CPR • May 2012 • Page 1 of 5

CMA Practice Resources (CPR) is a free monthly bulletin from the

California Medical Association’s Center for Economic Services. This bulletin is

full of tips and tools to help physicians and their office staff improve practice

efficiency and viability.

SUBSCRIBE TO CPR OR ANY OTHER CMA NEWSLETTERS: To stay up to date, sign

up for free subscriptions at www.cmanet.org/newsletters.

SPREAD THE WORD: Please forward this bulletin to your coworkers and colleagues.

Aetna to require additional accreditation requirements

in order to be paid for certain surgical pathology ser-

vicesAetna recently notified physicians that, effective August 1, 2012, practices per-

forming in-office pathology testing will be required to be both Clinical Labora-

tory Improvement Amendments (CLIA) certified and accredited with the Col-

lege of American Pathologists (CAP).

In a letter to physicians, Aetna claims that the change is consistent with the

Centers for Medicare & Medicaid Services (CMS) recognition of CAP as an

approved accreditation organization for non-hospital anatomic pathology test-

ing.The California Medical Association has voiced concerns with the implemen-

tation of this policy and has asked Aetna to explain the need for dual certifica-

tion. Although CMS may recognize CAP as an approved accreditation organiza-

tion, CMS does not require both a CLIA certification and a specialty society

accreditation to perform in-office pathology testing services. Further, CMA

expressed concerns with the ability of physicians to obtain the CAP accredita-

tion prior to the deadline imposed by Aetna. According to CAP, the accredita-

tion process takes approximately 90 days. Additionally, the process of obtaining

a secondary accreditation can be very costly for practices.

In addition to their contact with Aetna on this issue, CMA is working close-

ly with the American Medical Association (AMA) and several other state and

specialty medical societies. Stay tuned for further details.

Practices with questions about the letter can contact Tammy Gaul, senior

network manager at Aetna at (215)775-6604.

Contact: CMA reimbursement help line, (888) 401-5911 or [email protected]

Update on two Anthem Blue Cross issues pending with

the Department of Managed Health Care

DMHC claims audit

As previously reported, on Jan. 12, 2012 the Department of Managed Health

Care (DMHC) ordered Anthem Blue Cross to reprocess provider claims, with

interest, dating back to 2007.

The order is based on 2008 DMHC audits of the seven largest health plans

in California. These audits found violations of claim payments above the thresh-

old allowed under California law at all seven health plans.

As a result, DMHC assessed administrative fines, required the plans to pay

providers the money they were owed and mandated that plans demonstrate CMA Center for Economic Services1201 J Street, #200, Sacramento, CA [email protected] • 916/551-2061

In this issue:Aetna to require additional accreditation require-ments in order to be paid for certain surgical pathology services

1Update on two Anthem Blue Cross issues pending with the Department of Managed Health Care 1Meet Your CMA Center for Economic Services Advocate: Mark Lane 2CMA Advocacy at Work 2Urgent survey response requested 3Aetna erroneously terminates providers from California network

3Document, Document, Document 3United Healthcare announces extension of HIPAA 5010 enforcement 4What’s a COHS? 4Save the Date 4Act now to avoid the 2013 e-prescribing pen-alty 5Payor Updates 5Health plan provider newsletters 5

May 2012

Medical-Legal Library (Formerly CMA On-Call)In this publication, you will find references to “medical-legal” documents. The California Medical Association’s (CMA) online medical-legal library contains over 4,500 pages of medical-legal, regulatory, and reimbursement information.Medical-legal documents are free to members and can be found in CMA’s online resource library, http://www.cmanet.org/resource-library. Nonmembers can purchase medical-legal docu-ments for $2 per page.

CMA resourcesWhen you see this icon, that means there are additional resources avail-able free to California Medical Asso-ciation (CMA) members at the CMA website. To access any of these resources, visit http://www.cmanet.org/ces.

CPR • May 2012 • Page 1 of 5

CMA Practice Resources (CPR) is a free monthly bulletin from theCalifornia Medical Association’s Center for Economic Services. This bulletin is full of tips and tools to help physicians and their office staff improve practice efficiency and viability.SUBSCRIBE TO CPR OR ANY OTHER CMA NEWSLETTERS: To stay up to date, sign up for free subscriptions at www.cmanet.org/newsletters.SPREAD THE WORD: Please forward this bulletin to your coworkers and colleagues.

Aetna to require additional accreditation requirements in order to be paid for certain surgical pathology ser-vicesAetna recently notified physicians that, effective August 1, 2012, practices per-forming in-office pathology testing will be required to be both Clinical Labora-tory Improvement Amendments (CLIA) certified and accredited with the Col-lege of American Pathologists (CAP). In a letter to physicians, Aetna claims that the change is consistent with the Centers for Medicare & Medicaid Services (CMS) recognition of CAP as an approved accreditation organization for non-hospital anatomic pathology test-ing.

The California Medical Association has voiced concerns with the implemen-tation of this policy and has asked Aetna to explain the need for dual certifica-tion. Although CMS may recognize CAP as an approved accreditation organiza-tion, CMS does not require both a CLIA certification and a specialty society accreditation to perform in-office pathology testing services. Further, CMA expressed concerns with the ability of physicians to obtain the CAP accredita-tion prior to the deadline imposed by Aetna. According to CAP, the accredita-tion process takes approximately 90 days. Additionally, the process of obtaining a secondary accreditation can be very costly for practices. In addition to their contact with Aetna on this issue, CMA is working close-ly with the American Medical Association (AMA) and several other state and specialty medical societies. Stay tuned for further details. Practices with questions about the letter can contact Tammy Gaul, senior network manager at Aetna at (215)775-6604.Contact: CMA reimbursement help line, (888) 401-5911 or [email protected]

Update on two Anthem Blue Cross issues pending with the Department of Managed Health CareDMHC claims auditAs previously reported, on Jan. 12, 2012 the Department of Managed Health Care (DMHC) ordered Anthem Blue Cross to reprocess provider claims, with interest, dating back to 2007. The order is based on 2008 DMHC audits of the seven largest health plans in California. These audits found violations of claim payments above the thresh-old allowed under California law at all seven health plans. As a result, DMHC assessed administrative fines, required the plans to pay providers the money they were owed and mandated that plans demonstrate


CMA and the 38 county medical societies are a team, working together to solve physicians’ professional and practice

management issues, and to provide advocacy at the local, state, and national levels. Membership starts with your

county society; there, dues are collected, and the professional staff works closely with physician leadership to

present the face of organized medicine at the local level.

County societies are busy places, a resource for physicians and the public. The societies administer member

benefits, interact with community and public officials, organize physician education and public health programs,

publish magazines and newsletters, and provide physician referral and public resource helplines.

Alameda-Contra Costa

Medical Association

(510) 654-5383

Butte-Glenn Medical Society

(530) 342-4296

Central Coast Medical Association(formally Santa Barbara County Medical Society and

San Luis Obispo County Medical Association)

(805) 683-5333

Fresno-Madera Medical Society

(559) 224-4224

Humboldt-Del Norte County

Medical Society

(707) 442-2367

Imperial County Medical Society

(760) 554-1901

Inyo-Mono County Medical Society

(916) 551-2541

Kern County Medical Society

(661) 325-9025

Kings County Medical Society

(559) 582-0310

Lassen-Plumas-Modoc-Sierra County

Medical Society

(530) 258-4116

Los Angeles County Medical

Association

(213) 683-9900

Marin Medical Society

(707) 525-4375

Mendocino-Lake County Medical

Society

(707) 525-4375

Merced-Mariposa County Medical

Society

(209) 723-2976

Monterey County Medical Society

(831) 455-1008

Napa County Medical Society

(707) 255-3622

North Valley Medical Association

(530) 247-0293

Orange County Medical Association

(949) 398-8100

Placer-Nevada County Medical

Society

(530) 822-7770

Riverside County Medical Association

(951) 686-3342

San Benito County Medical Society

(831) 635-0604

San Bernardino County

Medical Society

(909) 273-6000

San Diego County

Medical Society

(858) 565-8888

San Francisco Medical Society

(415) 561-0850

San Joaquin Medical Society

(209) 952-5299

San Mateo County

Medical Association

(650) 312-1663

Santa Clara County

Medical Association

(408) 998-8850

Santa Cruz County Medical Society

(831) 479-7226

Sierra-Sacramento Valley

Medical Society

(916) 452-2671

Siskiyou County Medical Society

(530) 247-0293

Solano County Medical Society

(707) 255-3622

Sonoma County Medical Association

(707) 525-4375

Stanislaus Medical Society

(209) 527-1704

Tehama County Medical Society

(530) 247-0293

Tulare County Medical Society

(559) 627-2262

Tuolumne County Medical Society

(209) 586-5431

Ventura County Medical Association

(805) 484-6822

Yuba-Sutter-Colusa County

Medical Society

(530) 673-6894

County Medical Societies


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• Nuances found in the new coding system, with coding tips

TRAINING FOCUSES ON:

Learn to code for ICD-10-Clinical Modification (ICD-10-CM) and prepare for the ICD-10 Proficiency Assessment. Training is led by a certified AAPC instructor and is provided onsite in a classroom format. Conducted over two days, attendees will receive 16 hours of intensive general ICD-10 code set training along with hands-on coding exercises.

• 16 CEUs

• AAPC ICD-10-CM Code Set Course Manual

• AAPC ICD-10-CM Code Set Draft Book

• AAPC Online ICD-10-CM Proficiency Assessment (Required for current AAPC CPCs to maintain their credential)

• Access to AAPC’s Online ICD-10-CM Assessment Training Course through December 31, 2015

WHAT’S INCLUDED:

• $399 for CMA members & members’ staff

• $499 for CA-MGMA members

• $599 for non-members*Comparable AAPC ICD-10 Boot Camp Costs $799

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AAPC, please visit: www.cmanet.org/AAPC

Stockton . . . . August 10-11(French Camp)

Modesto . . . . August 12-13

Redding . . . . August 24-25

Eureka . . . . . August 26-27

Santa Maria . . . . . . . . .TBA

Roseville . . . . . . . . . . .TBA

Fresno . . . . . . . June 15-16

Napa . . . . . . . . . June 18-19

Irvine . . . . . . . . June 23-24

San Diego . . . . June 25-26

San Jose . . June 30-July 1

Redlands . . . . . . . .July 7-8

Los Angeles . . . . . .July 8-9

Santa Rosa . . . . .July 13-14

Torrance . . . . . . .July 14-15

Sacramento . . . .July 15-16


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