08/03/2026

Under the Dome

CASA's Latest Legislative Updates for you!

CALIFORNIA

August 2026

PART I — LEGISLATIVE SESSION OVERVIEW

State Budget — Enacted

The California Legislature passed the 2026–27 state budget on June 15, 2026, meeting the constitutional deadline, with the remaining budget trailer bills — including the MCO tax reauthorization and Proposition 35 provider reimbursement implementation — finalized ahead of the June 30 statutory deadline. t is still unclear CMS will approve the newly designed MCO Tax structure. CASA will continue to monitor rate-setting guidance issued under Prop. 35 as it affects specialty and ambulatory surgery reimbursement.

Legislative Calendar — Deadlines

The Legislature is currently in Summer Recess. The stretch between reconvening on August 3rd and the August 30th end of session represents the final and most intensive period of legislative activity this year. Bills that have not cleared both houses by August 30th are dead for the year, and the Governor then has until September 30th to sign or veto enrolled legislation.

CASA is tracking all priority bills closely heading into the August floor sessions and will issue an end-of-session summary once final disposition on each bill is known.

PART II — CASA PRIORITY BILLS STATUS SUMMARY

CASA's remaining priority bills survived their first-house or policy-committee votes and are now moving through fiscal committee review, with most calendared for the August 3rd Senate Appropriations hearing - the first order of business when the Legislature reconvenes from recess. Each bill is expected to be referred to its respective Appropriations Suspense File and, if released, will advance to the Assembly or Senate Floor for a vote following the Appropriations Suspense File hearing on August 14.

Artificial Intelligence

Medi-Cal

Other Priority Bills

Prior Authorization

Reimbursements

PART III — SPOTLIGHT: AB 225 (BONTA) — FACILITY FEES

A Fast-Moving Gut-and-Amend, and CASA's Rapid Response

AB 225 (Bonta) illustrates how quickly a bill can move in Sacramento — and why CASA's ability to respond fast matters. As introduced in 2025, AB 225 was an unrelated measure concerning patient trust funds at state mental health hospitals. In early June, the author gutted and amended the bill, replacing its original subject matter entirely with new language prohibiting health care providers, hospitals, and health systems from charging facility fees for a broad range of outpatient services, including preventive care.

The bill moved on an accelerated timeline through the Senate, being amended and re-referred to the Senate Health Committee to be hear in its new form. As drafted, the bill's facility fee prohibition swept in preventive screenings –  including screening colonoscopies – performed in ambulatory surgery centers, without accounting for the operating room, anesthesia, equipment, staffing, and monitoring costs that make those procedures possible in an outpatient setting.

Because the amended language emerged so close to the Committee's hearing date, CASA had a narrow window to act. CASA’s leadership team and advocates turned around a formal opposition letter to Senate Health Committee Chair, in parallel with other provider organizations expressing similar concerns. The letter laid out the clinical and cost realities of screening colonoscopies performed in ASCs and warned that the bill, as drafted, would push preventive screenings into higher-cost hospital settings – directly undermining the state's colorectal cancer screening and early-detection goals.

Due to CASA’s advocacy, at least in part, AB 225 did not advance out of the Senate Health Committee and will not advance through the legislative process this year. CASA will continue to monitor the bill for any renewed movement or amendments when the Legislature reconvenes on August 3rd, given the subject matter could resurface before the August 30th end-of-session deadline, albeit unlikely.

PART IV — REGULATORY UPDATE: CAL/OSHA SURGICAL PLUME STANDARD

CASA's Comments Remain Pending as Rulemaking Continues

CASA continues to actively engage in Cal/OSHA's rulemaking on occupational exposure to surgical plume under AB 1007. As previously reported, CASA formally submitted written comments to the Cal/OSHA Regulatory Services Unit on May 27, 2026, in response to the agency's April 2026 revised discussion draft of proposed § 51XX.

Since that filing, the California Hospital Association submitted its own comment letter on June 1, 2026, reiterating that the latest discussion draft still does not resolve concerns first raised in CHA's September 2025 letter – reinforcing that CASA is not alone among provider groups pressing Cal/OSHA to revise the current approach. As of this update, Cal/OSHA has not released a further revised draft or scheduled a new advisory committee meeting; the agency remains under a statutory deadline to propose formal rulemaking text by December 1, 2026, with adoption anticipated sometime in 2027.

CASA's core requests remain unchanged and continue to be the association's focus in ongoing conversations with Cal/OSHA staff:

• Remove or revise the CIH requirement; replace with a practical, facility-appropriate competency standard consistent with existing Title 8 frameworks.
• Eliminate the 25-foot outdoor exhaust requirement; allow a properly operating source-capture system with ULPA and gas phase filtration to satisfy the engineering control standard.
• Apply a proportionality standard to filter requirements, calibrated to the level of plume generation reasonably anticipated for the type of procedure performed.
• Adopt the AORN Guideline for Surgical Smoke Safety as the primary technical benchmark, allowing the regulation to remain current as technology evolves without requiring repeated rulemaking.
• Provide a minimum of 12 months following final adoption for full implementation, to allow for procurement, training, and, where necessary, HCAI facility review and approval.

CASA will notify members as soon as Cal/OSHA schedules its next advisory committee meeting or releases updated regulatory text. Members with operational questions about the proposed standard are encouraged to contact CASA staff.

PART V — REGULATORY AWARENESS: OHCA HEALTH CARE MARKET OVERSIGHT (AB 1415 / CMIR)

State's Emergency CMIR Regulations Remain in Effect

The Office of Health Care Affordability (OHCA), housed within the Department of Health Care Access and Information (HCAI), continues to implement its emergency regulatory amendments to the Cost and Market Impact Review (CMIR) process – the state's oversight framework for material change transactions involving health care entities. CASA continues to monitor this regulatory area given its implications for ASC ownership, affiliation, and transaction activity, including expanded filing triggers for private equity and management services organization transactions, and the 45/60/90-day OHCA review timelines under 22 CCR § 97431 et seq.

Members contemplating transactions involving affiliations, acquisitions, or management arrangements are encouraged to consult with legal counsel to assess whether OHCA notice obligations may apply.

PART VI — POLITICAL LANDSCAPE: 2026 GOVERNOR'S RACE

Becerra Holds Wide Lead Over Hilton Heading Into the Fall

With the June primary behind us, a new Public Policy Institute of California (PPIC) survey conducted June 29–July 6, 2026 shows Democrat Xavier Becerra leading Republican Steve Hilton 61% to 36% in the general election matchup for Governor. The poll surveyed 1,578 California adults, including 1,003 likely voters, and found Becerra leading across age, gender, homeownership, income, and racial/ethnic groups, as well as across the state's major regions.

As the two general-election candidates begin building out their platforms ahead of November, CASA will monitor both campaigns for statements on health care affordability, hospital and ASC regulation, and scope-of-practice issues relevant to ambulatory surgery, and will keep members apprised of any positions that bear on the association's legislative and regulatory priorities.

FEDERAL

Legislative & Regulatory Update

Guidance on Required Remittance Advice Remark Codes Related to the No Surprises Act

On June 4, 2026, the Department of the Treasury, the Department of Labor, and the Department of Health and Human Services (the Departments), along with the Office of Personnel Management (OPM), published the Federal Independent Dispute Resolution Operations final rules to improve the functioning of the Federal Independent Dispute Resolution (IDR) process established under the No Surprises Act. These final rules establish new requirements for plans and issuers to use claim adjustment reason codes (CARCs) and remittance advice remark codes (RARCs), which are standardized codes that convey information about claims processing, in the manner and timeframe specified in guidance issued by the Departments, when providing remittance advice for items and services furnished under certain circumstances. CARCs explain why a claim or service line was paid differently from how it was billed, and RARCs provide additional explanation for the remittance.

The guidance released on July 17, 2026, specifies the RARCs to be used for purposes of the final regulations, the circumstances in which each RARC is to be used, and technical instructions to facilitate their use. Use of the specified RARCs in the circumstances detailed in this guidance and any related future guidance will satisfy the requirements related to the use of CARCs and RARCs under the final regulations. Plans and issuers may continue to use the CARC they deem most appropriate for any claim adjustment. The requirement to provide CARCs and RARCs in the manner, circumstances, and timeframe specified in this guidance applies for items and services furnished on or after January 1, 2027.

View the guidance here: https://www.cms.gov/cciio/programs-and-initiatives/other-insurance-protections/caa-nsa-rarc-codes.pdf

Comments Now Open for the Calendar Year (CY) 2027 Quality Payment Program (QPP)

How Do I Comment on the CY 2027 Proposed Rule? 

The proposed rule includes directions for submitting comments within the 60-day comment period. Comments must be submitted by Monday, September 14, 2026. 

When commenting, refer to file code: CMS-1848-P 

Use 1 of the 3 following ways to officially submit your comments: 

• Electronically: regulations.gov  

• Regular mail: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1848-P, P.O. Box 8016, Baltimore, MD 21244-8016. 

• Express or overnight mail: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1848-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. 

Additional Resources 

Learn more about QPP proposals in the following resources: 

• 2027 Quality Payment Program Proposed Rule Fact Sheet and Policy Comparison Table (PDF) – This resource provides an overview of QPP proposals and RFIs included in the CY 2027 Medicare Physician Fee Schedule (PFS) Proposed Rule, and a comparison table contrasting existing policies with proposals. 

• Proposed Timeline: Transitioning from Traditional MIPS to MVPs (PDF) – This graphic displays the timeline for sunsetting traditional MIPS as proposed in the CY 2027 Medicare Physician Fee Schedule (PFS) Proposed Rule. 

• Medicare Shared Savings Program Proposals Fact Sheet – This resource reviews information on the proposals specific to participation in the Shared Savings Program 

• 2027 Proposed and Modified MVPs Guide (PDF) - This resource reviews details of the newly proposed MVPs and proposed changes to existing MVPs.