BILL NUMBER: AB 211	CHAPTERED
	BILL TEXT

	CHAPTER  602
	FILED WITH SECRETARY OF STATE  SEPTEMBER 30, 2008
	APPROVED BY GOVERNOR  SEPTEMBER 30, 2008
	PASSED THE SENATE  AUGUST 26, 2008
	PASSED THE ASSEMBLY  AUGUST 31, 2008
	AMENDED IN SENATE  AUGUST 22, 2008
	AMENDED IN SENATE  AUGUST 12, 2008
	AMENDED IN SENATE  AUGUST 6, 2008
	AMENDED IN SENATE  JULY 1, 2008
	AMENDED IN SENATE  JUNE 12, 2008
	AMENDED IN SENATE  SEPTEMBER 5, 2007

INTRODUCED BY   Assembly Member Jones
   (Coauthors: Senators Alquist, Kuehl, and Torlakson)

                        JANUARY 25, 2007

   An act to amend Section 56.36 of the Civil Code, and to add
Division 109 (commencing with Section 130200) to, the Health and
Safety Code, relating to health.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 211, Jones. Public health.
   Existing law prohibits a health care provider, health care service
plan, or contractor from disclosing medical information regarding a
patient of the provider or an enrollee or subscriber of the health
care service plan without authorization, except as specified.
Existing law makes it a misdemeanor to violate these provisions
resulting in economic loss or personal injury to a patient, as
specified. In addition, existing law authorizes administrative fines
and civil penalties against any person or entity that negligently
discloses, or knowingly and willfully obtains, discloses, or uses
medical information in violation of these provisions, as specified.
Existing law specifies the entities that may bring a civil action to
recover civil penalties.
   This bill would require every provider of health care, as defined,
to implement appropriate specified safeguards to protect the privacy
of a patient's medical information. The bill would require every
provider of health care to reasonably safeguard confidential medical
information from unauthorized or unlawful access, use, or disclosure.
The bill would establish within the California Health and Human
Services Agency the Office of Health Information Integrity to assess
and impose administrative fines for a violation of these provisions,
as provided. The director would be appointed by the Secretary of
California Health and Human Services. The bill would establish the
Internal Health Information Integrity Quality Improvement Account for
the deposit of funds derived from these penalties. Upon
appropriation by the Legislature, the bill would authorize money in
the account to be used to support quality improvement activities. The
bill would also authorize the director to send a recommendation for
further investigation of, or discipline for, a potential violation to
the licensee's relevant licensing authority.
   This bill would provide that any costs created pursuant to this
act associated with the implementation and operation of the Office of
Health Information Integrity shall be funded through non-General
Fund sources.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 56.36 of the Civil Code is amended to read:
   56.36.  (a) Any violation of the provisions of this part that
results in economic loss or personal injury to a patient is
punishable as a misdemeanor.
   (b) In addition to any other remedies available at law, any
individual may bring an action against any person or entity who has
negligently released confidential information or records concerning
him or her in violation of this part, for either or both of the
following:
   (1) Nominal damages of one thousand dollars ($1,000). In order to
recover under this paragraph, it shall not be necessary that the
plaintiff suffered or was threatened with actual damages.
   (2) The amount of actual damages, if any, sustained by the
patient.
   (c) (1) In addition, any person or entity that negligently
discloses medical information in violation of the provisions of this
part shall also be liable, irrespective of the amount of damages
suffered by the patient as a result of that violation, for an
administrative fine or civil penalty not to exceed two thousand five
hundred dollars ($2,500) per violation.
   (2) (A) Any person or entity, other than a licensed health care
professional, who knowingly and willfully obtains, discloses, or uses
medical information in violation of this part shall be liable for an
administrative fine or civil penalty not to exceed twenty-five
thousand dollars ($25,000) per violation.
   (B) Any licensed health care professional, who knowingly and
willfully obtains, discloses, or uses medical information in
violation of this part shall be liable on a first violation, for an
administrative fine or civil penalty not to exceed two thousand five
hundred dollars ($2,500) per violation, or on a second violation for
an administrative fine or civil penalty not to exceed ten thousand
dollars ($10,000) per violation, or on a third and subsequent
violation for an administrative fine or civil penalty not to exceed
twenty-five thousand dollars ($25,000) per violation. Nothing in this
subdivision shall be construed to limit the liability of a health
care service plan, a contractor, or a provider of health care that is
not a licensed health care professional for any violation of this
part.
   (3) (A) Any person or entity, other than a licensed health care
professional, who knowingly or willfully obtains or uses medical
information in violation of this part for the purpose of financial
gain shall be liable for an administrative fine or civil penalty not
to exceed two hundred fifty thousand dollars ($250,000) per violation
and shall also be subject to disgorgement of any proceeds or other
consideration obtained as a result of the violation.
   (B) Any licensed health care professional, who knowingly and
willfully obtains, discloses, or uses medical information in
violation of this part for financial gain shall be liable on a first
violation, for an administrative fine or civil penalty not to exceed
five thousand dollars ($5,000) per violation, or on a second
violation for an administrative fine or civil penalty not to exceed
twenty-five thousand dollars ($25,000) per violation, or on a third
and subsequent violation for an administrative fine or civil penalty
not to exceed two hundred fifty thousand dollars ($250,000) per
violation and shall also be subject to disgorgement of any proceeds
or other consideration obtained as a result of the violation. Nothing
in this subdivision shall be construed to limit the liability of a
health care service plan, a contractor, or a provider of health care
that is not a licensed health care professional for any violation of
this part.
   (4) Nothing in this subdivision shall be construed as authorizing
an administrative fine or civil penalty under both paragraphs (2) and
(3) for the same violation.
   (5) Any person or entity who is not permitted to receive medical
information pursuant to this part and who knowingly and willfully
obtains, discloses, or uses medical information without written
authorization from the patient shall be liable for a civil penalty
not to exceed two hundred fifty thousand dollars ($250,000) per
violation.
   (d) In assessing the amount of an administrative fine or civil
penalty pursuant to subdivision (c), the Office of Health Information
Integrity, licensing agency, or certifying board or court shall
consider any one or more of the relevant circumstances presented by
any of the parties to the case including, but not limited to, the
following:
   (1) Whether the defendant has made a reasonable, good faith
attempt to comply with this part.
   (2) The nature and seriousness of the misconduct.
   (3) The harm to the patient, enrollee, or subscriber.
   (4) The number of violations.
   (5) The persistence of the misconduct.
   (6) The length of time over which the misconduct occurred.
   (7) The willfulness of the defendant's misconduct.
   (8) The defendant's assets, liabilities, and net worth.
   (e) (1) The civil penalty pursuant to subdivision (c) shall be
assessed and recovered in a civil action brought in the name of the
people of the State of California in any court of competent
jurisdiction by any of the following:
   (A) The Attorney General.
   (B) Any district attorney.
   (C) Any county counsel authorized by agreement with the district
attorney in actions involving violation of a county ordinance.
   (D) Any city attorney of a city.
   (E) Any city attorney of a city and county having a population in
excess of 750,000, with the consent of the district attorney.
   (F) A city prosecutor in any city having a full-time city
prosecutor or, with the consent of the district attorney, by a city
attorney in any city and county.
   (G) The Director of the Office of Health Information Integrity may
recommend that any person described in subparagraphs (A) to (F),
inclusive, bring a civil action under this section.
   (2) If the action is brought by the Attorney General, one-half of
the penalty collected shall be paid to the treasurer of the county in
which the judgment was entered, and one-half to the General Fund. If
the action is brought by a district attorney or county counsel, the
penalty collected shall be paid to the treasurer of the county in
which the judgment was entered. Except as provided in paragraph (3),
if the action is brought by a city attorney or city prosecutor,
one-half of the penalty collected shall be paid to the treasurer of
the city in which the judgment was entered and one-half to the
treasurer of the county in which the judgment was entered.
   (3) If the action is brought by a city attorney of a city and
county, the entire amount of the penalty collected shall be paid to
the treasurer of the city and county in which the judgment was
entered.
   (4) Nothing in this section shall be construed as authorizing both
an administrative fine and civil penalty for the same violation.
   (5) Imposition of a fine or penalty provided for in this section
shall not preclude imposition of any other sanctions or remedies
authorized by law.
   (6) Administrative fines or penalties issued pursuant to Section
1280.15 of the Health and Safety Code shall offset any other
administrative fine or civil penalty imposed under this section for
the same violation.
   (f) For purposes of this section, "knowing" and "willful" shall
have the same meanings as in Section 7 of the Penal Code.
   (g) No person who discloses protected medical information in
accordance with the provisions of this part shall be subject to the
penalty provisions of this part.
   (h) Paragraph (6) of subdivision (e) shall only become operative
if Senate Bill 541 of the 2007-08 Regular Session is enacted and
becomes effective on or before January 1, 2009.
  SEC. 2.  Division 109 (commencing with Section 130200) is added to
the Health and Safety Code, to read:

      DIVISION 109.  OFFICE OF HEALTH INFORMATION INTEGRITY


   130200.  There is hereby established within the California Health
and Human Services Agency the Office of Health Information Integrity
to ensure the enforcement of state law mandating the confidentiality
of medical information and to impose administrative fines for the
unauthorized use of medical information. The Office of Health
Information Integrity shall be administered by a director who shall
be appointed by the Secretary of California Health and Human
Services.
   130201.  For purposes of this division, the following definitions
apply:
   (a) "Director" means the Director of the Office of Health
Information Integrity.
   (b) "Medical information" means the term as defined in subdivision
(g) of Section 56.05 of the Civil Code.
   (c) "Office" means the Office of Health Information Integrity.
   (d) "Provider of health care" means the term as defined in
subdivision (j) of Section 56.05 and Section 56.06 of the Civil Code.

   (e) "Unauthorized access" means the inappropriate review or
viewing of patient medical information without a direct need for
diagnosis, treatment, or other lawful use as permitted by the
Confidentiality of Medical Information Act (Part 2.6 (commencing with
Section 56) of Division 1 of the Civil Code) or by other statutes or
regulations governing the lawful access, use, or disclosure of
medical information.
   130202.  (a) (1) Upon receipt of a referral from the State
Department of Public Health, the office may assess an administrative
fine against any person or any provider of health care, whether
licensed or unlicensed, for any violation of this division in an
amount as provided in Section 56.36 of the Civil Code. Proceedings
against any person or entity for a violation of this section shall be
held in accordance with administrative adjudication provisions of
Chapter 4.5 (commencing with Section 11400) and Chapter 5 (commencing
with Section 11500) of Part 1 of Division 3 of Title 2 of the
Government Code.
   (2) Paragraph (1) shall not apply to a clinic, health facility,
agency, or hospice licensed pursuant to Section 1204, 1250, 1725, or
1745 if Senate Bill 541 of the 2007-08 Regular Session is enacted and
becomes effective on or before January 1, 2009.
   (3) Nothing in paragraph (1) shall be construed as authorizing the
office to assess the administrative penalties described in Section
1280.15 of the Health and Safety Code.
   (b) The office shall adopt, amend, or repeal, in accordance with
the provisions of Chapter 3.5 (commencing with Section 11340) of Part
1 of Division 3 of Title 2 of the Government Code, such rules and
regulations as may be reasonable and proper to carry out the purposes
and intent of this division, and to enable the authority to exercise
the powers and perform the duties conferred upon it by this division
not inconsistent with any other provision of law.
   (c) Paragraph (3) of subdivision (a) shall only become operative
if Senate Bill 541 of the 2007-08 Regular Session is enacted and
becomes effective on or before January 1, 2009.
   130203.  (a) Every provider of health care shall establish and
implement appropriate administrative, technical, and physical
safeguards to protect the privacy of a patient's medical information.
Every provider of health care shall reasonably safeguard
confidential medical information from any unauthorized access or
unlawful access, use, or disclosure.
   (b) In exercising its duties pursuant to this division, the office
shall consider the provider's capability, complexity, size, and
history of compliance with this section and other related state and
federal statutes and regulations, the extent to which the provider
detected violations and took steps to immediately correct and prevent
past violations from reoccurring, and factors beyond the provider's
immediate control that restricted the facility's ability to comply
with this section.
   130204.  The Internal Health Information Integrity Quality
Improvement Account is hereby created in the State Treasury. All
administrative fines assessed by the office pursuant to Section 56.36
of the Civil Code shall be deposited in the Internal Health
Information Integrity Quality Improvement Account. Notwithstanding
Section 16305.7 of the Government Code, all interest earned on the
moneys deposited in the account shall be retained in the account.
Upon appropriation by the Legislature, money in the account shall be
used for the purpose of supporting quality improvement activities in
the office.
   130205.  Notwithstanding any other provision of law, the director
may send a recommendation for further investigation of, or discipline
for, a potential violation of this division to the licensee's
relevant licensing authority. The recommendation shall include all
documentary evidence collected by the director in evaluating whether
or not to make that recommendation. The recommendation and
accompanying evidence shall be deemed in the nature of an
investigative communication and be protected by Section 6254 of the
Government Code. The licensing authority of the provider of health
care shall review all evidence submitted by the director and may take
action for further investigation or discipline of the licensee.
  SEC. 3.  Any costs created pursuant to this act associated with the
implementation and operation of the Office of Health Information
Integrity or the implementation of Division 109 (commencing with
Section 130200) of the Health and Safety Code shall be funded through
non-General Fund sources.