BILL ANALYSIS AB 278 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 278 (Monning) As Amended August 17, 2010 Majority vote ----------------------------------------------------------------- |ASSEMBLY: | |(May 18, 2009) |SENATE: |23-12|(August 19, | | | | | | |2010) | ----------------------------------------------------------------- (vote not relevant) Original Committee Reference: REV. & TAX. SUMMARY : Permits the California Office of Health Information Integrity (CalOHII) to establish and administer up to four demonstration projects annually to evaluate potential solutions to facilitate health information exchange that promote quality of care, respect the privacy of personal health information, and enhance the trust of stakeholders. The Senate amendments delete the Assembly approved version of this bill and instead: 1)Authorize CalOHII to establish and administer up to four demonstration projects a year, as defined, to evaluate potential solutions to facilitate health information exchange (HIE) that promote quality of care, respect the privacy and security of personal health information, and enhance the trust of the stakeholders. 2)Authorize health care entities, as defined, to submit an application to CalOHII to be approved as a demonstration project participant, as defined. 3)For purposes of this bill define the following: a) "Demonstration project" means a project approved and administered by CalOHII in accordance to specified provisions; b) "Demonstration project participant" means a health care entity that is approved by CalOHII to participate in a demonstration project; AB 278 Page 2 c) "Governmental authority" means any municipal, county, state, or other governmental entity that has jurisdiction and control over the provision of, or payment for, medical services or that routinely receives medical information to complete its designated governmental function; d) "Meaningful use" means the term as defined in the Health Information Technology for Economic and Clinical Health (HITECH) Act, and in regulations promulgated under the HITECH Act; and, e) "State Cooperative Agreement" means the grant agreement between the federal government and the state, in which the federal government awarded the state with grant money pursuant to the HITECH Act. 4)Require CalOHII, upon receiving a demonstration project application, to assist applicants in soliciting federal funds for the demonstration project and work with applicants to define the scope of the demonstration project. 5)Authorize the Director of CalOHII to approve demonstration projects to test for, but not limited to policies and practices related to patient consent, information, and notification, new technologies and applications that enable the transmission of protected health information, as specified; and implementation issues, if any, encountered by small solo health care providers as a result of exchanging electronic health information. 6)Require that the selection of demonstration projects be based on, but not limited to, the following criteria: a) Areas critical to building consumer trust and confidence in the HIE system; b) Projects that help support the exchange of information critical to meeting the federal meaningful use provisions, as defined; and, c) Areas recommended by the California HIE consumer and industry stakeholder advisory process. 7)Require CalOHII to engage with stakeholders to evaluate issues AB 278 Page 3 identified by the demonstration projects, comment upon proposed regulations, and discuss HIE solutions. 8)Require CalOHII to work collaboratively with approved demonstration project participants to identify a set of common data elements that will be used to collect, analyze, and measure performance. 9)Authorize the Director of CalOHII to adopt regulations to ensure all approved HIE service participants, as defined, and demonstration project participants follow rules, and work within parameters, as defined by the office, that are consistent for the exchange of information. 10)Exempt adoption of, and changes to, such regulations from provisions in existing law related to procedures for public participation, the review of proposed regulations by the Office of Administrative Law, and filing and publication requirements that specify an effective date that is 30 days after the date of filing with the Secretary of State. 11)Require the Director of CalOHII to file any regulation adopted pursuant to this bill with the Office of Administrative Law, for filing with the Secretary of State and publication in the California Code of Regulations. Requires such filings to cite the appropriate section of this bill and any other applicable state or federal laws. 12)Require CalOHII, prior to adopting a regulation or changing an existing regulation pursuant to this bill, to adopt the standards requiring CalOHII to: a) Post the proposed regulation on its website at least 45 days prior to adoption; b) Accept public comments for at least 30 days after the proposed regulation has been posted online; and, c) Hold a hearing prior to adoption of the regulation if a member of the public requests a public hearing during the 30-day review period. 13)Specify that any regulation adopted shall become effective on the date it is filed with the Secretary of State unless the AB 278 Page 4 director prescribes a later date in the regulation, or in a written instrument filed with the regulation. 14)Require regulations adopted to expire upon repeal of the authorizing statute. 15)Require CalOHII to receive reports from demonstration project participants on the outcome of the demonstration project no later than 60 days after the end of the project. 16)Require CalOHII to review the results of the demonstration projects and report to the Joint Legislative Budget Committee, the Senate Committee on Appropriations, the Senate Committee on Budget and Fiscal Review, the Senate Committee on Health, the Assembly Committee on Appropriations, the Assembly Committee on Budget, and the Assembly Committee on Health, within six months after the end of the project. 17)Specify that demonstration projects carried out utilizing federal grant funds may be subject to federal auditing requirements. 18)Require costs associated with the support, assistance and evaluation of approved demonstration projects to be funded exclusively by federal funds or other non-General Fund sources. 19)Repeal the provisions of the bill on the date the Director of CalOHII executes a declaration stating that the grant period for the State Cooperative Grant Agreement for HIE has ended. 20)Make various legislative findings and declarations. AS PASSED BY THE ASSEMBLY , this bill deleted an erroneous reference in Revenue and Taxation Code (R&TC) Section 18639 to non-existing Title 15 of the Internal Revenue Code (IRC). FISCAL EFFECT : According to Senate Appropriations Committee: Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Demonstration project $360 $360 $360Special* procurement, administration, AB 278 Page 5 and oversight * California Health Information Technology and Exchange Fund (federal HITECH funds) COMMENTS : According to the author, current state privacy laws, while extensive, are problematic when it comes to electronic HIE. For example, current state law does not specifically address widespread HIE, which results in ambiguity of some state rules in an electronic environment. Additionally, the current health privacy framework is built upon an interaction of state and federal requirements, and it is not easily determined which requirements apply. Last of all, no agency or office at the state level is authorized to establish requirements, or interpret California medical privacy law, when it is applied to health information exchanged electronically. The author points out that the imminent implementation of widespread HIE systems has raised many new issues among stakeholders with strong and often opposing viewpoints. While these issues generate strong and often opposing viewpoints, there is growing consensus on two points: 1) electronic HIE is such a new area that it raises new privacy issues on which there is very little empirical information that can alter the debate; and, 2) demonstration projects can provide valuable new insights into these complex issues and can help lead to resolution on issues. This bill was substantially amended in the Senate and the Assembly-approved version of this bill was deleted. This bill, as amended in the Senate, is inconsistent with Assembly actions. Analysis Prepared by : Martin Radosevich / HEALTH / (916) 319-2097 FN: 0006286