BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 952
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          Date of Hearing:   May 5, 2009

                            ASSEMBLY COMMITTEE ON HEALTH
                                  Dave Jones, Chair
                AB 952 (Krekorian) - As Introduced:  February 26, 2009
           
          SUBJECT  :   Health information: health plans.

           SUMMARY  :   Revises the Confidentiality of Medical Information  
          Act (CMIA) to authorize, notwithstanding any other provision of  
          law, a health plan, as defined in federal law, to disclose  
          summary health information (SHI) and protected health  
          information (PHI) to the health plan's third party  
          administrator, or to another health plan, to the extent  
          authorized by, and in a manner consistent with the federal  
          Health Insurance Portability and Accountability Act of 1996  
          (HIPAA) and HIPAA regulations.  For purposes of this bill, and  
          the disclosures authorized, makes applicable in CMIA the federal  
          HIPAA definitions of health plan, PHI and SHI.  Specifically,  
           this bill  : 

          1)Authorizes a health plan, as that term is defined in federal  
            HIPAA, notwithstanding any other provision of law, to disclose  
            SHI and PHI to the health plan's third party administrator, or  
            to another health plan, to the extent authorized by, and in a  
            manner consistent with federal HIPAA and HIPAA regulations.

          2)Defines the following, for purposes of this bill, by reference  
            to federal HIPAA regulations:

             a)   "Health plan" as an individual or group plan that  
               provides, or pays the cost of, medical care, and which  
               includes the following, singly or in combination, among  
               other specified entities: an employer welfare benefit plan;  
               specified state and federal coverage plans; a group health  
               plan, organized pursuant to the Employer Income Retirement  
               Security Act (ERISA); a health insurance issuer or an HMO;  
               or any other individual or group plans that provide or pay  
               for medical care;  
             b)   "PHI" as individually identifiable health information,  
               which identifies an individual or can be used to identify  
               an individual; and,
             c)   "SHI" as information that may be individually  
               identifiable health information and that summarizes claims  
               history, claims expenses, or types of claims experienced by  








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               individuals for whom a plan sponsor has provided health  
               benefits under a group health plan, and from which  
               individual identifying information has been removed (such  
               as name, social security numbers, health plan membership  
               number, e-mail addresses or any number, characteristic or  
               code that can be used to identify an individual) and which  
               need only be aggregated to the geographic zip code level.

           EXISTING LAW  :

          1)Provides for regulation of health plans by the Department of  
            Managed Health Care (DMHC) under the Knox-Keene Health Care  
            Service Plan Act of 1975 (Knox-Keene) and for regulation of  
            health insurers by the California Department of Insurance  
            (CDI) under the Insurance Code.

          2)Prohibits health plans and health insurers, under Knox-Keene  
            and the Insurance Code, respectively, from releasing any  
            information to an employer that would directly or indirectly  
            indicate that an employee is receiving or has received  
            services from a health care provider covered by the health  
            plan or insurer unless authorized to do so by the employee.

          3)Prohibits, under the CMIA, a provider of health care, health  
            care service plan, or health care contractor from disclosing a  
            person's medical information without first obtaining that  
            person's authorization, except as specified.  

          4)Requires under the CMIA, notwithstanding 3) above, a health  
            care provider, health care service plan, or health care  
            contractor to disclose medical information if required by a  
            subpoena, search warrant, or other court order.  

          5)Permits under the CMIA, a provider, plan, or contractor to  
            disclose information in other specified circumstances,  
            including for purposes of diagnosis or treatment or as  
            necessary to provide billing or other administrative services  
            to the provider or plan.  Prohibits a provider, plan, or  
            contractor from disclosing a person's medical information for  
            marketing purposes, or any other purpose not necessary to  
            provide health care services to the patient, without express  
            authorization from that person.  

          6)Prohibits, under the California Insurance Information and  
            Privacy Protection Act, insurers, including health insurers,  








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            from disclosing any personal or privileged individual  
            information collected or received in an insurance transaction,  
            except as specified, including that the information may be  
            disclosed to insurers, agents, or self-insurers if related to  
            an insurance transaction involving the individual, as  
            specified, and to a group policyholder for the purpose of  
            reporting claims experience or conducting an audit of an  
            insurer or agent, as specified.

          7)Under HIPAA, prohibits, with exceptions, covered entities from  
            using or disclosing PHI, except pursuant to a written  
            authorization signed by the patient or for treatment, payment  
            or health care operations, and generally requires a covered  
            entity to make reasonable efforts to limit the use or  
            disclosure of PHI to the minimum necessary to accomplish the  
            intended purpose of the disclosure.  

          8)Defines in federal HIPAA regulations:

             a)   "Group health plan" as an employee welfare benefit plan,  
               as defined in ERISA, including insured and self-insured  
               plans;
             b)   "Health insurance issuer" as an insurance company,  
               insurance service or insurance organization, including an  
               HMO, licensed to engage in the business of insurance in a  
               state and subject to state laws that regulate insurance; 
             c)   "PHI" as individually identifiable health information,  
               which identifies an individual or can be used to identify  
               an individual; and,
             d)   "SHI" as information that may be individually  
               identifiable health information and that summarizes claims  
               history, claims expenses, or types of claims experienced by  
               individuals for whom a plan sponsor has provided health  
               benefits under a group health plan, and from which  
               individual identifying information has been removed (such  
               as name, social security numbers, health plan membership  
               number, e-mail addresses or any number, characteristic or  
               code that can be used to identify an individual) and which  
               need only be aggregated to the geographic zip code level.

          9)Under federal ERISA, authorizes one or more employers, or  
            employee organizations, to voluntarily establish an employee  
            welfare benefit plan for the purpose of providing for its  
            participants or their beneficiaries, through the purchase of  
            insurance or otherwise, specified benefits, including health  








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            care benefits, and sets minimum standards related to the  
            rights and protection of individuals in these plans, subject  
            to oversight by the federal Department of Labor (DOL).  

          10)Defines in federal ERISA regulations:

             a)   "Employer" as any person acting directly as an employer,  
               or indirectly in the interest of an employer, in relation  
               to an employee benefit plan;
             b)   "Plan" as an employee welfare benefit plan, which means  
               any plan, fund, or program established or maintained by an  
               employer or employee organization, or by both, for the  
               purposes of providing employee benefits, including but not  
               limited to, health benefits; 
             c)   "Plan administrator" as the person specifically  
               designated by the terms of the plan; and,
             d)   "Plan sponsor" as an employer or employee organization,  
               or joint employer-employee plan or trust.

           FISCAL EFFECT  :   This bill has not yet been analyzed by a fiscal  
          committee.

           COMMENTS  :   

           1)PURPOSE OF THIS BILL  .  According to the author, California has  
            some of the most strict and effective patient privacy  
            regulations for health plans governed by DMHC and CDI.  The  
            author acknowledges that these regulations, codified in the  
            CMIA, contain intentionally greater protections than are  
            provided under federal HIPAA.  However, according to the  
            author, in recently adopted federal regulations around HIPAA,  
            a problem has emerged with provisions that give deference in  
            the implementation of HIPAA to more strict state law.  As a  
            result, a uniquely structured class of health plans present in  
            California (ERISA Taft-Hartley Trusts regulated by the federal  
            DOL) is unduly burdened by a quirk in state law.  The author  
            contends that both HIPAA and the CMIA allow appropriate PHI to  
            be shared with appropriate health plan administrators in order  
            to facilitate efficient and proper administration of health  
            benefits for patients and consumers.  The author argues that  
            if PHI is not allowed to be shared with the Taft-Hartley plan,  
            consistent with HIPAA and CMIA, the Taft-Hartley plan will not  
            know whether it is paying health care providers for the  
            appropriate benefits, for the right patients and consumers,  
            and at the appropriate level of compensation.  The author  








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            indicates that the unfortunate quirk in CMIA is that it does  
            not recognize an ERISA DOL Taft-Hartley Health plan as a  
            "health plan, " and therefore health care providers, in the  
            absence of state law regarding Taft-Hartley plans, are  
            imposing requirements for sharing PHI that are even more  
            stringent than state law.  According to the author, this bill  
            allows for Taft-Hartley Trusts to share PHI and SHI in a  
            manner consistent with and as authorized by HIPAA.

           2)BACKGROUND  .  According to the Privacy Rights Clearinghouse  
            (PRC) in San Diego, California, many people consider  
            information about their health to be highly sensitive,  
            deserving of the strongest protection under the law.   
            Long-standing laws in many states and the age-old tradition of  
            doctor-patient privilege have been the mainstay of privacy  
            protection for decades.  The federal HIPAA sets a national  
            standard for privacy of health information, under the Privacy  
            Rule, but HIPAA only applies to medical records maintained by  
            health care providers, health plans, and health clearinghouses  
            - and only if the facility maintains and transmits records in  
            electronic form.  PRC points out that a great deal of  
            health-related information exists outside of health care  
            facilities and the files of health plans, and thus beyond the  
            reach of HIPAA.  The extent of privacy protection given to  
            medical information often depends on where the records are  
            located and the purpose for which the information was  
            compiled.  The laws that cover privacy of medical information  
            vary by situation.  PRC indicates that confidentiality is  
            likely to be lost in return for insurance coverage, an  
            employment opportunity, application for a government benefit,  
            or an investigation of health and safety at a work site.    
            Medical records are created when a patient receives treatment  
            from a health professional such as a physician, nurse,  
            dentist, chiropractor, or psychiatrist.  Records may include a  
            person's medical history, details about lifestyle (such as  
            smoking or involvement in high-risk sports), and family  
            medical history.  In addition, medical records contain  
            laboratory test results, medications prescribed, and reports  
            that indicate the results of operations and other medical  
            procedures.  Medical records could also include the results of  
            genetic testing used to predict future health. 

           3)HIPAA  .  The privacy regulations enacted pursuant to HIPAA  
            became effective April 14, 2003.  HIPAA Privacy Rules only  
            apply to covered entities, including health care providers,  








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            health plans and health care clearinghouses, such as medical  
            billing services.  HIPAA applies to covered entities when they  
            use electronic means to perform HIPAA covered transactions,  
            including transmission of health claims, remittance and  
            payment advice, and even simply accessing a health plan's web  
            site to check the eligibility of a patient.  If a provider or  
            health plan is covered by HIPAA, then all PHI held by the  
            provider, whether in paper, oral, or electronic form, is  
            subject to HIPAA Privacy Rules.  HIPAA covers any information  
            about a person's past, present or future mental or physical  
            health, including information about payment for health care  
            services.  A person's health information, combined with some  
            fact that identifies the person, (name, address, telephone  
            number, social security number, etc.) is referred to as PHI.   
            PHI can be oral, handwritten or entered into a computer.   
            HIPAA generally requires patient authorization to disclose  
            information for non-treatment purposes, such as to employers,  
            life insurers, underwriters, or researchers.  Under federal  
            law, patient authorization is not required when medical  
            information is used for treatment, payment or health care  
            operations disclosed as part of specified "business associate"  
            relationships established through contract.  Disclosure for  
            non-treatment purposes must generally be limited to the  
            minimum necessary to accomplish the purpose of the disclosure.  
             Under federal law, if a HIPAA provision conflicts with a  
            provision of state law, the provision that is most protective  
            of patient privacy prevails.

           4)CMIA  .  As a general rule, under CMIA, health care providers  
            and Knox-Keene health care service plans are prohibited from  
            disclosing a patient's confidential medical information  
            without the consent of the patient.  (Note: Health insurers  
            subject to the jurisdiction of the Insurance Commissioner are  
            covered by Insurance Code privacy protections related to  
            personal or privileged information collected or transmitted in  
            an insurance transaction, but are not subject to CMIA.)    
            However, there are many exceptions to this rule, where  
            disclosure by the plan or provider is either required or  
            permitted by law.  Under CMIA, a provider or health plan is  
             required  to release medical record information, even without a  
            patient's written authorization, to the following, among  
            others:

             a)   A court pursuant to a court order;
             b)   A board, commission, or administrative agency for  








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               purposes of resolving a dispute pursuant to its lawful  
               authority;
             c)   A party to a proceeding before a court or administrative  
               agency pursuant to an investigative subpoena;
             d)   An arbitrator or arbitration panel, when arbitration is  
               lawfully requested by either party pursuant to a subpoena;  
               and,
             e)   A government law enforcement agency pursuant to a search  
               warrant. 

            Under CMIA, a health plan or health care provider  ma  y, in  
            their discretion, release medical information without the  
            patient's written authorization to the following entities in  
            the following limited circumstances:

             f)   Billing, claims management, medical data processing or  
               other administrative services for the health care provider  
               or health plan; 
             g)   Organizations or professional societies that review the  
               competence or qualifications of health care professionals; 
             h)   Any private or public body responsible for licensing or  
               accrediting health care providers or health plans for  
               review at the premises of the health care provider or  
               health plan;
             i)   County coroner in the course of an investigation by the  
               coroner's office;
             j)   Agencies, investigators, and educational and research  
               organizations engaged in bona fide research projects  
               provided that the recipient does not further disclose a  
               person's identity; 
             aa)  An employer who has paid for employment-related health  
               care services in connection with a lawsuit or arbitration  
               dispute where the medical condition is an issue, provided  
               that the information is disclosed only in connection to the  
               proceeding, or when used to determine entitlement to leave  
               from work for medical reasons or physical limitations that  
               prevent a person from performing his or her job;
             bb)  The sponsor, insurer, or administrator of a group or  
               individual health plan for the purpose of evaluating the  
               application for coverage of benefits; 
             cc)  A health care service plan for the purpose of  
               transferring a patient to other health care providers in  
               the plan; 
             dd)  Probate officers or domestic relations investigators for  
               the purposes of determining the need for a conservatorship  








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               or guardianship; 
             ee)  Organ procurement organizations or tissue banks for  
               purpose of aiding a transplant; 
             ff)  Federal Food and Drug Administration when medical  
               information relates to problems with drug products or  
               medical devices; 
             gg)  Disaster relief organizations for the purpose of  
               responding to disaster welfare inquiries, but only basic  
               information such as name, city of residence, age, sex and  
               general condition may be disclosed; 
             hh)  Third parties for purposes of encoding, encrypting, or  
               otherwise making information anonymous; and,
             ii)  Disease management organizations that provide services  
               to patients in order to improve their overall health in  
               accordance with certain practice guidelines to which a  
               physician refers a patient. 

           5)ERISA  .  ERISA is a federal law that sets minimum standards for  
            most pension and group health plans (group benefit plans)  
            voluntarily established by employers and employee  
            organizations, including Taft-Hartley group benefit plans, or  
            trusts (Taft-Hartley Trusts).  ERISA requires group benefit  
            plans to provide participants with plan information including  
            important information about plan features and funding;  
            provides fiduciary responsibilities for those who manage and  
            control plan assets; requires plans to establish a grievance  
            and appeals process for participants to get benefits from  
            their plans; and gives participants the right to sue for  
            benefits and breaches of fiduciary duty.  ERISA's treatment of  
            group benefit plans is both complicated and confusing.  ERISA  
            has been interpreted as dividing group benefit plans into two  
            groups regulated differently under the law: a) individuals who  
            are covered by self-insured group benefit plans for which the  
            employer, rather than an insurer, assumes the risk for paying  
            for covered services; and b) individuals who are covered by  
            insurance purchased by the group benefit plan.  ERISA also  
            distinguishes between the regulation of group benefit plans  
            and the business of insurance, for purposes of determining  
            federal and state regulatory authority.   As these  
            distinctions are not clear cut, ERISA has been the subject of  
            many court cases.  Generally speaking, ERISA permits states to  
            regulate the business of insurance, including instances where  
            an ERISA plan contracts with a state licensed insurer to  
            provide health care to the employees, in which case the  
            contracted insurer is subject to state insurance regulation.   








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            ERISA generally preempts states from regulating health  
            benefits provided by a self-insured ERISA plan.  Some ERISA  
            group benefit plans offer choice of coverage to employees,  
            which might include a self-insured coverage option, generally  
            a Preferred Provider Organization, and a fully insured  
            coverage option, such as an HMO.

            In short, only ERISA applies to self-insured health plans,  
            while both ERISA and state insurance regulatory authority  
            apply to insured health plans covering employees in an ERISA  
            group benefit plan.  The distinction is important because  
            federal and state laws governing health plans are different in  
            areas such as consumer rights, provider compensation, claims  
            payment, access to care and mandated coverage.

           6)TAFT-HARTLEY TRUSTS  .  Under ERISA, Taft-Hartley Trusts can be  
            established as group benefit plans to provide employee  
            benefits for private sector unionized employees.  Taft-Hartley  
            Trusts have five basic characteristics: a) one or more  
            employers contribute to the plan; b) the plan is collectively  
            bargained with each participating employer; c) the plan and  
            its assets are managed by a joint board of trustees equally  
            representative of labor and management; d) assets are placed  
            in a trust fund; and, e) mobile employees can change employers  
            without losing health or pension coverage provided the new job  
            is with an employer who participates in the same Taft-Hartley  
            trust fund.  Unions negotiate for employer contributions to a  
            Taft-Hartley plan, rather than for specific benefits and cost  
            sharing provisions.  Typically, employer contributions are a  
            flat rate based on covered employment, such as $1.75 per hour  
            of covered service.  Some unions negotiate for monthly  
            contributions to provide for more financial stability.  The  
            number of hours employees must work during a given time period  
            to be eligible for coverage is negotiated with the employer.   
            A new Taft-Hartley Trust cannot provide benefits to its  
            members until sufficient reserves have been accumulated.  

          Taft-Hartley Trusts may provide more than just health benefits  
            and, for example, can also include pension benefits, life and  
                                     disability insurance, vacation, severance and holiday  
            benefits, child care centers, legal services, and financial  
            assistance for employee housing.  According to an article in  
            the newsletter of the American Federation of State, County and  
            Municipal Employees, approximately 93% of Taft-Hartley plans  
            are wholly or partially self-funded for health care.  As  








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            discussed above, as ERISA group benefit plans, Taft-Hartley  
            Trusts are exempt from state insurance regulation, including  
            mandated benefit requirements.  According to the California  
            HealthCare Foundation nearly three million Californians  
            receive their health care coverage through a Taft-Hartley  
            Trust.
           7)SUPPORT  .  Pacific Federal (Pac-Fed), sponsor of this bill,  
            writes in support that this bill will benefit health care  
            coverage provided to the three million Californians who are  
            covered in DOL health plans.  According to Pac-Fed, federal  
            HIPAA law permits the sharing of information between state and  
            federal regulated plans.  Pac-Fed identifies areas when this   
            exchange of information is necessary including: verifying  
            accuracy of claims; coordinating courses of treatment;  
            establishing and conducting wellness programs; funding  
            appropriate reserves for future claims; advocating for claims  
            payment; establishing pricing for contracted health plan  
            services; monitoring large claims; and transferring risk and  
            reinsurance to a new contracted health plan.  Valley Industry  
            and Commerce Association (VICA) writes that California law  
            places restrictions on the flow of SHI and PHI between health  
            plans, which makes it difficult for Taft-Hartley Trusts to  
            rapidly deliver services to those who rely on them.  According  
            to VICA, this bill will allow for the flow of information  
            between health plans that otherwise would not be able to  
            occur.  Western Alliance Trust (WAT) Fund supports this bill  
            and argues that the exchange of PHI is a necessary component  
            of health plan treatment, risk-sharing or reinsurance  
            relationships.  WAT complains that one provider would not  
            share medical information, claiming that California law is  
            applicable not federal law.

          Neighborhood Legal Services (NLS) of California supports this  
            bill because NLS believes that it strikes the right balance  
            between protecting individual rights and ensuring the health  
            insurance delivery system is able to meet the needs of working  
            Californians.  According to NLS, the primary impact of this  
            bill is to conform California law to federal HIPAA by  
            permitting the sharing of administrative and PHI between  
            health plans and health plan business associates.  

           8)OPPOSE UNLESS AMENDED  .  Kaiser Permanente opposes this bill  
            unless it is amended to limit disclosures of individually  
            identifiable medical information to those currently permitted  
            for payment purposes under the CMIA, and to expressly provide  








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            that no further use or disclosure of the information may be  
            made.  According to Kaiser, as written, this bill puts health  
            plans like Kaiser Permanente between competing statutory  
            directions--on the one hand to disclose PHI with third party  
            administrators and on the other to comply with the strict  
            dictates of CMIA, which permits only very limited disclosures  
            of medical information without the express written  
            authorization of the individuals affected.  Kaiser writes that  
            it understands the need of certain third party administrators,  
            including Taft-Hartley trusts to secure limited medical  
            information for paying claims and other payment-related  
            purposes.   Kaiser would therefore remove its opposition if  
            this bill is amended: a) to incorporate changes to the  
            existing CMIA payment exception that expressly incorporate the  
            HIPAA definition of "health plan" that includes Taft-Hartley  
            trusts and other entities involved in payment of health care  
            claims; and b) to expressly provide that no further use or  
            disclosure of the medical information received for payment  
            purposes may be permitted.

           9)OPPOSITION  .  World Privacy Forum (the Forum) is opposed to  
            this bill and objects to the inclusion of the clause  
            "notwithstanding any other provision of law" because it is  
            unclear what it means.  The Forum expresses the concern that  
            the inclusion of that phrase may be interpreted to exempt the  
            disclosures permitted in this bill from the possibility of any  
            civil or criminal liability.  According to the Forum, if there  
            is some specific provision of California law that would  
            prohibit the disclosure which is being sought it should be  
            clearly identified on the record so that the reasons for  
            changing it can be evaluated.  The Forum is also concerned  
            about the placement of the new section added in this bill  
            outside of the existing CMIA.   The Forum contends that since  
            this bill places a new section outside of CMIA it would appear  
            to completely exempt all disclosures authorized from the  
            limitations and restrictions of CMIA, including the  
            prohibition on a provider or health plan using a person's  
            medical information, without their authorization, for purposes  
            not necessary to provide health care service to the patient.   
            The Forum recommends that, presuming the specific statutory  
            barrier and the need for a new disclosure authorization can be  
            justified on the public record, any new disclosures authorized  
            be included within the existing provisions of CMIA.  Finally,  
            the Forum suggests that any new authorizations for disclosure  
            of medical information include restrictions on the entities  








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            receiving the information and their subsequent use of the  
            information to ensure that information disclosed for health  
            plan purposes cannot be used against an employee in any way. 

          Privacy Rights Clearinghouse (PRC) writes in opposition to this  
            bill that while HIPAA may allow the disclosures in this bill,  
            it appears that no provision of the CMIA authorizes the  
            disclosures.  PRC writes further that just because a  
            particular disclosure is allowed by the HIPAA health privacy  
            rule does not mean that it should be allowed under California  
            law.  PRC writes with the particular concern that this bill  
            may result in the disclosure of summary health information to  
            a plan sponsor - for example, an employer -- which might be  
            identifiable, notwithstanding the required removal of some  
            identifiers to meet HIPAA standards.  PRC writes that it is  
            strongly opposed to provisions of law that have the potential  
            to sweep away privacy and patient protections.   

           10)RELATED LEGISLATION  .  AB 562 (Cook) would require a health  
            insurance issuer to, upon request, provide specified aggregate  
            and individual health care claims information, for employers  
            with more than 50 employees, to an employee welfare benefit  
            plan (maintained by an employer(s) or employee  
            organization(s)), joint employer-employee plan, a governmental  
            entity, or plan administrator, as specified.   AB 562 failed  
            passage in the Assembly Health Committee on April 21, 2009.

           11)DOUBLE REFERRAL  .  This bill is double referred, should it  
            pass out of this committee, it will be referred to the  
            Committee on Judiciary.

           12)POLICY ISSUES  .

              a)   Confusion of terminology in state and federal law  .  This  
               bill would incorporate federal definitions into a new  
               section in the CMIA, including the federal HIPAA definition  
               of a health plan.  The federal definition, intended to  
               apply HIPAA protections broadly to any and all entities  
               engaged in providing health care services across the 50  
               states, is necessarily broad and all-inclusive.  For  
               example, the federal definition takes in all employer  
               welfare benefit plans and group benefit plans, even those  
               that are self-insured for health care.  However, at the  
               state level, a health plan or insurer is an entity subject  
               to state insurance regulation and would not include  








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               self-insured ERISA plans, such as Taft-Hartley Trusts.   
               Federal ERISA prohibits states from including ERISA plans  
               as health plans for state law purposes and precludes their  
               regulation as health plans under state law.   To be a  
               health plan under California law, an entity would have to  
               be either licensed by DMHC or certificated as an insurer by  
               CDI.  This bill authorizes "health plans" to provide  
               specified information to other health plans, incorporating  
               the federal definition in California's CMIA, which  
               generally applies to health care providers and  
               DMHC-regulated health plans.  It is unclear what the effect  
               of this bill would be, specifically what the impact would  
               be of including all types of health plans anticipated in  
               federal law within the state privacy law.   It is also  
               unclear which entities subject to state oversight would be  
               authorized to disclose the medical information of patients  
               and to whom they would be authorized to disclose it under  
               this bill.

              b)   Self-insured v. fully insured  .  Proponents of this bill  
               state that they are seeking an information exchange between  
               Taft-Hartley Trusts and the fully-insured health plans that  
               are contracted to provide health care services to workers  
               eligible to receive health care through the Trust.  They  
               seek the information exchange on the basis that they are a  
               health plan.  CMIA already allows for disclosure by a  
               health care provider or health plan of medical information,  
               to various entities, including employee benefit plans, to  
               the extent necessary to allow responsibility for payment to  
               be determined and payment to be made.  However, once a  
               Trust or other group benefit plan contracts with a fully  
               insured health plan, such as an HMO licensed under  
               Knox-Keene, the Knox-Keene plan is obligated to assume all  
               administrative functions, pay all claims, set provider  
               fees, respond to consumer complaints, bear all financial  
               risk and coordinate and provide for treatment.  In this  
               instance, the Taft-Hartley is a purchaser of insurance,  
               which pays premiums, but no longer has responsibility for  
               day-to-day claims payment or the administrative functions  
               typically performed by a health plan.   It is unclear why a  
               Taft-Hartley trust contracted with a state licensed health  
               plan needs PHI, as if it is acting as a health plan,  
               without the enrollee's authorization, on a day-to-day  
               basis, when it is functioning primarily as a purchaser of  
               health coverage.  








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              c)   Patient authorization  .  Both HIPAA and CMIA contemplate  
               disclosure and exchange of SHI and PHI among health care  
               providers and health plans providing authorization is first  
               obtained from the patient or enrollee.  Given the suggested  
               uses of this information by proponents, many of which  
               appear likely to be helpful or in the interest of the  
               patient and enrollee, why is there a need to provide for  
               such disclosure without any of the protections of CMIA as  
               proposed in this bill and without patient permission?   
               Would the Taft-Hartley trusts be able to obtain patient  
               authorization for disclosure of medical information when  
               the trust is acting in the interests of the patient?  What  
               are the specific statutory barriers in this regard?

              d)   Scope of this bill  .  According to the author and  
               sponsors of this bill, the goal is to enable disclosure of  
               information to Taft-Hartley Trusts, and their  
               administrators, to allow the Trusts to assist members and  
               advocate for claims payment among other administrative  
               functions.  However, this bill is drafted much more broadly  
               and could permit disclosures to employers as well as trust  
               administrators.  Should this bill be narrowed to permit  
               specified disclosures specifically to Taft-Hartley trusts  
               and their administrators?

              e)   Use of the information  .  Once information is provided  
               under this bill to any entity that meets the definition of  
               a health plan under federal law, PHI may be in the  
               possession of entities not subject to HIPAA protections and  
               there is at least the potential for PHI disclosed to be  
               used against an employee.  The Committee may wish to  
               consider imposing restrictions on the subsequent and  
               secondary use of the information.   Specifically, the  
               committee may wish to prohibit any further use or  
               disclosure by the recipient of information provided under  
               this bill, in a manner that would directly or indirectly  
               violate CMIA or HIPAA, including the manipulation of the  
               information in any way that might reveal individually  
               identifiable medical information.
           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Pacific Federal (sponsor)








                                                                  AB 952
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          California Association of Joint Powers Authorities
          International Union of Security, Police and Fire Professionals  
          of America and Participating Employers Health and Welfare Fund
          Liberty Dental Fund
          Professional Musicians, Local 47, and Employers' Health and  
          Welfare Fund
          Public Employees Benefit Trust Fund
          South Bay Teamster and Employers Health and Welfare Related  
          Benefits Trust
          Teamsters Local Union 572
          Western Alliance Trust Fund

           Oppose unless amended
           
          Kaiser Permanente

           Opposition 
           
          Privacy Rights Clearinghouse
          World Privacy Forum
           

          Analysis Prepared by  :    Deborah Kelch / HEALTH / (916) 319-2097