BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1011
                                                                  Page  1

          Date of Hearing:   May 6, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                    AB 1011 (Jones) - As Amended:  April 15, 2009 

          Policy Committee:                              Health Vote:18-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill requires the Office of Health Information Integrity  
          (OHII) within the California Health and Human Services Agency  
          (CHHSA) to report to the Legislature on health information  
          technology and medical privacy issues. Specifically, this bill: 

          1)Requires OHII to report by April 1, 2010 on the impact of  
            federal law changes related to health care technology and the  
            privacy of health and medical information.

          2)Requires OHII to evaluate and make recommendations for  
            statutory changes to ensure that California law complies with  
            or exceeds federal privacy laws, including changes to the  
            federal Health Insurance Portability and Accountability Act of  
            1996 (HIPAA), enacted recently through the federal American  
            Recovery and Reinvestment Act of 2009 (ARRA). 

          3)Requires OHII to ensure California law is updated to reflect  
            and promote the development and expansion of health  
            information technology (HIT), while safeguarding confidential  
            medical information.

           FISCAL EFFECT  

          One-time costs of $300,000 to OHII for reporting and staff costs  
          in 2010-11 and 2011-12 related to legal review, analysis, and  
          statutory recommendations about federal and state requirements  
          and changes.  OHII has only 16 full-time staff under current  
          law. In order to accomplish the depth of federal and state  
          analysis required by this bill, OHII would have to either  
          contract for outside counsel or hire full-time staff. 









                                                                  AB 1011
                                                                  Page  2

           COMMENTS  

           1)Rationale  . This bill requires OHII to report to the  
            Legislature about recent opportunities created under the ARRA  
            and make recommendations about ensuring California law is  
            clear and protective with regard to medical privacy and HIT.  
            The ARRA included the Health Information Technology for  
            Economic and Clinical Health (HITEACH) Act, which provides $36  
            billion (federal) over six years for HIT infrastructure and  
            provider adoption incentives.

             According to the California HealthCare Foundation (CHCF),  
            California is well positioned to make effective use of these  
            new federal funds. CHCF has made recommendations to the  
            Legislature on how to prepare for and compete for more than $3  
            billion in funding that California providers will access in  
            the next several years. This bill helps provide specificity to  
            the needs of California for planning and statutory changes. 

           2)California Health Information Technology  . The Legislative  
            Analyst's Office (LAO) and RAND have each recently evaluated  
            the impact of HIT adoption, such as electronic health records  
            and personal health records. The LAO confirmed that  
            paper-based medical records contribute to cost and quality  
            concerns in health care by reducing efficiency and increasing  
            medical errors that harm health. The LAO identified the many  
            benefits of HIT and the numerous efforts within California and  
            nationwide in both public and private sectors. 

          Both RAND and the LAO have provided estimates of savings  
            following adoption of technology solutions in health care.  
            RAND estimates net annual savings following adoption of $34  
            billion nationally. LAO estimates, based on research in other  
            states, fee-for-service Medi-Cal savings in California of up  
            to $300 million annually by increasing coordination and  
            reducing duplication across a variety of patient service  
            areas. 



           Analysis Prepared by  :    Mary Ader / APPR. / (916) 319-2081