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