BILL NUMBER: AB 2112	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 7, 2010
	AMENDED IN ASSEMBLY  MARCH 24, 2010

INTRODUCED BY   Assembly Member Monning

                        FEBRUARY 18, 2010

   An act to add Part 2.7 (commencing with Section 60) to Division 1
of the Civil Code, and to amend Section 130202 of the Health and
Safety Code, relating to privacy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2112, as amended, Monning. Prescription Record Privacy Act.
   The Confidentiality of Medical Information Act prohibits a
provider of health care, a health care service plan, contractor, or
corporation and its subsidiaries and affiliates from intentionally
sharing, selling, using for marketing, or otherwise using any medical
information, as defined, for any purpose not necessary to provide
health care services to a patient, unless a specified exception
applies.
   This bill would enact the Prescription Record Privacy Act,
prohibiting a person  or entity, including a pharmacist, 
from  knowingly disclosing or using regulated records that
include prescription information containing individual identifying
information for marketing a prescribed product, as provided, except
when information may be transferred to another entity, as provided,
and in accordance with other state and federal laws. The act would
not prohibit conduct involving the collection, use, transfer, or sale
of regulated records for marketing purposes if the data is
aggregated, does not contain individual identifying information, and
cannot reasonably be used to obtain individual identifying
information   selling or releasing to a 3rd party any
physician prescribing data for marketing purposes, as defined, except
when the data is necessary for any local, state, or federal
governmental or oversight activity, as provided, or is necessary for
the processing of a health care claim. The bill also would permit the
release of physician prescribing data to a licensed health care
professional, service plan, contractor, or facility, as provided, a
health insurer or disability insurer, or an authorized operator of a
program related to the treatment of chronic and seri   ously
debilitating or life-threatening conditions. The bill would also
permit the release of data for clinical trials or established
research projects, as provided  . This bill would also require
that any person that knowingly fails to comply with these provisions
be subject to an administrative penalty of at least $10,000 and not
more than $50,000 per violation.
   This bill would authorize the Secretary of California Health and
Human Services to adopt regulations to implement these provisions.
This bill would require the office of the Attorney General to enforce
payment of penalties for violations of these provisions, as
provided. This bill would also authorize the Office of Health
Information Integrity, upon receipt of a complaint of a violation of
these provisions, to conduct an administrative hearing, in accordance
with the administrative adjudication provisions set forth in the
Administrative Procedure Act, and to assess an administrative fine
against a person or entity found to have committed a violation of
these provisions.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Part 2.7 (commencing with Section 60) is added to
Division 1 of the Civil Code, to read:

      PART 2.7.  Prescription Record Privacy Act


   60.  This part may be cited as the Prescription Record Privacy
Act.
   60.5.  It is the intent of the Legislature to  further the
state's interest in improving the quality and lowering the cost of
health care, restrain undue influence exerted by pharmaceutical
industry marketing representatives over prescribing decisions, combat
vexatious and harassing sales practices,  safeguard the
confidentiality of  prescribing information  
physician prescribing data  , protect the integrity of the
doctor-patient relationship,  and  maintain the integrity
and public trust of the medical profession  , combat
vexatious and harassing sales practices, restrain undue influence
exerted by pharmaceutical industry marketing representatives over
prescribing decisions, and further the state's interest in improving
the quality and lowering the cost of health care  . The
Legislature intends to regulate  the monitoring of
prescribing practices   physician prescribing data 
only for commercial marketing purposes by companies selling
prescribed products. The intent is not to regulate 
monitoring for  other uses, such as quality control,
research unrelated to marketing, or use by governments or other
entities not in the business of selling health care products.
   61.  For purposes of this part: 
   (a) "Bona fide clinical trial" means any research project that
prospectively assigns human subjects to intervention and comparison
groups to study the cause and effect relationship between a medical
intervention and a health outcome, has received approval from an
appropriate institutional review board, and has been registered at
http://ClinicalTrials.gov prior to commencement.  
   (b) "Individual identifying information" means information that
directly or indirectly identifies a prescriber or a patient in this
state, indicates where the information is derived from, or relates to
a prescription for any prescribed product.  
   (a) "Licensee" means a person described in Section 4036 or 4037 of
the Business and Professions Code.  
   (c) 
    (b)  "Marketing" means any activity by a company making
or selling prescribed products, or by that company's agent, intended
to influence prescribing or purchasing choices of its products,
including, but not limited to:
   (1) Advertising, publicizing, promoting, or sharing information
about a product.
   (2) Identifying individuals to receive a message promoting use of
a particular product, including, but not limited to, an
advertisement, brochure, or contact by a sales representative.
   (3) Planning the substance of a sales representative visit or
communication or the substance of an advertisement or other
promotional message or document.
   (4) Evaluating or compensating sales representatives.
   (5) Identifying individuals to receive any form of gift, product
sample, consultancy, or any other item, service, compensation, or
employment of value.
   (6) Advertising or promoting prescribed products directly to
patients. 
   (d) "Person" means a business, individual, corporation, union,
association, firm, partnership, committee, or other organization or
group of persons.  
   (e) "Pharmacy" means any individual or entity licensed under state
law to dispense prescribed products.  
   (c) "Physician" means a person described in Section 2041 of the
Business and Professions Code.  
   (d) "Physician prescribing data" means information that sets forth
a prescription written on or after the operative date of this part
by a physician in combination with any data that individually
identifies the physician, including a unique number identifier
assigned for tracking purposes, telephone number, e-mail address,
medical identification number, business or home address, or any other
information that can reasonably be used to identify the physician or
track the prescribing habits of the physician.  
   (f) 
    (e)  "Prescribed product" includes a biological product
as defined in Section 262 of Title 42 of the United States Code and a
device or a drug as defined in Section 321 of Title 21 of the United
States Code. 
   (g) "Regulated record" means information or documentation from a
prescription written by a prescriber doing business in this state or
a prescription dispensed in this state.  
   62.  (a) No person shall knowingly disclose or use regulated
records that include prescription information containing individual
identifying information for marketing a prescribed product. 

   (b) A regulated record containing individual identifying
information may be transferred to another entity, including to
another branch or subsidiary of the same firm, only if it carries
satisfactory assurance that the recipient will safeguard the records
from being disclosed or used for a marketing purpose prohibited under
this section and only if the transfer is in accordance with other
state and federal laws.  
   (c) Regulated records containing individual identifying
information may be disclosed, sold, transferred, exchanged, or used
for nonmarketing purposes only in accordance with other state and
federal laws.  
   (d) This section does not prohibit conduct involving the
collection, use, transfer, or sale of regulated records for marketing
purposes if:  
   (1) The data is aggregated.  
   (2) The data does not contain individual identifying information.
 
   (3) There is no reasonable basis to believe that the data can be
used to obtain individual identifying information.  

   (e) This section shall not prevent any person from disclosing
regulated records to the identified individual as long as the
information does not include protected information pertaining to any
other person.  
    (f) "Release to a third party" or "release" does not include
communication or use of physician prescribing data among covered
entities that participate in an organized health care arrangement, as
defined in Section 160.103 of Title 45 of the Code of Federal
Regulations.  
   62.  A person or entity, including a licensee, shall not sell or
release to a third party, or exchange for remuneration, any physician
prescribing data for marketing purposes.  
   63.  Nothing in this part may be construed to limit or restrict
the release of physician prescribing data that is necessary for any
local, state, or federal governmental oversight or regulatory
activity, including, but not limited to, the release of physician
prescribing data to a local, state, or federal law enforcement or
public health authority in furtherance of its regulatory activity.
 
   64.  Nothing in this part may be construed to limit or restrict
the release of physician prescribing data that is necessary for the
processing of a health care claim.  
   65.  Nothing in this part is intended to limit or restrict the
otherwise lawful activities of a licensee.  
   66.  Nothing in this part is intended to prohibit or limit an
individual patient of a physician from releasing any identifiable
information relating to a prescription that the patient received, or
that the physician wrote, that is not otherwise restricted or
prohibited by law.  
   67.  Nothing in this part may be construed to limit or restrict
the release of physician prescribing data to any of the following:
   (a) A licensed health care professional, if the release is
directly related to providing health care to a patient.
   (b) A health insurer or disability insurer, health care service
plan, pharmacy benefit manager, employee-sponsored health benefit
plan, or their contractors, if the data is directly related to
administrating or monitoring the use of a health care benefit.
   (c) An authorized operator of a program related to the treatment
of chronic and seriously debilitating or life-threatening conditions,
as defined in subdivisions (d) and (e) of Section 1367.21 of the
Health and Safety Code.
   (d) An employee benefit plan or any other person or private entity
responsible for paying for health care services rendered to the
patient, if the physician prescribing data is reasonably necessary to
complete or verify a health care transaction related to the
prescription information sought to be disclosed.
   (e) Any health care service plan, contractor, or other health care
professional or facility exclusively for purposes of diagnosis or
treatment of a patient.
   (f) Use by a health care service plan or health insurer or
disability insurer as permitted or required by Sections 1367.01 or
1370 of the Health and Safety Code or Sections 10123.135 or
subdivision (d) of Section 10133 of the Insurance Code.  
   68.  Nothing in this part may be construed to prohibit the release
of aggregate prescription data to any individual or entity, provided
that data does not include identifiable physician prescribing data
as described in this part.  
   69.  (a) Nothing in this part may be construed to prohibit the
release of physician prescribing data if it is solely intended to be
used for clinical trials or established research projects conducted
in accordance with protocols, guidelines, or standards recognized by
the federal Health and Human Services Agency, the federal Food and
Drug Administration, the National Institutes of Health, the National
Cancer Institute, or the Centers for Disease Control and Prevention.
   (b) Any entity receiving physician prescribing data pursuant to
this section may not use the data for any other purpose.  
   70.  Nothing in this part may be construed to limit or restrict
the release of physician prescribing data for the purposes of
providing the physician with information regarding action by the
state or by the federal Food and Drug Administration limiting or
disallowing the sale or use of a specific drug, or to provide the
physician with information regarding adverse events related to a
specific drug or medical device.  
   71.  Nothing in this part shall prohibit the otherwise lawful use
or release of physician prescribing data for litigation purposes.

    63.   72.   The Secretary of California
Health and Human Services may adopt regulations as necessary to
implement this part.
    64.   73.   Any person that knowingly
fails to comply with the requirements of this part or regulations
adopted pursuant to this part by using or disclosing regulated
records in a manner not authorized by this part or its regulations,
shall be subject to an administrative penalty of at least ten
thousand dollars ($10,000) per violation and not more than fifty
thousand dollars ($50,000) per violation, as assessed by the
California Health and Human Services Agency. Each disclosure of a
regulated record shall constitute a violation. The office of the
Attorney General shall take necessary action to enforce payment of
penalties assessed under this section. Minimum statutory penalties
shall be set at ten thousand dollars ($10,000) per violation,
notwithstanding Section 125.9 of the Business and Professions Code.
    64.5.   74.   In addition to any other
remedy provided by law, a violation of this chapter shall be an
unfair or deceptive act in trade or commerce and an unfair method of
competition and may be enforced as an unfair business practice
pursuant to Chapter 5 of Part 2 of Division 7 of the Business and
Professions Code. 
   65.  (a) The intent of this section is to ensure the
confidentiality of data held by a state agency or its agent, which
could be used to directly or indirectly identify a patient or a
health care professional licensed to prescribe drugs, biological
products, or medical devices.
   (b) For the purposes of this section:
   (1) "Individual identifying information" shall have the same
meaning as in Section 61.
   (2) "Prescribed product" includes a biological product as defined
in Section 262 of Title 42 of the United States Code and a device or
a drug as defined in Section 321 of Title 21 of the United States
Code.
   (3) "State health care program" means a program for which the
state purchases prescribed products, including, but not limited to, a
state pharmaceutical assistance program, or a program for state
employees and their dependents, individuals under the supervision of
corrections, or state retirees and their dependents with the
exception of the state medical assistance program (Medi-Cal).
   (c) Records held by an agency administering a state health care
program that include prescription information containing individual
identifying information shall only be disclosed for the purposes
allowed in Section 62.
   (d) Any person who knowingly fails to comply with the requirements
of this chapter or rules adopted pursuant to this part by using or
disclosing regulated records in a manner not authorized by this part
or its rules shall be subject to an administrative penalty of at
least ten thousand dollars ($10,000) per violation and not more than
fifty thousand dollars ($50,000) per violation, as assessed by the
California Health and Human Services Agency. Each disclosure of a
regulated record shall constitute a violation. The office of the
Attorney General shall take necessary action to enforce payment of
penalties assessed under this section.  
   65.5.  (a) The intent of this part is to ensure compliance with
federal Medicaid law and regulations prohibiting the disclosure and
use of Medicaid data, except to administer the Medicaid program, and
to ensure that data held by the state agency or its agents that could
directly or indirectly identify patients or health care
professionals licensed to prescribe products be kept confidential.
   (b) The State Department of Health Care Services, which
administers the state medical assistance program (Medi-Cal) under
subchapter C of Chapter 4 of Title 42 of the Code of Federal
Regulations (Medicaid) or a Medicaid waiver approved by the Centers
for Medicare and Medicaid Services, shall disclose records that
include prescription information only as provided for under Section
431 of Title 42 of the Code of Federal Regulations and the federal
Privacy Act of 1974. The department shall ensure that any agent or
contractors with the department are informed of the limitations on
redisclosure or use of the data provided for under applicable federal
regulations and shall have policies and procedures for ensuring
compliance with this statute and federal regulations.
   (c) Any person that knowingly fails to comply with the
requirements of this part or rules adopted pursuant to this part by
using or disclosing regulated records in a manner not authorized by
this part or its rules shall be subject to an administrative penalty
of at least ten thousand dollars ($10,000) per violation and not more
than fifty thousand dollars ($50,000) per violation, as assessed by
the California Health and Human Services Agency. Each disclosure of a
regulated record shall constitute a violation. The office of the
Attorney General shall take necessary action to enforce payment of
penalties assessed under this section. 
    66.   75.   If any provision of this
act or its application to any person or circumstance is held invalid,
the remainder of the act or the application of the provision to
other persons or circumstances is not affected.
    67.   76.   Nothing in this act shall
be interpreted to regulate conduct that takes place entirely outside
of the state.
    67.5.   77.   Nothing in this act shall
be interpreted to regulate the content, time, place, or manner of
any discussion between a prescriber and his or her patient, or a
prescriber and any person representing a prescription drug
manufacturer.
  SEC. 2.  Section 130202 of the Health and Safety Code is amended to
read:
   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 the 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) Upon receipt of a complaint under Part 2.7 (commencing with
Section 60) of Division 1 of the Civil Code, the office may assess an
administrative fine against any person or any provider of health
care, whether licensed or unlicensed, for any violation of that part.
Proceedings against any person or entity for a violation of Part 2.7
(commencing with Section 60) of Division 1 of the Civil Code shall
be held in accordance with the 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.
   (c) 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.
   (d) 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.