BILL ANALYSIS Ó
SENATE COMMITTEE ON PUBLIC SAFETY
Senator Loni Hancock, Chair S
2011-2012 Regular Session B
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SB 484 (Rubio)
As Amended March 21, 2011
Hearing date: April 26, 2011
Government Code
AA:mc
DEPARTMENT OF CORRECTIONS AND REHABILITATION:
ACCESS TO CONFIDENTIAL HEALTH CARE SERVICES CONTRACTS AND RATES
HISTORY
Source: Author
Prior Legislation: None
Support: American Federation of State, County and Municipal
Employees (AFSCME);
Taxpayers for Improving Public Safety
Opposition:Health Net
KEY ISSUE
SHOULD INDIVIDUAL MEMBERS OF THE LEGISLATURE AND THE LEGISLATIVE
ANALYST'S OFFICE HAVE THE SAME LEVEL OF ACCESS TO CONFIDENTIAL CDCR
HEALTH CARE SERVICES CONTRACTS, INCLUDING RATES, AS THE JOINT
LEGISLATIVE AUDIT COMMITTEE AND THE BUREAU OF STATE AUDITS, AS
SPECIFIED?
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PURPOSE
The purpose of this bill is to provide members of the
legislature and the Legislative Analyst's Office with the same
level of access to confidential California Department of
Corrections and Rehabilitation (CDCR) health care services
contracts, including rates, as the Joint Legislative Audit
Committee and the Bureau of State Audits, as specified.
Current law contains the California Public Records Act, enacted
as "the Legislature, mindful of the right of individuals to
privacy, finds and declares that access to information
concerning the conduct of the people's business is a fundamental
and necessary right of every person in this state." (Gov't.
Code § 6250 et seq.)
Current law generally provides that the Public Records Act does
not require disclosure of records of the Department of
Corrections and Rehabilitation "that relate to health care
services contract negotiations, and that reveal the deliberative
processes, discussions, communications, or any other portion of
the negotiations, including, but not limited to, records related
to those negotiations such as meeting minutes, research, work
product, theories, or strategy of the department, or its staff,
or members of the California Medical Assistance Commission, or
its staff, who act in consultation with, or on behalf of, the
department." (Gov't. Code § 6254.14(a).)
Current law provides that, except "for the portion of a contract
that contains the rates of payment, contracts for health
services entered into by CDCR or the California Medical
Assistance Commission on or after July 1, 1993, shall be open to
inspection one year after they are fully executed," as
specified. (Id.)
Current law provides that three years after a contract or
amendment is open to inspection
pursuant to this section, " the portion of the contract or
amendment containing the rates of payment shall be open to
inspection." (Id.)
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Current law further provides that, "(n)otwithstanding any other
provision of law, the entire contract or amendment shall be open
to inspection by the Joint Legislative Audit Committee and the
Bureau of State Audits. The Joint Legislative Audit Committee
and the Bureau of State Audits shall maintain the
confidentiality of the contracts and amendments until the
contract or
amendment is fully open to inspection by the public. () It is
the intent of the Legislature that confidentiality of health
care provider contracts, and of the contracting process as
provided
in this subdivision, is intended to protect the competitive
nature of the negotiation process, and shall not affect public
access to other information relating to the delivery of health
care services. . . ." (Id.)
This bill would add the Legislative Analyst's Office and members
of the Legislature to the law now authorizing the Joint
Legislative Audit Committee and Bureau of State Audits to
inspect an entire contract or amendment subject to these
provisions.
This bill would provide that a "request for information
described in this section made by a Member of the Legislature to
the Bureau of State Audits shall be deemed a request for
inspection by that Member pursuant to this paragraph."
This bill additionally would specifically provide that these
provisions supersede Evidence Code section 1060, pertaining to
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the privilege to refuse to disclose a trade secret.<1>
This bill would make an additional technical conforming change.
RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION
For the last several years, severe overcrowding in California's
prisons has been the focus of evolving and expensive litigation.
As these cases have progressed, prison conditions have
continued to be assailed, and the scrutiny of the federal courts
over California's prisons has intensified.
On June 30, 2005, in a class action lawsuit filed four years
earlier, the United States District Court for the Northern
District of California established a Receivership to take
control of the delivery of medical services to all California
state prisoners confined by the California Department of
Corrections and Rehabilitation ("CDCR"). In December of 2006,
plaintiffs in two federal lawsuits against CDCR sought a
court-ordered limit on the prison population pursuant to the
federal Prison Litigation Reform Act. On January 12, 2010, a
three-judge federal panel issued an order requiring California
to reduce its inmate population to 137.5 percent of design
capacity -- a reduction at that time of roughly 40,000 inmates
-- within two years. The court stayed implementation of its
ruling pending the state's appeal to the U.S. Supreme Court.
On Monday, June 14, 2010, the U.S. Supreme Court agreed to hear
the state's appeal of this order and, on Tuesday, November 30,
2010, the Court heard oral arguments. A decision is expected as
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<1> Evidence Code section 1060 states: "If he or his agent or
employee claims the privilege, the owner of a trade secret has a
privilege to refuse to disclose the secret, and to prevent
another from disclosing it, if the allowance
of the privilege will not tend to conceal fraud or otherwise
work injustice."
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early as this spring.
In response to the unresolved prison capacity crisis, in early
2007 the Senate Committee on Public Safety began holding
legislative proposals which could further exacerbate prison
overcrowding through new or expanded felony prosecutions.
This bill does not aggravate the prison overcrowding crisis
described above.
COMMENTS
1. Stated Need for This Bill
The author states:
Prison health care costs are currently skyrocketing.
The non-partisan LAO found "dramatic increase in
spending on adult prison health care: from $1.2
billion in 2005-2006 to $2.5 billion in 2008-2009."
Last year, California spent an average of $16,000 per
inmate (170,000 total) on health care services. The
LAO directly attributes the growing health care costs
to greater usage of contract medical services.
Despite the growing costs in prison health care, the
LAO and the Legislature are kept in the dark about
exactly how much is being spent on health contracts
because all health care contracts and records under
the Department of Corrections and Rehabilitation are
exempt from the Public Records Act.
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2. What This Bill Would Do
Current law provides that CDCR health care services contracts
are not open for public inspection until at least one year after
they are fully executed, and rates of payment are not open to
inspection until three years after the contract documents are
open for public inspection. The Joint Legislative Budget
Committee ("JLAC") and the Bureau of State Audits ("BSA") are
authorized, however, to inspect entire health care services
contracts or amendments prior to these documents becoming
available to the public. This bill would give the Legislative
Analyst's Office and members of the Legislature this same
authority.
3. Support
The American Federation of State, County and Municipal Employees
(AFSCME), which supports this bill, submits:
The Public records Act prevents the records of the
(CDCR) relating to health care services contract
negotiations from being disclosed until one year after
the contract is fully executed. This Act also
provides that the part of the contract that contains
the rates of payment is not open to inspection until
three years after it has been fully executed. The
(JLBC) and (BSA), however, are immediately able to
inspect the entirety of the contract or amendment.
(This bill) . . . would facilitate the Legislature's
ability to understand and monitor health care services
contracts made with CDCR. . . .
4. Opposition
Health Net, which opposes this bill, submits:
Health Net opposes SB 484, which could hamper the
ability of the state to achieve cost savings in the
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provision of health care services to prison inmates.
. . .
Health Net recently entered into a contract with the
California Prison Health Care Services to achieve
savings for the state by negotiating rates with
providers for the provision of health care services to
inmates receiving treatment outside of the prison
walls. Health Net is leveraging their existing
provider networks to secure these savings while
providing enhanced access to care and better control
over the utilization of health care services.
Current law, which this bill seeks to amend, is
patterned after a similar law that limits disclosure
of health care service rates in the Medi-Cal and
Health Families programs. These safeguards ensure
that health plans are able to secure the lowest
possible rates for health care delivered to the low
income Californians served by these programs. The
same can be said for rates Health Net negotiates with
medical providers to treat prison inmates.
Included in our contract are rate targets for various
regions of the state. Our concern is that if these
target rates become public Health Net will lose
leverage with health care providers to negotiate the
lowest possible rates, and the state will lose savings
they may have otherwise achieved.
We question the value of expanding access to these
contracts to anyone other than the State Auditor and
the Joint Legislative Audit Committee. These entities
are uniquely qualified to review contracts to ensure
that they are in the best interest of the state.
5. Considerations
Individual members of the Legislature and the LAO currently can
access CDCR health services contracts and rates the same as the
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public: they can obtain the contracts one year after they are
fully executed, and the rates three years after that. JLAC and
BSA, however, can obtain this information before it is open to
the public, although they are required to maintain
confidentiality under the documents are fully open for public
inspection. This bill seeks to give individual members of the
Legislature and the LAO this same authority to obtain these
documents prior to their becoming public, also while maintaining
confidentiality until public disclosure.
In considering this proposal, members of the Committee and the
author may wish to discuss the following considerations:
Would this bill assist the Legislature in controlling
the costs of prison health care?
Could this bill inadvertently have an adverse effect on
the ability of CDCR to negotiate lower health services
rates?
What would individual legislators and the LAO do with
these confidential documents?
How would individual legislators and the LAO differ from
JLAC or BSA in reviewing and analyzing these confidential
documents?
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