BILL ANALYSIS Ó
SB 1196
Page 1
Date of Hearing: June 12, 2012
ASSEMBLY COMMITTEE ON HEALTH
William W. Monning, Chair
SB 1196 (Ed Hernandez) - As Amended: April 10, 2012
SENATE VOTE : 35-0
SUBJECT : Claims data disclosure.
SUMMARY : Prohibits a contract in existence or issued, amended,
or renewed on or after January 1, 2013, between a health care
service plan (health plan), or health insurer (collectively
carriers), and a provider, including a provider of supplies,
from prohibiting, conditioning, or in any way restricting the
disclosure of claims data related to health care services
provided to an enrollee or subscriber of the health plan or
beneficiaries of any self-funded health coverage arrangement
administered by the carrier to a qualified entity, as defined.
Exempts provisions of this bill from Civil Code requirements
related to the disclosure of medical information and any other
provision of law.
EXISTING LAW :
1)Regulates health plans under the Knox-Keene Health Care
Service Plan Act of 1975 through the Department of Managed
Health Care and regulates health insurers under the Insurance
Code through the California Department of Insurance.
2)Prohibits contracts between carriers and a licensed hospital
or health care facility owned by a licensed hospital from
containing any provision that restricts the ability of the
carrier from furnishing information to subscribers, enrollees,
policyholders, or insureds concerning cost range of procedures
or the quality of services.
3)Provides hospitals at least 20 days in advance to review the
methodology and data, requires risk adjustment factors for
quality data, requires a disclosure on the carrier's Website
about the data and an opportunity for a hospital to provide a
link where the hospital's response to the data can be
accessed.
4)Prohibits a provider of health care, health plan, or
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contractor from disclosing medical information regarding a
patient of the provider of health care or an enrollee or
subscriber of a health plan without first obtaining an
authorization, with specified exceptions including when
information is disclosed to public agencies, clinical
investigators, including health care research organizations
for bona fide research purposes. Prohibits this information
from being disclosed in a way that would reveal the identity
of a patient or violate existing law, as specified.
5)Makes Medicare data, under federal law, available for the
evaluation of the performance of providers of services and
suppliers, to qualified entities, defined as a public or
private entity that is qualified as determined by the
Secretary of the federal Department of Health and Human
Services (HHS), to use claims data to evaluate the performance
of providers of services and suppliers on measures of quality,
efficiency, effectiveness, and resource use, and agrees to
meet specified requirements and other requirements as the HHS
Secretary may specify, such as ensuring security of data.
6)Requires, under federal regulation, a qualified entity and any
contractors to comply with data requirements in its data use
agreement with the Centers for Medicare and Medicaid Services
(CMS). Requires the data use agreement to require the
qualified entity to maintain privacy and security protocols
and ban the use of data for purposes other than those set out
in regulation, and inform each Medicare beneficiary if
identifiable data has been inappropriately accessed.
7)Requires, under federal regulation, a qualified entity to
share measures, measurement methodologies, and measure results
with providers and suppliers at least 60 calendar days before
making the reports public. Requires a qualified entity to
inform providers and suppliers of the date after which the
reports will be made public, and if necessary will include
information related to the status of any data or error
correction requests, regardless of their status. If a
provider or supplier has a data or error correction request
outstanding at the time the reports become public, the
qualified entity must, if feasible, post publicly the name of
the appealing provider or supplier and the category of the
appeal request.
FISCAL EFFECT : According to the Senate Appropriations
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Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, advancing
health information access and transparency is a goal of the
Patient Protection and Affordable Care Act (ACA), which
includes a number of provisions to incentivize quality
measurement and reporting as well as enabling more informed
consumer decision-making. Under the ACA and final
implementing regulations issued in December 2011, the vast
Medicare claims database will be made available for use in
producing public reports on the performance of health care
providers. The data will be provided to organizations
certified by CMS, called data aggregators, which will generate
these performance reports. This bill will help ensure
successful implementation of the ACA data access program in
California by removing barriers to accessing data and
authorizing the reporting of insurance claims data to any
CMS-certified entity despite plan-provider contractual
provisions that prohibit or restrict the disclosure of such
data.
2)TRANSPARENCY INITIATIVES . Transparency in health care has
been a focus over the last decade with the rise of more
consumer driven health coverage. Government and private
sector initiatives have been developed with the goals of
advancing higher quality health care and controlling the rapid
growth of health care costs. The health care market is unique
with a variety of intermediaries involved in decision making
which make it challenging to determine the effect transparency
and reporting can have on the market. It is believed that
despite these complications price transparency may lead to
more efficient outcomes and lower prices. Over 30 states,
including California, have passed legislation affecting
disclosure, transparency, reporting, and/or publication of
health care, provider, and hospital charges and fees. Several
states have established databases that collect health
insurance claims information from all health care payers into
statewide information repositories, known as "all payer clams
databases." Some states have created programs publicly
posting prescription drug prices and hospital charges. At the
same time, some insurance companies have developed patient
portals that make available cost and quality information on a
range of services such as prescription drugs, outpatient and
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inpatient medical procedures and services, and dental
treatment. The federal government has also pursued public
reporting and transparency initiatives in the Medicare
program.
The California Physician Performance Initiative (CPPI), begun in
2006, has developed a system to measure and report the quality
of patient care that is provided by individual physicians in
California. This measurement and reporting initiative,
taking place in phases over several years, and with the
involvement of many stakeholders, informs the development of
comprehensive, evidence-based national standards to measure
the quality and cost of care provided by individual
physicians. In 2006, CMS provided funding to aggregate
Medicare fee-for-service and commercial claims data to
calculate and report quality measures as part of a national
effort to establish physician performance standards. The
six-site pilot project was known as the Better Quality
Initiative. The voluntary addition of data from California's
three largest commercial preferred provider organizations
(Anthem Blue Cross, Blue Shield of California, and United
Healthcare) provided a large enough pool to test the
reliability of an initial set of 15 quality measures as well
as methods for attributing claims data of patient care
provided in 2007.
According to a September 13, 2010 California Healthline article,
the California Medical Association (CMA) filed a class-action
lawsuit in 2010 claiming that Blue Shield of California
created an online physician rating program that could harm
doctors and their patients by promoting inaccurate
information. The article states that Blue Shield worked with
the Pacific Business Group on Health to evaluate the doctors
using data collected by the CPPI. The CMA sought a court
order to stop the program and inform state residents about
problems with the data. The case was dismissed by an Alameda
County court.
3)ACA OPPORTUNITIES . The ACA expands health coverage to
Americans through a variety of mechanisms including private
health insurance market reforms, the creation of Health
Benefit Exchanges, and expanding the Medicaid program. Among
the ACA's many provisions is the inclusion of a framework for
making Medicare claims data available to qualified entities
for the evaluation of the performance of providers of services
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and suppliers. A qualified entity must submit to the HHS
Secretary a description of the methodologies that will be used
to evaluate the performance of providers of services and
suppliers using such data, if available standard measures, or
alternative measures that are determined to be more valid,
reliable, responsive to consumer preferences, cost-effective,
or relevant to dimensions of quality and resource use not
addressed by standard measures. A qualified entity must
include claims data from other sources, and make available the
data, upon request, to providers of services and suppliers.
Any report issued by a qualified entity using this data must
include an understandable description of the measures which
shall include quality measures, risk adjustment methods,
physician attribution methods, data specifications and
limitations, and sponsors so that consumers, providers,
suppliers and others can assess the reports.
The reports must be available confidentially to any provider of
services or supplier to be identified in such report, prior to
the public release of such report, and provide an opportunity
to appeal and correct errors. The reports must only include
information on a provider of services or supplier in an
aggregate form as determined appropriate by the HHS Secretary.
According to the implementing regulations, the CMS believes
the sharing of Medicare data with qualified entities and the
resulting reports will be an important driver of improving
quality and reducing costs in Medicare, as well as for the
health care system in general. CMS believes this will
increase the transparency of provider and supplier performance
while ensuring Medicare beneficiary privacy.
4)SUPPORT . Supporters include Insurance Commissioner Dave
Jones, business associations, insurers, and organizations that
purchase health insurance for their members. Supporters all
agree that increasing transparency and giving consumers access
to data on health care costs will help in making more informed
decisions. The Insurance Commissioner writes in support that
this bill will help ensure successful implementation of the
ACA's data access program in California by preventing carriers
from restrictions of this particular data sharing that
currently some insurer/plan-provider contracts forbid and that
there is evidence that this is a growing trend. The San Diego
Electrical Pension Trust expresses in their support that
private reporting of only selected data has been proven
ineffective and contributes greatly to the exorbitant
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escalation of cost in the health care delivery system in
California. The Small Business Majority (SBM) emphasizes that
California's small businesses are being hit hard with
skyrocketing health care costs that impact their ability to
create jobs and grow the economy. SBM continues that the
ACA's health care reforms will improve access for small
businesses to affordable health care and ensure their health
care dollars are being spent in the most efficient way. The
Pacific Business Group on Health supports this bill because
claims data contain standardized information on sizeable
patient populations with little effort from providers. These
data can provide information preventing unnecessary
hospitalizations and an average price an insured patient would
pay for knee replacement surgery.
5)OPPOSE UNLESS AMENDED . The California Hospital Association
(CHA) requests amendments to make this bill consistent with SB
751 (Gaines), Chapter 244, Statutes of 2011. According to
CHA, SB 751 allows the hospital to review the data and
methodology before it is released to ensure accuracy and
requires risk adjustment.
6)PREVIOUS LEGISLATION .
a) SB 751 prohibits contracts between carriers and a
licensed hospital or health care facility owned by a
licensed hospital from containing any provision that
restricts the ability of the carrier from furnishing
information to subscribers, enrollees, policyholders, or
insureds concerning cost range of procedures or the quality
of services. Provides hospitals at least 20 days in
advance to review the methodology and data developed and
compiled by the carriers, requires risk adjustment factors
for quality data, requires a disclosure on the carrier's
Web site about the data developed and compiled by the
carriers and an opportunity for a hospital to provide a
link where the hospital's response to the data can be
accessed.
b) AB 2389 (Gaines) of 2009 would have prohibited a
contract between a health facility and a carrier from
containing a provision that restricts the ability of the
carrier to furnish information on the cost of procedures or
health care quality information to carrier enrollees. AB
2389 died in the Assembly on Concurrence.
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c) SB 1300 (Corbett) of 2008 would have prohibited a
contract between a health care provider and a health plan
from containing a provision that restricts the ability of
the health plan to furnish information on the cost of
procedures or health care quality information to plan
enrollees. SB 1300 died on the Senate Floor.
d) AB 2967 (Lieber) of 2007, would have established a
Health Care Cost and Quality Transparency Committee to
develop and recommend to the Secretary of the Health and
Human Services Agency a health care cost and quality
transparency plan, and would have made the Secretary
responsible for the timely implementation of the
transparency plan. AB 2967 died in the Senate
Appropriations Committee on the inactive file.
e) AB 1296 (Torrico), Chapter 698, Statutes of 2007,
requires a health plan or contractor offering health
benefits to California Public Employees' Retirement System
(CalPERS) members and annuitants to disclose to CalPERS the
cost, utilization, actual claim payments, and contract
allowance amounts for health care services rendered by
participating hospitals to each member and annuitant.
Requires this information to be deemed confidential
information.
7)POLICY CONCERNS .
a) It is not clear why this bill needs to include a
provision in Section 1 that exempts the section from a
Civil Code requirement related to the disclosure of medical
information. The Civil Code already specifies an exemption
from some of its requirements that appears to apply for the
purposes described in this bill. However, there are other
provisions of this code which should apply to this bill
such as requirements to get a permission of a patient prior
to a disclosure of medical information for the purposes of
marketing. The committee may wish to suggest the
"notwithstanding section 56.10 of the Civil Code" phrase be
deleted from this bill.
b) It is not clear why this bill needs to include a
provision in Section 2 that exempts the section from any
other provision of law. This creates a broad exemption
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that has not been justified. The committee may wish to
suggest the "notwithstanding any other provision of law"
phrase be deleted from this bill.
c) The ACA includes requirements on qualified entities
related to privacy and security of Medicare claims data.
The committee may wish to amend this bill to ensure that
those same requirements and procedures apply in the case of
non-Medicare claims data that could be disclosed with the
successful passage of the this bill.
d) Provider and provider of supplies are not defined in
this bill. The implementing federal regulations define the
terms in this way: provider means a hospital, a critical
access hospital, a skilled nursing facility, a
comprehensive outpatient rehabilitation facility, a home
health agency, or a hospice that has in effect an agreement
to participate in Medicare, or a clinic, a rehabilitation
agency, or a public health agency that has in effect a
similar agreement but only to furnish outpatient physical
therapy or speech pathology services, or a community mental
health center that has in effect a similar agreement but
only to furnish partial hospitalization services, and
supplier means a physician or other practitioner, or an
entity other than a provider, that furnishes health care
services under Medicare. The committee may wish to amend
this bill to define these terms for the purposes of this
bill.
8)AUTHOR'S AMENDMENT . The ACA includes requirements on
qualified entities related to procedures for ensuring
providers and suppliers have the opportunity to review data
and request error corrections prior to public reporting. The
author has agreed to accept an amendment to ensure that those
same procedures are followed with regard to reports generated
based on the non-Medicare claims data that could be disclosed
with the successful passage of this bill. This amendment is
in response to concerns raised by CHA.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees,
AFL-CIO
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Blue Shield of California
California Department of Insurance
California Professional Firefighters
California Public Employees' Retirement System
California School Employees Association, AFL-CIO
Pacific Business Group on Health
San Diego Electrical Pension Trust
Small Business California
Small Business Majority
Opposition
None on file.
Analysis Prepared by : Teri Boughton / HEALTH / (916) 319-2097