BILL ANALYSIS                                                                                                                                                                                                    






                             SENATE COMMITTEE ON HEALTH
                          Senator Ed Hernandez, O.D., Chair

          BILL NO:       SB 138
          AUTHOR:        Hernandez
          AMENDED:       March 13, 2013
          HEARING DATE:  April 3, 2013
          CONSULTANT:    Moreno

           SUBJECT  :  Confidentiality of medical information.
           
          SUMMARY :  Prohibits a health plan or insurer (collectively,  
          "carriers") from sending insurance communications relating to  
          sensitive services, as defined, unless the carrier has received  
          an authorization for insurance communications, as defined, from  
          an insured individual who is under 26 years of age and insured  
          as a dependent on another person's insurance policy. Prohibits  
          carrier from sending communications related to sensitive  
          services for insured dependents over the age of 26 if he/she has  
          submitted a nondisclosure request, as defined.

          Existing law:
          1.Establishes, under the federal Health Insurance Portability  
            and Accountability Act of 1996 (HIPAA), requirements relating  
            to the provision of health insurance, and the protection of  
            privacy of individually identifiable health information.

          2.Prohibits, under the state Confidentiality of Medical  
            Information Act, providers of health care, health care service  
            plans, or contractors, as defined, from sharing medical  
            information without the patient's written authorization,  
            subject to certain exceptions, including disclosure to a  
            probate court investigator, as specified. 

          3.Provides for regulation of health insurers by the California  
            Department of Insurance under the Insurance Code, and provides  
            for the regulation of health plans by the Department of  
            Managed Health Care pursuant to the Knox-Keene Health Care  
            Service Plan Act of 1975.
          
          This bill:
          1.Prohibits carriers from sending insurance communications  
            relating to sensitive services, as defined, unless the carrier  
            has received an authorization for insurance communications, as  
            defined, from an insured individual who is under 26 and  
            insured as a dependent on another person's insurance policy.  
                                                         Continued---



          SB 138 | Page 2




            Prohibits carriers from sending communications related to  
            sensitive services for insured dependents over the age of 26  
            if he/she has submitted a nondisclosure request, as defined.

          2.Requires carriers to comply with a confidential communications  
            request, as defined, regarding sensitive services from an  
            insured individual.

          3.Requires carriers to comply with a nondisclosure request, as  
            defined, or a confidential communications request from an  
            insured individual who states that disclosure of health  
            information will endanger the individual.  Prohibits carriers  
            from requiring an explanation as to the basis for the insured  
            individual's statement that disclosure will endanger the  
            individual.

          4.Permits the provider of health care to make arrangements with  
            the insured individual for the payment of benefit cost-sharing  
            and communicate that arrangement with the carrier.

          5.Prohibits carriers from conditioning enrollment or coverage in  
            the health plan or insurance policy or eligibility for  
            benefits on the provision of an authorization for insurance  
            communications.

          6.Defines a number of terms, including:
             a.   "Authorization for insurance communications" means  
               permission from the individual, that meets specified  
               requirements of existing law which specifies the medical  
               information and insurance transactions that may be  
               disclosed and the identity of the people to whom  
               disclosures are permitted as part of an insurance  
               communication.
             b.   "Confidential communications request" means a request by  
               an insured individual that insurance communications be  
               communicated by a specific method, such as by telephone,  
               e-mail, or in a covered envelope rather than postcard, or  
               to a specific mail or e-mail address or specific telephone  
               number, as designated by the insured individual.
             c.   "Insurance communication" means any communication from  
               the carrier to policyholders or insured individuals that  
               discloses individually identifiable medical information.  
               Insurance communication includes, but is not limited to,  
               explanation of benefits forms, scheduling information,  
               notices of denial, and notices of contested claims.
             d.   "Sensitive services" means specified health care  




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               services described in existing law (including services  
               related to HIV, family planning, drug and alcohol use, and  
               mental health) obtained by any patient who has reached the  
               minimum age specified for consenting to the service  
               specified in the section, including patients 18 years of  
               age and older.

           FISCAL EFFECT  :  This bill has not been analyzed by a fiscal  
          committee

           COMMENTS  :  
           1.Author's statement. When it comes to the sharing of patient  
            information for insured dependents, there is a lack of clear  
            definitions and clarity around requirements and restrictions  
            in existing state and federal law, there are different  
            regulations for different insurance products, there are not  
            standardized forms or processes, and there is an undue burden  
            on the insured dependent to opt-in to confidentiality  
            protections. This bill will bring clarity to the existing  
            patchwork of state and federal statutes and regulations  
            related to the sharing of patient information, and will  
            protect patient confidentiality for insured dependents  
            accessing services related to sexual and reproductive health,  
            HIV/AIDS, substance use and mental health care or any other  
            health care service when disclosure could cause harm.
            
          2.Federal health care reform.  On March 23, 2010, President  
            Obama signed the Affordable Care Act (ACA) (Public Law  
            111-148), as amended by the Health Care and Education  
            Reconciliation Act of 2010 (Public Law 111-152). Among other  
            provisions, the new law makes statutory changes affecting the  
            regulation of and payment for certain types of private health  
            insurance. Beginning in 2014, individuals will be required to  
            maintain health insurance or pay a penalty, with exceptions  
            for financial hardship (if health insurance premiums exceed  
            eight percent of household adjusted gross income), religion,  
            incarceration, and immigration status. Several insurance  
            market reforms are included in the new law, such as requiring  
            health plans and insurers to offer dependent coverage for  
            children up to age 26. 
               
          3.Federal and state laws regarding confidentiality.  Existing  
            state and federal law provides some protection of sensitive  
            health information for patients. For example: 
             a.   Adult patients in California have a right to keep health  




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               information confidential and decide whether and when to  
               share that information with their partners and parents. 
             b.   Adolescent patients in California have a right to keep  
               certain health information confidential and decide whether  
               and when to share that information with parents, including  
               information about sexual and reproductive health services,  
               drug treatment and most mental health counseling.
             c.   HIPAA and California confidentiality laws make an  
               exception to the general confidentiality rules above,  
               allowing providers and insurers to use and disclose  
               information for payment and health care operations  
               purposes. With such disclosures, HIPAA requires "reasonable  
               efforts" to limit them to the "minimum necessary" to  
               accomplish the intended purpose of the disclosure.
             d.   HIPAA allows patients to ask their carriers and  
               providers to send communications of protected health  
               information by alternate means (e.g. by phone) or to  
               alternate locations (e.g. a friend's address).  Carriers  
               and providers are required to accommodate "reasonable  
               requests" if as part of the request "the individual clearly  
               states that the disclosure of all or part of the  
               information could endanger the individual." California law  
               does not further define this right.
             e.   HIPAA allows patients to ask their carriers and  
               providers to restrict communications.  HIPAA permits but  
               does not require that carriers and providers accept these  
               requests.  California law does not further define this  
               right.
             f.   Federal and state insurance laws and regulations permit  
               many insurance communications, or may require certain  
               communications. For example, some types of insurance plans  
               are required to send explanation of benefits (EOBs) under  
               California law while others are not. 
          
          1.Confidentiality for individuals insured as dependents.  A July  
            2012 Guttmacher Institute report reviewed state-level  
            requirements related to confidentiality in private insurance.  
            The report assessed laws that can compromise confidentiality  
            through a number of different avenues. According to the  
            report, despite the widespread recognition of the importance  
            of maintaining patient confidentiality, billing and insurance  
            claims (most notably the practice of sending EOBs to a  
            policyholder whenever care is provided under his or her  
            policy) routinely violate confidentiality for anyone, often a  
            minor or a young adult, insured as a dependent on someone  
            else's policy. EOBs inform policyholders of claims made and  




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            actions taken in response to those claims, for anyone covered  
            under their policy. EOBs typically identify the individual who  
            received care, the health care provider and the type of care  
            obtained. They also include information on the amount charged  
            for the care, the amount reimbursed by the insurer and any  
            remaining financial obligation on the part of the policyholder  
            or patient. The report found provisions in the laws in almost  
            all states that lead to disclosure to a policyholder or other  
            third party of confidential health information for dependents  
            seeking sensitive health care services.
            
          2.Double referral.  This bill is double referred. Should it pass  
            out of this committee, it will be referred to the Senate  
            Judiciary Committee.

          3.Support.  Supporters, including the American Civil Liberties  
            Union, Los Angeles Trust for Children's Health, California  
            Adolescent Health Collaborative, California National  
            Organization for Women, California Primary Care Association,  
            California Partnership to End Domestic Violence, Center on  
            Reproductive Rights and Justice at UC Berkeley School of Law,  
            Physicians for Reproductive Health, Women's Community Clinic,  
            and National Center for Youth Law state that the inability to  
            guarantee confidential access to services can lead to harm -  
            some minors and adults may choose not to seek care for  
            sensitive services such as STDs, birth control, drug treatment  
            and mental health services because they fear a parent or  
            partner will find out. Further, supporters assert that  
            survivors of domestic violence may choose not to seek medical  
            or mental health services knowing an abusive spouse may have  
            access to this information, and that patients with private  
            insurance may instead choose to enroll in public health  
            insurance plans for sensitive services in order to avoid  
            possible privacy breaches, which will increase state costs.  
            Supporters state that this bill will close loopholes and  
            clarify definitions in existing laws to help insured  
            dependents feel safe and comfortable using their private  
            health insurance to access the health care services they need,  
            which is good for public health and will help save state  
            dollars. The American Congress of Obstetricians and  
            Gynecologists, District IX (California) writes that they  
            recently surveyed their membership and 53 percent of  
            responding physicians strongly agreed that a barrier to  
            screening for Chlamydia infection was the concern of patients  
            that billing statements could be sent home and seen by  




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            household members for policy holders.  

          4.Oppose. According to Association of California Life & Health  
            Insurance Companies, the bill gives no indication how the  
            opt-in process would work nor does it suggest how insurers  
            would comply when they have little initial contact with anyone  
            other than the primary policy holder. Additionally, this new  
            opt-in process, in and of itself, would require insurers to  
            invest a considerable amount of time and resources toward  
            upgrading all their IT systems so that they may fully comply  
            with the provisions of this bill.
            
           SUPPORT AND OPPOSITION  :
          Support:  California Family Health Council (sponsor)
                    ACCESS Women's Health Justice
                    American Civil Liberties Union
                    American Congress of Obstetricians and Gynecologists,  
                    District IX (California)
                    California Adolescent Health Collaborative
                    California National Organization for Women
                    California Partnership to End Domestic Violence
                    California Primary Care Association
                    California Women's Law Center
                    Center on Reproductive Rights and Justice at UC  
                    Berkeley School of Law
                    Citizens for Choice
                    Los Angeles Trust for Children's Health
                    National Center for Youth Law
                    Physicians for Reproductive Health
                    Planned Parenthood Affiliates of California
                    Privacy Rights Clearinghouse
                    The Women's Community Clinic

          Oppose:   Association of California Life & Health Insurance  
                    Companies
                    California Association of Health Plans


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