BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 138
                                                                  Page  1

          Date of Hearing:   August 14, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                  SB 138 (Hernández) - As Amended:  August 6, 2013 

          Policy Committee:                             HealthVote:13-5
                       Judiciary                        Vote: 7-3

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill requires health plans and insurers to accommodate an  
          individual's wishes for confidential communication related to  
          "sensitive services," as defined, for persons insured as  
          dependents on another individuals' policy, as well as an  
          individuals' wishes for non-disclosure of certain insurance  
          communications in cases where an insured individual specifies  
          disclosure will endanger them.

           FISCAL EFFECT  

          One-time costs for initial review of health plan compliance in  
          the range of $500,000 (Managed Care Fund) to the Department of  
          Managed Health Care (DMHC).  Costs to the California Department  
          of Insurance (CDI) should be minor and absorbable, as they  
          appear to rely on insurance plan attestation of compliance  
          rather than reviewing privacy policies and plan contracts for  
          compliance.  

          Potential increase in ongoing enforcement costs to CDI and DMHC,  
          not likely to exceed $100,000 total annually (Insurance  
          Fund/Managed Care Fund). 

           COMMENTS  

           1)Rationale  . This bill intends to 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. Studies indicate, for  
            example, minors and young adults delay or forgo needed  








                                                                  SB 138
                                                                  Page  2

            reproductive health care because of concerns about  
            confidentiality. This bill mirrors and strengthens existing  
            federal protections related to an individual's wishes for  
            confidentiality of their medical information. Supporters of  
            this bill indicate it will allow individuals to access  
            services without worrying that parents or spouses will be  
            notified.  This bill is sponsored by the California Family  
            Health Council.

           2)Background  .  A significant body of federal law and state law  
            protect privacy of an individual's personal health information  
            (PHI).  However, PHI related to dependents is often included  
            in insurance communications such as Explanation of Benefits  
            (EOB) forms that are sent to the policyholder as a  
            notification of paid claims.  EOB forms, for example, may list  
            specific services that insured individuals may wish to keep  
            confidential from the policyholder.  State law allows minors  
            to consent to certain types of medical care, such as care  
            related to the prevention or treatment of pregnancy.  Federal  
            law now allows children to remain on their parent's policies  
            until age 26, which supporters indicate is another impetus for  
            strengthening confidentiality protections around certain  
            services. 

           3)Concerns  . Although significant amendments have been taken that  
            addressed some of their concerns, the California Association  
            of Health Plans (CAHP) and the Association of California Life  
            & Health Insurance Companies (ACLHIC) still have significant  
            concerns related to implementation and workability details.   
            They indicate discussions are ongoing with the bill's author  
            to resolve outstanding issues. 

           Analysis Prepared by  :    Lisa Murawski / APPR. / (916) 319-2081