BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                                  SB 138
                                                                  Page  1

          SB 138 (Ed Hernandez)
          As Amended September 3, 2013
          Majority vote

           SENATE VOTE  :26-11  
           JUDICIARY           7-3         HEALTH              13-5        
          |Ayes:|Wieckowski, Alejo, Chau,  |Ayes:|Pan, Ammiano, Atkins,     |
          |     |Dickinson, Garcia,        |     |Bonilla, Bonta, Chesbro,  |
          |     |Muratsuchi, Stone         |     |Gomez,                    |
          |     |                          |     |Roger Hernández,          |
          |     |                          |     |Lowenthal, Mitchell,      |
          |     |                          |     |Nazarian, V. Manuel       |
          |     |                          |     |Pérez, Wieckowski         |
          |     |                          |     |                          |
          |Nays:|Wagner, Gorell,           |Nays:|Maienschein, Mansoor,     |
          |     |Maienschein               |     |Nestande, Wagner, Wilk    |
          |     |                          |     |                          |
           APPROPRIATIONS              12-5                                  

          |Ayes:|Gatto, Bocanegra,         |
          |     |Bradford,                 |
          |     |Ian Calderon, Campos,     |
          |     |Eggman, Gomez, Hall,      |
          |     |Holden, Pan, Quirk, Weber |
          |     |                          |
          |     |                          |
          |Nays:|Harkey, Bigelow,          |
          |     |Donnelly, Linder, Wagner  |
          |     |                          |
          |     |                          |
          SUMMARY  :  Requires health care service plans (health plans) and  
          health insurers to take specified steps to protect the  
          confidentiality of an insured individual's medical information  


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          for purposes of sensitive services or if disclosure will  
          endanger an individual, as specified.  Specifically,  this bill  : 

          1)Requires health plans and health insurers to take the  
            following steps to protect the confidentiality of a  
            subscriber's/enrollee's or insured's medical information on or  
            after January 1, 2015:

             a)   Permit a subscriber/enrollee or insured to request, and  
               must accommodate requests for, communication in the form  
               and format requested by the individual, if it is readily  
               producible in the requested form and format, or at  
               alternative locations, if the subscriber/enrollee or  
               insured clearly states either that the communication  
               discloses medical information or provider name and address  
               relating to receipt of sensitive services or that  
               disclosure of all or part of the medical information or  
               provider name and address could endanger him or her.

             b)   Authorizes health plans and health insurers to require  
               the subscriber/enrollee or insured to make a request for a  
               confidential communication specified in 1) a) above in  
               writing or by electronic transmission.

             c)   Authorizes health plans and health insurers to require  
               that confidential communications request contain a  
               statement that the request pertains to either medical  
               information related to the receipt of sensitive services or  
               that disclosure of all or part of the medical information  
               could endanger the subscriber/enrollee or insured.   
               Prohibits a health plan and health insurer from requiring  
               an explanation as to the basis for a  
               subscriber's/enrollee's or insured's statement that  
               disclosure could endanger the subscriber/enrollee or  

             d)   Indicates that the confidential communications request  
               is valid until the subscriber/enrollee or insured submits a  
               revocation of the request, or a new confidential  
               communication request is submitted.

             e)   Specifies that a confidential communications request  
               must be implemented by the health plan and health insurer  
               within seven calendar days of the receipt of an electronic  


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               transmission or telephonic request within 14 calendar days  
               of receipt by first class mail.  Requires the health plan  
               and health insurer to acknowledge receipt of the  
               confidential communications request and advise the  
               subscriber/enrollee or insured of the status of  
               implementation of the request if a subscriber/enrollee or  
               insured contacts the insurer.

          2)Authorizes a provider of health care to make arrangements with  
            the subscriber/enrollee or insured for the payment of benefit  
            cost sharing and communicate that arrangement with the health  
            plan and health insurer.

          3)Prohibits a health plan or health insurer from conditioning  
            enrollment or coverage on the waiver of rights, as specified.

          4)Provides that to the extent that the Knox-Keene Health Care  
            Service Plan Act of 1975 and the provisions of the Insurance  
            Code that apply to health insurers conflicts with this bill's  
            provisions, this bill controls.

          5)Defines the following terms, including:

             a)   Confidential communications request is a request by a  
               subscriber/enrollee or insured that health plan/health  
               insurance communications containing medical information be  
               communicated at specific mail or email address or specific  
               telephone number, as designated by the subscriber/enrollee  
               or insured.

             b)   Endanger means that the subscriber/enrollee or insured  
               fears that disclosure of his or her medical information  
               could subject the subscriber/enrollee or insured to  
               harassment or abuse.

             c)   Sensitive services means all health care services that  
               minors can consent to, including: mental health treatment  
               or counseling services; residential shelter services;  
               medical care related to the prevention or treatment of  
               pregnancy, as specified; diagnosis or treatment related to  
               infectious, contagious, or communicable disease; prevention  
               of sexually transmitted diseases, as specified; and human  
               immunodeficiency virus (HIV) services, obtained by a  
               patient at or above the minimum age specified for  


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               consenting to the service specified.

          6)States that it is the intent of the Legislature to incorporate  
            Health Insurance Portability and Accountability Act (HIPAA)  
            standards into state law and to clarify the standards for  
            protecting the confidentiality of medical information in  
            insurance transactions.

          7)Includes a definition of medical information in the Insurance  
            Code that conforms to a similar definition found in the Health  
            and Safety Code.  Makes other technical, conforming, and  
            clarifying changes.

           FISCAL EFFECT  :  According to the Assembly Appropriations  

          1)One-time costs for initial review of health plan compliance in  
            the range of $500,0000 (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.  

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

           COMMENTS  :  The California Family Health Council is the sponsor  
          of this bill.  According to the author, 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.


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          The California Family Health Council, the Privacy Rights  
          Clearinghouse, the American Civil Liberties Union of California,  
          all 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 sexually  
          transmitted diseases, birth control, drug treatment, and mental  
          health services for fear a parent or partner will find out.   
          Survivors of domestic violence may choose not to seek medical or  
          mental health services knowing an abusive spouse may have access  
          to this information.  In addition, there are concerns about  
          confidentiality protections, patients with private insurance may  
          choose to enroll in public programs in order to avoid possible  
          privacy breaches, and this unnecessarily shifts health care  
          costs to the state. 

          The Association of California Life and Health Insurance  
          Companies and the California Association of Health Plans  
          indicate that with the most recent amendments, they are removing  
          their opposition.

           Analysis Prepared by  :    Rosielyn Pulmano / HEALTH / (916)  

                                                                FN: 0002164