BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 332|
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THIRD READING
Bill No: SB 332
Author: Emmerson (R) and DeSaulnier (D)
Amended: 5/16/13
Vote: 27 - Urgency
SENATE HEALTH COMMITTEE : 9-0, 6/19/13
AYES: Hernandez, Anderson, Beall, De León, DeSaulnier, Monning,
Nielsen, Pavley, Wolk
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : California Health Benefit Exchange: records
SOURCE : Author
DIGEST : This bill makes contracts and rates of payment under
those contracts of the California Health Benefit Exchange (known
as Covered California) open to public inspection under the
California Public Records Act (PRA) except for health plan
contracts and their rates, which are made public in three and
four years respectively. This bill makes the impressions,
opinions, recommendations, meeting minutes, research, work
product, theories, strategy of the board or the staff of Covered
California, or records that provide instructions, advice, or
training to employees subject to the PRA by deleting an
exemption from disclosure for these items.
ANALYSIS : Existing law:
1. Establishes Covered California in state government, and
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specifies the duties and authority of Covered California.
Requires Covered California be governed by a board that
includes the Secretary of the Health and Human Services
Agency (HHSA) and four members with specified expertise who
are appointed by the Governor and the Legislature.
2. Requires the Covered California board, in the course of
selectively contracting for health care coverage offered to
individuals and small employers through Covered California,
to seek to contract with health plans and insurers so as to
provide health care coverage choices that offer the optimal
combination of choice, value, quality, and service.
3. Requires, under the PRA, public records of state and local
agencies be made open to public inspection, as specified,
unless a record is exempt from disclosure.
4. Exempts the following records of Covered California from
disclosure under the PRA that reveal any of the following
A. The deliberative processes, discussions,
communications, or any other portion of the negotiations
with entities contracting or seeking to contract with
Covered California, entities with which Covered California
is considering a contract, or entities with which Covered
California is considering or enters into any other
arrangement under which Covered California provides,
receives, or arranges services or reimbursement; and,
B. The impressions, opinions, recommendations, meeting
minutes, research, work product, theories, or strategy of
the board of Covered California or its staff, or records
that provide instructions, advice, or training to
employees.
5. Requires contracts entered into by Covered California to be
open to inspection one year after their effective dates,
except for the portion of a contract that contains the rates
of payment. Requires, if a contract entered into is amended,
the amendment to be open to inspection one year after the
effective date of the amendment.
This bill:
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1. Requires Covered California to make public contracts it
enters into by deleting an exemption in existing law that
only allows contracts to be open to inspection one year after
the effective date of the contract.
2. Continues the existing exemption from public disclosure for
health plan contracts for one year, except for the portion of
health plan contracts that contain the rates of payment.
Requires the portion of the contract with a carrier
containing the rate of payment to be open to inspection three
years after the contract is open to inspection.
3. Makes the records that reveal the impressions, opinions,
recommendations, meeting minutes, research, work product,
theories, or strategy of the board or its staff, or records
that provide instructions, advice, or training to employees
subject to the PRA by deleting the exemption in existing law.
4. Makes the entire contract with Covered California and its
participating carriers, or amendments to those contracts,
open to inspection by the Joint Legislative Audit Committee.
(JLAC). Requires JLAC to maintain the confidentiality of the
contracts and amendments until the contracts or amendments to
a contract are open to inspection under the provisions of
this bill.
Background
According to the Senate Health Committee analysis, in May 2013,
the Associated Press (AP) published a story entitled "California
Exchange Granted Secrecy" stating the implementing legislation
gave Covered California the authority to keep all contracts
private for a year and the amounts paid secret indefinitely,
potentially shielding the public from seeing how hundreds of
millions of dollars are spent. The story stated the indefinite
ban on releasing rates of pay to companies and individuals
receiving contracts also goes beyond exemptions for other state
health programs, such as Healthy Families, which withholds rates
of pay from disclosure for up to four years, but not
permanently. According to the story, in response to an AP PRA
request, HHSA released information on a dozen competitively bid
contracts issued since early 2011, which included $14 million
for a 19-month contract with Ogilvy Public Relations for
marketing and other services; $400,000 for PriceWaterhouse
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Coopers for a four-month deal developing a small business
program; and $327 million for a five-year deal with consulting
giant Accenture to develop a web portal and enrollment system
for those who will seek coverage. Those contracts also are
accessible on the HHSA's Web site, along with about two dozen
requests for services HHSA has published. But the AP story
states it's not clear how many contracts HHSA has executed, for
how much or with whom.
Prior Legislation
SB 900 (Alquist, Chapter 659, Statutes of 2010) establishes
Covered California as an independent public entity within state
government, and requires Covered California to be governed by a
board composed of the Secretary of HHSA, or his/her designee,
and four other members appointed by the Governor and the
Legislature who meet specified criteria.
AB 1602 (John A. Pérez, Chapter 655, Statutes of 2010) specifies
the powers and duties of Covered California relative to
determining eligibility for enrollment in the Covered California
and arranging for coverage under health plans.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 7/2/13)
California Chronic Care Coalition
California Common Cause
Health Access California
ARGUMENTS IN SUPPORT : Health Access California (HAC) writes
to narrow the circumstances under which Covered California would
be permitted to exclude from public scrutiny various contracts.
HAC writes that it supported the Covered California implementing
legislation, but at that time, it understood the provisions of
AB 1602 to provide that the health plans contracts would be
exempt from PRA, and it did not envision the heavy reliance
Covered California on contracts, particularly during these
start-up years. HAC states that, in reviewing the enabling
statute for Covered California, it was surprised to discover
that the enabling statute thus excluded from public scrutiny
numerous contracts that would have been public if another state
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agency had been involved. HAC states its view and recollection
is that this is inadvertent, and this bill rightly corrects the
drafting error by narrowly specifying the circumstances under
which Covered California contracts, including health contracts
and rates, can be excluded from public scrutiny.
California Common Cause writes that this bill promotes
transparency and states the Covered California should be held to
the same disclosure and transparency standards as similar
agencies, such as the Healthy Families Program.
JL:k 7/2/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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