BILL ANALYSIS                                                                                                                                                                                                    Ó


          |SENATE RULES COMMITTEE            |                       SB 1182|
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                                 UNFINISHED BUSINESS

          Bill No:  SB 1182
          Author:   Leno (D)
          Amended:  8/27/14
          Vote:     21

           SENATE HEALTH COMMITTEE  :  7-1, 4/24/14
          AYES:  Hernandez, Beall, De León, DeSaulnier, Evans, Monning,  
          NOES:  Morrell
          NO VOTE RECORDED:  Nielsen

           SENATE APPROPRIATIONS COMMITTEE  :  5-2, 5/23/14
          AYES:  De León, Hill, Lara, Padilla, Steinberg
          NOES:  Walters, Gaines

           SENATE FLOOR  :  21-12, 5/28/14
          AYES: Beall, Block, Corbett, De León, DeSaulnier, Evans,  
            Galgiani, Hancock, Hernandez, Hill, Hueso, Jackson, Leno,  
            Lieu, Liu, Mitchell, Monning, Padilla, Pavley, Steinberg, Wolk
          NOES:  Anderson, Berryhill, Correa, Fuller, Gaines, Huff,  
            Knight, Morrell, Nielsen, Vidak, Walters, Wyland
          NO VOTE RECORDED:  Calderon, Cannella, Lara, Roth, Torres,  
            Wright, Yee

           ASSEMBLY FLOOR  :  Not available

           SUBJECT  :    Health care coverage: claims data

            SOURCE  :     California Labor Federation 
                       UNITE HERE


                                                                    SB 1182

           DIGEST  :    This bill requires health plans and insurers to share  
          specified data with purchasers that have 1,000 or more enrollees  
          or that are multiemployer trusts.

           Assembly Amendments  revise and recast the provisions of this  
          bill by deleting provisions requiring health plans and insurers  
          to submit to regulators for rate review of any large group plan  
          contract or policy rate increases that exceed 5% of the prior  
          year's rate and instead require a health care service plan or  
          health insurer to provide deidentified claims data to a large  
          group purchaser that requests the information and meets  
          specified conditions, as specified.

           ANALYSIS  :    

          This bill:  

          1. Requires a health plan or insurer annually to provide  
             deidentified claims data at no charge to a large group  
             purchaser upon request, if the purchaser is able to  
             demonstrate its ability to comply with state and federal  
             privacy laws and is either an employer with enrollment of  
             greater than 1,000 covered lives (at least 500 of which are  
             enrolled with the health plan or insurer) or a multiemployer  
             trust with enrollment of greater than 500 lives (at least 250  
             of which are enrolled with the health plan or insurer).   
             Requires health plans and insurers to obtain a determination  
             by a qualified statistician that the claims data do not  
             provide a reasonable basis from which to identify an  
             individual.  Allows a health plan to provide the claims data  
             in an aggregated form as necessary to comply with state and  
             federal privacy laws.

          2. As an alternative to providing claims data under #1) above,  
             requires a health plan or insurer to provide:  deidentified  
             aggregated data sufficient for the purchaser to compare costs  
             of similar services from other health plans or insurers; and  
             deidentified aggregated patient level data that includes  
             demographics and encounter data, including data used to  
             experience rate the group, as specified.  Requires the health  
             plan or insurer, for purposes of this requirement, to obtain  
             a formal determination, documented in writing, from a  


                                                                   SB 1182

             qualified statistician that the shared data do not provide a  
             reasonable basis from which to identify an individual.  

          3. Provides that data that a statistician is unable to determine  
             has been deidentified shall not be shared under this bill.  

          4. Makes the information shared not subject to public  
             availability, as specified.  Deems data shared under this  
             bill confidential information that shall not be shared by  
             state regulators and is exempt from disclosure under the  
             California Public Records Act.  Prohibits health plans and  
             insurers from disclosing their contracted rates with  
             providers to purchasers under this bill.

          The author's office states that the rising cost of health care  
          is a major concern for employers in California, and the lack of  
          transparency in pricing for the large group market has  
          contributed to uncontrolled cost increases for large employers  
          and union trusts.  This bill is intended to bring transparency  
          to this market for purchasers in an effort to control costs.

          According to the Medical Expenditure Panel Survey (MEPS), a  
          survey of employers conducted by the United States Census Bureau  
          that collects information on employer-sponsored health  
          insurance, premiums for employer-based coverage have increased  
          significantly over the past decade.  MEPS data from 2012 show  
          the average annual premium for individual private sector  
          employer coverage in California is $5,422, an 85% increase since  
          2002.  For family coverage, the average premium was $15,898, a  
          90% increase since 2002.  For comparison, prices for goods and  
          services increased 27.6% during this period, according to the  
          Bureau of Labor Statistics' Consumer Price Index.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

          According to the Assembly Appropriations Committee:

             Enforcement costs of $350,000 for the first two years, and  
             $100,000 ongoing, to address complaints and staff trials  


                                                                    SB 1182

             regarding alleged violations to the Department of Managed  
             Health Care (Managed Care Fund).

             Enforcement costs to the California Department of Insurance  
             are likely to be minor and absorbable (Insurance Fund).

             Unknown cost pressure to the California Public Employees'  
             Retirement System, potentially exceeding $100,000, for the  
             provision of health benefits, assuming costs of compliance  
             are passed on to large-group customers in the form of a  
             general increase in administrative costs (General  

           SUPPORT  :   (Verified  8/29/14)

          California Labor Federation (co-source)
          Teamsters (co-source)
          UNITE HERE (co-source)
          California Alliance of Retired Americans
          California Conference Board of the Amalgamated Transit Union
          California Conference of Machinists
          California Department of Insurance
          California-Nevada Conference of Operating Engineers 
          California Nurses Association
          California Physical Therapy Association
          California Professional Firefighters
          California Retired Teachers Association
          California School Employees Association
          California Teachers Association
          California Teamsters Public Affairs Council 
          City and County of San Francisco
          Communication Workers of America, District 9, AFL-CIO
          Congress of California Seniors
          Engineers and Scientists of CA, IFPTE Local 20, AFL-CIO
          Federated Indians of Graton Rancheria
          Health Access
          Health Care for All California
          International Longshore and Warehouse Union
          Professional and Technical Engineers, IFPTE Local 21, AFL-CIO
          Sailors' Union of the Pacific
          San Diego Electrical Health and Welfare Trust


                                                                    SB 1182

          SEIU California
          State Building and Construction Trades Council
          United Auburn Indian Community
          Utility Workers Union of America, Local 132
          Yocha Dehe Wintun Nation

           ARGUMENTS IN SUPPORT  :    The California Labor Federation (Labor  
          Fed), a co-sponsor of this bill, writes that rising health care  
          costs are taking a toll on employers, workers, and union trust  
          funds.  The Labor Fed argues every dollar that large purchasers  
          have to put toward health coverage is a dollar that comes out of  
          workers' pockets, with employers increasingly shifting costs to  
          workers by increasing cost sharing and the use of  
          high-deductible plans.  The Labor Fed argues that this bill's  
          requirement for health plans to disclose claims data to large  
          purchasers will help those purchasers understand health care  
          cost drivers, institute cost savings programs, and bargain  
          effectively with health plans.  The California Teachers  
          Association, in support, argues the data provided under this  
          bill will be an essential tool in the bargaining process, one  
          that has the potential to free up funds for use in the  

          JL:d  8/29/14   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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